IDEX SERIES FUND Semi-Annual Report
April 30, 1997
TABLE OF CONTENTS
PORTFOLIO MANAGERS' COMMENTARY,
PORTFOLIO PERFORMANCE, STATISTICS AND
SCHEDULE OF INVESTMENTS
Commentary/ Schedule
Performance/ of
Statistics Investments
Aggressive Growth Portfolio 2, 3 32, 33
International Equity Portfolio 4 - 6 34 - 36
Capital Appreciation Portfolio 8, 9 38, 39
Global Portfolio 10 - 12 40 - 43
Growth Portfolio . 14, 15 44, 45
C.A.S.E. Portfolio. 16, 17 46, 47
Value Equity Portfolio 18, 19 48, 49
Strategic Total Return Portfolio
(formerly Equity-Income Portfolio) 20, 21 50, 51
Tactical Asset Allocation Portfolio 22, 23 52, 53
Balanced Portfolio 24, 25 54 - 56
Flexible Income Portfolio 26, 27 58, 59
Income Plus Portfolio 28, 29 60, 61
Tax-Exempt Portfolio 30, 31 62
FINANCIAL STATEMENTS
Statement of Assets and Liabilities 64
Statement of Operations 70
Statement of Changes in Net Assets 72
FINANCIAL HIGHLIGHTS 76
NOTES TO FINANCIAL STATEMENTS 84
TO CONTACT US 89
Fellow Shareholders:
Welcome to the next millennia...again.
We're talking, of course, about the stock market. More specifically, the Dow
Jones Industrial Average. Indeed, it seems that no sooner does that venerable
old keeper of the blue chips break a one-thousand point mark than it's
approaching the next. You may remember (many don't) that just two years ago, the
Dow was trading below the 4000 level. By the end of 1995, it had not only passed
4000, but the 5000 mark as well. Then last year it cruised easily past 6000. And
this year? Well, so far in 1997, the Dow Jones Industrial Average has already
reached the seventh millennium. Twice, in fact.
That's because of a stunning 694-point selloff between March 11 and April 11
that took the stock market's favorite benchmark all the way back to 6391.69-just
15 points above the level that would have marked the first 10% drop since 1990.
But then, just when it looked as if the great bull market of the decade was
coming to its knees, the Dow charged back to close the period at 7008.99. Whew.
Actually, there was no particular news to account for the selloff. Or the abrupt
recovery, for that matter. The simple fact is, we don't know exactly what drives
the day-to-day market moves, nobody ever does. But this little "correction" does
provide a wakeup call about the potential volatility of a market that has risen
some 75% in two years-a reminder, in other words, about the meaning of short-
term risk.
And if nothing else, this dose of reality should remind us all once again to
make sure individual financial plans are in order-that asset allocations match
objectives, time horizons, risk tolerance, and overall financial situations.
This is one of those seasons where we should each be thinking a lot about these
concepts and deciding just how they're tailored to us. It will mean talking with
an investment professional most likely, but the answer is still an individual
one.
For the investor who has realistic expectations about long-term gains, and who
is prepared for the occasional nail-biting, short-term decline along the way, is
less likely to panic when the market does tumble. As a result, he or she is much
more likely to stick with an appropriate investment plan over the long haul.
Throughout it all, a professional money manager's discipline is to be prized
above all other virtues by the investor seeking to defend against volatility.
And a truly balanced investment plan can only be built on the backs of managers
who run on different cycles. On the following pages, the IDEX portfolio managers
each discuss how they have responded to this period's changes, where they've
invested their respective Portfolio's assets, and why. We encourage you to
review these reports to better understand your investment and its performance.
Note, too, the addition of two new Portfolios to the IDEX Series Fund-the
International Equity Portfolio, co-managed by GE Investment Management
Incorporated and Scottish Equitable Investment Management Limited, and the Value
Equity Portfolio, managed by NWQ Investment Management Company, Inc. effective
February 3, 1997. These new managers' comments will provide an insight into
their approaches and individual styles of money management.
As we look forward to the rest of this year, there are good and compelling
reasons to be optimistic about the financial markets. But no matter what the
market does or doesn't do, at IDEX we plan to stay true to our goals and focus
on long-term results. Our goal is to provide you with solid, well-managed
investment products. Our commitment remains to provide you with superior
service. This is attested to by IDEX Investor Services being one of only eleven
fund service companies awarded the coveted DALBAR Quality Tested Service Seal
for 1996, symbolizing the achievement of the highest tier of service in the
mutual fund industry. We respect your personal task of financial planning and
genuinely appreciate the opportunity to assist.
Sincerely yours,
/s/ John R. Kenney /s/ G. John Hurley
John R. Kenney G. John Hurley
Aggressive Growth Portfolio
While the period started and concluded with exceptionally favorable months, the
four months in the middle proved extremely volatile. Investor uncertainty, which
has plagued the market since July of 1996, persisted throughout the period,
reaching a new level in late February and March. This uncertainty caused
investors to flock to large, blue-chip type stocks noted for earnings
predictability and liquidity. Consequently, the historic premium paid for
quality growth stocks, which offer greater earnings growth potential with less
predictability and liquidity, disappeared. This discrepancy was even more
noticeable in the small-cap sector where, despite substantially higher earnings
growth rates, small company stocks closed the period selling at a discount to
the rest of the market.
Throughout this turbulent period, the Portfolio remained well-diversified with
holdings in many different sectors. In comparing the Portfolio's composition at
the beginning of the quarter to its makeup at the end of the quarter, there were
consistent and significant positions in both finance and retailing. In addition,
healthcare stocks, which represented 5.4% of total net assets on November 1,
1996, were scaled back to only a fraction of a percent by period end. Weightings
in other sectors such as pharmaceuticals, semiconductors, and communications
equipment all increased. While no individual sector performed exceptionally
strong for the entire six-month period, larger companies, like Microsoft and
American International Group, generally performed well for the Portfolio. In
contrast, Cisco Systems, with a market cap of over $34 billion, stumbled.
Buoyed by a strong November and April, the Portfolio finished the period with a
positive six-month return. But primarily because the Portfolio invests in growth
stocks and has a fair degree of small-cap exposure, its performance lagged the
S&P 500 Index by a significant margin. We invite you to review the Portfolio
Performance page for details.
Despite this underperformance, the Aggressive Growth Portfolio seems well
positioned for the future. Cash flows remained strong over the period and
provided the fuel for ample buying opportunities during some short-term
volatility. It is our contention that investor uncertainty should ultimately
subside and that the historic premiums paid for quality growth stocks should be
realized once again. Although our primary focus remains bottom up, stock-by-
stock analysis, we are aware of, and encouraged by, the fact that despite low
unemployment, inflation remains under control. Consequently, we feel the Federal
Reserve may not deem it necessary to further raise interest rates during the
rest of the year. If so, this should bode very well for the Portfolio.
/s/ David Alger
David Alger
Aggressive Growth Portfolio Manager
<TABLE>
<CAPTION>
Top Five Industries (% of Net Assets)
<S> <C>
Semiconductors 10.5%
Pharmaceuticals 9.4%
Computers 6.5%
Software 6.2%
Communications 5.5%
</TABLE>
<TABLE>
<CAPTION>
Five Largest Holdings (% of Net Assets)
<S> <C>
The Gillette Company 3.2%
Home Depot, Inc. 3.2%
Merck and Company, Inc. 3.2%
Eli Lilly and Company 3.0%
Morgan Stanley Group, Inc. 2.9%
</TABLE>
A hypothetical $10,000 invested in Class A Shares at inception (12/2/94) was
worth $16,505.
Note: Performance of Class B and C Shares will be less than the performance
shown in this chart for Class A Shares, based on the different loads and fees
paid by shareholders investing in the different classes.
<TABLE>
<CAPTION>
Average Annual Total Returns For the Period Ended 4/30/97*
<S> <C> <C> <C> <C>
From Inception
6 months 1 year Inception Date
Class A (without sales load) 4.13% 1.93% 26.03% 12/2/94
Class A** (with sales load) (1.57)% (3.66)% 23.10% 12/2/94
S&P 500*** 14.65% 24.94% 29.48% 12/2/94
Class B (without sales load) 3.97% 1.56% (1.20)% 10/1/95
Class B**(with sales load) (1.03)% (3.44)% (3.72)% 10/1/95
Class C 3.96% 1.62% 25.63% 12/2/94
</TABLE>
* Aggressive Growth Portfolio performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results. Periods less than one year
represent total return and are not annualized.
** Aggressive Growth Portfolio Class A Shares performance reflects the maximum
sales charge of 5.5%. Aggressive Growth Portfolio Class B Shares reflects the
maximum applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
*** The Standard & Poor's 500 (S&P 500) Index is an unmanaged index used as a
general measure of market performance. Calculations assume dividends and capital
gains are reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A.
<TABLE>
<CAPTION>
INVESTMENTS BY INDUSTRY GROUPING AS A PERCENTAGE OF NET ASSETS
<S> <C> <C>
4/30/97 10/31/96
Basic Materials 0.7% 1.7%
Consumer Cyclical 12.2% 16.1%
Consumer Non-Cyclical 20.3% 14.7%
Energy 5.1% 4.1%
Financial 12.1% 11.4%
Independent 1.4% -
Industrial 7.6% 6.2%
Technology 35.3% 41.4%
Utilities 1.2% 1.1%
Short-term 4.7% 2.9%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
International Equity Portfolio
Our investment philosophy is to seek companies which are undervalued by the
market relative to their growth potential. We analyze a company's ability to
generate cash flow in an effort to establish its growth potential, then attempt
to invest in companies whose long-term growth of cash earnings exceeds its price
to-cash earnings ratio by at least 25%. Currently, the companies which fit this
criteria best are those which effectively compete on a global basis. We find
these companies typically perform well over the long term irrespective of their
domicile.
The two main factors which affected global markets during the period were the
ongoing strength of the dollar and the Federal Reserve's decision in early March
to raise U.S. interest rates. As a result, assets continued to flow into the
U.S. markets and away from the European and Asian markets. Individually, the
regions and markets performed differently although a common theme was the
strength of stocks which have a high exposure to dollar-based exports. The
European markets were less affected by the interest rate hike, while Asia fared
much less well with most economies consolidating after the recent high level of
economic growth. The Japanese market fluctuated in a trading range as investors
struggled with the banking crisis, a weak yen, and the poor underlying economy,
although it, too, managed a rally in the second half of April. The Latin
American region performed well despite the rise in U.S. interest rates.
Stocks in the global arena which contributed positively to the Portfolio's
performance during the period include: Novartis, the Swiss pharmaceutical
company; Suzuki Motor, the Japanese manufacturer of small cars; Alcatel Alsthom,
the French electrical contractor; Polygram, the Dutch music distributor; and
HSBC, the British/Hong Kong based bank with interests in Asia, UK, and America.
Our geographic asset allocation is dictated by stock selection, although we take
such factors as trends in currencies, strength of the underlying economy, and
interest rates in making that stock analysis. For the moment, we expect the U.S
economy to remain buoyant despite the recent interest rate hike and for the
dollar to remain firm. We are likely to continue to focus on companies that are
predominantly exporters, along with those which are successfully restructuring
their businesses. To this end we find good value selectively in Europe and
Japan. In addition, with the declines in some of the Asian markets, we are
starting to find value there.
/s/ Ralph Layman
Ralph Layman
GE Investments
International Equity Portfolio Manager
The International Equity Portfolio commerced operations February 3, 1997. For
the period ended April 30, 1997, the Portfolio performed on par against its
benchmark, the Morgan Stanley Capital International - Europe, Asia and Far East
Index. We invite you to review its corresponding Portfolio Performance page for
details.
Stock selection in Europe was the main contributor to performance for the
period; returns in France, Belgium, and The Netherlands were particularly
positive. Japanese stock selection was marginally positive, but this was
partially outweighed by disappointing results in the UK. Country allocation was
reasonably positive-our underweighting in Hong Kong, for example, was maintained
for the whole period and contributed usefully to performance. In addition, our
hedging policy proved very fruitful. Our portion of the Portfolio was fully
hedged against the deutschemark, the sterling, and the yen throughout the
period, boosting overall performance as the dollar strengthened considerably.
Our favored area for investment has been Europe. Faced with record levels of
unemployment, Europe's central bankers have pushed interest rates down to
historically low levels-a low-risk strategy, given the sluggishness of economic
activity and the degree of slack in the economy. Corporate earnings momentum has
accelerated in recent months, and we look forward to domestically oriented
sectors taking up the baton. Stock highlights included Groupe Schneider, the
French electrical equipment manufacturer, Promodes, one of France's top five
food retailers, and Compagnie Generale des Eaux, a French blue chip utility.
Philips, a Dutch holding, also performed solidly over the period.
Looking forward, good news on Europe's inflation performance should support the
valuation of European equities. French inflation, for example, during March was
at its lowest rate in forty years. It seems likely that European equities will
outperform other equity markets in the coming months, though a neutral weighting
in UK equities remains appropriate. That market looks fairly fully valued, but
UK institutions' cash positions are at historically high levels and can be
regarded as providing good support for the equity market.
Investors in Japan, meanwhile, have been disappointed by recent developments.
The difficulties Japanese authorities have in dealing with the problems of the
financial sector reinforce our view that, despite equities offering good value
on a number of measures, a neutral position in Japanese equities is appropriate.
In the Pacific region overall, valuations for most equity markets are no better
than neutral and some countries, particularly Thailand, face difficult economic
situations. Tightening monetary conditions in the U.S. could also reduce or
reverse the flow of capital into the Pacific region's equity markets.
/s/ Carol Clark
Carol Clark
Scottish Equitable
International Equity Portfolio Manager
<TABLE>
<CAPTION>
Top Five Industries (% of Net Assets)
<S> <C>
Banks 11.1%
Pharmaceuticals 6.4%
Communications 4.4%
Industrial - Diversified 3.8%
Electronic Components and
Equipment 3.5%
</TABLE>
<TABLE>
<CAPTION>
Five Largest Holdings (% of Net Assets)
<S> <C>
Novartis 2.5%
Total SA 1.7%
Roche Holding AG 1.7%
Canon, Inc. 1.6%
Oversea Chinese Banking Corp., Ltd. 1.6%
</TABLE>
A hypothetical $10,000 invested in Class A Shares at inception (2/3/97) was
worth $9,698.
Note: Performance of Class B and C Shares will be less than the performance
shown in this chart for Class A Shares, based on the different loads and fees
paid by shareholders investing in the different classes.
<TABLE>
<CAPTION>
Average Annual Total Returns For the Period Ended 4/30/97*
<S> <C> <C>
From Inception
Inception Date
Class A (without sales load) 2.61% 2/3/97
Class A**(with sales load) (3.02)% 2/3/97
MSCI-EAFE*** 2.62% 2/3/97
Class B (without sales load) 2.50% 2/3/97
Class B** (with sales load) (2.50)% 2/3/97
Class C 2.51% 2/3/97
</TABLE>
* International Equity Portfolio performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results. Periods less than one year
represent total return and are not annualized.
** International Equity Portfolio Class A Shares performance reflects the
maximum sales charge of 5.5%. International Equity Portfolio Class B Shares
reflects the maximum applicable contingent deferred sales charge (5% in the
first year, decreasing to 0% after 6 years).
*** The Morgan Stanley Capital International - Europe, Asia, and Far East
(MSCI-EAFE) Index is an unmanaged index used as a general measure of market
performance. Calculations assume dividends and capital gains are reinvested and
do not include any managerial expenses.
From inception calculation is based on life of Class A.
<TABLE>
<CAPTION>
INVESTMENTS BY INDUSTRY GROUPING AS A PERCENTAGE OF NET ASSETS
<S> <C>
4/30/97
Basic Materials 5.5%
Consumer Cyclical 15.8%
Consumer Non-Cyclical 15.1%
Energy 4.6%
Financial 16.0%
Independent 1.8%
Industrial 13.7%
Technology 12.2%
Utilities 6.0%
Short-term 11.4%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
International Equity Portfolio
<TABLE>
<CAPTION>
INVESTMENT HOLDINGS BY COUNTRY
(as a percentage of Net Assets)
<S> <C>
Europe (59.84%)
Austria 1.24%
Belgium 0.58%
Denmark 1.21%
Finland 1.51%
France 10.10%
Germany 8.67%
Greece 0.22%
Italy 3.18%
Netherlands 5.91%
Portugal 0.42%
Spain 2.68%
Sweden 2.25%
Switzerland 7.73%
United Kingdom 14.14%
Asia/Pacific Rim (24.02%)
Hong Kong 3.16%
India 0.21%
Indonesia 0.85%
Japan 16.88%
Malaysia 0.09%
Philippines 0.46%
Singapore 1.54%
South Korea 0.71%
Thailand 0.12%
Latin America (3.03%)
Argentina 0.47%
Brazil 0.58%
Mexico 1.28%
Peru 0.70%
Middle East/Africa (0.56%)
Israel 0.15%
South Africa 0.41%
Australia (2.88%)
North America (9.67%)
Canada 0.36%
Cash and Other 9.31%
</TABLE>
Capital Appreciation Portfolio
The equity markets moved rapidly into record territory early in 1997, only to
weaken steadily after the Federal Reserve raised short-term interest rates
at the end of March. A substantial increase in the yield of the 30-year
U.S. Treasury bond weighed heavily on stocks, with the long bond ratcheting
up in yield to 7.15%. Larger capitalization indexes proved resilient, however,
and an eventual decline in interest rates combined with strong corporate
earnings to send equities back toward their previous records.
The advances in large stocks, however, masked some very steep declines among
smaller issues. The average NASDAQ stock, for example, is down 33.3% from its
1996-1997 peak. And small to mid-sized stocks with high earnings multiples have
been especially hard hit. In this environment, the Portfolio underperformed its
benchmark indexes, the S&P MidCap 400 and the S&P 500. We invite you to review
its corresponding Portfolio Performance page for details. Personally, I am
very disappointed with our results of late-as a portfolio manager, it has been
the most frustrating stretch I have ever encountered.
But while our recent results are disappointing, we are not the only ones
affected. The New York Times recently reported the average small-cap growth fund
finished the first quarter down 11%. Similarly, many prominent mutual funds were
off substantially, some as much as 20%.
Actually, our individual stock disappointments, while always unpleasant, were
really no more than usual during this period. Specifically, OmniPoint and Global
DirectMail were sold at losses because their future growth prospects were
negatively altered. More frustrating were the companies represented in the
Portfolio, like Papa John's International, PriCellular, and CommNet, companies
which have good fundamentals but declining stock prices nonetheless.
Additionally, the Portfolio was underweighted in strong performing areas like
financial services and pharmaceutical stocks, and we were not invested in
either technology or energy-related stocks. I tend to underperform when these
sectors are "hot" because I avoid companies with unpredictable long-term
earnings patterns. The Portfolio did have a number of strong performers for the
period, including O'Reilly Automotive, Sealed Air, and Petco Animal Supplies,
all of which appreciated nicely.
In terms of portfolio composition, the number of holdings was increased with the
addition of smaller, but still significant positions. These would include the
Apollo Group, which operates the University of Phoenix, Regal Cinemas, the sixth
largest operator of movie theaters in the U.S., and Sofamor Danek Group, which
dominates the spinal fixation market.
Historically, small- and mid-cap earnings growth rates tend to outpace those of
larger companies, and, ultimately, stock prices are driven by earnings growth.
So, given the historical norm, the real value in the market would now appear to
be in smaller equities. And despite the current, narrow stock market focus on
large-cap stocks, I think the best way to capitalize on investment opportunities
over time is through rigorous, fundamental analysis. This remains my discipline,
whatever the outside, macroeconomic trends.
Nevertheless, I am disappointed in our recent results-rest assured I do not take
underperformance lightly, even in difficult times. I do, however, remain
committed to our investment approach of utilizing fundamental, intensive
research to locate dominant franchises with substantial earnings growth. I am
using this current volatility to add high-quality growth companies at reasonable
prices. Given the current low valuations, solid earnings trends, and the
projection that the vast majority of our holdings should meet or exceed our
expectations, even in an economic downturn, I am quite optimistic about their
prospectus.
/s/ James P. Goff
James P. Goff
Capital Appreciation Portfolio Manager
A hypothetical $10,000 invested in Class A Shares at inception (12/2/94) was
worth $13,469.
Note: Performance of Class B and C Shares will be less than the performance
shown in this chart for Class A Shares, based on the different loads and fees
paid by shareholders investing in the different classes.
<TABLE>
<CAPTION>
Average Annual Total Returns For the Period Ended 4/30/97*
<S> <C> <C> <C> <C>
From Inception
6 months 1 year Inception Date
Class A (without sales load) (13.87)% (14.84)% 15.84% 12/2/94
Class A** (with sales load) (18.62)% (19.52)% 13.15% 12/2/94
S&P 500*** 14.65% 24.94% 29.48% 12/2/94
S&P 400*** 6.85% 10.10% 21.22% 12/2/94
Class B (without sales load) (14.19)% (15.44)% 2.66% 10/1/95
Class B** (with sales load) (18.48)% (19.67)% 0.15% 10/1/95
Class C (14.18)% (15.38)% 15.27% 12/2/94
</TABLE>
* Capital Appreciation Portfolio performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results. Periods less than one year
represent total return and are not annualized.
** Capital Appreciation Portfolio Class A Shares performance reflects the
maximum sales charge of 5.5%. Capital Appreciation Portfolio Class B Shares
reflects the maximum applicable contingent deferred sales charge (5% in the
first year, decreasing to 0% after 6 years).
*** The Standard & Poor's 500 (S&P 500) Index and Standard & Poor's MidCap 400
(S&P 400) Index are unmanaged indices used as a general measure of market
performance. Calculations assume dividends and capital gains are reinvested and
do not include any managerial expenses. From inception calculation is based on
life of Class A.
<TABLE>
<CAPTION>
INVESTMENTS BY INDUSTRY GROUPING AS A PERCENTAGE OF NET ASSETS
<S> <C> <C>
4/30/97 10/31/96
Basic Materials 1.3% 2.1%
Consumer Cyclical 37.5% 37.5%
Consumer Non-Cyclical 12.0% 15.0%
Financial 12.3% 5.9%
Industrial 17.2% 11.9%
Technology 6.1% 22.5%
Utilities - 1.5%
Short-term 13.8% 1.9%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Global Portfolio
Global equity markets were generally characterized this period by their renewed
volatility. Within this environment, the Global Portfolio still registered
strong performance, outperforming its benchmark index, the MSCI World Index.
Please refer to the Portfolio Performance page for details.
Domestic equity markets opened the year with dramatic advances, lifted by the
larger, more liquid components of each index. Market leaders would reverse
course in March, however, as uncertainty surrounding the U.S. economy's strength
confused the financial markets. As March drew to a close, Mr. Greenspan and the
Federal Reserve made good on their threat to raise interest rates in the face of
potential inflationary pressures, raising short-term interest rates for the
first time since 1995. In reaction, the 30-year U.S. Treasury bond rose to its
highest level in over six months. But despite a significant drop in the S&P 500,
stocks on the whole would stage a rather remarkable turnaround by the end of
April. Strong earnings reports combined with a bond market rally to bring the
long bond back below 7%, boosting larger capitalization stocks back towards
their previous levels.
For their part, overseas markets finished the period generally mixed. The
economies of Continental Europe remain relatively weak, with slow growth and low
interest rates. European governments are beginning to initiate real fiscal and
structural reforms, especially in regard to budgets, labor markets, and their
respective capital markets. The continued strength of the dollar has served to
bolster exports across Europe, making imported goods more competitive in the
U.S. Elsewhere, Latin America is rebounding, while economies in Southeast Asia
remain mixed.
In this environment, I remain committed to individual stock selection as the
basis of my investment approach; industry and regional diversification are the
end result. In terms of regional diversification, I continue to find a number of
compelling ideas in Europe, which currently accounts for almost two-thirds of
the Portfolio's assets.
During the period, there were a number of good performers in the Portfolio,
including Netherlands based Philips Electronics and Cap Gemini Sogeti, the
French information technology company. Among the emerging market holdings,
Telecommunicacoes Brasileiras continues to stand out. The Brazilian-based
company is benefiting from considerable pent-up demand as the economy continues
to grow while only 8% or so of the country's population has telephone service.
A positive trade during the period was long-time favorite Rentokil Group. This
UK-based company provides a number of industrial services, including facilities
cleaning, hospital waste disposal, and landscaping. According to our estimates,
the stock price began to get ahead of itself, so the position was trimmed near
the top. Shortly thereafter, the stock fell, and we were able to successfully
rebuild our position at more realistic multiples.
Although the Portfolio performed well overall, it was not without
disappointments, including Lucasvarity and Dorling Kindersley, both British
businesses. Lucasvarity, the result of the merger between two highly
complementary companies within the automotive replacement parts business, fell
short of its extremely aggressive integration targets, and the position was
liquidated. Dorling Kindersley, which specializes in publishing, specifically
within children's education and interactive CD ROMs, was negatively impacted by
excess capacity within the retailing sector.
In light of the current global market environments, I remain positive regarding
the Portfolio's prospects. Continental Europe continues to experience slow
growth, low interest rates, and minimal inflation, while corporate management
has taken on a more "American" flair, stressing shareholder value. Behind this
backdrop, governments are being forced to restrain their fiscal excesses while
simultaneously creating a more favorable regulatory environment. Looking
internationally, there continues to be a wealth of solid growth companies
trading at reasonable valuations. Intensive, fundamental analysis is crucial to
uncovering these investment opportunities, regardless of their geographic
location, and remains the key to portfolio construction.
/s/ Helen Young Hayes
Helen Young Hayes
Global Portfolio Manager
<TABLE>
<CAPTION>
Top Five Industries (% of Net Assets)
<S> <C>
Communications 11.1%
Banks 10.1%
Pharmaceuticals 9.3%
Other Industrial Services 5.5%
Software 5.2%
</TABLE>
<TABLE>
<CAPTION>
Five Largest Holdings (% of Net Assets)
<S> <C>
Rentokil Group PLC 2.8%
Novartis 2.5%
Volkswagen AG 2.2%
Roche Holding AG 2.1%
BASF AG 1.8%
</TABLE>
A hypothetical $10,000 invested in Class A Shares at inception (10/1/92) was
worth $23,950.
Note: Performance of Class B and C Shares will be less than the performance
shown in this chart for Class A Shares, based on the different loads and fees
paid by shareholders investing in the different classes.
<TABLE>
<CAPTION>
Average Annual Total Returns For the Period Ended 4/30/97*
<S> <C> <C> <C> <C>
From Inception
6 months 1 year Inception Date
Class A (without sales load) 10.18% 16.59% 22.52% 10/1/92
Class A**(with sales load) 4.08% 10.16% 21.01% 10/1/92
MSCIW*** 7.79% 10.83% 14.54% 10/1/92
Class B (without sales load) 10.12% 16.38% 22.17% 10/1/95
Class B** (with sales load) 5.12% 11.38% 19.90% 10/1/95
Class C 10.17% 16.34% 19.06% 10/1/93
</TABLE>
* Global Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results. Periods less than one year represent total
return and are not annualized.
** Global Portfolio Class A Shares performance reflects the maximum sales
charge of 5.5%. Global Portfolio Class B Shares reflects the maximum applicable
contingent deferred sales charge (5% in the first year, decreasing to 0% after 6
years).
*** The Morgan Stanley Capital International World (MSCIW) Index is an
unmanaged index used as a general measure of market performance. Calculations
assume dividends and capital gains are reinvested and do not include any
managerial expenses. From inception calculation is based on life of Class A.
<TABLE>
<CAPTION>
INVESTMENTS BY INDUSTRY GROUPING AS A PERCENTAGE OF NET ASSETS
<S> <C> <C>
4/30/97 10/31/96
Basic Materials 4.3% 1.9%
Consumer Cyclical 13.1% 14.2%
Consumer Non-Cyclical 15.6% 16.3%
Energy 1.9% -
Financial 12.9% 9.6%
Independent 1.4% 2.7%
Industrial 13.2% 16.6%
Technology 28.6% 22.4%
Utilities 1.7% 1.4%
Short-term 8.6% 13.1%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Global Portfolio
<TABLE>
<CAPTION>
INVESTMENT HOLDINGS BY COUNTRY
(as a percentage of Net Assets)
<S> <S>
Europe (64.05%)
Austria 0.46%
Belgium 0.82%
Denmark 0.74%
Finland 1.50%
France 8.41%
Germany 10.79%
Italy 1.88%
Luxembourg 1.31%
Netherlands 8.45%
Norway 0.25%
Portugal 0.34%
Russia 0.65%
Spain 1.09%
Sweden 7.82%
Switzerland 7.03%
United Kingdom 12.51%
Asia/Pacific Rim (10.69%)
Hong Kong 0.19%
India 0.87%
Indonesia 0.44%
Japan 8.63%
Philippines 0.37%
South Korea 0.19%
Latin America (5.85%)
Argentina 1.87%
Brazil 1.69%
Chile 0.05%
Mexico 1.75%
Peru 0.49%
Middle East/Africa (0.30%)
Israel 0.20%
South Africa 0.10%
North America (19.11%)
Canada 0.22%
United States 11.61%
Cash and Other 7.28%
</TABLE>
Growth Portfolio
The first part of 1997 proved to be difficult in many respects. The market
remained narrowly focused on a few large equity names which outperformed the
rest of the market by a significant amount. After posting strong advances
through early March, the equity markets experienced renewed volatility when the
Federal Reserve raised short-term interest rates. While the S&P 500 Index was up
10.16% through March 10, the index gave up most of this by the early part of
April. But as the 30-year U.S. Treasury bond moved back below the
psychologically important 7% threshold, equities made up lost ground, ending
just below their previous peaks by the end of April. During this period, the
Portfolio underperformed its benchmark index, the S&P 500. Please review the
details on the corresponding Portfolio Performance page.
The last six months has been a very frustrating period for those of us who
believe earnings drive stock prices. I am still of the opinion that this is a
very anomalous-and temporary-market phenomenon, with investors fleeing to large
stocks, or to stocks with perceived "value", instead of rewarding companies for
running a good business. In fact, high-growth stocks, even those that met or
exceeded earnings estimates, continued to be punished along with those that fell
short.
To put into focus just how narrow the market's focus has been, consider the
following statistics. In 1996, five companies; Intel, GE, Microsoft, Coca-Cola
and IBM accounted for over 20% of the S&P 500's performance. But while the big
stocks rallied, the great majority of stocks did not fare as well. According to
a recent study from Merrill Lynch, some 56% of NASDAQ stocks were down more than
20% from their 1996-1997 peaks, while 40% of NASDAQ listings were down from
their peaks more than 30%. In sum, there were only a relative handful of stocks
that did well this period, and more often than not, these were extremely
expensive.
My strategy during this period remained unchanged. I am still enthusiastic about
financial services, telecommunications, healthcare, pharmaceuticals,
biotechnology, and technology. I continue to believe these sectors will benefit
greatly from fundamental changes in economic and demographic trends, both at
home and abroad. Within these sectors, I look for individual companies with
outstanding fundamentals. Even though the short-term risk may be higher with
some of these stocks than with the more mature businesses in the Portfolio, I
remain convinced the long-term potential is much higher as well.
Current Portfolio strategy utilizes a "barbell" approach. At one end of the
barbell are large, stable companies, such as Citicorp, Pfizer, Lucent
Technologies, and Merrill Lynch, that have numerous product lines and powerful,
secure global market franchises. On the other end of the barbell are smaller,
faster-growing companies such as PeopleSoft (human resources software) and Cisco
Systems (networking equipment), which have fewer product lines, higher growth
rates, and are still building market share. I continue to run the portfolio in a
fairly concentrated manner.
I am hopeful that the sell-off in large capitalization stocks during the last
days of the quarter marks the beginning of a return to fundamental analysis and
a lessening of the psychological conformity that has dominated equity
performance for the last two quarters. In other words, this could prove a
healthy correction, and do away with some of the froth among large-cap stocks.
Going forward I intend to be opportunistic and take advantage of volatility to
build or add positions. But I also intend to be patient. Although we may be
nearer a bottom in the small- and mid-cap arenas, as of quarter end the decline
in large-caps was still relatively mild, at least on a percentage basis. We have
been compelled to live in interesting times these last six months. But whatever
the market's psychology, buying good businesses at the right price remains the
key to long-term performance.
/s/ Scott W. Schoelzel
Scott W. Schoelzel
Growth Portfolio Manager
<TABLE>
<CAPTION>
Top Five Industries (% of Net Assets)
<S> <C>
Pharmaceuticals 14.5%
Banks 12.5%
Software 8.8%
Beverages 4.1%
Securities Brokers 4.1%
</TABLE>
<TABLE>
<CAPTION>
Five Largest Holdings (% of Net Assets)
<S> <C>
Microsoft Corp. 6.2%
Citicorp 5.0%
General Electric Company 4.2%
Coca-Cola Company 4.1%
Merrill Lynch & Company, Inc. 4.1%
</TABLE>
A hypothetical $10,000 invested in Class A Shares at inception (5/8/86) was
worth $47,921.
Note: Performance of Class B, C and T Shares will be less than the performance
shown in this chart for Class A Shares, based on the different loads and fees
paid by shareholders investing in the different classes.
<TABLE>
<CAPTION>
Average Annual Total Returns For the Period Ended 4/30/97*
<S> <C> <C> <C> <C> <C> <C>
From Inception
6 months 1 year 5 year 10 year Inception Date
Class A
(without sales load) 2.31% 6.51% 12.71% 15.16% 15.94% 5/8/86
Class A**
(with sales load) (3.32)% 0.66% 11.44% 14.52% 15.33% 5/8/86
S&P 500**** 14.65% 24.94% 17.00% 14.07% 15.17% 5/8/86
Class B
(without sales load) 2.07% 6.04% - - 13.97% 10/1/95
Class B**
(with sales load) (2.93)% 1.04% - - 11.61% 10/1/95
Class C 2.15% 6.12% - - 13.21% 10/1/93
Class T***
(without sales load) 2.42% 6.91% 13.26% 14.96% 16.67% 9/20/96
Class T***
(with sales load) (6.28)% (1.38)% 11.45% 14.04% 15.88% 9/20/96
</TABLE>
* Growth Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results. Periods less than one year represent total
return and are not annualized.
** Growth Portfolio Class A Shares performance reflects the maximum sales
charge of 5.5%. Growth Portfolio Class B Shares performance reflects the
maximum applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
*** Growth Portfolio Class T Shares are owned by the former shareholders of
IDEX Fund and IDEX Fund 3 as a result of the recent reorganization. Historical
performance is that of IDEX Fund, from inception on 6/4/85 until the
reorganization on 9/20/96. All future performance will be based solely on Class
T Shares. Class T Shares performance with sales load reflects the maximum sales
charge of 8.5%. Class T Shares are not available to new investors.
**** The Standard & Poor's 500 (S&P 500) Index is an unmanaged index used as a
general measure of market performance. Calculations assume dividends and capital
gains are reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A.
<TABLE>
<CAPTION>
INVESTMENTS BY INDUSTRY GROUPING AS A PERCENTAGE OF NET ASSETS
<S> <C> <C>
4/30/97 10/31/96
Basic Materials 1.0% -
Consumer Cyclical 4.1% 9.1%
Consumer Non-Cyclical 22.5% 17.5%
Financial 21.2% 17.8%
Independent - 1.7%
Industrial 4.2% -
Technology 22.2% 37.0%
Utilities 0.1% 0.2%
Long-term U.S. Gov't 1.5% 1.5%
Short-term 23.1% 15.2%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
C.A.S.E. Portfolio
The C.A.S.E Portfolio was funded February 1, 1996 with an investment objective
of capital appreciation with moderate risk. This objective is sought through
investments in common stocks of mostly large-sized companies. Mid and smaller-
sized companies may be used as well.
Generally, our strategy is to invest in stocks of companies with well above-
average management, solid balance sheets, below market price-to-earnings ratios
(on a leading and lagging basis, above market insider and institutional buying,
and earnings estimates that are being revised upwards. While generally
employing a buy-and-hold posture until fundamentals dictate a change, the
Portfolio may use short-term strategies to take advantage of changing market
conditions.
The market's historically high volatility continues to create one of the most
difficult periods ever for money managers. Even though more than 90% of mutual
funds are failing to match the S&P 500 returns, it is no excuse for under-
performance. For the six month period ending April 30, 1997, the Portfolio
underperformed its benchmark. Please review the Portfolio Performance page for
details. Our philosophy of using more fundamental factors than most of the
competition is penalizing performance during this time frame. The market is
being influenced more by liquidity, monthly economic reports, and earnings
releases rather than well-founded growth strategies and valuations. In other
words, the longer-term strategy of discovering companies with above average
earnings characteristics and investing in them when risks are deemed relatively
low is trailing the market averages right now.
The stock market continues to be dominated by earnings as it reaches new highs.
During the past six months, of the two dozen fundamental disciplines used by
C.A.S.E., 90% of the time the factors most price relevant have represented
earnings. There has seemingly been virtually no regard for valuations.
Managers like ourselves are not benefiting from the proper management of the
risks associated with investing in this environment. This is a peculiar event
because in each downturn of the past year, the Portfolio has outperformed the
market. But when the market resumes its march upwards, we are not being
rewarded for our risk management abilities. I am confident, however, that when
the market resumes a more orderly pattern, our strategy of combining growth and
value can provide quality results.
/s/ William E. Lange
William E. Lange
C.A.S.E. Portfolio Manager
<TABLE>
<CAPTION>
Top Five Industries (% of Net Assets)
<S> <C>
Pharmaceuticals 7.0%
Software 6.9%
Computers 5.9%
Insurance 5.7%
Communications 5.2%
</TABLE>
<TABLE>
<CAPTION>
Five Largest Holdings (% of Net Assets)
<S> <C>
Lucent Technologies, Inc. 2.3%
CalEnergy Company, Inc. 2.2%
Storage Technology Corp. 2.2%
Thiokol Corp. 2.2%
The Gillette Company 2.2%
A hypothetical $10,000 invested in Class A Shares at inception (10/1/95) was
worth $11,375.
Note: Performance of Class B and C Shares will be less than the performance
shown in this chart for Class A Shares, based on the different loads and fees
paid by shareholders investing in the different classes.
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Returns For the Period Ended 4/30/97*
<S> <C> <C> <C> <C>
From Inception
6 months 1 Year Inception Date
Class A (without sales load) 6.81% 10.40% 12.46% 10/1/95
Class A**(with sales load) 0.94% 4.35% 8.51% 10/1/95
S&P 500*** 14.65% 24.94% 24.72% 10/1/95
LBIGCB*** 1.74% 6.72% 5.53% 10/1/95
Class B (without sales load) 6.47% 9.70% 11.71% 10/1/95
Class B** (with sales load) 1.47% 4.70% 9.32% 10/1/95
Class C 6.52% 9.81% 11.84% 10/1/95
</TABLE>
* Tactical Asset Allocation Portfolio performance includes dividends and
capital gains reinvested. Investment return and principal value will
fluctuate; shares when redeemed may be worth more or less than their original
cost. Past performance does not guarantee future results. Periods less than
one year represent total return and are not annualized.
** Tactical Asset Allocation Portfolio Class A Shares performance reflects the
maximum sales charge of 5.5%. Tactical Asset Allocation Portfolio Class B
Shares reflects the maximum applicable contingent deferred sales charge (5% in
the first year, decreasing to 0% after 6 years).
*** The Standard & Poor's 500 (S&P 500) Index and Lehman Brothers Intermediate
Government/Corporate Bond (LBIGCB) Index are unmanaged indices used as a general
measure of market performance. Calculations assume dividends and capital gains
are reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A.
<TABLE>
<CAPTION>
INVESTMENTS BY INDUSTRY GROUPING AS A PERCENTAGE OF NET ASSETS
<S> <C> <C>
4/30/97 10/31/96
Basic Materials 3.4% 5.0%
Consumer Cyclical 11.7% 9.2%
Consumer Non-Cyclical 14.5% 19.6%
Energy - % 1.7%
Financial 7.1% 12.5%
Independent 3.1% 1.5%
Industrial 9.1% 6.7%
Technology 8.8% 10.6%
Utilities 9.4% 8.7%
Short-term 25.7% 27.5%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Value Equity Portfolio
The Value Equity Portfolio commenced operations on February 3, 1997. The
Portfolio's investment objective is to achieve maximum, consistent total return
with minimum risk to principal by investing primarily in common stocks with
above-average statistical value which, in our opinion, are in fundamentally
attractive industries, and are undervalued at the time of purchase. Given the
degree of stock market volatility during the initial period of management, we
have moved cautiously toward getting fully invested. Cash reserves remain above
average and are likely to be used in the period ahead to add to stock holdings
as opportunities arise. For the period ending April 30, 1997, the Portfolio
underperformed its benchmark index, the S&P 500. We invite you to review its
corresponding Portfolio Performance page for details.
The cornerstone of our investment process is a disciplined approach to value
recognition within industries representing long-term market leadership. We
believe that investment opportunity is created by changes in the economic,
monetary, political, and social environment. We seek to recognize change early
in asset categories, market sectors, industries and companies-before these
changes are reflected in securities' prices. Stock selection emphasizes medium-
to large-capitalization companies representing above-average statistical value.
Investments are concentrated in those fundamentally attractive industries
identified as the beneficiaries of long-term investment trends. Our value equity
discipline serves as a complimentary, risk-averse style to other more aggressive
growth managers.
While certain sectors of the stock market seem expensive, we remain generally
constructive on the longer-term outlook for financial assets. The U.S. economy
remains the most competitive in the world and inflation should remain low, even
by the overstated CPI measure. And while profit growth may slow over the course
of the year, especially for multinational companies that have exposure to the
stronger U.S. dollar, we still believe there are numerous opportunities for
profitable investment in the industrial, capital goods, technology, finance, and
energy sectors.
The broad market averages, however, are likely to be constrained while investors
worry about a further tightening in May. We do not believe, though, that even a
moderate increase in the Federal Funds rate will significantly alter the longer-
term dynamics at work in the economy or the financial markets. While the overall
rate of increase in stock prices may decelerate going forward, the general
outlook remains positive so long as inflation remains dormant and productivity
growth is strong.
/s/ Edward C. Fridel
Edward C. Fridel
Value Equity Portfolio Manager
<TABLE>
<CAPTION>
Top Five Industries (% of Net Assets)
<S> <C>
Heavy Construction 9.6%
Banks 8.7%
Chemicals 5.8%
Electronic Components and Equipment 5.3%
Oil Drilling 5.0%
</TABLE>
<TABLE>
<CAPTION>
Five Largest Holdings (% of Net Assets)
<S> <C>
Loews Corp. 3.0%
Caterpillar, Inc. 2.9%
General Motors Corp. 2.8%
Norwest Corp. 2.8%
The Boeing Company 2.7%
</TABLE>
A hypothetical $10,000 invested in Class A Shares at inception (2/3/97) was
worth $9,565.
Note: Performance of Class B and C Shares will be less than the performance
shown in this chart for Class A Shares, based on the different loads and fees
paid by shareholders investing in the different classes.
<TABLE>
<CAPTION>
Average Annual Total Returns For the Period Ended 4/30/97*
<S> <C> <C>
From Inception
Inception Date
Class A (without sales load) 1.23% 2/3/97
Class A**(with sales load) (4.35)% 2/3/97
S&P 500*** 2.41% 2/3/97
Class B (without sales load) 1.10% 2/3/97
Class B** (with sales load) (3.90)% 2/3/97
Class C 1.13% 2/3/97
</TABLE>
* Value Equity Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results. Periods less than one year represent total
return and are not annualized.
** Value Equity Portfolio Class A Shares performance reflects the maximum
sales charge of 5.5%. Value Equity Portfolio Class B Shares reflects the
maximum applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
*** The Standard & Poor's 500 (S&P 500) Index is an unmanaged index used as a
general measure of market performance. Calculations assume dividends and capital
gains are reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A.
<TABLE>
<CAPTION>
INVESTMENTS BY INDUSTRY GROUPING AS A PERCENTAGE OF NET ASSETS
<S> <C>
4/30/97
Basic Materials 8.5%
Consumer Cyclical 7.3%
Consumer Non-Cyclical 5.3%
Energy 9.5%
Financial 13.4%
Independent 0.7%
Industrial 21.3%
Technology 10.2%
Utilities 1.2%
Short-term 22.2%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Strategic Total Return Portfolio
We are pleased to report that for the six-month period ending April 30, 1997,
the Strategic Total Return Portfolio performed well against its benchmark
indices, the S&P 500 and the Lehman Brothers Intermediate Government/Corporate
Bond Index. We invite you to review the corresponding Portfolio Performance
page for details.
The Portfolio is structured to participate in a significant part of the stock
market's upside while limiting downside exposure. We utilize a disciplined
approach to equity valuation and also invest in a variety of fixed-income
securities including government notes, corporate bonds, and convertibles. Asset
mix at period end was 64.3% stocks, 10.6% convertible securities, 8.2%
government bonds, 14.8% corporate bonds, and 2.3% cash equivalents. While the
mix is expected to remain relatively stable over time, the composition of each
of the subsegments (stocks, convertibles, bonds) will change to reflect our
current outlook.
Security selection for the Portfolio is driven by a commitment to investing in
companies with strong balance sheets, established market shares, and high and
sustainable returns on invested capital. In addition to high quality core
holdings, we strive to identify companies where a catalyst exists that is
expected to substantially improve the underlying business prospects of a company
or industry group. In addition to stock selection, our disciplines support
corporate bond and convertible security investment decisions as well. Finally,
we continuously assess value, using several complementary valuation tools, in
order to control portfolio risk.
During the period, the financial markets experienced a step up in volatility to
more normalized levels as a strong economy pushed interest rates higher.
Consequently, concerns about the sustainablility of historically high market
returns crowded investors into some of the largest stocks. This phenomenon can
be seen in the divergence of returns between the large-company dominated Dow
Jones Industrial Average and the broader Russell 2000 Index.
But despite the deceptively attractive return of the large-cap indexes, the
period was a difficult one for many managers. Nonetheless, the Portfolio posted
strong returns over the six-month period. In fact, the first half of the fiscal
year offered the Portfolio an opportunity to prove itself during a period that
exhibited months of both substantial market weakness as well as significant
gains.
We were pleased by overall performance during this volatile period. Among
specific holdings, a number of large pharmaceutical companies and financial
institutions boosted portfolio returns. Our continued decision to avoid the poor
performing electric utility industry also added value.
Looking ahead, we believe the market's increased volatility is likely to
continue. While inflationary pressures appear contained, the Federal Reserve
Board could act to raise interest rates for a second time during 1997 in a pre-
emptive effort to insure future price stability. If interest rates continue to
rise, the valuation expansion that investors have enjoyed during the last
several years will probably end. Consequently, an advance in share prices will
depend on rising corporate profits and cash flows at a time when the current
economic expansion has already outlasted most previous periods of growth.
Still, we remain constructive towards the balance of 1997 as inflation appears
tame, economic growth seems favorable, and the supply/demand dynamics of the
stock market remain attractive. We are confident that attractive investment
opportunities will continue to be present in the vast U.S. capital markets. As
always, we will continue to remain diligent in seeking out these opportunities
in an effort to provide shareholders current income, long-term growth of income,
and capital appreciation.
/s/ Luther King
Luther King
/s/ Scot C. Hollmann
Scot C. Hollmann
Strategic Total Return Portfolio Managers
<TABLE>
<CAPTION>
Top Five Industries (% of Net Assets)
<S> <C>
Industrial - Diversified 7.8%
Pharmaceuticals 6.0%
Insurance 5.5%
Oil Companies - Major 5.1%
Real Estate 4.4%
</TABLE>
<TABLE>
<CAPTION>
Credit Quality (% of Net Assets)
<S> <C>
AAA 8.2%
AA 3.2%
A 8.4%
BBB 7.0%
BB -
B -
Not Rated 1.0%
</TABLE>
<TABLE>
<CAPTION>
Five Largest Holdings (% of Net Assets)
<S> <C>
US Treasury Note 05/15/98 3.4%
US Treasury Note 05/31/01 2.9%
Mobil Corp. 2.2%
Procter & Gamble Company 2.0%
Nabisco Holdings Corp. Class A 1.8%
</TABLE>
A hypothetical $10,000 invested in Class A Shares at inception (12/2/94) was
worth $14,194.
Note: Performance of Class B and C Shares will be less than the performance
shown in this chart for Class A Shares, based on the different loads and fees
paid by shareholders investing in the different classes.
<TABLE>
<CAPTION>
Average Annual Total Returns For the Period Ended 4/30/97*
<S> <C> <C> <C> <C>
From Inception
6 months 1 year Inception Date
Class A (without sales load) 8.02% 12.75% 18.39% 12/2/94
Class A** (with sales load) 2.08% 6.58% 15.64% 12/2/94
S&P 500*** 14.65% 24.94% 29.48% 12/2/94
LBIGCB*** 1.74% 6.42% 8.49% 12/2/94
Class B (without sales load) 7.67% 12.04% 15.52% 10/1/95
Class B** (with sales load) 2.67% 7.04% 13.18% 10/1/95
Class C 7.72% 12.15% 17.75% 12/2/94
</TABLE>
* Strategic Total Return Portfolio performance includes dividends and capital
gains reinvested. Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original cost. Past
performance does not guarantee future results. Periods less than one year
represent total return and are not annualized.
** Strategic Total Return Portfolio Class A Shares performance reflects the
maximum sales charge of 5.5%. Strategic Total Return Portfolio Class B Shares
reflects the maximum applicable contingent deferred sales charge (5% in the
first year, decreasing to 0% after 6 years).
*** The Standard & Poor's 500 (S&P 500) Index and Lehman Brothers Intermediate
Government/Corporate Bond (LBIGCB) Index are unmanaged indices used as a general
measure of market performance. Calculations assume dividends and capital gains
are reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A.
<TABLE>
<CAPTION>
INVESTMENTS BY INDUSTRY GROUPING AS A PERCENTAGE OF NET ASSETS
<S> <C> <C>
4/30/97 10/31/96
Basic Materials 5.5% 6.6%
Consumer Cyclical 4.9% 8.1%
Consumer Non-Cyclical 20.5% 19.1%
Energy 8.3% 8.6%
Financial 17.6% 17.9%
Independent 0.9% 1.1%
Industrial 17.1% 15.5%
Technology 7.9% 8.3%
Utilities 7.0% 6.7%
Long-term U.S. Gov't 8.2% 4.6%
Short-term 2.3% 3.1%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Tactical Asset Allocation Portfolio
Stock and bond markets were highly volatile during the latter part of 1996 and
the first part of 1997, a result of shifting market sentiment regarding the
outlook for earnings, interest rates, and the general pace of the economic
expansion.
Meanwhile, economic conditions continue to be strong, with steady corporate
earnings growth, higher productivity, and healthy capital spending, especially
in the area of technology. Such conditions make the long-term fundamental
outlook for stocks quite favorable. Several other factors are helping sustain
the bull market as well, including inflationary measures which appear to be
largely benign, greater demand for stocks, and a relative lack of new equity
supply. But even with these conditions in place, sentiment has often turned
anxious, and sharp downturns in the market have become common.
The potential for higher interest rates-which could slow economic growth and
scare off investors-has been very closely scrutinized. Even with little evidence
of inflation, the Fed tightened rates in March as a "preemptive strike" against
the potential for inflation. In addition, valuation measures are signaling
caution in our forecasting models. Our allocation to stocks moved higher during
the period to take advantage of selected opportunities, but ended the period at
55%, slightly below a neutral position. We believe a neutral stance is
appropriate given the current status of the market, and is consistent with our
stated objective as managers: competitive investment returns, while at the same
time providing some equity downside protection and preservation of capital.
The recent strength in the market indexes has been highly concentrated in a
relatively small number of "mega-cap" stocks-essentially, the largest companies
with the largest capitalizations and highest amount of market liquidity.
Meantime, funds and portfolios which emphasize small- and mid-cap names have
lagged the S&P 500, and even a majority of the large-cap names have been
disappointing in a relative sense. In other words, only a manager who emphasizes
price momentum and has concentrated a portfolio in the "mega-caps" will have out
performed in the recent market environment. Our philosophy, on the other hand,
adheres to a "value" discipline. Companies will be scrutinized for their growth
potential, market positioning, and strategic planning, but only companies with
reasonable valuations are candidates to be included in the Portfolio. Our
performance during the period reflects the fact that "value" is out of favor in
this particular market environment. During the period, the Portfolio
outperformed the Lehman Brothers Intermediate Government/Corporate Bond Index
but underperformed the S&P 500. Please review the corresponding Portfolio
Performance page for details.
Nevertheless, we have had success with many companies in this market utilizing a
value-oriented approach-one which favors stocks with "cheap" valuations, most
often found in "mature" sectors of the economy. A good example would be Green
Tree Financial, a financial services firm with a leading position in providing
consumer loans for the purchase of manufactured housing. Our analysis is the
company is well-managed and has developed a solid strategic plan for future
growth, and valuations are much too inexpensive.
While many stocks in the high-growth technology sector often do not fit our
investment criteria, we believe it is necessary to take a representative
position in the group. Simply put, technological advancements are providing
outstanding opportunities for above-average growth, and, as a manager, we need
to take advantage of these opportunities. Identifying undervalued opportunities
in the technology sector is challenging, but we have had success with Seagate
Technology, a maker of high-end disk drives and other data storage products and
components, and Applied Materials, the leading manufacturer of semiconductor
equipment.
Our stock selection process and asset allocation models have provided long-term
clients with returns that have exceeded the market indexes, and exceeded the
returns produced by "growth" or "momentum" managers. Going forward, we will be
committed to our approach to once again gain favor and reward investors, while
providing downside protection in times of market instability.
/s/ John Riazzi
John Riazzi
/s/ Arvind Sachdeva
Arvind Sachdeva
Tactical Asset Allocation Portfolio Managers
<TABLE>
<CAPTION>
Top Five Industries (% of Net Assets)
<S> <C>
Financial - Diversified 7.0%
Insurance 6.2%
Auto Manufacturers 5.8%
Securities Brokers 5.7%
Broadcasting 3.6%
</TABLE>
<TABLE>
<CAPTION>
Credit Quality (% of Net Assets)
<S> <C>
AAA 16.7%
AA 4.6%
A 6.8%
BBB -
BB -
B -
Not Rated 2.3%
</TABLE>
<TABLE>
<CAPTION>
Five Largest Holdings (% of Net Assets)
<S> <C>
Merrill Lynch & Company, Inc. 03/25/02 4.6%
Ford Motor Credit Company, Inc. 11/09/98 4.6%
US Treasury Note 07/31/01 2.3%
Federal National Mortgage Assoc. 04/14/00 2.3%
Chrysler Financial Corp. 03/25/02 2.3%
</TABLE>
A hypothetical $10,000 invested in Class A Shares at inception (10/1/95) was
worth $11,375.
Note: Performance of Class B and C Shares will be less than the performance
shown in this chart for Class A Shares, based on the different loads and fees
paid by shareholders investing in the different classes.
<TABLE>
<CAPTION>
Average Annual Total Returns For the Period Ended 4/30/97*
<S> <C> <C> <C> <C>
From Inception
6 months 1 Year Inception Date
Class A (without sales load) 6.81% 10.40% 12.46% 10/1/95
Class A**(with sales load) 0.94% 4.35% 8.51% 10/1/95
S&P 500*** 14.65% 24.94% 24.72% 10/1/95
LBIGCB*** 1.74% 6.72% 5.53% 10/1/95
Class B (without sales load) 6.47% 9.70% 11.71% 10/1/95
Class B** (with sales load) 1.47% 4.70% 9.32% 10/1/95
Class C 6.52% 9.81% 11.84% 10/1/95
</TABLE>
* Tactical Asset Allocation Portfolio performance includes dividends and
capital gains reinvested. Investment return and principal value will
fluctuate; shares when redeemed may be worth more or less than their original
cost. Past performance does not guarantee future results. Periods less than
one year represent total return and are not annualized.
** Tactical Asset Allocation Portfolio Class A Shares performance reflects the
maximum sales charge of 5.5%. Tactical Asset Allocation Portfolio Class B
Shares reflects the maximum applicable contingent deferred sales charge (5% in
the first year, decreasing to 0% after 6 years).
*** The Standard & Poor's 500 (S&P 500) Index and Lehman Brothers Intermediate
Government/Corporate Bond (LBIGCB) Index are unmanaged indices used as a general
measure of market performance. Calculations assume dividends and capital gains
are reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A.
<TABLE>
<CAPTION>
INVESTMENTS BY INDUSTRY GROUPING AS A PERCENTAGE OF NET ASSETS
<S> <C> <C>
4/30/97 10/31/96
Basic Materials 8.1% 9.4%
Consumer Cyclical 17.6% 13.9%
Consumer Non-Cyclical 1.0% 3.1%
Energy - 2.0%
Financial 24.2% 17.8%
Independent 1.6% 1.5%
Industrial 1.3% 5.4%
Technology 10.8% 8.2%
Utilities 2.9% -
Long-term U.S. Gov't 18.9% 18.8%
Short-term 13.7% 20.1%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Balanced Portfolio
In many respects, early 1997 proved to be a continuation of market trends in
1996. Investors remained narrowly focused on a few large equity names which
outperformed the rest of the market by an extreme margin. But even these stocks
succumbed to pricing pressures in March when the Federal Reserve Board raised
short-term interest rates. Although the S&P 500 Index gave up most of its early
gains during late March and early April, equities would reverse themselves and
recoup most of these losses. Bond yields proved erratic during the first part of
the year, as the yield on the 30-year U.S. Treasury bond moved progressively
higher. But more encouraging economic news eventually soothed the bond market,
and yields dropped back below 7.0% by the end of the period.
While I believe the current market psychology is an historically anomalous-and
temporary-phenomenon, real crosscurrents are now in evidence. The outlook for
interest rates and inflation is less certain than it was three months ago while
rising wage pressure, strong employment data, and a powerful housing market,
among other signs of economic strength, have raised fears that inflation may re-
ignite. In addition, the specter of 1994, when the Federal Reserve raised rates
several times, is still relatively fresh in investors' minds.
Given the uncertainty over the direction of interest rates, the Portfolio's
fixed-income maturities remained short, mostly in the two- to five-year range.
It is difficult to commit to the long end of the market with rates so low-there
is not that much money to be made should rates decline, and if interest rates
move higher, it's easy to lose several years' interest in a relatively short
time.
In the equity portion of the Portfolio, many of our high-quality growth stocks
continued to perform well. I trimmed our position in UNUM because it had become
over-weighted in the portfolio, largely through appreciation. I sold down the
position in banking giant Wells Fargo for similar reasons. In addition, we made
a successful trade in drug maker Warner Lambert. The stock moved higher on
expectations of strong sales of both its new diabetes drug, Rezolin, and its new
cholesterol-lowering drug, Lipitor. Our high-quality food and consumer products
companies also performed well, including Campbell's, whose stock split two-for-
one. For the six month period ended April 30, 1997, the portfolio was mixed
verses its benchmark indices. Please review the Portfolio Performance page for
details.
Important Portfolio additions include Nationwide Financial Services, a newly
public company that is a recent "de-mutualization" from Nationwide Insurance;
DuPont, Equifax, and Minnesota Mining and Manufacturing (3M) were also added.
During the period, I continued to add smaller banks and thrifts to the portfolio
to take advantage of opportunities in a powerful wave of consolidation. Reliance
Bancorp was the standout performer among this group, which now includes Roslyn
Bancorp, Standard Financial, Home Bancorp of Elgin, and Ocean Financial, among
others.
I took losses this quarter in Labor Ready, which failed to meet our earnings
estimates, and in Heritage Media. Heritage was a frustrating situation. I sold
it after it missed it's earnings target, but then the company was acquired.
Going forward, it appears that strength in the economy is not out of hand,
despite the current uncertainty about interest rates. Even if rates should move
higher, I do not believe it would appreciably affect the earnings of our
financial holdings. They should still be able to achieve growth rates in the
high teens, while trading at ten to twelve times our 1998 earnings estimates, or
just 50% to 60% of the current market multiple.
Overall, I am very happy about the current earnings outlook for our companies.
And, as the market comes in, I am continuing to find additional good
opportunities. Although the current interest rate uncertainty can be unpleasant,
I would prefer to respond to, rather than forecast, rates. Over the long term, I
am confident that buying great businesses at the right price remains the key to
good performance, whatever the market's short-term distortions.
/s/ Blaine Rollins
Blaine Rollins
Balanced Portfolio Manager
<TABLE>
<CAPTION>
Top Five Industries (% of Net Assets)
<S> <C>
Banks 16.1%
Financial - Diversified 10.0%
Insurance 8.6%
Savings & Loans 5.6%
Electronic Components and
Equipment 3.5%
</TABLE>
<TABLE>
<CAPTION>
Credit Quality (% of Net Assets)
<S> <C>
AAA 20.7%
AA 3.0%
A 6.1%
BBB 3.2%
BB -
B 2.0%
Not Rated -
</TABLE>
<TABLE>
<CAPTION>
Five Largest Holdings (% of Net Assets)
<S> <C>
US Treasury Note 05/15/99 7.0%
International Lease Finance Corp. 12/15/99 3.1%
Dionex Corp. 3.0%
Associates Corp. of North America 01/15/01 3.0%
US Treasury Note 02/15/00 2.5%
</TABLE>
A hypothetical $10,000 invested in Class A Shares at inception (12/2/94) was
worth $14,212.
Note: Performance of Class B and C Shares will be less than the performance
shown in this chart for Class A Shares, based on the different loads and fees
paid by shareholders investing in the different classes.
<TABLE>
<CAPTION>
Average Annual Total Returns For the Period Ended 4/30/97*
<S> <C> <C> <C> <C>
From Inception
6 months 1 year Inception Date
Class A (without sales load) 5.89% 14.94% 18.45% 12/2/94
Class A** (with sales load) 0.05% 8.58% 15.69% 12/2/94
S&P 500*** 14.65% 24.94% 29.48% 12/2/94
LBLGCB*** 1.30% 6.72% 9.42% 12/2/94
Class B (without sales load) 5.55% 14.21% 17.55% 10/1/95
Class B** (with sales load) 0.55% 9.21% 15.24% 10/1/95
Class C 5.60% 14.32% 17.81% 12/2/94
</TABLE>
* Balanced Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results. Periods less than one year represent total
return and are not annualized.
** Balanced Portfolio Class A Shares performance reflects the maximum sales
charge of 5.5%. Balanced Portfolio Class B Shares reflects the maximum
applicable contingent deferred sales charge (5% in the first year, decreasing to
0% after 6 years).
*** The Standard & Poor's 500 (S&P 500) Index and Lehman Brothers Long
Government/Corporate Bond (LBLGCB) Index are unmanaged indices used as a general
measure of market performance. Calculations assume dividends and capital gains
are reinvested and do not include any managerial expenses. From inception
calculation is based on life of Class A.
<TABLE>
<CAPTION>
INVESTMENTS BY INDUSTRY GROUPING AS A PERCENTAGE OF NET ASSETS
<S> <C> <C>
4/30/97 10/31/96
Basic Materials 3.5% 0.3%
Consumer Cyclical 7.5% 11.4%
Consumer Non-Cyclical 4.2% 6.6%
Energy 1.4% -
Financial 43.4% 36.9%
Independent 1.5% -
Industrial 10.3% 9.6%
Technology 2.7% 8.7%
Utilities 3.0% 1.4%
Long-term U.S. Gov't 16.8% 13.7%
Long-term Foreign Gov't - 3.1%
Short-term 4.8% 8.4%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Flexible Income Portfolio
The bond market grew increasingly volatile during the past six months. Even the
high-yield market, which has been the best performing fixed-income asset class
for more than a year now, came under pressure during March, primarily as a
result of Alan Greenspan's remarks that high-yield securities were overvalued
and the Federal Reserve's move to raise short-term interest rates.
Actually, after closing out 1996 on a strong note, bond yields appeared poised
to move lower. Interest rates, as measured by the yield on the benchmark 30-year
U.S. Treasury bond, were near the low end of their recent range, and the stock
market was pushing into record territory. But faster economic growth, as
evidenced by strong jobs data, a robust housing market, and sky-high consumer
confidence, threatened to undermine what had been near-perfect economic
conditions of low inflation and moderate growth. As a result, the long bond
backed up toward the top of its recent range, and the financial markets,
including the high-yield sector, came under pressure. But as April came to a
close, the bond market focused on more signs of mild inflationary data, pulling
yields back below the psychologically important 7% threshold.
Within this environment we are pleased to report the Portfolio outperformed its
benchmark index. Please reference the Portfolio Performance page for details.
During the period, the Treasury and corporate sectors of the Portfolio were
little changed. U.S. Treasuries were kept around ten-year maturities to preserve
a competitive yield and avoid the volatility of longer bonds.
We became more defensive, however, in the high-yield section of the Portfolio
and increased our exposure to "cushion bonds". These bonds, while carrying
generous yields, have a good chance of being called early, thus they have less
potential of capital appreciation. But they do allow us to collect a good coupon
with less risk. As always in the high-yield sector, buy and sell decisions are
based on the prospects of individual companies. Our high-yield investment
discipline is to add value to the Portfolio through detailed, fundamental
research of individual ideas.
Allbritton is good example of what we look for in a cushion bond. Allbritton
owns six television stations on the east coast. Our analysis indicates the
company's ABC affiliate in Washington, D.C. by itself provides reasonable
collateral for the debt offering we own. These bonds, which carry an 11.5%
coupon, are callable in August. The company recently issued bonds with a coupon
of 9.75%, so we believe Allbritton is likely to call in its more expensive debt
at the first opportunity.
Looking ahead, we are cautiously optimistic about the bond market. The Federal
Reserve has generally done a very good job of regulating fiscal policy. The long
Treasury bond has traded in a range of 6.5% to 7.25%, and every time the top of
the range is approached, as it was when the first quarter ended, the economy has
slowed and rates have settled lower. As long as this equilibrium remains in
place we plan to stay the course with our current holdings. Selectivity is the
key to performance among our high-yield positions, but with a healthy economy,
the attractive coupons on high-yield bonds should help mitigate much of the
uncertainty surrounding the direction of interest rates.
/s/ Sandy R. Rufenact
Sandy R. Rufenact
/s/ Ronald V. Speaker
Ronald V. Speaker
Flexible Income Portfolio Managers
<TABLE>
<CAPTION>
Top Five Industries (% of Net Assets)
<S> <C>
Banks 13.9%
Financial - Diversified 11.6%
Industrial - Diversified 8.5%
Insurance 5.7%
Entertainment 4.5%
</TABLE>
<TABLE>
<CAPTION>
Credit Quality (% of Net Assets)
<S> <C>
AAA 5.8%
AA 2.8%
A 10.6%
BBB 13.1%
BB 15.8%
B 28.1%
Not Rated 10.0%
</TABLE>
<TABLE>
<CAPTION>
Five Largest Holdings (% of Net Assets)
<S> <C>
US Treasury Note 10/15/06 5.8%
Ford Moter Credit Company 08/15/08 4.2%
Selmer Company, Inc. 05/15/05 3.8%
Tenet Healthcare Corp. 03/01/05 3.2%
Neodata Services, Inc. 05/01/03 3.1%
</TABLE>
A hypothetical $10,000 invested in Class A Shares at inception (6/29/87) was
worth $20,484.
Note: Performance of Class B and C Shares will be less than the performance
shown in this chart for Class A Shares, based on the different loads and fees
paid by shareholders investing in the different classes.
<TABLE>
<CAPTION>
Average Annual Total Returns For the Period Ended 4/30/97*
<S> <C> <C> <C> <C> <C>
From Inception
6 months 1 year 5 year Inception Date
Class A (without sales load) 2.61% 9.02% 8.32% 8.10% 6/29/87
Class A**(with sales load) (2.31)% 3.88% 7.27% 7.56% 6/29/87
LBLGCB*** 1.30% 6.72% 7.50% 8.77% 6/29/87
Class B (without sales load) 2.37% 8.31% - 6.62% 10/1/95
Class B**(with sales load) (2.63)% 3.31% - 4.16% 10/1/95
Class C 2.42% 8.42% - 5.27% 10/1/93
</TABLE>
* Flexible Income Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results. Periods less than one year represent total
return and are not annualized.
** Flexible Income Portfolio Class A Shares performance reflects the maximum
sales charge of 4.75%. Flexible Income Portfolio Class B Shares reflects the
maximum applicable contingent deferred sales charge (5% in the first year,
decreasing to 0% after 6 years).
*** The Lehman Brothers Long Government/Corporate Bond (LBLGCB) Index is an
unmanaged index used as a general measure of market performance. Calculations
assume dividends and capital gains are reinvested and do not include any
managerial expenses. From inception calculation is based on life of Class A.
<TABLE>
<CAPTION>
INVESTMENTS BY INDUSTRY GROUPING AS A PERCENTAGE OF NET ASSETS
<S> <C> <C>
4/30/97 10/31/96
Basic Materials 3.0% -
Consumer Cyclical 15.2% 9.1%
Consumer Non-Cyclical 10.6% 4.4%
Financial 31.2% 45.4%
Industrial 9.8% 10.5%
Technology 9.5% 5.6%
Utilities 2.5% 2.9%
Long-term U.S. Gov't 5.8% 11.4%
Short-term 10.3% 10.3%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Income Plus Portfolio
High-yield bonds outperformed investment-grade bonds during the period by over
400 basis points. This was due to a combination of continued strong technical
and fundamental conditions and investors' persistent reach for more yield. The
sector also benefited from strong mutual fund cash flow throughout the period
along with considerable crossover interest from investment-grade buyers,
increased allocations from pension accounts, and significant funding of many
collateralized bond obligations. The economy and default rates have, too, been
positive attributes which contributed to a positive environment for below-
investment-grade bonds. The continued expectation of positive cash flow from
mutual funds and other non-traditional sources should provide good support for
this sector in the near term.
The investment-grade sector continued to experience interest rate volatility
during the final calendar quarter of 1996 and the first quarter of 1997. This
was due in large part to the Federal Reserve's efforts to curb the potential for
inflation and what it considers "irrational exuberance" on the part of
investors. When the Fed raised rates in late March, investment-grade bond
spreads finally began to widen from what had become historically tight levels.
Dollar denominated bonds issued by foreign entities (Yankee bonds) encountered
the most weakness. Additionally, the new issue calendar began to see an increase
in activity late in the first quarter. With a number of large deals still in the
pipeline for late April and early May, spreads have remained soft and well away
from the levels seen in late 1996 and early 1997.
For the six month period ended April 30, 1997, the Portfolio underperformed its
benchmark, the Merrill Lynch High Yield Master Index. We invite you to refer to
the Portfolio Performance page for details.
An increase in interest rates and/or a deteriorating economy pose the key risks
to the Portfolio going forward. Given the historically tight spread levels in
both the high-yield and investment-grade markets, economic deterioration could
set the stage for underperformance of those bonds with low ratings in both
markets. I feel confident addressing this risk, however, as the Portfolio
typically does not assume inordinate amounts of credit risk. The key determinate
for interest rate risk appears to be inflation expectations. Investors are
nervous that an accelerating economy will re-ignite inflation, especially that
of wage-induced inflation. I prefer not to attempt a prediction of this outcome,
but to react instead to those numerous variables that create bond price
movement. Currently, the Portfolio's duration is below that of the blended index
which should help mitigate any further rise in interest rates.
I think the outlook for the remainder of fiscal 1997 remains moderately
favorable for the Income Plus Portfolio. But while conditions remain favorable
for high-yield bonds, they will not be without challenges over the remainder of
the year. The most significant threat comes from the Fed. Specifically, during
Chairman Greenspan's February 25th testimony, he highlighted high-yield bonds as
one sector that "suggested perceptions of low risk, possibly unrealistically low
risk." Whether or not we agree with Chairman Greenspan is not the most important
issue; rather history and our own experience has taught us that it can be
financially unhealthy to fight the Fed. Accordingly, my strategy will be to look
for signs that would signal a slowing of the economy. This would provide more
solid evidence that a portfolio structured toward higher quality and longer
duration is the strategy of choice.
/s/ David R. Halfpap
David R. Halfpap
Income Plus Portfolio Manager
<TABLE>
<CAPTION>
Top Five Industries (% of Net Assets)
<S> <C>
Financial - Diversified 7.5%
Banks 6.0%
Electric 5.9%
Pipelines 5.4%
Publishing 5.3%
</TABLE>
<TABLE>
<CAPTION>
Credit Quality (% of Net Assets)
<S> <C>
AAA -
AA -
A 13.9%
BBB 48.5%
BB 15.7%
B 13.0%
Not Rated 0.5%
</TABLE>
<TABLE>
<CAPTION>
Five Largest Holdings (% of Net Assets)
<S> <C>
US West Capital Funding, Inc. 02/01/27 4.4%
Inco, Ltd. 06/15/22 4.0%
Mark IV Industries, Inc. 04/01/03 3.6%
Enron Corp. 07/01/05 3.6%
Time Warner, Inc. 144A 3.5%
</TABLE>
A hypothetical $10,000 invested in Class A Shares at inception (6/14/85) was
worth $30,920.
Note: Performance of Class B and C Shares will be less than the performance
shown in this chart for Class A Shares, based on the different loads and fees
paid by shareholders investing in the different classes.
<TABLE>
<CAPTION>
Average Annual Total Returns For the Period Ended 4/30/97*
<S> <C> <C> <C> <C> <C> <C>
From Inception
6 months 1 year 5 year 10 year Inception Date
Class A
(without sales load) 2.68% 10.65% 9.21% 9.87% 10.42% 6/14/85
Class A**
(with sales load) (2.20)% 5.39% 8.15% 9.34% 9.96% 6/14/85
MLHYM*** 4.83% 11.58% 11.80% 11.29% 12.19% 6/14/85
Class B
(without sales load) 2.39% 10.09% - - 7.64% 10/1/95
Class B**
(with sales load) (2.61)% 5.09% - - 5.20% 10/1/95
Class C 2.43% 10.20% - - 6.19% 10/1/93
</TABLE>
* Income Plus Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results. Periods less than one year represent total
return and are not annualized.
** Income Plus Portfolio Class A Shares performance reflects the maximum sales
charge of 4.75%. Income Plus Portfolio Class B Shares reflects the maximum
applicable contingent deferred sales charge (5% in the first year, decreasing to
0% after 6 years).
*** The Merrill Lynch High Yield Master (MLHYM) Index is an unmanaged index
used as a general measure of market performance. Calculations assume dividends
and capital gains are reinvested and do not include any managerial expenses.
From inception calculation is based on life of Class A.
<TABLE>
<CAPTION>
INVESTMENTS BY INDUSTRY GROUPING AS A PERCENTAGE OF NET ASSETS
<S> <C> <C>
4/30/97 10/31/96
Basic Materials 4.0% 3.9%
Consumer Cyclical 24.7% 25.1%
Consumer Non-Cyclical 11.5% 17.3%
Energy 11.2% 11.2%
Financial 18.1% 10.7%
Independent 2.8% -
Industrial 7.5% 15.0%
Technology 4.9% -
Utilities 10.3% 5.7%
Short-term 3.3% 9.1%
</TABLE>
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
Tax-Exempt Portfolio
Bond market participants spent most of the first quarter bracing for a Federal
Reserve Board tightening. In anticipation of the March month-end rate increase,
bond yields rose in all maturities, and the yield curve flattened slightly. As
anticipated, rates were increased, signifying the Fed's commitment to attack any
risk of increased inflation. The municipal market also benefited from a
continued improvement in credit conditions and limited new issue supply.
In this environment, the Portfolio performed in tandem with its benchmark index,
the Lehman Brothers Long Municpal Bond Index. Please refer to the Porfolio
Performance page for details.
I believe it's likely that interest rates will be increased an additional 25
basis points at the next Federal Open Market Committee meeting. My reasoning is
the recent evidence of the economy's surprisingly strong performance. But later
in the year, we expect signs of an economic slowdown to emerge and if they do,
the Fed will likely resist further increasing rates in order to prolong the
current expansion.
While municipals will continue to take their lead from Treasuries, other factors
will play a crucial role in determining how the tax-exempt market fares during
the remainder of 1997. Changes in credit conditions, net new issue activity,
and the continued prospects for tax reform could all have a meaningful impact on
the municipal market this year.
Going forward in 1997, steady demand for tax-exempt bonds could help the
municipal market outperform Treasury bonds over time. The trend in municipal
underwriting reaffirms this view. Once the market becomes convinced that the Fed
is finished its rate tightening cycle, we expect yields to decline
sharply-probably during the second half of the year. In anticipation of a rally
in bond prices, we are in the process of positioning the Portfolio to benefit
fully in this rally.
/s/ Rachel Dennis
Rachel Dennis
Tax-Exempt Portfolio Mananger
<TABLE>
<CAPTION>
Credit Quality (% of Net Assets)
<S> <C>
AAA 33.5%
AA 28.6%
A 12.5%
BBB 4.0%
BB -
B -
Not Rated 19.6%
</TABLE>
<TABLE>
<CAPTION>
Top Five Municipal Concentrations (% of Net Assets)
<S> <C>
General Obligations 16.4%
School Districts 16.3%
University Projects 12.3%
Building Authorities 12.0%
Housing 8.5%
</TABLE>
A hypothetical $10,000 invested in Class A Shares at inception (4/1/85) was
worth $24,189.
Note: Performance of Class B and C Shares will be greater or less than the
performance shown in this chart for Class A Shares, based on the different loads
and fees paid by shareholders investing in the different classes.
<TABLE>
<CAPTION>
Average Annual Total Returns For the Period Ended 9/30/96*
<S> <C> <C> <C> <C> <C> <C>
From Inception
6 months 1 year 5 year 10 year Inception Date
Class A
(without sales load) 2.05% 6.75% 5.88% 7.01% 8.02% 4/1/85
Class A**
(with sales load) (2.81)% 1.66% 4.86% 6.48% 7.58% 4/1/85
LBLMB*** 2.02% 6.65% 7.15% 8.57% 9.31% 4/1/85
Class B
(without sales load) 1.62% 6.05% - - 4.85% 10/1/95
Class B**
(with sales load) (3.38)% 2.06% - - 2.38% 10/1/95
Class C 1.80% 6.45% - - 4.15% 10/1/93
</TABLE>
* Tax-Exempt Portfolio performance includes dividends and capital gains
reinvested. Investment return and principal value will fluctuate; shares when
redeemed may be worth more or less than their original cost. Past performance
does not guarantee future results. Periods less than one year represent total
return and are not annualized.
** Tax-Exempt Portfolio Class A Shares performance reflects the maximum sales
charge of 4.75%. Tax-Exempt Portfolio Class B Shares reflects the maximum
applicable contingent deferred sales charge (5% in the first year, decreasing to
0% after 6 years).
*** The Lehman Brothers Long Municipal Bond (LBLMB) Index is an unmanaged index
used as a general measure of market performance. Calculations assume dividends
and capital gains are reinvested and do not include any managerial expenses.
From inception calculation is based on life of Class A.
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies and
other facts about the Fund.
<TABLE>
<CAPTION>
April 30, 1997
SCHEDULE OF INVESTMENTS (unaudited)
AGGRESSIVE GROWTH PORTFOLIO
<S><C> <C> <C>
Shares Description Value
COMMON STOCK (94.5%)
Basic Materials (0.7%)
Precious Metals
8,000 Titanium Metals Corp. * $207,000
Consumer Cyclical (12.2%)
Clothing/Fabric (2.9%)
4,400 Cintas Corp. 240,900
5,700 Gucci Group NV # 395,438
5,500 Tommy Hilfiger Corp. * 218,625
854,963
Entertainment (2.3%)
7,900 Carnival Corp. 291,313
18,000 International Game Technology 285,750
5,000 Mirage Resorts, Inc. * 100,625
677,688
Footwear (0.5%)
3,300 Nine West Group, Inc. * 130,763
Restaurants (1.1%)
7,700 Boston Chicken, Inc. * 183,838
7,200 Lone Star Steakhouse & Saloon, Inc. * 142,200
326,038
Retailers - Broadline (1.6%)
17,000 Wal-Mart Stores, Inc. 480,250
Retailers - Drug Based (0.6%)
4,000 Rite Aid Corp. 184,000
Retailers - Specialty (3.2%)
16,000 Home Depot, Inc. 928,000
Consumer Non-Cyclical (20.3%)
Beverages (0.3%)
2,300 PepsiCo, Inc. 80,213
Consumer Services (2.0%)
18,350 CUC International, Inc. * 387,644
2,200 Loewen Group, Inc. 63,250
4,200 Service Corp. International 143,850
594,744
Cosmetics (3.2%)
11,000 The Gillette Company 935,000
Food - Other (1.2%)
4,700 Nabisco Holdings Corp. Class A 180,363
2,200 Pioneer Hi Bred International, Inc. 155,375
335,738
Healthcare (1.1%)
4,700 Oxford Health Plans, Inc. * 309,613
Household Products (2.5%)
1,500 Colgate-Palmolive Company 166,500
17,600 Sunbeam Corp. 558,800
725,300
Medical Supplies (0.6%)
4,000 Becton, Dickinson & Company 184,000
Pharmaceuticals (9.4%)
5,000 BioChem Pharma, Inc. * $89,922
2,400 Bristol-Myers Squibb Company, Inc. 157,200
9,900 Eli Lilly and Company 869,963
2,000 McKesson Corp. 144,750
10,300 Merck and Company, Inc. 932,150
1,500 Pfizer, Inc. 144,000
4,300 Warner-Lambert Company, Inc. 421,400
2,759,385
Energy (5.1%)
Oil Drilling (1.1%)
14,000 Reading & Bates Corp. * 313,250
Oilfield Equipment and Services (4.0%)
4,800 Halliburton Company 339,000
5,200 Schlumberger, Ltd. 575,900
4,000 Smith International, Inc. * 189,500
1,700 Tidewater, Inc. 68,213
1,172,613
Financial (12.1%)
Banks (3.4%)
2,700 Chase Manhattan Corp. 250,088
6,600 Citicorp 743,325
993,413
Diversified (2.0%)
5,000 Equifax, Inc. 143,750
20,000 The Money Store, Inc. 432,500
576,250
Insurance (2.8%)
6,500 American International Group, Inc. 835,250
Securities Brokers (3.9%)
8,000 Charles Schwab Corp. 293,000
13,500 Morgan Stanley Group, Inc. 852,188
1,145,188
Independent (1.4%)
Conglomerate
5,800 AlliedSignal, Inc. 419,050
Industrial (7.6%)
Containers and Packaging (0.5%)
4,000 Avery Dennison Corp. 147,000
Diversified (4.8%)
7,000 General Electric Company 776,125
3,500 Monsanto Company 149,625
6,200 United Technologies Corp. 468,875
1,394,625
Electronic Components and Equipment (0.5%)
5,400 Kulicke and Soffa Industries, Inc. * 150,863
Pollution Control (1.8%)
8,600 U.S.A. Waste Services, Inc. * 281,650
7,000 United Waste Systems, Inc. * 236,250
517,900
Technology (33.9%)
Advanced Medical Devices (1.0%)
4,000 Hologic, Inc. * $83,000
3,000 Medtronic, Inc. 207,750
290,750
Aerospace/Defense (3.6%)
5,500 Gulfstream Aerospace Corp. * 140,250
3,000 Sunstrand Corp. 146,250
7,700 The Boeing Company 759,413
1,045,913
Communications (5.5%)
9,100 Cisco Systems, Inc. * 470,925
9,600 Motorola, Inc. 549,600
5,200 ParGain Technologies, Inc. * 135,200
11,000 Tellabs, Inc. * 438,625
1,594,350
Computers (6.5%)
8,300 Adaptec, Inc. * 307,100
10,500 Hewlett-Packard Company 551,250
9,900 Seagate Technology, Inc. * 454,163
3,700 International Business Machines Corp. 594,775
1,907,288
Diversified (0.6%)
5,484 First Data Corp. 189,190
Semiconductors (10.5%)
8,600 Altera Corp. * 426,238
5,200 Applied Materials, Inc. * 285,350
4,300 Intel Corp. 658,438
8,700 Linear Technology Corp. 437,175
4,400 Maxim Integrated Products, Inc. * 232,650
3,900 Micron Technology, Inc. 137,475
5,100 Texas Instruments, Inc. 455,175
8,900 Xilinx, Inc. * 436,100
3,068,600
Software (6.2%)
7,200 Electronics For Imaging, Inc. * 282,600
6,500 Microsoft Corp. * 789,750
15,300 Oracle Systems Corp. * 608,175
2,900 Parametric Technology Corp. * 131,225
1,811,750
Utilities (1.2%)
Telephone
14,500 WorldCom, Inc. * 348,000
Total Common Stock (cost $24,388,150) 27,633,939
CONVERTIBLE PREFERRED STOCK (1.4%)
Technology
Diversified
6,400 Nokia Corp. # (cost $358,189) 413,600
Principal Description Value
SHORT-TERM SECURITIES (4.7%)
Commercial Paper (2.7%)
$300,000 Merrill Lynch & Company, Inc.
5.420% 5-6-97 $299,774
500,000 Rembrandt International Holding Company
5.580% 5-12-97 499,148
798,922
Repurchase Agreement (2.0%)
577,414 State Street Bank & Trust ***
4.250% Repurchase Agreement
dated 4-30-97 to be repurchased
at $577,481 on 5-1-97 577,414
Total Short-Term Securities (cost $1,376,336) 1,376,336
Total Investments (100.6%) (cost $26,122,675) 29,423,875
Liabilities in Excess of Other Assets (-0.6%) (166,414)
Net Assets (100.0%) $29,257,461
</TABLE>
<TABLE>
<CAPTION>
April 30, 1997
SCHEDULE OF INVESTMENTS (unaudited)
INTERNATIONAL EQUITY PORTFOLIO
<S><C> <C> <C>
Shares Description Value
COMMON STOCK (89.8%)
Basic Materials (5.5%)
Chemicals (3.3%)
346 BASF AG + $13,289
280 BOC Group PLC + 4,303
6 Ciba Specialty Chemicals AG + * 518
1,000 Shin-Etsu Chemical Company, Ltd. + 20,162
2,000 Toray Industries, Inc. + 12,444
50,716
Forest Products (0.1%)
200 Ammb Holding Bnd + 1,331
Other Non-Ferrous (0.1%)
110 PT Tambang Timah # 1,815
Paper Products (0.4%)
1,800 Arjo Wiggins Appleton PLC + 5,295
Precious Metals (0.8%)
390 Hoganas AB + 11,698
Steel (0.8%)
9,042 Iscor, Ltd. + 6,261
300 Tokyo Steel Manufacturing Company + 3,213
200 Usinor Sacilor + 3,026
12,500
Consumer, Cyclical (15.8%)
Airlines (0.8%)
864 Airtours PLC + 12,856
Auto Manufacturers (2.5%)
2,000 Mitsubishi Motors Corp. + 13,862
2,500 PT Astra International + 9,156
140 Tata Engineering & Locomotive, Ltd. + 1,733
20 Volkswagen AG + * 12,699
37,450
Auto Parts and Equipment (3.4%)
305 Autoliv AB + 11,114
1,020 LucasVarity PLC + * 3,075
90 Michelin Generale de Etablissments + * 5,035
1,000 Suzuki Motor Company Limited + 10,632
342 Valeo SA + 21,120
50,976
Broadcasting (0.3%)
1,000 Television Broadcasts, Ltd. + 4,105
Clothing/Fabric (0.1%)
15 Gucci Group NV # 1,041
Consumer Electronics (2.4%)
90 Electrolux AB + * 5,169
1,000 Matsushita Electric Industrial Company, Ltd.+ 15,988
200 Sony Corp. + 14,555
35,712
Entertainment (1.7%)
1,101 Granada Group PLC + 15,926
199 PolyGram NV + 9,769
25,695
Footwear (0.8%)
115 Adidas AG + 11,937
Home Construction (0.7%)
1,000 Daiwa House Industry Company, Ltd. + 11,184
Home Furnishings (0.1%)
44 Industrie Natuzzi SpA # $979
Lodging (0.1%)
1,000 Hong Kong & Shanghai Hotels, Ltd. + 1,452
Publishing (2.0%)
471 Elsevier NV + 7,554
598 Reed International PLC + 11,056
366 VNU-Verenigde Nederlandse
Uitgeversbedrijven Verenigd Bezit + 7,582
39 Wolters Kluwer NV + 4,629
30,821
Retailers - Specialty (0.3%)
530 Dixons Group PLC + 4,359
Toys (0.6%)
260 EMI Group PLC + * 5,172
1,500 Thorn EMI PLC + 4,157
9,329
Consumer, Non-Cyclical (15.1%)
Beverages (2.6%)
450 Coca-Cola Amatil, Ltd. + 5,148
1,600 Fomento Economico Mexicano, SA de C.V. + 7,509
650 Guinness PLC + 5,388
271 Panamerican Beverages, Inc. Class A 7,859
1,000 San Miguel Corp. Class B + 2,882
1,000 Sapporo Breweries + 7,002
340 Whitbread PLC + 4,244
40,032
Consumer Services (0.9%)
2,484 Cordiant PLC + * 5,248
171 Vendex International NV + 8,130
13,378
Food - Other (2.9%)
5,289 Burns, Philip & Company, Ltd. + 8,791
130 Cultor OY + 7,059
126 Danisco A/S + 7,312
110 Gruma SA + 519
1,000 Mycal Corp. + 12,286
7 Nestle SA + * 8,518
44,485
Food Retailers (1.8%)
23 Carrefour SA + 14,377
27 Promodes + 9,120
720 Tesco PLC + 4,178
27,675
Household Products (0.5%)
310 Moulinex + * 7,174
Pharmaceuticals (6.4%)
301 F. H. Faulding & Company, Ltd. + 1,860
156 Gehe AG + 10,329
260 Glaxo Wellcome PLC + 5,128
3,364 Medeva PLC + 16,402
29 Novartis + * 38,285
3 Roche Holding AG + 25,391
97,395
Energy (4.6%)
Oil Companies - Major (1.4%)
71 Elf Aquitaine SA + 6,894
458 ENI SpA + 2,328
272 Repsol SA + * 11,424
20,646
Oil Companies - Secondary (1.9%)
760 Edison SpA + $4,036
305 Total SA + 25,323
29,359
Oil Drilling (1.0%)
30 OEMV AG + 3,274
1,485 Saipem SpA + 7,021
240 Shell Transport & Trading Company + 4,252
14,547
Oilfield Equipment and Services (0.3%)
153 Coflexip SA # 4,131
Financial (16.0%)
Banks (11.1%)
110 ABN AMRO Holdings NV + 7,571
45 Alpha Credit Bank + 3,202
20 Alpha Credit Bank Rights + 147
168 Banco Bilbao Vizcaya SA + 11,326
417 Banco Comercial Portugues SA + 6,354
35 Banco de Santander SA + 2,638
82 CLF-Dexia France + 7,596
280 Commerzbank AG + 7,561
127 Den Danske Bank + 10,998
200 Dresdner Bank AG + 3,209
1,000 Fuji Bank, Ltd. + 11,262
21 Generale de Banque SA + 8,723
814 HSBC Holdings PLC + 20,595
1,050 Lloyds TSB Group PLC + 9,625
200 Metropolitan Bank & Trust Company + * 4,096
1,200 National Australia Bank, Ltd. + 16,434
2,000 Oversea-Chinese Banking Corp., Ltd. + 23,363
1,000 Sumitomo Bank + 11,420
300 Thai Farmers Bank + 1,815
167,935
Diversified (2.0%)
560 Credit Saison Company, Ltd. + 10,762
313 ING Groep NV + 12,308
385 Merita, Ltd. + 1,253
1,000 New World Development Company, Ltd. + 5,770
30,093
Insurance (1.8%)
85 AXA-UAP + 5,236
127 Corporacion Mapfre + 6,657
320 General Accident PLC + 4,577
65 Pohjola Insurance Group + 1,852
5 Schweizerische Rueckversicherungs
Gesellschaft + 5,799
11 Zurich Versicherungs Gesellschaft + 3,619
27,740
Real Estate (1.1%)
720 British Land Company PLC + 6,776
1,000 Cheung Kong, Ltd. + 8,778
1,000 Lai Sun Development Company, Ltd. + 1,220
16,774
Independent (1.8%)
Conglomerates
1,160 BTR PLC + 4,760
295 Grupo Carso SA de C.V. # * 3,518
100 Kinnevik Investments AB B-Free + 2,597
875 Perez Companc SA + 7,045
2,020 Tomkins PLC + * 8,749
26,669
Industrial (13.7%)
Building Materials (0.4%)
760 BPB PLC + $4,107
3,000 PT Mulia Industrindo + 1,883
5,990
Diversified (3.8%)
270 Bombardier, Inc. Class B # 5,471
627 Brambles Industries, Ltd. + 11,351
680 General Electric Company PLC + 4,056
1,000 Ishikawajima-Harima Heavy Industries
Company, Ltd. + 3,725
57 Mannesman AG + * 22,453
99 Oerlikon-Buehrle Holding AG + * 9,826
56,882
Electronic Components and Equipment (3.5%)
12 ABB AG + 14,562
500 Johnson Electric Holdings, Ltd. + 1,355
1,280 National Grid Group PLC + * 4,650
900 Siebe PLC + 13,340
1,000 Sumitomo Electric Industries + 13,547
190 Unilever NV + 5,010
52,464
Factory Equipment (2.2%)
143 Schneider SA + 8,071
96 SGL Carbon AG + 13,490
14 Sulzer AG + 9,660
150 Valmet Corp. OY + 2,539
33,760
Heavy Construction (0.2%)
41 Flughafen Wien AG + 1,699
1 Holderbank Financiere Glarus AG + 780
2,479
Heavy Machinery (0.4%)
1,000 NSK Limited + 6,033
Other Industrial Services (1.4%)
920 BAA PLC + 7,648
89 VA Technologie AG + 13,826
21,474
Railroads (1.2%)
2 East Japan Railway Company + * 8,647
1,284 Railtrack Group PLC + * 9,714
18,361
Transportation Equipment (0.6%)
190 IHC Caland NV + * 9,395
Technology (11.3%)
Advanced Medical Devices (0.2%)
33 Fresenius AG + 2,929
Aerospace/Defense (0.3%)
250 British Aerospace PLC + 5,327
Communications (4.4%)
119 Alcatel Alsthom + 13,248
1,150 British Telecommn PLC + 8,458
2 DDI Corp.+ 13,279
107 ECI Telecom, Ltd. 2,341
68 L.M. Ericsson Telephone Company Class B + 2,152
97 Netcom Systems AB + 1,325
1 Nippon Telegraph & Telephone Corp. + 7,049
77 Telecommunicacoes Brasileiras SA # 8,836
1,000 Uniden Corp. + 10,160
66,848
Computers (0.8%)
1,000 NEC Corp. + * $12,208
Diversified (3.3%)
128 Compagnie Generale des Eaux + * 17,851
208 Philips Electronics NV + 10,873
213 Siemens AG + 11,560
2,699 Stet Societa' Finanziaria Telefonica SpA + 10,022
50,306
Office Equipment (1.6%)
1,000 Canon, Inc. 23,706
Software (0.7%)
202 Baan Company NV + * 10,601
Utilities (6.0%)
Electric (2.9%)
64 BSES, Ltd. # 1,504
1,000 China Light & Power Company, Ltd. + 4,505
250 Electricas Reunidas de Zaragoza SA + 8,564
630 Korea Electric Power Corp. # 10,710
352 VEBA AG + 18,290
43,573
Gas (0.1%)
1,000 Osaka Gas Company + 2,394
Telephone (2.3%)
7,556 Telecom Italia Mobile SpA + 23,795
444 Telefonica del Peru SA # 10,656
34,451
Water (0.7%)
51 Lyonnaise des Eaux SA + 4,619
500 Severn Trent PLC + 6,156
10,775
Total Common Stock (cost $1,342,542) 1,359,240
CONVERTIBLE PREFERRED STOCK (0.7%)
Technology
Diversified
162 Nokia Corp. + (cost $10,378) 10,120
NON-CONVERTIBLE PREFERRED STOCK (0.2%)
Technology
Advanced Medical Devices
48 Fresenius Medical Care AG + * (cost $3,615) 3,525
Principal Description Value
SHORT-TERM SECURITIES (11.4%)
Repurchase Agreement (3.9%)
$59,004 State Street Bank & Trust ***
4.250% Repurchase Agreement
dated 4-30-97 to be repurchased
at $59,011 on 5-1-97 $59,004
Time Deposit (7.5%)
113,000 State Street Bank & Trust ***
4.750% Euro Time Deposit
dated 4-30-97 to mature
at $113,015 on 5-2-97 113,000
Total Short-Term Securities (cost $172,004) 172,004
Total Investments (102.1%) (cost $1,528,539) 1,544,889
Notional
Amount Description Value
UNREALIZED GAIN(LOSS) ON FORWARD FOREIGN
CURRENCY CONTRACTS (4.9%) @
D 403,969 German Deutschemark 5-12-97 Sell 1,880
D 117,847 German Deutschemark 5-12-97 Buy (261)
J 16,025,940 Japanese Yen 5-12-97 Sell 768
J 3,881,029 Japanese Yen 5-12-97 Buy (64)
Total Unrealized Gain(Loss) on Forward
Foreign Currency Contracts 2,323
Liabilities in Excess of Other Assets (-7.0%) (33,603)
Net Assets (100.0%) $1,513,609
</TABLE>
<TABLE>
<CAPTION>
April 30, 1997
SCHEDULE OF INVESTMENTS (unaudited)
CAPITAL APPRECIATION PORTFOLIO
<S><C> <C> <C>
Shares Description Value
COMMON STOCK (86.4%)
Basic Materials (1.3%)
Chemicals (0.3%)
900 BetzDearborn, Inc. $57,600
Mining (1.0%)
6,200 Minerals Technology, Inc. 217,775
Consumer, Cyclical (37.5%)
Auto Parts and Equipment (1.0%)
6,250 O'Reilly Automotive, Inc. * 218,750
Broadcasting (0.5%)
3,150 Univision Communications, Inc. * 107,100
Entertainment (3.8%)
16,200 Family Golf Centers, Inc. * 330,075
7,425 Premier Parks, Inc. * 219,965
9,475 Regal Cinemas, Inc. * 258,194
808,234
Lodging (3.7%)
7,225 Choice Hotel International, Inc. * 101,150
11,450 HFS, Inc. * 678,412
779,562
Restaurants (16.7%)
76,837 J. D. Wetherspoon PLC + 1,454,889
29,093 Papa John's International, Inc. * 749,145
123,524 PizzaExpress PLC + 1,382,257
3,586,291
Retailers - Specialty (11.8%)
38,200 Fastenal Company 1,489,800
3,150 MSC Industrial Direct Company * 96,863
43,115 Petco Animal Supplies, Inc. * 921,583
2,508,246
Consumer, Non-Cyclical (12.0%)
Consumer Services (4.7%)
24,350 Apollo Group, Inc. Class A * 654,406
13,600 Coinmach Laundry Corp. * 234,600
6,900 Profit Recovery Group International * 98,325
575 Strayer Education, Inc. 14,806
1,002,137
Food - Other (0.6%)
4,350 JP Foodservice, Inc. * 121,256
Healthcare (0.8%)
15,675 Karrington Health, Inc. * 172,425
Medical Supplies (2.2%)
9,750 Boston Scientific Corp. 470,437
Pharmaceuticals (3.7%)
15,425 Omnicare, Inc. 375,984
8,250 Teva Pharmaceutical Industries, Ltd. 418,688
794,672
Financial (12.3%)
Banks (1.5%)
13,904 Lloyds TSB Group PLC + $127,454
1,025 Regions Financial Corp. 58,169
350 First Empire State Corp. 112,700
285 IBS Financial Corp. 4,239
800 First Defiance Financial Corp. 10,200
312,762
Diversified (0.8%)
2,275 Associates First Capital Corp. 116,594
3,225 Medallion Financial Corp. 57,244
173,838
Insurance (4.3%)
1,375 Progressive Corp. 104,672
2,150 Travelers Group, Inc. 119,056
9,575 Protective Life Corp. 423,694
4,500 UCI, Inc. * 119,250
4,650 Western National Corp. 119,737
1,100 Nationwide Financial Services, Inc. * 29,150
915,559
Real Estate (3.5%)
42,850 Insignia Financial Group, Inc. * 749,875
Savings & Loans (0.3%)
675 Affiliated Community Bancorp, Inc. 16,875
1,000 FFVA Financial Corp. 21,250
1,100 Flushing Financial Corp. 20,350
58,475
Securities Brokers (1.7%)
9,950 Charles Schwab Corp. 364,419
U.S. Government Agencies (0.2%)
1,300 Federal Agricutural Mortgage Corp. * 37,700
Industrial (17.2%)
Building Materials (1.7%)
20,000 Barnett, Inc. * 370,000
Containers and Packaging (2.6%)
11,800 Sealed Air Corp. * 545,750
Electronic Components and Equipment (2.5%)
11,675 Littlefuse, Inc. * 524,669
Other Industrial Services (4.5%)
10,175 Paychex, Inc. 476,317
2,500 Robert Half International, Inc. * 98,125
15,950 Trigen Energy Corp. 388,781
963,223
Pollution Control (3.0%)
14,125 Culligan Water Technologies, Inc. * 577,359
9,202 Rentokil Group PLC + 60,497
637,856
Railroads (2.9%)
18,825 Wisconsin Central Transportation Corp. * 616,519
Technology (6.1%)
Advanced Medical Devices (2.9%)
225 DENTSPLY International, Inc. $11,138
15,425 Sofamor Danek Group, Inc. * 601,575
612,713
Communications (2.6%)
11,975 CommNet Cellular, Inc. * 308,356
32,735 PriCellular Corp. * 243,467
551,823
Diversified (0.6%)
8,150 DepoTech, Inc. * 119,194
Total Common Stock (cost $17,188,378) 18,398,860
Principal Description Value
SHORT-TERM SECURITIES (13.8%)
United States Government Agencies (7.0%)
Federal Home Loan Mortgage Acceptance Corp.
$500,000 5.410% 5-13-97 499,098
500,000 5.420% 6-30-97 495,484
500,000 5.500% 7-2-97 495,264
1,489,846
Commercial Paper (6.6%)
Ford Motor Credit Corp.
500,000 5.550% 7-11-97 494,527
400,000 5.600% 5-1-97 400,000
500,000 Household Finance Company
5.580% 5-1-97 500,000
1,394,527
Repurchase Agreement (0.2%)
50,904 State Street Bank & Trust ***
4.250% Repurchase Agreement
dated 4-30-97 to be repurchased
at $50,910 on 5-1-97 50,904
Total Short-Term Securities (cost $2,935,277) 2,935,277
Total Investments (100.2%) (cost $20,123,655) 21,334,137
Notional
Amount Description Value
UNREALIZED GAIN(LOSS) ON FORWARD
FOREIGN CURRENCY CONTRACTS (0.1%) @
B 4,079 British Pound 5-1-97 Sell $(2)
B 1,368 British Pound 5-2-97 Sell (3)
B 37,529 British Pound 5-7-97 Buy (266)
B 150,000 British Pound 5-27-97 Sell 8,600
B 2,000 British Pound 6-4-97 Sell 96
B 75,000 British Pound 7-18-97 Sell 3,495
B 290,000 British Pound 7-24-97 Sell 10,636
B 650,000 British Pound 7-24-97 Sell 11,776
B 120,000 British Pound 7-28-97 Sell (345)
B 210,000 British Pound 8-20-97 Sell (5,299)
B 152,000 British Pound 9-11-97 Sell (3,340)
Total Unrealized Gain(Loss) on Forward Foreign
Currency Contracts 25,348
Liabilities in Excess of Other Assets (-0.3%) (73,462)
Net Assets (100.0%) $21,286,023
</TABLE>
<TABLE>
<CAPTION>
April 30, 1997
SCHEDULE OF INVESTMENTS (unaudited)
GLOBAL PORTFOLIO
<S><C> <C> <C>
Shares Description Value
COMMON STOCK (90.6%)
Basic Materials (4.3%)
Chemicals (4.2%)
8,880 Akzo Nobel NV # $1,145,689
12,238 Akzo Nobel NV 144A + 1,578,934
96,352 BASF AG + 3,700,746
4,203 Ciba Specialty Chemicals AG + * 362,869
1,991 Clariant AG + 1,142,355
8,100 E.I. Du Pont de Nemours and Company 859,612
8,790,205
Mining (0.1%)
6,065 De Beers Centenary AG + 218,165
Consumer Cyclical (13.1%)
Airlines (0.3%)
652 Swissair AG + * 571,775
Auto Manufacturers (4.7%)
1,292 Bayerische Motoren Werke (BMW) AG + 1,051,949
71,000 Honda Motor Company, Ltd. + 2,203,198
10,765 Mahindra & Mahindra, Ltd. # 133,755
44,375 New Holland NV # 981,797
63,214 Tata Engineering & Locomotive, Ltd. 144A # 776,738
23,600 Tata Engineering & Locomotive, Ltd. # 288,510
7,150 Volkswagen AG + * 4,539,815
9,975,762
Auto Parts and Equipment (1.0%)
12,680 Bajaj Auto, Ltd. # 416,538
80,701 LucasVarity PLC + * 243,308
24,458 Michelin Generale de Etablissments + * 1,368,171
2,028,017
Broadcasting (1.4%)
33,975 CanWest Global Communications Corp. 454,416
30,951 Central European Media Enterprises, Ltd.
Class A # * 878,235
61,575 Grupo Televisa SA # 1,423,922
25,120 Pearson PLC + 289,263
3,045,836
Clothing/Fabric (1.0%)
27,096 Adolfo Dominguez SA + 928,231
5,322 Eurobike + 140,952
9,488 Wolford AG + 977,879
2,047,062
Consumer Electronics (1.2%)
2,075 Sony Corp. # 152,253
32,400 Sony Corp. + 2,357,848
2,788 Tandberg Television ASA + * 22,349
2,532,450
Entertainment (0.1%)
1,606 London Clubs International PLC + 10,102
16,000 Yamaha Motor Company, Ltd. + 142,396
152,498
Footwear (1.5%)
15,812 Adidas AG + 1,641,273
22,176 Merkantildata A/S + 405,440
19,750 Nike, Inc. Class B 1,110,937
3,157,650
Home Furnishings (0.2%)
14,650 Industrie Natuzzi SpA # 325,962
Lodging (0.3%)
4,700 East India Hotels, Ltd. # 76,939
6,119 Indian Hotels Company, Ltd. # 146,061
10,857 Sol Melia, SA + * 372,674
595,674
Publishing (1.2%)
21,551 Wolters Kluwer NV + 2,557,828
Recreation Products - Other (0.2%)
18,140 Amer Group, Ltd. + 310,880
27 Kuoni Reisen AG + 77,825
388,705
Retailers - Apparel (0.0%)
1,888 Cortefiel SA + 60,797
Consumer Non-Cyclical (15.6%)
Beverages (0.5%)
770,000 Companhia Cervejaria Brahma + 524,391
109,100 Fomento Economico Mexicano
SA de C.V. + 512,007
1,036,398
Consumer Services (0.3%)
971 Azkoyen SA + 145,695
3,120 Grand Optical Photoservice SA + 465,096
610,791
Cosmetics (0.6%) .
41,025 Grupo Casa Autrey SA # 712,809
39,000 Shiseido Company, Ltd. + 559,030
1,271,839
Food - Other (3.5%)
124,428 Compass Group PLC 144A + 1,373,161
17,001 Nutricia NV + 2,583,205
695,730 Parmalat Finanziaria SpA + 1,013,110
12,953 Raision Tehtaat OY + 1,075,010
101,255 Sardus AB + 924,025
7,000 Tele Pizza SA + * 321,332
7,289,843
Food Retailers (0.3%)
15,325 Disco SA # * 475,075
4,725 Santa Isabel SA # * 115,172
590,247
Healthcare (0.4%)
181,154 London International Group PLC + 531,445
13,650 Vivra, Inc. * 353,194
884,639
Household Products (0.1%)
2,442 Hunter Douglas NV + 199,583
Medical Supplies (0.2%)
8,550 Boston Scientific Corp. 412,537
Pharmaceuticals (9.3%)
235 Ares-Serono Group + 315,996
26,250 Bristol-Myers Squibb Company, Inc. 1,719,375
81,350 Eisai Company, Ltd. + 1,409,546
18,834 Gehe AG + 1,247,032
62,930 Glaxo Wellcome PLC + 1,241,169
3,942 Novartis + * 5,204,190
6,150 Omnicare, Inc. 149,906
4,325 Pfizer, Inc. 415,200
20,700 Rhone-Poulenc Rorer, Inc. # 1,492,987
522 Roche Holding AG + 4,418,015
2,225 SmithKline Beecham PLC # 179,391
28,098 SmithKline Beecham PLC Class A + 452,795
36,000 Takeda Chemical Industries, Ltd. + 830,747
8,125 Teva Pharmaceutical Industries, Ltd. 412,344
19,488,693
Tobacco (0.4%)
228,500 PT Hanjaya Mandala Sampoerna + $919,172
Energy (1.7%)
Oil Companies - Major (1.2%)
14,892 Elf Aquitaine SA + 1,445,900
42,950 YPF Sociedad Anonima SA # 1,186,494
2,632,394
Oil Companies - Secondary (0.5%)
6,250 Lukoil Holding Company # * 352,187
9,100 Tatneft 144A # * 682,500
1,034,687
Financial (12.9%)
Banks (10.1%)
7,880 Amtssparekassen Fyn A/S + 478,864
25,472 Banco Frances del Rio la Plata SA # 773,712
8,725 BankAmerica Corp. 1,019,734
6,650 Bank of New York Company, Inc. 262,675
40,549 Banque Nationale de Paris + * 1,732,001
85,711 Barclays PLC + 1,599,234
19,800 Citicorp 2,229,975
1,653 CLF-Dexia France + 153,121
8,793 Credit Communal Holding/Dexia + * 874,619
316,482 Credito Italiano + 444,198
12,484 Credit Suisse Group + 1,408,799
63,510 Deutsche Bank AG + * 3,356,742
30,897 Deutsche Pfandbrief & Hypothekenbank AG + 1,675,903
54,295 Equitable Banking Corp. + 212,074
5,442 Jyske Bank + 431,573
157,195 Lloyds TSB Group PLC + 1,440,958
12,000 Mitsui Trust & Banking Company + * 68,426
23,835 Nordbanken AB + 733,151
7,338 Societe Generale + 823,236
27,559 Sparbanken Sverige AB + 492,439
497 Spar Nord Holding A/S + 20,613
21,000 Sumitomo Trust & Banking Company Ltd. + * 173,663
3,158 Wells Fargo & Company 842,396
21,248,106
Diversified (1.7%)
1,971 Compagnie Bancaire SA + 260,343
1,503 FIH A/S Class B + 36,078
11,000 First Pacific Company, Ltd. + 13,135
183,830 Grupo Financiero Inbursa SA Class B + 629,111
48,751 Investment Bure AB + 615,999
55,000 Nomura Securities Company, Ltd. + 615,106
172,153 Stet Societa' Finanziaria Telefonica SpA + 814,982
12,610 Sydbank A/S + 590,054
3,574,808
Real Estate (1.1%)
112,000 Mitsui Estate Company, Ltd. + 1,411,357
87,000 Mitsui Fudosan Company, Ltd. + 993,542
2,404,899
Independent (1.4%)
Conglomerates
4,961 Barco NV + 846,525
68,917 Grupo Carso SA de C.V. + 397,131
47,000 Hutchison Whampoa, Ltd. + 348,863
49,080 Kinnevik Investments AB B-Free + 1,274,765
2,867,284
Industrial (13.2%)
Building Materials (0.3%)
1,686,000 Hi Cement Corp. + 562,639
Containers and Packaging (0.0%)
24,380 Victrex PLC + 65,183
Diversified (0.8%)
5,948 Incentive AB + $390,966
5,480 Koninklijke Nedlloyd Groep NV + 125,912
24,300 Monsanto Company 1,038,825
375 Raychem Corp. 24,187
1,579,890
Electronic Components and Equipment (1.7%)
217,483 Electrocomponents PLC + 1,396,227
1,614 Le Carbone-Lorraine + 383,462
32,828 Pricer AB B Shares + * 1,039,099
20,550 UCAR International, Inc. * 863,100
3,681,888
Factory Equipment (0.9%)
2,968 SGL Carbon AG + 417,061
1,891 Sulzer AG + 1,304,803
4,593 Tomra Systems ASA + 89,141
1,811,005
Heavy Construction (0.2%)
3,240 Cubiertas y Mzov SA + 328,318
Heavy Machinery (0.2%)
16,739 Atlas Copco AB + 414,469
Other Industrial Services (5.5%)
165,680 Assa Abloy AB + 3,245,932
406,602 Hays PLC + 3,611,547
11,860 Prosegur CIA de Segundad SA + 128,794
4,594 Randstad Holdings NV + 413,246
7,675 Robert Half International, Inc. * 301,244
151,896 Securitas AB + 3,664,115
34,054 TI Group PLC + 291,961
11,656,839
Pollution Control (2.8%)
885,014 Rentokil Group PLC + 5,818,382
Transportation Equipment (0.8%)
182,759 Stagecoach Holdings PLC + 1,765,892
Technology (27.0%)
Advanced Medical Devices (1.3%)
5,851 Fresenius AG + 22,669
91,500 Fresenius Medical Care AG # * 2,687,812
2,710,481
Biotechnology (0.1%)
13,396 Biocompatibles International PLC + 308,625
Communications (11.1%)
8,215 Alcatel Alsthom + 914,578
35,425 Cisco Systems, Inc. * 1,833,244
1,828,606 Freepages Group PLC + * 1,203,673
6,350 Globalstar Telecommunications, Ltd. * 336,550
39,550 L.M. Ericsson Telephone Company # 1,329,869
13,213 L.M. Ericsson Telephone Company Class B + 418,229
94,121 Lagardere Group SA + 2,915,902
24,325 Lucent Technologies, Inc. 1,438,216
60,550 Millicom International Cellular SA # * 2,755,025
427 Nippon Telegraph & Telephone Corp. + 3,009,884
19,300 Portugal Telecom SA # 711,481
81,417 Rhone-Poulenc Rorer, Inc. + 2,741,600
42,313 SK Telecom Company, Ltd. # 401,973
10,075 Telecom Arentina France SA # 503,750
15,950 Telecommunicacoes Brasileiras SA # 1,828,144
30,075 Telefonica de Argentina SA # 999,994
23,342,112
Computers (3.8%)
20,950 Cap Gemini Sogeti SA + * $1,270,405
12,825 Computer Sciences Corp. * 801,563
6,250 Dassault Systems SA # * 385,156
30,787 Enator AB + * 620,848
7,175 International Business Machines Corp. 1,153,381
23,875 IONA Technologies PLC + * 346,187
109,839 Misys PLC + 2,209,201
225 Technology Solutions Company 5,934
17,790 WM Data AB Class B + 1,294,231
8,086,906
Diversified (3.3%)
58,175 Philips Electronics NV # 3,112,363
63,394 Philips Electronics NV + 3,313,974
10,963 Siemens AG + 594,968
1,095 Tandberg ASA + * 12,243
7,033,548
Industrial Technology (0.1%)
2,793 ASM Litography Holdings NV + * 208,888
3,400 Pfeiffer Vacuum Technology SpA # * 79,050
287,938
Office Equipment (1.8%)
85,000 Canon, Inc. 2,015,043
23,675 Danka Business Systems PLC # 723,567
16,400 Ikon Office Solutions, Inc. 440,750
5,216 Oce-van der Grinten NV + 631,942
3,811,302
Semiconductors (0.3%)
8,800 SGS-Thomson Microelectronics NV # * 689,700
Software (5.2%)
15,275 Electronics For Imaging, Inc. * 599,544
63,149 Getronics NV + 1,915,131
17,870 Group Axime + * 2,151,941
81,374 JBA Holdings PLC + 1,077,896
760 NTT Data Communications Systems Corp. + 2,220,682
68,225 Parametric Technology Corp. * 3,087,181
11,052,375
Utilities (1.4%)
Electric (0.2%)
77,150 Beijing Datang Power Generation
Company, Ltd. + * 40,086
54,000 Centrais Eletricas de Santa Catarina SA + 78,224
5,000,000 Companhia Paranaense de Energia-Copel + 76,663
4,525 Mosenergo # * 176,475
371,448
Gas (0.1%)
9,400 Gazprom # * 146,640
Telephone (1.1%)
42,575 Telefonica del Peru SA # 1,021,800
190,782 Telecom Italia Mobile SpA + 600,814
285,242 Telecom Italia SpA + 751,493
2,374,107
Total Common Stock (cost $163,733,903) 190,813,993
CONVERTIBLE PREFERRED STOCK (0.9%)
Technology
Diversified
22,050 Nokia Corp. # $1,424,981
5,492 Nokia Corp. + 343,065
Total Convertible Preferred Stock (cost $1,402,749) 1,768,046
NON-CONVERTIBLE PREFERRED STOCK (1.2%)
Energy (0.2%)
Oil Companies - Major
1,943,000 Petroleo Brasileiro SA + 412,140
Technology (0.7%)
Advanced Medical Devices
5,851 Fresenius AG + 1,302,628
3,409 Fresenius Medical Care AG + * 250,357
1,552,985
Utilities (0.3%)
Electric
13,888,000 Companhia Energetica de Minas Gerais SA + 632,282
Total Non-Convertible Preferred Stock (cost $1,497,596) 2,597,407
Principal Description Value
SHORT-TERM SECURITIES (8.6%)
United States Government Agencies (4.7%)
Federal National Mortgage Association Corp.
$5,000,000 5.190% 5-13-97 4,991,350
5,000,000 5.270% 6-12-97 4,969,258
9,960,608
Commercial Paper (3.9%)
3,200,000 Ford Motor Credit Corp.
5.600% 5-1-97 3,200,000
5,000,000 General Electric Capital Corp.
5.460% 5-7-97 4,995,450
8,195,450
Repurchase Agreement (0.0%)
12,000 State Street Bank & Trust ***
4.250% Repurchase Agreement
dated 4-30-97 to be repurchased
at $12,001 on 5-1-97 12,000
Total Short-Term Securities (cost $18,168,058) 18,168,058
Total Investments (101.3%) (cost $184,802,306) 213,347,504
Notional
Amount Description Value
UNREALIZED GAIN(LOSS) ON FORWARD FOREIGN
CURRENCY CONTRACTS (1.4%) @
B 179,137 British Pound 5-7-97 Buy $(1,272)
B 4,500,000 British Pound 7-24-97 Sell 81,525
B 3,000,000 British Pound 7-24-97 Buy (28,250)
B 3,000,000 British Pound 7-28-97 Sell (8,633)
D 417,857 German Deutschemark 5-2-97 Sell (502)
D 88,518 German Deutschemark 5-5-97 Sell 184
D 1,200,000 German Deutschemark 7-21-97 Sell 54,950
D 8,287,000 German Deutschemark 7-24-97 Sell 324,392
D 1,750,000 German Deutschemark 8-11-97 Sell 47,854
D 250,000 German Deutschemark 9-11-97 Sell 1,360
F 1,729,436 French Franc 5-30-97 Buy (1,637)
F 17,000,000 French Franc 8-4-97 Sell 171,222
F 10,000,000 French Franc 8-11-97 Sell 63,955
F 2,300,000 French Franc 9-11-97 Sell 4,258
G 9,563 Dutch Guilder 5-1-97 Sell 15
G 117,818 Dutch Guilder 5-1-97 Buy (183)
G 83,220 Dutch Guilder 5-2-97 Sell (120)
G 18,954 Dutch Guilder 5-2-97 Buy 27
G 148,078 Dutch Guilder 5-5-97 Sell 190
G 36,069 Dutch Guilder 5-6-97 Buy (46)
G 8,000,000 Dutch Guilder 7-21-97 Sell 330,906
G 8,000,000 Dutch Guilder 7-24-97 Sell 255,810
G 2,000,000 Dutch Guilder 8-11-97 Sell 38,454
H 2,667,429 Hong Kong Dollar 5-1-97 Buy (27)
H 80,812 Hong Kong Dollar 5-1-97 Sell 1
J 162,688,664 Japanese Yen 5-1-97 Buy (11,598)
J 112,078,600 Japanese Yen 5-2-97 Buy (612)
J 210,000,000 Japanese Yen 6-17-97 Sell 227,899
J 271,000,000 Japanese Yen 7-18-97 Sell 231,582
J 50,000,000 Japanese Yen 9-11-97 Sell 19,755
K 897,307 Swedish Krona 5-5-97 Sell 11
K 5,000,000 Swedish Krona 7-23-97 Sell 71,509
K 32,900,000 Swedish Krona 7-28-97 Sell 473,489
M 853,000 Finnish Markka 5-12-97 Sell 25,491
P 15,238,631 Spanish Peseta 5-6-97 Buy (435)
R 62,341 South African Rand 5-6-97 Sell 5
R 587,000 South African Rand 11-3-97 Sell (13,269)
S 2,018,000 Swiss Franc 5-12-97 Sell 250,270
S 2,500,000 Swiss Franc 7-18-97 Sell 140,889
S 2,000,000 Swiss Franc 7-24-97 Sell 53,408
S 500,000 Swiss Franc 8-4-97 Sell 14,711
Total Unrealized Gain(Loss) on Forward
Foreign Currency Contracts 2,817,538
Liabilities in Excess of Other Assets (-2.7%) (5,675,312)
Net Assets (100.0%) $210,489,730
</TABLE>
<TABLE>
<CAPTION>
April 30, 1997
SCHEDULE OF INVESTMENTS (unaudited)
GROWTH PORTFOLIO
<S><C> <C> <C>
Shares Description Value
COMMON STOCK (74.1%)
Basic Materials (1.0%)
Chemicals
106,650 E.I. Du Pont de Nemours and Company $11,318,231
Consumer, Cyclical (4.1%)
Airlines (0.8%)
128,625 UAL Corp. 9,566,484
Clothing/Fabric (0.5%)
74,850 Gucci Group NV # 5,192,719
Entertainment (0.3%)
186,675 Mirage Resorts, Inc. * 3,756,834
Footwear (2.5%)
512,625 Nike, Inc. Class B 28,835,156
Toys (0.0%)
6,800 Mattel, Inc. 189,550
Consumer, Non-Cyclical (22.5%)
Beverages (4.1%)
744,750 Coca-Cola Company 47,384,719
Consumer Services (0.0%)
19,175 META Group, Inc. 325,975
3,000 Scopus Technology, Inc. 80,250
406,225
Food Retailers (0.5%)
204,400 Starbucks Corp. 6,106,450
Healthcare (3.4%)
438,700 Oxford Health Plans, Inc. * 28,899,362
215,750 United Healthcare Corp. 10,490,844
39,390,206
Pharmaceuticals (14.5%)
203,416 Astra AB A-Free + 8,333,955
410,800 Bristol-Myers Squibb Company, Inc. 26,907,400
320,025 Eli Lilly and Company 28,122,197
459,625 Pfizer, Inc. 44,124,000
361,900 SmithKline Beecham PLC # 29,178,188
43,631 SmithKline Beecham PLC Class A + 703,106
298,325 Warner-Lambert Company, Inc. 29,235,850
166,604,696
Financial (21.2%)
Banks (12.5%)
213,500 BankAmerica Corp. 24,952,812
287,300 Chase Manhattan Corp. 26,611,162
506,320 Citicorp 57,024,290
130,108 Wells Fargo & Company 34,706,309
143,294,573
Diversified (1.9%)
291,475 American Express Company 19,200,916
604,175 Grupo Financiero Inbursa SA Class B + 2,067,635
2,125 Sabre Group Holdings, Inc. 54,453
21,323,004
Savings and Loans (0.0%)
650 Downey Financial Corp. 12,594
Securities Brokers (4.1%)
497,475 Merrill Lynch & Company, Inc. 47,384,494
U.S. Government Agencies (2.7%)
423,500 Federal Home Loan Mortgage Corp. $13,499,062
423,605 Federal National Mortgage Association 17,420,756
30,919,818
Industrial (4.2%)
Diversified
431,425 General Electric Company 47,834,247
Technology (21.0%)
Advanced Medical Devices (0.0%)
12,775 Bio-Technology General Corp. 183,641
43,150 Photoelectron Corp. * 188,781
372,422
Aerospace/Defense (1.4%)
158,500 The Boeing Company 15,632,062
Biotechnology (0.0%)
1,593 U.S. Bioscience, Inc. * 14,038
Communications (3.2%)
204,075 Ascend Communications, Inc. * 9,336,431
353,000 Cisco Systems, Inc. * 18,267,750
7,650 L.M. Ericsson Telephone Company # 257,231
111,375 Lucent Technologies, Inc. 6,585,047
4,875 Northern Telecom, Ltd. 354,047
2,100 Omnipoint Corp. * 16,275
3,200 ParGain Technologies, Inc. * 83,200
10,225 QUALCOMM, Inc. * 478,019
10,625 Tellabs, Inc. * 423,672
58,700 TTI Team Telecom International, Ltd. 289,831
34,100 ViaSat, Inc. 323,950
36,415,453
Computers (2.2%)
14,875 BEA Systems, Inc. 89,250
296,750 Dell Computer Corp. * 24,834,266
5,100 EMC Corp. * 185,512
1,275 Storage Technology Corp. 44,785
14,925 Sun Microsystems, Inc. * 430,027
3,400 Teradyne, Inc. * 111,350
25,695,190
Diversified (2.6%)
66,850 Brilliant Digital Entertainment, Inc. 334,250
846,100 First Data Corp. 29,190,450
29,524,700
Semiconductors (2.8%)
3,425 3Dlabs, Inc. 80,487
2,550 Altera Corp. * 126,384
5,516 Analog Devices, Inc. * 147,580
4,675 Atmel Corp. * 116,291
850 Intel Corp. 130,156
4,250 Ramtron International Corp. * 24,969
2,550 Sanmina Corp. * 127,500
4,250 Tegal Corp. 26,562
344,900 Texas Instruments, Inc. 30,782,325
31,562,254
Software (8.8%)
1,350 Aspen Technology, Inc. 41,006
9,350 BMC Software, Inc. * 404,387
16,175 Cadence Design Systems, Inc. 517,600
4,300 Compuware Corp. * 162,325
2,186 JBA Holdings PLC + 28,956
5,125 Legato Systems, Inc. 68,227
581,500 Microsoft Corp. * $70,652,251
165,050 Netscape Communications Corp. * 4,466,666
2,125 Oracle Systems Corp. * 84,469
15,075 Parametric Technology Corp. * 682,144
500,350 PeopleSoft, Inc. * 20,764,525
26,075 Planning Sciences International # 114,078
9,375 Puma Technology, Inc. 71,484
5,100 Remedy Corp. 165,113
15,625 Sapient Corp. 560,547
14,475 Veritas Software Corp. 486,722
11,925 VIASOFT, Inc. 506,813
11,100 Whittman-Hart, Inc. 210,900
19,150 Xylan Corp. * 284,856
100,273,069
Utilities (0.1%)
Telephone
45,525 Telefonica del Peru SA # 1,092,600
Total Common Stock (cost $580,152,942) 850,101,788
CONVERTIBLE PREFERRED STOCK (1.2%)
Technology
Diversified
216,350 Nokia Corp. # (cost $12,998,334) 13,981,619
NON-CONVERTIBLE PREFERRED STOCK (0.0%)
Technology
Software
300 SAP AG Vorzug + (cost $42,825) 55,322
Principal Description Value
NON-CONVERTIBLE CORPORATE BONDS (0.0%)
Technology
Communications
$430,000 Lernout & Hauspie Speech Products
NV 144A #
8.000% 11-15-01 (cost $430,000) 478,375
LONG-TERM GOVERNMENT BONDS (1.5%)
United States Government Securities
17,000,000 Treasury Notes
5.500% 9-30-97 (cost $17,024,904) 16,988,950
SHORT-TERM SECURITIES (23.1%)
United States Government Agencies (13.0%)
Federal Home Loan Bank
$25,000,000 5.390% 5-8-97 $24,973,799
Federal Home Loan Mortgage
Acceptance Corp.
25,000,000 5.160% 5-19-97 24,935,500
25,000,000 5.230% 6-16-97 24,832,930
Federal National Mortgage
Association Corp.
25,000,000 5.280% 6-10-97 24,800,882
25,000,000 5.200% 6-23-97 24,848,889
25,000,000 5.380% 10-20-97 24,326,333
148,718,333
Commercial Paper (10.1%)
10,000,000 Coca-Cola Company
5.420% 5-23-97 9,966,878
25,000,000 Deutsche Bank Financial, Inc.
5.300% 5-1-97 25,000,000
Ford Motor Credit Corp.
25,000,000 5.550% 7-11-97 24,726,354
30,900,000 5.600% 5-1-97 30,900,000
15,000,000 General Electric Capital Corp.
5.360% 7-8-97 14,848,133
10,000,000 IBM Credit Corp.
5.450% 6-2-97 9,951,556
115,392,921
Repurchase Agreement (0.0%)
75,109 State Street Bank & Trust ***
4.250% Repurchase Agreement
dated 4-30-97 to be repurchased
at $75,118 on 5-1-97 75,109
Total Short-Term Securities (cost $264,186,363) 264,186,363
Total Investments (99.9%) (cost $874,835,368) 1,145,792,417
Other Assets in Excess of Liabilities (0.1%) 812,403
Net Assets (100.0%) $1,146,604,820
</TABLE>
<TABLE>
<CAPTION>
April 30, 1997
SCHEDULE OF INVESTMENTS (unaudited)
C.A.S.E. PORTFOLIO
<S><C> <C> <C>
Shares Description Value
COMMON STOCK (89.8%)
Basic Materials (1.6%)
Chemicals
8,400 Ethyl Corp. $76,650
Consumer Cyclical (7.7%)
Entertainment (1.8%)
1,000 Eastman Kodak Company 83,500
Recreation Products - Other (1.9%)
3,200 Brunswick Corp. 90,400
Retailers - Broadline (4.0%)
2,200 Dayton Hudson Corp. 99,000
4,200 Woolworth Corp. * 90,300
189,300
Consumer Non-Cyclical (21.6%)
Cosmetics (2.2%)
1,200 The Gillette Company 102,000
Food - Other (3.0%)
3,700 Archer-Daniels-Midland Company 67,988
1,700 Sara Lee Corp. 71,400
139,388
Food Reatailers (1.7%)
5,500 Ruddick Corp. 82,500
Healthcare (2.6%)
5,000 NovaCare, Inc. * 56,875
2,500 Tenet Healthcare Corp. * 65,000
121,875
Household Products (1.4%)
3,000 Maytag Corp. 68,625
Medical Supplies (1.9%)
4,700 Respironics, Inc. * 87,538
Pharmaceuticals (7.0%)
1,400 Bristol-Myers Squibb Company, Inc. 91,700
1,500 Johnson & Johnson 91,875
800 Merck and Company, Inc. 72,400
2,100 Watson Pharmaceutical, Inc. * 75,075
331,050
Tobacco (1.8%)
900 Loews Corp. 82,688
Energy (9.9%)
Oil Companies - Major (1.5%)
1,200 Kerr-McGee Corp. 72,450
Oil Companies - Secondary (4.8%)
2,300 Baker Hughes, Inc. 79,350
5,500 Cross Timbers Oil Company 85,250
3,500 Rowan Companies, Inc. * 63,000
227,600
Oilfield Equipment and Services (3.6%)
1,600 Pennzoil Company 78,800
2,200 Tidewater, Inc. 88,275
167,075
Financial (12.3%)
Banks (4.9%)
3,100 City National Corp. $70,913
2,550 MBNA Corp. 84,150
1,800 PNC Bank Corp. 74,025
229,088
Diversified (1.7%)
1,800 SunAmerica, Inc. 82,800
Insurance (5.7%)
2,600 CMAC Investment Corp. 98,800
1,000 MGIC Investment Corp. 81,250
1,600 Travelers Group, Inc. 88,600
268,650
Independent (1.5%)
Conglomerate
2,000 U.S. Industries, Inc. * 72,250
Industrial (6.8%)
Heavy Construction (1.5%)
1,500 Deere & Company 69,000
Heavy Machinery (1.8%)
4,100 Cincinnati Milacron, Inc. 83,025
Other Industrial Services (3.5%)
2,700 CalEnergy Company, Inc. * 105,638
2,000 U.S. Filter Corp. * 60,750
166,388
Technology (25.5%)
Advanced Medical Devices (1.3%)
1,700 Mallinckrodt Group, Inc. 61,838
Aerospace/Defense (4.1%)
3,000 AAR Corp. 89,250
1,600 Thiokol Corp. 104,400
193,650
Communications (5.2%)
1,000 Cisco Systems, Inc. * 51,750
1,800 Lucent Technologies, Inc. 106,425
1,500 SBC Communications, Inc. 83,250
241,425
Computers (5.9%)
4,900 Data General Corp. * 91,875
3,000 Storage Technology Corp. 105,375
2,700 Sun Microsystems, Inc. * 77,794
275,044
Office Equipment (2.1%)
1,600 Xerox Corp. 98,400
Software (6.9%)
1,600 BMC Software, Inc. * 69,200
2,300 Oracle Systems Corp. * 91,425
4,200 Structural Dynamics Research Corp. * 89,250
5,200 Symantec Corp. * 74,750
324,625
Utilities (2.9%)
Gas (1.8%)
2,000 National Fuel Gas Company $83,250
Water (1.1%)
1,500 Eastern Enterprises, Inc. 50,807
Total Common Stock (cost $4,000,523) 4,222,881
Principal Description Value
SHORT-TERM SECURITIES (3.2%)
Time Deposit
$150,000 State Street Bank & Trust
4.750% Euro Time Deposit
dated 4-28-97 to mature
at $150,137 on 5-5-97 (cost $150,000) $150,000
Total Investments (93.0%) (cost $4,150,523) 4,372,881
Other Assets in Excess of Liabilities (7.0%) 330,223
Net Assets (100.0%) $4,703,104
</TABLE>
<TABLE>
<CAPTION>
April 30, 1997
SCHEDULE OF INVESTMENTS (unaudited)
VALUE EQUITY PORTFOLIO
<S><C> <C> <C>
Shares Description Value
COMMON STOCK (77.4%)
Basic Materials (8.5%)
Aluminum (1.3%)
1,000 Alumax, Inc. * $36,500
200 Reynolds Metals Company 13,575
50,075
Chemicals (5.8%)
700 Air Products & Chemicals, Inc. 50,225
400 E.I. Du Pont de Nemours and Company 42,450
1,900 IMC Global, Inc. 70,062
1,300 W.R. Grace & Company 67,600
230,337
Forest Products (1.4%)
1,000 Champion International Corp. 46,500
200 Weyerhaeuser Company 9,150
55,650
Consumer, Cyclical (7.3%)
Airlines (2.1%)
400 AMR Corp. * 37,250
500 Delta Air Lines, Inc. 46,062
83,312
Auto Manufacturers (2.8%)
1,900 General Motors Corp. 109,962
Auto Parts and Equipment (0.3%)
800 Exide Corp. 12,900
Retailers - Apparel (2.1%)
2,500 Federated Department Stores, Inc. * 85,000
Consumer, Non-Cyclical (5.3%)
Food - Other (1.0%)
200 Unilever NV # 39,250
Healthcare (1.3%)
1,500 Columbia / HCA Healthcare Corp. 52,500
Tobacco (3.0%)
1,300 Loews Corp. 119,437
Energy (9.5%)
Oil Drilling (5.0%)
200 ENSCO International, Inc. * 9,500
2,600 Noble Drilling Corp. * 45,175
1,500 Reading & Bates Corp. * 33,563
1,000 Transocean Offshore, Inc. 60,625
1,700 United Meridian Corp. * 48,237
197,100
Oilfield Equipment and Services (4.5%)
500 B.J. Services Company * 23,562
1,900 Dresser Industries, Inc. 56,763
1,100 Halliburton Company 77,688
500 Tidewater, Inc. 20,062
178,075
Financial (13.4%)
Banks (8.7%)
900 Chase Manhattan Corp. $83,363
1,600 National City Corp. 78,000
2,200 Norwest Corp. 109,725
1,900 Bank of New York Company, Inc. 75,050
346,138
Insurance (3.8%)
1,100 Allstate Corp. 72,050
600 American International Group, Inc. 77,100
149,150
Securities Brokers (0.9%)
1,200 Bear Stearns Companies, Inc. 36,600
Independent (0.7%)
Conglomerate
600 Cooper Industries, Inc. 27,600
Industrial (21.3%)
Diversified (3.8%)
200 General Electric Company 22,175
1,000 Harnischfeger Industries, Inc. 41,625
200 Minnesota Mining & Manufacturing
Company 17,400
900 United Technologies Corp. 68,063
149,263
Electronic Components and Equipment (5.3%)
1,900 Emerson Electric Company 96,425
800 W. W. Grainger, Inc. 60,300
1,200 York International Corp. 53,850
210,575
Heavy Construction (9.6%)
900 Case Corp. 49,838
1,300 Caterpillar, Inc. 115,700
1,900 Deere & Company 87,400
1,000 Foster Wheeler Corp. 38,625
1,800 Ingersoll-Rand Company 88,425
379,988
Other Industrial Services (1.4%)
1,500 Sinter Metals, Inc. Class A * 54,750
Railroads (1.2%)
600 Burlington Northern Santa Fe, Inc. 47,250
Technology (10.2%)
Aerospace/Defense (3.8%)
900 Sunstrand Corp. 43,875
1,100 The Boeing Company 108,487
152,362
Communications (1.5%)
3,400 U.S. WEST Media Group, Inc. * 58,650
Diversified (2.5%)
1,900 Ceridian Corp. * 63,413
500 Honeywell, Inc. 35,312
98,725
Industrial Technology (1.7%)
1,500 Thomas & Betts Corp. $68,063
Office Equipment (0.3%)
200 Xerox Corp. 12,300
Semiconductors (0.4%)
200 Texas Instruments, Inc. 17,850
Utilities (1.2%)
Telephone
1,000 GTE Corp. 45,875
Total Common Stock (cost $3,031,728 ) 3,068,737
Principal Description Value
SHORT-TERM SECURITES (22.2%)
United States Government Securities (7.5%)
Treasury Bills
$100,000 4.980% 5-22-97 $99,710
200,000 5.130% 6-19-97 198,603
298,313
Other Short-Term Securities (14.7%)
584,000 State Street Bank & Trust
State Street Global Advisors Fund
7-day yield of 5.250% 584,000
Total Short-Term Securities (cost $882,313 ) 882,313
Total Investments (99.6%) (cost $3,914,041) 3,951,050
Other Assets in Excess of Liabilities (0.4%) 15,960
Net Assets (100.0%) $3,967,010
</TABLE>
<TABLE>
<CAPTION>
April 30, 1997
SCHEDULE OF INVESTMENTS (unaudited)
STRATEGIC TOTAL RETURN PORTFOLIO
<S><C> <C> <C>
Shares Description Value
COMMON STOCK (64.3%)
Basic Materials (4.5%)
Chemicals (3.1%)
1,900 E.I. Du Pont de Nemours and Company $201,637
15,400 Lawter International, Inc. 163,625
6,500 Morton International, Inc. 272,187
637,449
Forest Products (1.0%)
12,100 Longview Fibre Company 195,112
Other Non-Ferrous (0.4%)
2,500 Tremont Corp. * 87,500
Consumer Cyclical (2.9%)
Entertainment (1.4%)
2,000 Eastman Kodak Company 167,000
1,500 Walt Disney Company 123,000
290,000
Publishing (1.5%)
8,300 A.H. Belo Corp. 298,800
Consumer Non-Cyclical (19.3%)
Beverages (1.7%)
10,100 PepsiCo, Inc. 352,237
Cosmetics (2.7%)
5,900 Estee Lauder Companies, Inc. Class A 269,925
3,392 The Gillette Company 288,320
558,245
Food - Other (2.3%)
2,600 H.J. Heinz Company 107,900
9,800 Nabisco Holdings Corp. Class A 376,075
483,975
Healthcare (1.2%)
4,500 Columbia / HCA Healthcare Corp. 157,500
5,500 Hooper Holmes, Inc. 95,562
253,062
Household Products (4.2%)
2,900 Colgate-Palmolive Company 321,900
3,200 Procter & Gamble Company 402,400
4,000 Tupperware Corp. 133,000
857,300
Medical Supplies (1.2%)
5,200 Baxter International, Inc. 248,950
Pharmaceuticals (6.0%)
15,750 Covance, Inc. * 232,313
4,200 Johnson & Johnson 257,250
3,000 Merck and Company, Inc. 271,500
2,500 Schering Plough Corp. 200,000
3,500 SmithKline Beecham PLC # 282,188
1,243,251
Energy (6.3%)
Oil Companies - Major (5.1%)
2,000 Amoco Corp. 167,250
4,000 Exxon Corp. 226,500
3,500 Mobil Corp. 455,000
7,300 Union Pacific Resources Group, Inc. 198,013
1,046,763
Oil Companies - Secondary (1.2%)
7,500 Baker Hughes, Inc. 258,750
Financial (13.4%)
Banks (2.7%)
17,500 First Colorado Bancorp, Inc. $280,000
3,400 Mellon Bank Corp. 282,625
562,625
Diversified (0.5%)
800 Marsh & McLennan Companies, Inc. 96,400
Insurance (4.8%)
5,000 American General Corp. 218,125
2,100 American International Group, Inc. 269,850
10,000 Nationwide Financial Services, Inc. * 265,000
7,000 PartnerRe, Ltd. 235,375
988,350
Real Estate (4.4%)
8,000 Boykin Lodging Trust, Inc. 172,000
14,800 Crescent Real Estate Equities, Inc. 388,500
9,000 Starwood Lodging Trust 346,500
907,000
U.S. Government Agency (1.0%)
5,300 Federal National Mortgage Association 217,962
Independent (0.9%)
Conglomerate
4,800 Philip Morris Companies, Inc. 189,000
Industrial (11.1%)
Building Materials (0.8%)
4,500 Masco Corp. 169,875
Diversified (5.9%)
7,500 Corning, Inc. 361,875
2,200 General Electric Company 243,925
5,200 Tyco International Ltd. 317,200
16,700 Westinghouse Electric Corp. 283,900
1,206,900
Electronic Components and Equipment (1.2%)
4,800 Emerson Electric Company 243,600
Other Industrial Services (2.3%)
7,000 Manpower, Inc. 280,875
4,800 National Service Industries, Inc. 202,200
483,075
Pollution Control (0.9%)
6,500 WMX Technologies, Inc. 190,938
Technology (5.0%)
Computers (1.6%)
6,200 Hewlett-Packard Company 325,500
Industrial Technology (1.3%)
6,500 Fisher Scientific International, Inc. 275,438
Office Equipment (1.6%)
11,100 Danka Business Systems PLC # 336,188
Software (0.5%)
3,000 Electronic Data Systems Corp. 100,125
Utilities (0.9%)
Telephone
5,600 ALLTEL Corp. 176,400
Total Common Stock (cost $11,355,200) 13,280,770
CONVERTIBLE PREFERRED STOCK (5.8%)
Basic Materials (1.0%)
Precious Metals
4,600 TIMET Capital Trust 144A $215,625
Financial (1.5%)
Diversified
3,000 SunAmerica, Inc. Series E 306,000
Technology (1.7%)
Computers
4,000 Microsoft Corp. Series A 342,500
Utilities (1.6%)
Electric
4,700 CalEnergy Company, Inc. 336,638
Total Convertible Preferred Stock (cost $1,079,031) 1,200,763
Principal Description Value
CONVERTIBLE CORPORATE BONDS (4.8%)
Consumer Cyclical (1.5%)
Retailers - Specialty
$300,000 Home Depot, Inc.
3.250% 10-1-01 307,125
Energy (1.5%)
Oil Drilling
250,000 Nabors Industries, Inc.
5.000% 5-15-06 306,250
Industrial (1.2%)
Pollution Control
250,000 USA Waste Services, Inc.
4.000% 2-1-02 245,313
Utilities (0.6%)
Electric
150,000 Potomac Electric Power Company
5.000% 9-1-02 138,187
Total Convertible Corporate Bonds (cost $949,811) 996,875
NON-CONVERTIBLE CORPORATE BONDS (14.8%)
Consumer Cyclical (0.5%)
Entertainment
100,000 Walt Disney Company 7.750% (until 1997,
increasing thereafter), 10-05-09 100,472
Consumer Non-Cyclical (1.2%)
Food - Other
250,000 Nabisco Brands, Inc.
8.300% 4-15-99 257,500
Energy (0.5%)
Pipelines
100,000 Transcontinental Gas Pipeline Corp.
9.125% 2-1-17 104,375
Financial (2.7%)
Banks (1.0%)
200,000 J. P. Morgan & Company, Inc.
7.625% 9-15-04 205,250
Diversified (1.0%)
$200,000 Norwest Financial, Inc.
7.000% 1-15-03 $199,000
Insurance (0.7%)
150,000 Torchmark Corp.
8.625% 3-1-17 152,560
Industrial (4.8%)
Diversified (1.9%)
150,000 Dexter Corp.
9.250% 12-15-16 157,242
200,000 Robbins & Myers, Inc.
6.500% 9-1-03 236,000
393,242
Other Industrial Services (1.2%)
250,000 Olsten Corp.
7.000% 3-15-06 242,813
Railroads (1.7%)
Union Pacific Corp.
100,000 7.375% 5-15-01 101,000
250,000 8.500% 1-15-17 255,625
356,625
Technology (1.2%)
Communications
250,000 Lucent Technologies, Inc.
6.900% 7-15-01 249,688
Utilities (3.9%)
Electric (2.2%)
175,000 Interstate Power Company
8.625% 9-15-21 185,719
175,000 Kentucky Utilities Company
8.550% 5-15-27 258,125
443,844
Gas (0.7%)
150,000 Southwest Gas Corp.
7.500% 8-1-06 150,000
Telephone (1.0%)
200,000 ALLTEL Corp.
7.250% 4-1-04 201,500
Total Non-Convertible Corporate Bonds (cost $3,048,718) 3,056,869
LONG-TERM GOVERNMENT BONDS (8.2%)
United States Government Securities
Treasury Notes
700,000 6.125% 5-15-98 700,973
400,000 6.125% 8-31-98 400,028
600,000 6.500% 5-31-01 599,160
Total Long-Term Government Bonds (cost $1,701,243) 1,700,161
SHORT-TERM SECURITIES (2.3%)
Repurchase Agreement
$468,846 State Street Bank & Trust***
4.250% Repurchase Agreement
dated 4-30-97 to be repurchased
at $468,901 on 5-1-97 (cost $468,846) $468,846
Total Investments (100.2%) (cost $18,602,849) 20,704,284
Liabilities in Excess of Other Assets (-0.2%) (48,424)
Net Assets (100.0%) $20,655,860
</TABLE>
<TABLE>
<CAPTION>
April 30, 1997
SCHEDULE OF INVESTMENTS (unaudited)
TACTICAL ASSET ALLOCATION PORTFOLIO
<S><C> <C> <C>
Shares Description Value
COMMON STOCK (54.6%)
Basic Materials (8.1%)
Aluminum (3.3%)
10,000 Alumax, Inc. * $365,000
5,000 Aluminum Company of America 349,375
714,375
Chemicals (1.9%)
5,000 Dow Chemical Company 424,375
Mining (2.1%)
6,000 Potash Corp. of Saskatchewan, Inc. 461,250
Steel (0.8%)
12,000 Birmingham Steel Corp. 175,500
Consumer, Cyclical (13.9%)
Airlines (1.2%)
12,000 Comair Holdings, Inc. 253,500
Auto Manufacturers (3.5%)
15,000 Chrysler Corp. 450,000
10,000 Ford Motor Company 347,500
797,500
Broadcasting (2.2%)
15,000 Cox Communications, Inc. Class A * 292,500
7,000 Viacom, Inc. Class B * 186,375
478,875
Footwear (1.7%)
8,820 Payless ShoeSource, Inc. * 374,850
Home Construction (1.5%)
23,750 Clayton Homes, Inc. 332,500
Restaurants (0.9%)
7,500 Cracker Barrel Old Country Store, Inc. 200,625
Retailers - Specialty (2.9%)
12,000 Fingerhut Companies, Inc. 178,500
16,000 Toys R Us, Inc. * 456,000
634,500
Consumer, Non-Cyclical (1.0%)
Tobacco
8,000 UST, Inc. 209,000
Financial (15.0%)
Diversified (2.4%)
11,000 Countrywide Credit Industries, Inc. 298,375
7,500 Green Tree Financial Corp. 222,187
520,562
Insurance (6.2%)
3,000 AMBAC, Inc. 194,250
5,000 Frontier Insurance Group, Inc. 257,500
3,000 MGIC Investment Corp. 243,750
7,000 PMI Group, Inc. 357,875
7,000 AFLAC, Inc. 301,000
1,354,375
Real Estate (2.0%)
20,000 Trizec Hahn Corp. $437,500
Securities Brokers (1.1%)
7,000 Lehman Brothers Holding, Inc. 237,125
U.S. Governtment Agencies (3.3%)
10,000 Federal Home Loan Mortgage Corp. 318,750
10,000 Federal National Mortgage Association 411,250
730,000
Independent (1.6%)
Conglomerate
9,000 Philip Morris Companies, Inc. 354,375
Industrial (1.3%)
Electronic Components and Equipment
5,000 Arrow Electronics, Inc. * 278,125
Technology (10.8%)
Communications (3.0%)
25,000 360 Communications Company * 434,375
10,000 ECI Telecom, Ltd. 218,750
653,125
Computers (1.6%)
468 NCR Corp. * 13,572
7,500 Seagate Technology, Inc. * 344,063
357,635
Diversified (1.7%)
7,000 Philips Electronics NV # 374,500
Semiconductors (3.5%)
6,000 Applied Materials, Inc. * 329,250
1,000 Intel Corp. 153,125
10,000 MEMC Electric Material, Inc. * 273,750
756,125
Software (1.0%)
10,000 Digi International, Inc. * 66,250
19,000 Novell, Inc. * 143,688
209,938
Utilities (2.9%)
Telephone
11,000 AT&T Corp. 368,500
6,000 Sprint Corp. 263,250
631,750
Total Common Stock (cost $10,672,536 ) 11,951,985
NON-CONVERTIBLE PREFERRED STOCK (1.4%)
Consumer, Cyclical
Broadcasting
20,000 News Corp., Ltd. # (cost $335,600 ) 302,500
Principal Description Value
NON-CONVERTIBLE CORPORATE BONDS (11.5%)
Consumer, Cyclical (2.3%)
Auto Manufacturers
$500,000 Chrysler Financial Corp.
6.950% 3-25-02 $497,500
Financial (9.2%)
Diversified (4.6%)
1,000,000 Ford Motor Credit Company
6.030% 11-9-98 1,000,104
Securities Brokers (4.6%)
1,000,000 Merrill Lynch and Company, Inc.
7.260% 3-25-02 1,001,250
Total Non-Convertible Corporate Bonds (cost $2,501,317 ) 2,498,854
LONG-TERM GOVERNMENT BONDS (18.9%)
United States Government Agencies (7.6%)
Federal Home Loan Bank
100,000 8.600% 8-25-99 104,804
100,000 7.880% 2-9-00 103,255
500,000 6.200% 7-7-00 490,360
500,000 Federal Home Loan Mortgage Corp.
5.990% 1-27-03 479,860
500,000 Federal National Mortgage Association
6.016% 4-14-00 499,990
1,678,269
United States Government Securities (11.3%)
Treasury Notes
500,000 5.875% 3-31-99 496,625
500,000 6.000% 10-15-99 496,500
500,000 5.500% 4-15-00 487,905
500,000 6.625% 7-31-01 501,535
500,000 6.250% 10-31-01 494,105
2,476,670
Total Long-Term Government Bonds (cost $4,201,413) 4,154,939
SHORT-TERM SECURITIES (13.7%)
Commercial Paper (13.0%)
Greentree Financial
$100,000 5.640% 5-12-97 $99,828
300,000 5.670% 5-12-97 299,480
225,000 5.650% 5-14-97 224,541
400,000 5.640% 5-19-97 398,872
500,000 Oglethorpe Corp.
5.600% 5-1-97 500,000
275,000 Progress Funding Corp.
5.650% 5-29-97 273,791
100,000 Reliastar Mortgage Corp.
5.620% 5-12-97 99,828
500,000 Southwest Electric Corp.
5.620% 5-8-97 499,454
450,000 Merrill Lynch & Company, Inc.
5.850% 5-5-97 449,708
2,845,502
Repurchase Agreement (0.7%)
151,505 State Street Bank & Trust***
4.250% Repurchase Agreement
dated 4-30-97 to be repurchased
at $151,523 on 5-1-97 151,505
Total Short-Term Securities (cost $2,997,007) 2,997,007
Total Investments (100.1%) (cost $20,707,873) 21,905,285
Liabilities in Excess of Other Assets (-0.1%) (26,397)
Net Assets (100.0%) $21,878,888
</TABLE>
<TABLE>
<CAPTION>
April 30, 1997
SCHEDULE OF INVESTMENTS (unaudited)
BALANCED PORTFOLIO
<S><C> <C> <C>
Shares Description Value
COMMON STOCK (57.2%)
Basic Materials (3.5%)
Aluminum (0.3%)
525 Reynolds Metals Company $35,634
Chemicals (3.2%)
277 Akzo Nobel NV # 35,738
2,308 BASF AG + 88,647
3,660 BOC Group PLC + 56,244
2,100 E.I. Du Pont de Nemours and Company 222,863
403,492
Consumer, Cyclical (3.3%)
Auto Parts and Equipment (0.4%)
2,000 Federal-Mogul Corp. 55,250
Broadcasting (0.4%)
2,025 Young Broadcasting Corp. * 53,663
Clothing/Fabric (0.2%)
265 Wolford AG + 27,312
Entertainment (0.2%)
4,846 London Clubs International PLC + 30,481
Lodging (0.3%)
2,700 Extended Stay America, Inc. * 40,838
Publishing (0.6%)
1,700 Meredith Corp. 39,950
330 Wolters Kluwer NV + 39,167
79,117
Recreation Products - Other (0.3%)
15 Kuoni Reisen AG + 43,236
Retailers - Broadline (0.3%)
775 JC Penney Company, Inc. 37,006
Retailers - Specialty (0.6%)
850 Fastenal Company 33,150
1,850 Gibson Greetings, Inc. 37,925
71,075
Consumer, Non-Cyclical (4.2%)
Cosmetics (0.6%)
1,275 Avon Products, Inc. 78,572
Food - Other (1.8%)
1,625 Campbell Soup Company 83,078
500 Unilever NV # 98,125
775 Wm. Wrigley Jr. Company 45,144
226,347
Healthcare (0.8%)
2,175 United Healthcare Corp. 105,759
Pharmaceuticals (1.0%)
2,425 Covance, Inc. * 35,769
525 SmithKline Beecham PLC # 42,328
900 Teva Pharmaceutical Industries, Ltd. 45,675
123,772
Energy (0.5%)
Oil Companies - Major
325 The Royal Dutch/Shell Petroleum Group # $58,581
Financial (31.4%)
Banks (10.2%)
1,075 BankAmerica Corp. 125,641
2,350 Bank of New York Company, Inc. 92,825
7,305 Barclays PLC + 136,300
1,050 Cascade Bancorp 30,450
1,625 Chester Bancorp, Inc. 23,969
775 Citicorp 87,284
368 CLF-Dexia France + 34,089
4,000 Community Financial Corp. 57,000
515 Deutsche Bank AG + * 27,220
395 Deutsche Pfandbrief & Hypothekenbank AG + 21,425
1,825 First Defiance Financial Corp. 23,269
1,175 First Savings Bancorp, Inc. 23,206
1,800 GA Financial, Inc. 28,350
3,400 Home Bancorp Elgin, Inc. 51,000
3,115 Lloyds TSB Group PLC + 28,554
775 Northern Trust Corp. 34,487
4,075 Roslyn Bancorp, Inc. * 66,219
1,575 South Street Financial Corp. 25,397
3,200 Star Banc Corp 136,000
875 State Street Boston Corp. 68,906
1,150 Sterling Bancorp 18,400
600 Wells Fargo & Company 160,050
1,300,041
Diversified (3.9%)
6,850 Associates First Capital Corp. 351,062
4,150 Equifax, Inc. 119,313
925 First USA Paymentech, Inc. * 22,316
492,691
Insurance (8.6%)
1,325 AFLAC, Inc. 56,975
1,555 Delphi Financial Group, Inc. Class A * 55,202
750 Foremost Corp. of America 39,844
725 Liberty Corp. 28,094
1,025 Mercury General Corp. 63,550
10,200 Nationwide Financial Services, Inc. * 270,300
2,275 Protective Life Corp. 100,669
1,075 Reinsurance Group of America, Inc. 53,481
775 Transatlantic Holdings, Inc. 64,131
5,000 UCI, Inc. * 132,500
2,575 UNUM Corp. 198,275
1,725 Western National Corp. 44,419
1,107,440
Real Estate (2.5%)
2,400 Amli Residential Properties Trust 53,100
5,225 Innkeepers USA Trust 73,150
975 Mid-America Apartment Communities, Inc. 25,228
1,675 Redwood Trust, Inc. 78,725
4,175 Walden Residential Properties, Inc. 91,850
322,053
Savings & Loans (5.6%)
1,850 BostonFed Bancorp, Inc. $28,213
850 Calumet Bancorp, Inc. * 29,963
4,000 Citizens First Financial Corp. * 60,500
237 Downey Financial Corp. 4,592
4,000 Empire Federal Bancorp, Inc. 53,000
2,050 First Mutual Bancorp, Inc. 28,700
1,825 First Savings Bank Washington Bancorp, Inc. 38,325
1,525 Flushing Financial Corp. 28,212
6,575 Klamath First Bancorp, Inc. 116,706
5,000 Little Falls Bancorp, Inc. 65,000
975 Long Island Bancorp, Inc. 33,150
1,500 MFB Corp. 28,500
1,200 Ocean Financial Corp. * 35,475
3,000 Park Bancorp, Inc. * 43,125
2,175 Reliance Bancorp, Inc. 49,209
4,000 River Valley Bancorp * 57,000
1,375 Standard Financial, Inc. 31,453
731,123
Securities Brokers (0.6%)
1,975 Charles Schwab Corp. 72,334
Independent (1.5%)
Conglomerate
4,750 Philip Morris Companies, Inc. 187,031
Industrial (9.1%)
Containers and Packaging (0.4%)
1,025 Sealed Air Corp. * 47,406
Diversified (1.4%)
1,400 Minnesota Mining & Manufacturing Company 121,800
25 Raychem Corp. 1,612
750 United Technologies Corp. 56,719
180,131
Electronic Components and Equipment (3.5%)
7,875 Dionex Corp. * 384,891
512 Pittway Corp. Class A 27,264
925 UCAR International, Inc. * 38,850
451,005
Heavy Construction (0.2%)
500 Deere & Company 23,000
Other Industrial Services (2.6%)
475 Manpower, Inc. 19,059
5,125 Robert Half International, Inc. * 201,156
1,525 Roper Industries, Inc. 62,334
23 SGS Societe Generale de Surveillance
Holding SA + 47,689
330,238
Trucking (1.0%)
6,200 Consolidated Freightways, Inc. * 68,200
1,950 Roadway Express, Inc. 34,125
1,200 Yellow Corp. * 23,100
125,425
Technology (1.9%)
Communications (0.5%)
1,895 Rhone-Poulenc Rorer, Inc. + $63,811
Diversified (0.7%)
200 Philips Electronics NV # 10,700
1,395 Philips Electronics NV + 72,925
83,625
Industrial Technology (0.2%)
1,275 Pfeiffer Vacuum Technology SpA # * 29,644
Software (0.5%)
1,300 Parametric Technology Corp. * 58,825
Utilities (1.8%)
Gas (0.8%)
4,068 Southern Union Company 97,124
Telephone (1.0%)
2,300 Cincinnati Bell, Inc. 128,800
Total Common Stock (cost $6,446,848) 7,301,882
NON-CONVERTIBLE PREFERRED STOCK (2.1%)
Energy (0.9%)
Oil Companies - Major
2,000 Unocal Capital Trust Corp. 112,500
Utilities (1.2%)
Telephone
2,845 Salomon, Inc. 159,320
Total Non-Convertible Preferred Stock (cost $274,313) 271,820
Principal Description Value
CONVERTIBLE CORPORATE BONDS (1.2%)
Consumer, Cyclical
Recreation Products - Other (0.3%)
$46,000 Outboard Marine Corp.
7.000% 7-1-02 42,550
Retailers - Broadline (0.9%)
124,000 Costco Companies, Inc.
5.750% 5-15-02 121,520
Total Convertible Corporate Bonds (cost $169,394) 164,070
NON-CONVERTIBLE CORPORATE BONDS (17.0%)
Consumer, Cyclical (3.0%)
Entertainment (0.9%)
120,000 Walt Disney Company
6.375% 3-30-01 118,200
Retailers - Broadline (2.1%)
275,000 Sears Roebuck Acceptance Corp.
6.500% 6-15-00 272,250
NON-CONVERTIBLE CORPORATE BONDS (continued)
Financial (12.0%)
Banks (5.9%)
$200,000 Bank of Boston Corp.
6.625% 12-1-05 $190,750
200,000 First Nationwide Holding Corp.
10.625% 10-1-03 213,000
150,000 First Nationwide Holdings, Inc.
9.125% 1-15-03 151,125
200,000 First USA Bank of Wilmington Delaware, Inc.
5.750% 1-15-99 197,500
752,375
Diversified (6.1%)
400,000 Associates Corp. of North America
5.600% 1-15-01 383,500
400,000 International Lease Finance Corp.
5.750% 12-15-99 392,000
775,500
Industrial (1.2%)
Diversified
145,000 Dade International, Inc.
11.125% 5-1-06 158,413
Technology (0.8%)
Aerospace/Defense
100,000 Lockheed Martin Corp.
6.550% 5-15-99 100,000
Total Non-Convertible Corporate Bonds (cost $2,196,882) 2,176,738
LONG-TERM GOVERNMENT BONDS (16.8%)
United States Government Securities
Treasury Note
325,000 5.875% 2-15-00 320,502
200,000 5.625% 2-28-01 194,068
200,000 5.875% 11-15-99 197,612
100,000 6.125% 5-15-98 100,139
300,000 6.250% 2-15-07 289,986
900,000 6.375% 5-15-99 901,224
150,000 6.625% 2-15-27 143,604
Total Long-Term Government Bonds (cost $2,153,418) 2,147,135
SHORT-TERM SECURITIES (4.8%)
Commercial Paper (4.7%)
600,000 Ford Motor Credit Corp.
5.600% 5-1-97 600,000
Repurchase Agreement (0.1%)
10,268 State Street Bank & Trust ***
4.250% Repurchase Agreement
dated 4-30-97 to be repurchased
at $10,269 on 5-1-97 10,268
Total Short-Term Securities (cost $610,268) 610,268
Total Investments (99.1%) (cost $11,851,123) 12,671,913
Notional
Amount Description Value
UNREALIZED GAIN(LOSS) ON FORWARD
FOREIGN CURRENCY CONTRACTS (-0.1%) @
A 128,006 Austrian Schilling 5-5-97 Sell $211
B 3,764 British Pound 5-1-97 Sell (2)
B 20,743 British Pound 5-1-97 Sell (8)
B 1,259 British Pound 5-2-97 Sell (3)
B 80,000 British Pound 7-28-97 Sell (683)
B 350,000 British Pound 8-20-97 Sell (8,832)
B 315,000 British Pound 8-20-97 Buy 4,485
D 3,536 German Deutschemark 5-5-97 Buy (7)
F 240,000 French Franc 10-10-97 Sell 545
G 30,611 Dutch Guilder 5-1-97 Buy (48)
G 13,967 Dutch Guilder 5-2-97 Sell (20)
G 4,962 Dutch Guilder 5-2-97 Buy 7
G 29,566 Dutch Guilder 5-5-97 Sell 38
G 9,344 Dutch Guilder 5-5-97 Buy (12)
P 30,513 Spanish Peseta 5-6-97 Sell 1
S 53,487 Swiss Franc 5-5-97 Buy (85)
S 95,000 Swiss Franc 6-17-97 Sell 590
S 75,000 Swiss Franc 6-17-97 Buy (418)
S 20,000 Swiss Franc 6-17-97 Buy (135)
Total Unrealized Gain(Loss) on Forward Foreign
Currency Contracts (4,376)
Other Assets in Excess of Liabilities (1.0%) 129,510
Net Assets (100.0%) $12,797,047
</TABLE>
<TABLE>
<CAPTION>
April 30, 1997
SCHEDULE OF INVESTMENTS (unaudited)
FLEXIBLE INCOME PORTFOLIO
<S> <C> <C>
Description Principal Value
NON-CONVERTIBLE CORPORATE BONDS (78.2%)
Basic Materials (3.0%)
Steel
Weirton Steel Corp.
11.375% 7-1-04 $ 490,000 $ 502,250
Consumer, Cyclical (15.2%)
Airlines (1.1%)
ValuJet, Inc.
10.250% 4-15-01 200,000 186,250
Auto Parts and Equipment (1.0%)
Federal-Mogul Corp.
8.800% 4-15-07 160,000 161,400
Broadcasting (1.9%)
Sinclair Broadcast Group, Inc.
10.000% 9-30-05 325,000 329,063
Entertainment (4.5%)
Time Warner, Inc.
7.750% 6-15-05 300,000 299,250
United Artists Theatres
9.300% 7-1-15 491,573 452,862
752,112
Home Furnishings (3.8%)
Selmer Company, Inc.
11.000% 5-15-05 600,000 648,000
Retailers - Specialty (2.9%)
GFSI, Inc.
9.625% 3-1-07 500,000 489,375
Consumer, Non-Cyclical (10.6%)
Beverages (2.3%)
Dr. Pepper Bottling Company of Texas, Inc.
0.000% (until 2-15-98,
11.625% thereafter) 2-15-03 400,000 389,000
Food - Other (2.8%)
Ralston Purina Company
7.875% 6-15-25 475,000 475,594
Healthcare (3.8%)
Tenet Healthcare Corp.
8.625% 12-1-03 100,000 102,000
10.125% 3-1-05 500,000 537,500
639,500
Household Products (1.7%)
Sherwin-Williams Company
6.850% 2-1-07 290,000 283,113
Financial (29.8%)
Banks (12.5%)
Anchor Bancorp, Inc.
8.937% 7-9-03 500,000 513,750
First National Bank of Boston, Inc.
7.375% 9-15-06 300,000 298,875
First Nationwide Holding Corp.
10.625% 10-1-03 250,000 266,250
Hubco, Inc.
8.200% 9-15-06 300,000 307,875
Standard Federal Bancorp, Inc.
7.750% 7-17-06 $ 250,000 $ 254,687
Swiss Bank Corp.
7.000% 10-15-15 500,000 470,000
2,111,437
Diversified (11.6%)
Ford Motor Credit Company
6.750% 8-15-08 750,000 710,625
Intertek Finance PLC
10.250% 11-1-06 500,000 512,500
Lifestyle Furnishings, Inc.
10.875% 8-1-06 400,000 428,000
Unifrax Investment Corp.
10.500% 11-1-03 250,000 255,000
Wilshire Financial Services Group, Inc.
13.000% 1-1-04 60,000 59,325
1,965,450
Insurance (5.7%)
Delphi Financial Group, Inc.
8.000% 10-1-03 500,000 497,500
Orion Capital Corp.
7.250% 7-15-05 400,000 394,000
Penncorp Financial Group
9.250% 12-15-03 75,000 78,000
969,500
Industrial (7.6%)
Diversified (6.3%)
Consolidated Cigar Acquisition Corp.
10.500% 3-1-03 390,000 410,475
USG Corp.
9.250% 9-15-01 Series B 400,000 419,500
8.500% 8-1-05 225,000 228,094
1,058,069
Transportation Equipment (1.3%)
Ryder TRS, Inc.
10.000% 12-1-06 225,000 226,687
Technology (9.5%)
Advanced Medical Devices (1.5%)
IMED Corp.
9.750% 12-1-06 250,000 249,375
Computers (1.8%)
International Business Machines Corp.
7.500% 6-15-13 300,000 301,875
Diversified (3.1%)
Neodata Services, Inc.
12.000% 5-1-03 500,000 532,500
Industrial Technology (3.1%)
American Standard Companies, Inc.
11.375% 5-15-04 500,000 531,250
Utilities (2.5%)
Electric
El Paso Electric Company
9.400% 5-1-11 400,000 425,500
Total Non-Convertible Corporate Bonds
(cost $13,106,129) 13,227,300
CONVERTIBLE CORPORATE BONDS (2.2%)
Industrial
Diversified
Pegasus Media & Communications, Inc.
12.500% 7-1-05 (cost $350,000) $ 350,000 $ 376,250
LONG-TERM GOVERNMENT BONDS (5.8%)
United States Government Securities
Treasury Notes ##
6.500% 10-15-06 (cost $1,012,446) 1,000,000 982,730
Description Shares Value
NON-CONVERTIBLE PREFERRED STOCK (1.4%)
Financial
Banks
California Federal Bank, Series A 5,000 $ 125,625
Chevy Chase Bank 3,500 104,562
Total Non-Convertible Preferred Stock
(cost $241,375) 230,187
SHORT-TERM SECURITIES (10.3%)
Commercial Paper (10.1%)
American Express Company
5.550% 5-1-97 $ 600,000 $ 600,000
General Electric Capital Corp.
5.620% 5-1-97 500,000 500,000
Household Finance Company
5.580% 5-1-97 600,000 600,000
1,700,000
Repurchase Agreement (0.2%)
State Street Bank & Trust ***
4.250% Repurchase Agreement
dated 4-30-97 to be repurchased
at $29,703 on 5-1-97 29,699 29,699
Total Short-Term Securities (cost $1,729,699) 1,729,699
Total Investments (97.9%) (cost $16,439,649) 16,546,166
Other Assets in Excess of Liabilities (2.1%) 359,656
Net Assets (100.0%) $ 16,905,822
</TABLE>
<TABLE>
<CAPTION>
April 30, 1997
SCHEDULE OF INVESTMENTS (unaudited)
INCOME PLUS PORTFOLIO
<S> <C> <C>
Description Principal Value
NON-CONVERTIBLE CORPORATE BONDS (91.6%)
Basic Materials (4.0%)
Precious Metals
Inco, Ltd.
9.600% 6-15-22 $ 2,500,000 $ 2,678,750
Consumer, Cyclical (24.7%)
Airlines (2.1%)
Piedmont Aviation, Inc.
10.100% 5-13-07 1,048,000 990,360
USAir, Inc.
10.800% 1-1-05 400,000 395,500
1,385,860
Auto Parts and Equipment (3.6%)
Mark IV Industries, Inc.
8.750% 4-1-03 2,430,000 2,430,000
Broadcasting (1.9%)
Walt Disney Company 144A
2.000% 3-1-00 1,000,000 1,267,500
Casinos (4.3%)
Circus Circus Enterprises, Inc.
6.450% 2-1-06 2,000,000 1,848,040
Majestic Star LLC
12.750% 5-15-03 1,000,000 1,075,000
2,923,040
Entertainment (1.6%)
Mattel, Inc.
10.125% 8-15-02 1,000,000 1,049,000
Home Construction (1.5%)
M.D.C. Holdings, Inc.
11.125% 12-15-03 1,000,000 1,025,000
Publishing (5.3%)
Golden Books Publishing, Inc.
7.650% 9-15-02 2,250,000 2,002,500
News America Holdings, Inc.
8.625% 2-1-03 1,500,000 1,585,575
3,588,075
Retailers - Broadline (4.4%)
Dayton Hudson Corp.
8.500% 12-1-22 2,000,000 2,021,400
Kmart Corp.
8.125% 12-1-06 1,000,000 955,000
2,976,400
Consumer, Non-Cyclical (11.5%)
Consumer Services (2.8%)
Hertz Corp.
6.000% 1-15-03 2,000,000 1,898,980
Food - Other (2.1%)
Flemming Companies, Inc.
7.785% 12-15-01 1,500,000 1,395,000
Food Retailers (4.5%)
American Stores Company
9.125% 4-1-02 $ 1,000,000 $ 1,079,990
Great Atlantic & Pacific Tea, Inc.
7.700% 1-15-04 2,000,000 1,983,860
3,063,850
Medical Supplies (2.1%)
C. R. Bard, Inc.
6.700% 12-1-26 1,500,000 1,434,375
Energy (11.2%)
Oil Drilling (4.3%)
Louisiana Land Exploration Company
7.625% 4-15-13 2,000,000 1,979,600
Maxus Energy Corp.
11.250% 5-1-13 905,000 923,100
2,902,700
Oilfield Equipment and Services (1.5%)
McDermott, Inc.
9.375% 3-15-02 1,000,000 1,012,050
Pipelines (5.4%)
Enron Corp.
6.750% 7-1-05 2,500,000 2,411,525
Williams Companies, Inc.
10.250% 7-15-20 1,000,000 1,252,130
3,663,655
Financial (18.1%)
Banks (6.0%)
Bank of Boston Corp.
8.250% 12-15-26 2,000,000 1,991,850
Citicorp
9.500% 2-1-02 1,000,000 1,096,980
Peoples Bank
7.200% 12-1-06 1,000,000 958,350
4,047,180
Diversified (7.5%)
BAT Capital Corp.
6.500% 11-24-03 2,000,000 1,913,200
Continental Bank N.A.
11.250% 7-1-01 1,100,000 1,157,728
GNS Financial Corp.
9.250% 3-15-03 1,000,000 1,054,850
Imperial Credit Industries, Inc. 144A
9.875% 1-15-07 1,000,000 942,500
5,068,278
Insurance (1.6%)
American Financial Group, Inc.
10.625% 4-15-00 1,000,000 1,090,370
Securities Brokers (3.0%)
Lehman Brothers, Inc.
7.625% 6-1-06 2,000,000 2,000,980
Independent (2.8%)
Conglomerate
ITT Corp.
6.750% 11-15-05 $ 2,000,000 $ 1,879,640
Industrial (7.5%)
Air Freight (1.6%)
Federal Express Corp.
9.625% 10-15-19 1,000,000 1,058,270
Containers and Packaging (1.5%)
Stone Container Corp.
11.875% 8-1-16 1,000,000 1,015,000
Other Industrial Services (1.5%)
Figgie International, Inc.
9.875% 10-1-99 1,000,000 1,037,500
Transportation Equipment (2.9%)
AAR Corp.
7.250% 10-15-03 2,000,000 1,926,380
Technology (1.5%)
Semiconductors
Fairchild Semiconductor Corp.
10.125% 3-15-07 1,000,000 1,012,500
Utilities (10.3%)
Electric (5.9%)
El Paso Electric Company
8.250% 2-1-03 1,000,000 1,020,160
8.900% 2-1-06 500,000 523,230
First PV Funding Corp.
10.300% 1-15-14 895,000 950,938
Texas Utilities Electric Company
6.750% 4-1-03 1,500,000 1,473,345
3,967,673
Telephone (4.4%)
US West Capital Funding, Inc.
7.900% 2-1-27 3,000,000 2,958,750
Total Non-Convertible Corporate Bonds
(cost $60,577,552 ) 61,756,756
CONVERTIBLE PREFERRED STOCK (3.4%)
Technology
Communications
Time Warner, Inc. 144A (cost $2,203,860) 2,206 $ 2,365,935
SHORT-TERM SECURITIES (3.3%)
Commercial Paper
Enterprise Funding Corp.
5.400% 5-1-97 (cost $ 2,200,000 ) $2,200,000 2,200,000
Total Investments (98.3%) (cost $64,981,412) 66,322,691
Other Assets in Excess of Liabilities (1.7%) 1,174,169
Net Assets (100.0%) $ 67,496,860
</TABLE>
<TABLE>
<CAPTION>
April 30, 1997
SCHEDULE OF INVESTMENTS (unaudited)
TAX-EXEMPT PORTFOLIO
<S> <C> <C>
Description ** Principal Value
MUNICIPAL BONDS (98.2%)
Alabama (4.2%)
City of Huntsville, Public Building Authority,
Revenue Bonds, Series 1996A,
6.000%, 10-1-25, AAA/Aaa $ 1,000,000 $ 1,012,300
California (0.3%)
Los Angeles, Convention and Exhibition
Center, Certificates of Participation,
9.000%, 12-1-20, AAA/Aaa 50,000 64,062
Florida (4.0%)
Hillsborough County School District,
Sales Tax Revenue Bonds, Series 1996
4.600%, 10-1-04, NR/Aaa 1,000,000 969,030
Illinois (16.5%)
Calumet City, General Obligation Bonds,
Series B, 5.350%, 1-1-17, NR/Aaa 1,000,000 949,770
Illinois State Dedicated Civic Center Tax,
Revenue Bonds, Series A,
6.000%, 12-15-15, AAA/Aaa 1,000,000 1,005,730
McHenry County Community School District,
General Obligation Bonds, Series 1996
5.850%, 1-1-16, AAA/NR 1,000,000 1,003,050
West Chicago, IDR-Leggett and Platt, Inc.
Project, Revenue Bonds, Series 1994,
6.900%, 9-1-24, A/NR 1,000,000 1,042,180
4,000,730
Iowa (12.4%)
Iowa Finance Authority, Drake University
Project, Revenue Bonds,
5.400%, 12-1-16, AAA/Aaa 1,000,000 953,490
Iowa Higher Education Loan Authority,
St. Ambrose University Project, Revenue
Bonds, 5.750%, 2-1-11, BBB/NR 1,000,000 969,430
Iowa State Certificate of Participation,
Revenue Bonds, Series 1992A,
6.500%, 7-1-06, AAA/Aaa 1,000,000 1,080,620
3,003,540
Kentucky (4.1%)
Jefferson County, Pollution Control,
Revenue Bonds, Series A,
5.900%, 4-15-23, AA/Aa2 1,000,000 1,005,050
Maine (4.2%)
Maine State Housing Authority, Mortgage
Revenue AMT Bonds, Series A-1
6.500%, 11-15-27, AAA/Aaa 1,000,000 1,027,720
Massachusetts (4.2%)
Massachusetts State Housing Finance
Agency, Series 1993A
6.300%, 10-1-13, A+/A1 1,000,000 1,023,050
Michigan (8.1%)
Detroit School District, General Obligation
Bonds, 6.250%, 5-1-12, AA/Aa 1,000,000 1,039,970
Michigan State Building Authority, Revenue
Refunding Special Sinking Fund, Series
1992A, 6.800%, 10-1-21, AA-/A1 855,000 925,862
1,965,832
Nebraska (4.3%)
Nebraska Higher Education Loan Program,
Revenue AMT Bonds, Series 1992A-6,
6.950%, 6-1-08, NR/A $ 1,000,000 $ 1,055,310
Nevada (8.1%)
Municipal Bond Authority, Project No. 52,
Series A, 6.000%, 5-15-24, AA/Aa 1,000,000 1,006,710
Salt Lake County, Municipal Building
Authority, Revenue Bonds,
5.850%, 10-1-17, A/A1 1,000,000 965,210
1,971,920
Ohio (4.1%)
Franklin County Hospital, Holy Cross Health
Systems Corp., Revenue Bonds,
5.800%, 6-1-16, AA/Aa3 1,000,000 996,740
Pennsylvania (4.1%)
Pennsylvania Housing Finance Agency,
Multi-Family Mortgage Revenue
Bonds, Series 1985A,
9.375%, 8-1-28, AAA/Aa 5,000 5,089
Quakertown Pennsylvania, General Authority
Revenue Bonds, Put Bonds - Weekly
4.550%, 7-1-26, NR/A1 1,000,000 1,000,000
1,005,089
South Carolina (3.3%)
Piedmont Municipal Power Agency,
Revenue Bonds, Put Bonds - Weekly
3.350%, 1-1-22, AAA/Aaa 800,000 800,000
South Dakota (4.1%)
Sioux Falls South Dakota School District,
Number 49-5 Refunding Capital Outlay
Certificates, Series 1992B,
5.750%, 7-1-12, AAA/Aaa 1,000,000 1,004,340
Texas (4.0%)
Carroll Independent School District,
General Obligation Bonds,
5.625%, 2-15-19, AAA/Aaa 1,000,000 969,990
Washington (4.1%)
Washington State, General Obligation Bonds
Series A, 5.750%, 2-1-17 AA/Aa 1,000,000 983,680
Wyoming (4.1%)
Wyoming State Farm Loan Board, Capital
Facilities Revenue Bonds,
5.750%, 10-1-20, AA-/NR 1,000,000 996,120
Total Investments (98.2%) (cost $23,767,685) 23,854,503
Other Assets in Excess of Liabilities (1.8%) 427,811
Net Assets (100.0%) $ 24,282,314
</TABLE>
April 30, 1997
SCHEDULE OF INVESTMENTS (unaudited)
NOTES TO SCHEDULE OF INVESTMENTS
+ Foreign securities.
# American Depository Receipts or Global Depository Receipts.
* Presently non-income producing.
@ Notional amount of forward foreign currency contracts and principal amount
of foreign bonds are denominated in the indicated currency: A-Austrian
Schilling; B-British Pound; D-German Deutschemark; F-French Franc;
G-Dutch Guilder; H-Hong Kong Dollar; J-Japanese Yen; K-Swedish Krona;
M-Finnish Markka; P-Spanish Peseta; R-South African Rand; S-Swiss Franc.
** Ratings indicated are by Standard and Poor's/Moody's, respectively,
and are unaudited; NR: not rated by this service.
## U.S. Treasury Notes owned by Flexible Income with an aggregate market
value of $2,139,375 have been segregated with the custodian to cover
margin requirements on twenty, 10 year U.S. Treasury Note June 1997
futures contracts. At April 30, 1997 the Portfolio had unrealized gains
of $11,063 and variation margin payable of $26,875 on these contracts.
See Note 2 to financial statements for security valuation and other significant
accounting policies.
See Note 5 to financial statements for futures, forward currency contracts and
other derivative transactions.
See Note 6 to financial statements for cost and unrealized appreciation and
depreciation of investments for Federal income tax purposes.
*** Aggressive Growth Portfolio
Collateralized by $495,000 principal of U.S. Treasury Bonds 8.750% due 8-15-20;
market value and accrued interest aggregated $593,031 for this collateral at
April 30, 1997.
*** International Equity Portfolio
Collateralized by $50,000 principal of U.S. Treasury Bonds 8.750% due 5-15-17;
market value and accrued interest aggregated $60,577 for this collateral at
April 30, 1997.
*** Capital Appreciation Portfolio
Collateralized by $45,000 principal of U.S. Treasury Bonds 8.875% due 8-15-17;
market value and accrued interest aggregated $54,141 for this collateral at
April 30, 1997.
*** Global Portfolio
Collateralized by $15,000 principal of U.S. Treasury Notes 5.000% due 2-15-99;
market value and accrued interest aggregated $14,816 for this collateral at
April 30, 1997.
*** Growth Portfolio
Collateralized by $65,000 principal of U.S. Treasury Bonds 9.125% due 5-15-18;
market value and accrued interest aggregated $81,685 for this collateral at
April 30, 1997.
*** Strategic Total Return Portfolio
Collateralized by $400,000 principal of U.S. Treasury Bonds 8.750% due 8-15-20;
market value and accrued interest aggregated $479,217 for this collateral at
April 30, 1997.
*** Tactical Asset Allocation Portfolio
Collateralized by $155,000 principal of U.S. Treasury Notes 5.250% due 7-31-98;
market value and accrued interest aggregated $155,426 for this collateral at
April 30, 1997.
*** Balanced Portfolio
Collateralized by $10,000 principal of U.S. Treasury Bonds 8.750% due 5-15-17;
market value and accrued interest aggregated $12,115 for this collateral at
April 30, 1997.
*** Flexible Income Portfolio
Collateralized by $25,000 principal of U.S. Treasury Bonds 9.000% due 11-15-18;
market value and accrued interest aggregated $31,102 for this collateral at
April 30, 1997.
<TABLE>
<CAPTION>
April 30, 1997
STATEMENTS OF ASSETS AND LIABILITIES (unaudited)
All numbers (except per share amounts) in thousands
<S> <C> <C> <C> <C>
Aggressive International Capital
Growth Equity Appreciation Global
Assets:
Investment securities,
at market value $29,424 $1,545 $21,334 $213,348
Cash 45 17 19 3,502
Receivables:
Investment securities sold 176 1 40 1,057
Shares of beneficial
interest sold 3 1 378
Interest - - - -
Dividends 10 4 6 485
Due from investment adviser - 7 - -
Forward foreign currency contracts - 3 34 2,884
Other 1 - 3 396
29,659 1,577 21,437 222,050
Liabilities:
Accounts payable:
Investment securities purchased 354 57 106 11,144
Shares of beneficial interest
redeemed - - - 5
Due to custodian - - - -
Accrued liabilities:
Management and advisory fees 21 - 23 65
Distribution fees 13 - 8 73
Transfer agent fees and expenses 13 2 5 101
Forward foreign currency contracts - - 9 66
Other 1 4 - 106
402 63 151 11,560
Net Assets $29,257 $1,514 $21,286 $210,490
Investment securities, at cost $26,123 $1,529 $20,124 $184,802
Net Asset Value Per Share:
Class A shares $15.67 $10.26 $13.15 $21.32
Class B shares $15.52 $10.25 $13.04 $21.00
Class C shares $15.54 $10.25 $13.05 $20.91
Class T shares (1)
Offering price per share (2):
Class A shares $16.58 $10.86 $13.92 $22.56
Class T shares (1)
</TABLE>
(1) Class T shares are not available to new investors; only existing Class T
shareholders may purchase additional Class T shares.
(2) Includes the maximum selling commission (represented as a percentage of
offering price) which is reduced on certain levels of sales as set forth in the
Prospectus.
Net asset value per share for Class B and Class C shares represents
offering price. The redemption price for class B equals net asset value less
any applicable contingent deferred sales charges.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
April 30, 1997
STATEMENTS OF ASSETS AND LIABILITIES (unaudited)
All numbers (except per share amounts) in thousands
<S> <C> <C> <C>
Value
Growth C.A.S.E. Equity
Assets:
Investment securities, at market value $1,145,792 $4,373 $3,951
Cash - - 9
Receivables:
Investment securities sold 3,515 312 9
Shares of beneficial interest sold 80 - -
Interest 95 - -
Dividends 1,292 2 3
Due from investment adviser - 32 14
Forward foreign currency contracts - - -
Other 36 26 -
1,150,810 4,745 3,986
Liabilities:
Accounts payable:
Investment securities purchased 3,282 - -
Shares of beneficial interest redeemed 94 - -
Due to custodian 256 37 -
Accrued liabilities:
Management and advisory fees 18 - -
Distribution fees 170 2 2
Transfer agent fees and expenses 306 2 6
Forward foreign currency contracts - - -
Other 79 1 11
4,205 42 19
Net Assets $1,146,605 $4,703 $3,967
Investment securities, at cost $874,835 $4,151 $3,914
Net Asset Value Per Share:
Class A shares $22.01 $10.58 $10.12
Class B shares $21.58 $10.56 $10.11
Class C shares $21.65 $10.56 $10.11
Class T shares (1) $22.25
Offering price per share (2):
Class A shares $23.29 $11.20 $10.71
Class T shares (1) $24.32
</TABLE>
(1) Class T shares are not available to new investors; only existing Class T
shareholders may purchase additional Class T shares.
(2) Includes the maximum selling commission (represented as a percentage of
offering price) which is reduced on certain levels of sales as set forth in the
Prospectus.
Net asset value per share for Class B and Class C shares represents
offering price. The redemption price for class B equals net asset value less
any applicable contingent deferred sales charges.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
April 30, 1997
STATEMENTS OF ASSETS AND LIABILITIES (unaudited)
All numbers (except per share amounts) in thousands
<S> <C> <C> <C>
StrategicTactical Asset
Total Return Allocation Balanced
Assets:
Investment securities, at market value $20,704 $21,905 $12,672
Cash - - 2
Receivables:
Investment securities sold - - 294
Shares of beneficial interest sold - 3 -
Interest 103 60 99
Dividends 19 15 10
Due from investment adviser - - 4
Forward foreign currency contracts - - 6
Other - 1 5
20,826 21,984 13,092
Liabilities:
Accounts payable:
Investment securities purchased 113 - 277
Shares of beneficial interest redeemed - - -
Due to custodian 25 49 -
Accrued liabilities:
Management and advisory fees 19 35 -
Distribution fees 8 12 5
Transfer agent fees and expenses 4 4 2
Forward foreign currency contracts - - 10
Other 1 5 1
170 105 295
Net Assets $20,656 $21,879 $12,797
Investment securities, at cost $18,603 $20,708 $11,851
Net Asset Value Per Share:
Class A shares $14.07 $11.83 $12.45
Class B shares $14.06 $11.82 $12.44
Class C shares $14.06 $11.82 $12.44
Class T shares (1)
Offering price per share (2):
Class A shares $14.89 $12.52 $13.17
Class T shares (1)
</TABLE>
(1) Class T shares are not available to new investors; only existing Class T
shareholders may purchase additional Class T shares.
(2) Includes the maximum selling commission (represented as a percentage of
offering price) which is reduced on certain levels of sales as set forth in the
Prospectus.
Net asset value per share for Class B and Class C shares represents
offering price. The redemption price for class B equals net asset value less
any applicable contingent deferred sales charges.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
April 30, 1997
STATEMENTS OF ASSETS AND LIABILITIES (unaudited)
All numbers (except per share amounts) in thousands
<S> <C> <C> <C>
Flexible Income Tax-
Income Plus Exempt
Assets:
Investment securities, at market value $16,546 $66,323 $23,855
15 - 80
Receivables:
Investment securities sold 62 - -
Shares of beneficial interest sold - - -
Interest 359 1,377 353
Dividends - - -
Due from investment adviser - - 2
Forward foreign currency contracts - - -
Other - 509 -
16,982 68,209 24,290
Liabilities:
Accounts payable:
Investment securities purchased - - -
Shares of beneficial interest redeemed - 2 -
Due to custodian - 105 -
Accrued liabilities:
Management and advisory fees 32 33 -
Distribution fees 6 21 7
Transfer agent fees and expenses 8 15 -
Forward foreign currency contracts - - -
Other 30 536 1
76 712 8
Net Assets $16,906 $67,497 $24,282
Investment securities, at cost $16,440 $64,981 $23,768
Net Asset Value Per Share:
Class A shares $9.27 $10.41 $11.29
Class B shares $9.27 $10.41 $11.28
Class C shares $9.27 $10.41 $11.28
Class T shares (1)
Offering price per share (2):
Class A shares $9.73 $10.93 $11.85
Class T shares (1)
</TABLE>
(1) Class T shares are not available to new investors; only existing Class T
shareholders may purchase additional Class T shares.
(2) Includes the maximum selling commission (represented as a percentage of
offering price) which is reduced on certain levels of sales as set forth in the
Prospectus.
Net asset value per share for Class B and Class C shares represents
offering price. The redemption price for class B equals net asset value less
any applicable contingent deferred sales charges.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES (continued)
All numbers in thousands
<S> <C> <C> <C>
Aggressive International
Growth Equity
1997 (1)1996 (2) 1997 (3)
Net Assets Consist Of:
Shares of beneficial interest,
unlimited shares authorized $27,384 $24,014 $1,478
Undistributed net investment
income (loss) (166) (1) 3
Undistributed net realized gain
(loss) from investments
and foreign currency transactions (1,262) (1,455) 14
Net unrealized appreciation of
investments and on translation of
assets and liabilities in foreign
currencies 3,301 3,501 19
Total net assets $29,257 $26,059 $1,514
Shares Of Beneficial Interest:
Class A:
Shares sold 352 45 133
Shares issued on reinvestment of
distributions 60 - -
Shares redeemed (299) (50) (1)
Net increase (decrease) in shares
outstanding 113 (5) 132
Shares outstanding at
beginning of period 1,397 1,402 -
Shares outstanding at
end of period 1,510 1,397 132
Class B:
Shares sold 75 13 12
Shares issued on reinvestment of
distributions 6 - -
Shares redeemed (12) - -
Net increase (decrease) in shares
outstanding 69 13 12
Shares outstanding at beginning
of period 128 115 -
Shares outstanding at end
of period 197 128 12
Class C:
Shares sold 57 3 3
Shares issued on reinvestment of
distributions 6 - -
Shares redeemed (37) (10) -
Net increase (decrease) in shares
outstanding 26 (7) 3
Shares outstanding at beginning
of period 137 144 -
Shares outstanding at end
of period 163 137 3
Class T:
Shares sold
Shares issued on reinvestment of
distributions
Shares redeemed
Net increase (decrease) in
shares outstanding
Shares outstanding at beginning
of period
Shares outstanding at end
of period
</TABLE>
(1) For the six month period ended April 30, 1997, unaudited.
(2) For the one month ended October 31, 1996.
(3) From commencement of investment operations on February 3, 1997 through
April 30, 1997, unaudited.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES (continued)
All numbers in thousands
Capital
Appreciation Global
<S> <C> <C> <C> <C>
1997 (1) 1996 (2) 1997 (1) 1996 (2)
Net Assets Consist Of:
Shares of beneficial interest,
unlimited shares authorized $21,802 $20,480 $171,836 $112,843
Undistributed net investment
income (loss) (169) (1) (698) (13)
Undistributed net realized gain
(loss) from investments
and foreign currency
transactions (1,583) 285 7,995 15,055
Net unrealized appreciation of
investments and on translation
of assets and liabilities in
foreign currencies 1,236 2,961 31,357 22,542
Total net assets $21,286 $23,725 $210,490 $150,427
Shares Of Beneficial Interest:
Class A:
Shares sold 1,116 231 3,249 341
Shares issued on reinvestment
of distributions 18 - 679 -
Shares redeemed (1,069) (170) (1,964) (130)
Net increase (decrease) in
shares outstanding 65 61 1,964 211
Shares outstanding at
beginning of period 1,249 1,188 6,349 6,138
Shares outstanding at
end of period 1,314 1,249 8,313 6,349
Class B:
Shares sold 63 14 581 49
Shares issued on reinvestment
of distributions 2 - 38 -
Shares redeemed (29) (5) (12) (4)
Net increase (decrease) in
shares outstanding 36 9 607 45
Shares outstanding at
beginning of period 138 129 282 237
Shares outstanding at
end of period 174 138 889 282
Class C:
Shares sold 36 7 287 35
Shares issued on reinvestment
of distributions 2 - 49 -
Shares redeemed (51) (13) (46) (9)
Net increase (decrease) in
shares outstanding (13) (6) 290 26
Shares outstanding at
beginning of period 145 151 410 384
Shares outstanding at
end of period 132 145 700 410
Class T:
Shares sold
Shares issued on reinvestment
of distributions
Shares redeemed
Net increase (decrease) in
shares outstanding
Shares outstanding at
beginning of period
Shares outstanding at
end of period
</TABLE>
(1) For the six month period ended April 30, 1997, unaudited.
(2) For the one month ended October 31, 1996.
(3) From commencement of investment operations on February 3, 1997 through
April 30, 1997, unaudited.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES (continued)
All numbers in thousands
Growth C.A.S.E.
<S> <C> <C> <C> <C>
1997 (1) 1996 (2) 1997 (1) 1996 (2)
Net Assets Consist Of:
Shares of beneficial interest,
unlimited shares authorized $793,804 $805,278 $4,570 $3,401
Undistributed net investment
income (loss) 812 20 (12) 175
Undistributed net realized gain
(loss) from investments
and foreign currency
transactions 80,036 23,722 (77) (178)
Net unrealized appreciation of
investments and on translation
of assets and liabilities in
foreign currencies 270,953 326,154 222 123
Total net assets $1,145,605 $1,155,174 $4,703 $3,521
Shares Of Beneficial Interest:
Class A:
Shares sold 4,318 690 77 20
Shares issued on reinvestment
of distributions 523 - 9 -
Shares redeemed (4,972) (523) (38) (1)
Net increase (decrease) in
shares outstanding (131) 167 48 19
Shares outstanding at
beginning of period 25,720 25,553 158 139
Shares outstanding at
end of period 25,589 25,720 206 158
Class B:
Shares sold 172 36 56 6
Shares issued on reinvestment
of distributions 6 - 4 -
Shares redeemed (17) (1) (28) (2)
Net increase (decrease) in
shares outstanding 161 35 32 4
Shares outstanding at
beginning of period 243 208 110 106
Shares outstanding at
end of period 404 243 142 110
Class C:
Shares sold 186 21 67 14
Shares issued on reinvestment
of distributions 12 - 4 -
Shares redeemed (102) (22) (39) (8)
Net increase (decrease) in
shares outstanding 96 (1) 32 6
Shares outstanding at
beginning of period 509 510 65 59
Shares outstanding at
end of period 605 509 97 65
Class T:
Shares sold 1,042 136
Shares issued on reinvestment
of distributions 531 -
Shares redeemed (2,221) (381)
Net increase (decrease) in
shares outstanding (648) (245)
Shares outstanding at
beginning of period 25,887 26,132
Shares outstanding at
end of period 25,239 25,887
</TABLE>
(1) For the six month period ended April 30, 1997, unaudited.
(2) For the one month ended October 31, 1996.
(3) From commencement of investment operations on February 3, 1997 through
April 30, 1997, unaudited.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES (continued)
All numbers in thousands
Value Strategic
Equity Total Return
<S> <C> <C> <C>
1997 (3) 1997 (1) 1996 (2)
Net Assets Consist Of:
Shares of beneficial interest,
unlimited shares authorized $3,928 $18,151 $13,493
Undistributed net investment
income (loss) 4 21 34
Undistributed net realized gain
(loss) from investments
and foreign currency
transactions (2) 383 376
Net unrealized appreciation of
investments and on translation
of assets and liabilities in
foreign currencies 37 2,101 1,317
Total net assets $3,967 $20,656 $15,220
Shares Of Beneficial Interest:
Class A:
Shares sold 238 285 48
Shares issued on reinvestment of
distributions - 28 -
Shares redeemed (11) (81) (26)
Net increase (decrease) in
shares outstanding 227 232 22
Shares outstanding at
beginning of period - 875 853
Shares outstanding at
end of period 227 1,107 875
Class B:
Shares sold 117 66 10
Shares issued on reinvestment of
distributions - 4 -
Shares redeemed (1) (11) (1)
Net increase (decrease) in
shares outstanding 116 59 9
Shares outstanding at
beginning of period - 125 116
Shares outstanding at
end of period 116 184 125
Class C:
Shares sold 50 72 6
Shares issued on reinvestment of
distributions - 4 -
Shares redeemed (1) (32) (3)
Net increase (decrease) in
shares outstanding 49 44 3
Shares outstanding at
beginning of period - 133 130
Shares outstanding at
end of period 49 177 133
Class T:
Shares sold
Shares issued on reinvestment of
distributions
Shares redeemed
Net increase (decrease) in
shares outstanding
Shares outstanding at
beginning of period
Shares outstanding at
end of period
</TABLE>
(1) For the six month period ended April 30, 1997, unaudited.
(2) For the one month ended October 31, 1996.
(3) From commencement of investment operations on February 3, 1997 through
April 30, 1997, unaudited.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES (continued)
All numbers in thousands
Tactical Asset
Allocation Balanced
<S> <C> <C> <C> <C>
1997 (1) 1996 (2) 1997 (1) 1996 (2)
Net Assets Consist Of:
Shares of beneficial interest,
unlimited shares authorized $20,039 $17,386 $11,623 $8,239
Undistributed net investment
income (loss) 33 14 26 23
Undistributed net realized gain
(loss) from investments
and foreign currency
transactions 609 62 332 1,358
Net unrealized appreciation of
investments and on translation
of assets and liabilities in
foreign currencies 1,198 705 816 627
Total net assets $21,879 $18,167 $12,797 $10,247
Shares Of Beneficial Interest:
Class A:
Shares sold 286 87 152 27
Shares issued on reinvestment
of distributions 8 - 97 -
Shares redeemed (131) (8) (68) (6)
Net increase (decrease) in
shares outstanding 163 79 181 21
Shares outstanding at
beginning of period 750 671 619 598
Shares outstanding at
end of period 913 750 800 619
Class B:
Shares sold 215 18 79 15
Shares issued on reinvestment
of distributions 4 - 10 -
Shares redeemed (51) (9) (14) (1)
Net increase (decrease) in
shares outstanding 168 9 75 14
Shares outstanding at
beginning of period 449 440 65 51
Shares outstanding at
end of period 617 449 140 65
Class C:
Shares sold 141 20 31 2
Shares issued on reinvestment
of distributions 3 - 10 -
Shares redeemed (249) (16) (24) (1)
Net increase (decrease) in
shares outstanding (105) 4 17 1
Shares outstanding at
beginning of period 425 421 71 70
Shares outstanding at
end of period 320 425 88 71
Class T:
Shares sold
Shares issued on reinvestment
of distributions
Shares redeemed
Net increase (decrease) in
shares outstanding
Shares outstanding at
beginning of period
Shares outstanding at
end of period
</TABLE>
(1) For the six month period ended April 30, 1997, unaudited.
(2) For the one month ended October 31, 1996.
(3) From commencement of investment operations on February 3, 1997 through
April 30, 1997, unaudited.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES (continued)
All numbers in thousands
Flexible Income Income Plus
<S> <C> <C> <C> <C>
1997 (1) 1996 (2) 1997 (1) 1996 (2)
Net Assets Consist Of:
Shares of beneficial interest,
unlimited shares authorized $19,333 $20,705 $65,905 $66,967
Undistributed net investment
income (loss) 44 48 214 243
Undistributed net realized gain
(loss) from investments
and foreign currency
transactions (2,588) (2,750) 37 474
Net unrealized appreciation of
investments and on translation
of assets and liabilities in
foreign currencies 117 366 1,341 2,186
Total net assets $16,906 $18,369 $67,497 $69,870
Shares Of Beneficial Interest:
Class A:
Shares sold 46 9 314 45
Shares issued on reinvestment
of distributions 44 8 213 27
Shares redeemed (246) (52) (653) (96)
Net increase (decrease) in
shares outstanding (156) (35) (126) (24)
Shares outstanding at
beginning of period 1,823 1,858 6,247 6,271
Shares outstanding at
end of period 1,667 1,823 6,121 6,247
Class B:
Shares sold 15 3 54 3
Shares issued on reinvestment
of distributions 1 - 3 -
Shares redeemed (5) (1) (14) (1)
Net increase (decrease) in
shares outstanding 11 2 43 2
Shares outstanding at
beginning of period 56 54 76 74
Shares outstanding at
end of period 67 56 119 76
Class C:
Shares sold 28 6 158 15
Shares issued on reinvestment
of distributions 2 - 10 1
Shares redeemed (32) (11) (188) (12)
Net increase (decrease) in
shares outstanding (2) (5) (20) 4
Shares outstanding at
beginning of period 91 96 262 258
Shares outstanding at
end of period 89 91 242 262
Class T:
Shares sold
Shares issued on reinvestment
of distributions
Shares redeemed
Net increase (decrease) in
shares outstanding
Shares outstanding at
beginning of period
Shares outstanding at
end of period
</TABLE>
(1) For the six month period ended April 30, 1997, unaudited.
(2) For the one month ended October 31, 1996.
(3) From commencement of investment operations on February 3, 1997 through
April 30, 1997, unaudited.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES (continued)
All numbers in thousands
Tax-Exempt
<S> <C> <C>
1997 (1) 1996 (2)
Net Assets Consist Of:
Shares of beneficial interest,
unlimited shares authorized $23,994 $25,042
Undistributed net investment
income (loss) 48 44
Undistributed net realized gain
(loss) from investments
and foreign currency
transactions 154 173
Net unrealized appreciation of
investments and on translation
of assets and liabilities in
foreign currencies 86 317
Total net assets $24,282 $25,576
Shares Of Beneficial Interest:
Class A:
Shares sold 46 14
Shares issued on reinvestment
of distributions 43 6
Shares redeemed (159) (51)
Net increase (decrease) in
shares outstanding (70) (31)
Shares outstanding at
beginning of period 2,144 2,175
Shares outstanding at
end of period 2,074 2,144
Class B:
Shares sold 5 1
Shares issued on reinvestment
of distributions - -
Shares redeemed - -
Net increase (decrease) in
shares outstanding 5 1
Shares outstanding at
beginning of period 18 17
Shares outstanding at
end of period 23 18
Class C:
Shares sold 13 14
Shares issued on reinvestment
of distributions 2 -
Shares redeemed (42) (12)
Net increase (decrease) in
shares outstanding (27) 2
Shares outstanding at
beginning of period 82 80
Shares outstanding at
end of period 55 82
Class T:
Shares sold
Shares issued on reinvestment
of distributions
Shares redeemed
Net increase (decrease) in
shares outstanding
Shares outstanding at
beginning of period
Shares outstanding at
end of period
</TABLE>
(1) For the six month period ended April 30, 1997, unaudited.
(2) For the one month ended October 31, 1996.
(3) From commencement of investment operations on February 3, 1997 through
April 30, 1997, unaudited.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
For the six months ended April 30, 1997
STATEMENTS OF OPERATIONS (unaudited)
All numbers in thousands
<S> <C> <C> <C>
Aggressive International Capital
Growth Equity (1) Appreciation
Investment Income:
Interest $18 $2 $41
Dividends 92 6 19
Withholding taxes on foreign dividends (1) (1) (1)
109 7 59
Expenses:
Management and advisory fees 140 3 116
Distribution and service fees:
Class A 40 1 33
Class B 12 - 11
Class C 11 - 9
Transfer agent fees and expenses 100 2 65
Custody fees and expenses 13 1 23
Registration fees 36 7 32
Trustees fees and expenses 1 - 1
Other 17 - 16
Less amounts waived/reimbursed by the
investment adviser (96) (10) (79)
274 4 227
Custodian earnings and brokerage credits - - -
Net expenses 274 4 227
Net investment income (loss) (165) 3 (168)
Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency:
Net realized gain (loss) on investments 1,320 2 (1,460)
Net realized gain (loss) from foreign
currency transactions - 12 (74)
Net realized gain (loss) 1,320 14 (1,534)
Net unrealized appreciation
(depreciation) during the period on:
Investments (199) 17 (1,803)
Translation of assets and liabilities
denominated in foreign currency - 2 78
Net unrealized appreciation (depreciation)
during the period (199) 19 (1,725)
Net gain (loss) on investments and
foreign currency 1,121 33 (3,259)
Net increase (decrease) in net assets
resulting from operations $956 $36 $(3,427)
</TABLE>
(1) From the commencement of investment operations on February 3, 1997 through
April 30, 1997.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
For the six months ended April 30, 1997
STATEMENTS OF OPERATIONS (unaudited)
All numbers in thousands
<S> <C> <C> <C>
Global Growth C.A.S.E.
Investment Income:
Interest $311 $5,648 $12
Dividends 948 4,837 24
Withholding taxes on foreign dividends (115) (45) -
1,144 10,440 36
Expenses:
Management and advisory fees 886 5,569 21
Distribution and service fees:
Class A 271 995 4
Class B 56 34 6
Class C 51 56 4
Transfer agent fees and expenses 312 1,551 11
Custody fees and expenses 148 116 6
Registration fees 33 52 48
Trustees fees and expenses 5 10 1
Other 67 265 19
Less amounts waived/reimbursed by the
investment adviser - - (74)
1,829 8,648 46
Custodian earnings and brokerage credits - - -
Net expenses 1,829 8,648 46
Net investment income (loss) (685) 1,792 (10)
Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency:
Net realized gain (loss) on investments 6,158 80,161 101
Net realized gain (loss) from foreign
currency transactions 2,247 420 -
Net realized gain (loss) 8,405 80,581 101
Net unrealized appreciation (depreciation)
during the period on:
Investments 6,289 (54,782) 99
Translation of assets and liabilities denominated
in foreign currency 2,526 (419) -
Net unrealized appreciation (depreciation)
during the period 8,815 (55,201) 99
Net gain (loss) on investments and
foreign currency 17,220 25,380 200
Net increase (decrease) in net assets resulting
from operations $16,535 $27,172 $190
(1) From the commencement of investment operations on February 3, 1997 through
April 30, 1997.
The notes to the financial statements are an integral part of these statements.
For the six months ended April 30, 1997
STATEMENTS OF OPERATIONS (unaudited)
All numbers in thousands Value Strategic Tactical Asset
Equity (1) Total Return Allocation
Investment Income:
Interest $10 $149 $254
Dividends 5 131 92
Withholding taxes on foreign dividends - - (3)
15 280 343
Expenses:
Management and advisory fees 6 88 100
Distribution and service fees:
Class A 1 23 16
Class B 2 11 31
Class C 1 10 19
Transfer agent fees and expenses 3 36 21
Custody fees and expenses 3 5 9
Registration fees 14 40 47
Trustees fees and expenses - 1 1
Other 1 15 19
Less amounts waived/reimbursed by the
investment adviser (20) (52) (47)
11 177 216
Custodian earnings and brokerage credits - - -
Net expenses 11 177 216
Net investment income (loss) 4 103 127
Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency:
Net realized gain (loss) on investments (2) 386 612
Net realized gain (loss) from foreign
currency transactions - - -
Net realized gain (loss) (2) 386 612
Net unrealized appreciation (depreciation)
during the period on:
Investments 37 784 493
Translation of assets and liabilities denominated
in foreign currency - - -
Net unrealized appreciation (depreciation)
during the period 37 784 493
Net gain (loss) on investments and
foreign currency 35 1,170 1,105
Net increase (decrease) in net assets resulting
from operations $39 $1,273 $1,232
(1) From the commencement of investment operations on February 3, 1997 through
April 30, 1997.
The notes to the financial statements are an integral part of these statements.
For the six months ended April 30, 1997
STATEMENTS OF OPERATIONS (unaudited)
All numbers in thousands Flexible Income Tax-
Balanced Income Plus Exempt
Investment Income:
Interest $149 $724 $2,785 $699
Dividends 56 5 204 -
Withholding taxes on foreign dividends (1) - - -
204 729 2,989 699
Expenses:
Management and advisory fees 57 79 207 74
Distribution and service fees:
Class A 16 28 114 42
Class B 6 3 5 1
Class C 5 4 13 2
Transfer agent fees and expenses 19 27 62 21
Custody fees and expenses 26 13 13 5
Registration fees 36 27 23 20
Trustees fees and expenses - 1 - 1
Other 15 17 14 19
Less amounts waived/reimbursed by the
investment adviser (66) (32) - (60)
114 167 451 125
Custodian earnings and brokerage credits - - - -
Net expenses 114 167 451 125
Net investment income (loss) 90 562 2,538 574
Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency:
Net realized gain (loss) on investments 317 162 194 154
Net realized gain (loss) from foreign
currency transactions 24 - - -
Net realized gain (loss) 341 162 194 154
Net unrealized appreciation (depreciation)
during the period on:
Investments 187 (249) (845) (231)
Translation of assets and liabilities denominated
in foreign currency 2 - - -
Net unrealized appreciation (depreciation)
during the period 189 (249) (845) (231)
Net gain (loss) on investments and
foreign currency 530 (87) (651) (77)
Net increase (decrease) in net assets resulting
from operations $620 $475 $1,887 $497
(1) From the commencement of investment operations on February 3, 1997 through
April 30, 1997.
The notes to the financial statements are an integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
All numbers in thousands
Aggressive International
Growth Equity
Increase (Decrease) In Net Assets From:
<S> <C> <C> <C>
1997 (1) 1996 (2) 1997 (3)
Operations:
Net investment income (loss) $(165) $(26) $3
Net realized gain (loss) on
investments and foreign
currency transactions 1,320 248 14
Net unrealized appreciation
(depreciation) during period (199) (301) 19
Net increase (decrease) in
net assets resulting
from operations 956 (79) 36
Distributions To Shareholders:
From net investment income:
Class A - - -
Class B - - -
Class C - - -
Class T
- - -
From net realized gains on
investments and foreign
currency transactions (1,127) - -
(1,127) - -
Shares Of Beneficial Interest
Transactions:
Class A:
Proceeds from sale of shares 5,660 717 1,335
Shares issued on reinvestment
of distributions 932 - -
Cost of shares repurchased (4,731) (790) (7)
Net increase (decrease) from
share transactions 1,861 (73) 1,328
Class B:
Proceeds from sale of shares 1,186 200 123
Shares issued on reinvestment
of distributions 91 - -
Cost of shares repurchased (182) (1) -
Net increase (decrease) from
share transactions 1,095 199 123
Class C:
Proceeds from sale of shares 905 40 27
Shares issued on reinvestment
of distributions 95 - -
Cost of shares repurchased (587) (156) -
Net increase (decrease) from
share transactions 413 (116) 27
Class T:
Proceeds from sale of shares
Shares issued on reinvestment
of distributions
Cost of shares repurchased
Net increase (decrease) from
share transactions
Total net increase (decrease)
from share transactions 3,369 10 1,478
Net increase (decrease)
in net assets $3,198 $(69) $1,514
Net Assets:
Beginning of period $26,059 $26,128 $-
End of period $29,257 $26,059 $1,514
</TABLE>
(1) For the six month period ended April 30, 1997, unaudited.
(2) For the one month ended October 31, 1996.
(3) From commencement of investment operations on February 3, 1997 through
April 30, 1997, unaudited.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
All numbers in thousands
Capital
Appreciation Global
Increase (Decrease) In Net Assets From:
<S> <C> <C> <C> <C>
1997 (1) 1996 (2) 1997 (1) 1996 (2)
Operations:
Net investment income (loss) $(168) $(31) $(685) $(153)
Net realized gain (loss) on
investments and foreign
currency transactions (1,534) (27) 8,405 2,413
Net unrealized appreciation
(depreciation) during period (1,725) (358) 8,815 (2,313)
Net increase (decrease) in
net assets resulting from
operations (3,427) (416) 16,535 (53)
Distributions To Shareholders:
From net investment income:
Class A - - - -
Class B - - - -
Class C - - - -
Class T
- - - -
From net realized gains on
investments and foreign
currency transactions (334) - (15,465) -
(334) - (15,465) -
Shares Of Beneficial Interest
Transactions:
Class A:
Proceeds from sale of shares 16,014 3,643 68,836 7,350
Shares issued on reinvestment
of distributions 268 - 13,477 -
Cost of shares repurchased (15,317) (2,667) (41,813) (2,831)
Net increase (decrease) from
share transactions 965 976 40,500 4,519
Class B:
Proceeds from sale of shares 898 221 12,055 1,064
Shares issued on reinvestment
of distributions 31 - 737 -
Cost of shares repurchased (402) (72) (248) (86)
Net increase (decrease) from
share transactions 527 149 12,544 978
Class C:
Proceeds from sale of shares 532 113 5,956 736
Shares issued on reinvestment
of distributions 31 - 954 -
Cost of shares repurchased (733) (201) (961) (181)
Net increase (decrease) from
share transactions (170) (88) 5,949 555
Class T:
Proceeds from sale of shares
Shares issued on reinvestment
of distributions
Cost of shares repurchased
Net increase (decrease) from
share transactions
Total net increase (decrease)
from share transactions 1,322 1,037 58,993 6,052
Net increase (decrease)
in net assets $(2,439) $621 $60,063 $5,999
Net Assets:
Beginning of period $23,725 $23,104 $150,427 $144,428
End of period $21,286 $23,725 $210,490 $150,427
</TABLE>
(1) For the six month period ended April 30, 1997, unaudited.
(2) For the one month ended October 31, 1996.
(3) From commencement of investment operations on February 3, 1997 through
April 30, 1997, unaudited.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
All numbers in thousands
Growth C.A.S.E.
Increase (Decrease) In Net Assets From:
<S> <C> <C> <C> <C>
1997 (1) 1996 (2) 1997 (1) 1996 (2)
Operations:
Net investment income (loss) $1,792 $34 $(10) $(1)
Net realized gain (loss) on
investments and foreign
currency transactions 80,581 18,010 101 12
Net unrealized appreciation
(depreciation) during period (55,201) (30,572) 99 21
Net increase (decrease) in
net assets resulting from
operations 27,172 (12,528) 190 32
Distributions To Shareholders:
From net investment income:
Class A - - (89) -
Class B - - (46) -
Class C - - (42) -
Class T - -
- - (177) -
From net realized gains on
investments and foreign
currency transactions (24,267) - - -
(24,267) - (177) -
Shares Of Beneficial Interest
Transactions:
Class A:
Proceeds from sale of shares 95,887 15,361 823 211
Shares issued on reinvestment
of distributions 11,526 - 87 -
Cost of shares repurchased (110,038) (11,670) (409) (6)
Net increase (decrease) from
share transactions (2,625) 3,691 501 205
Class B:
Proceeds from sale of shares 3,753 790 593 70
Shares issued on reinvestment
of distributions 127 - 44 -
Cost of shares repurchased (367) (18) (304) (22)
Net increase (decrease) from
share transactions 3,513 772 333 48
Class C:
Proceeds from sale of shares 4,108 462 704 148
Shares issued on reinvestment
of distributions 252 - 42 -
Cost of shares repurchased (2,244) (481) (411) (80)
Net increase (decrease) from
share transactions 2,116 (19) 335 68
Class T:
Proceeds from sale of shares 23,355 3,066
Shares issued on reinvestment
of distributions 11,812 -
Cost of shares repurchased (49,645) (8,580)
Net increase (decrease) from
share transactions (14,478) (5,514)
Total net increase (decrease)
from share transactions (11,474) (1,070) 1,169 321
Net increase (decrease)
in net assets $(8,569) $(13,598) $1,182 $353
Net Assets:
Beginning of period $1,155,174 $1,168,772 $3,521 $3,168
End of period $1,146,605 $1,155,174 $4,703 $3,521
</TABLE>
(1) For the six month period ended April 30, 1997, unaudited.
(2) For the one month ended October 31, 1996.
(3) From commencement of investment operations on February 3, 1997 through
April 30, 1997, unaudited.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
All numbers in thousands
Value Strategic
Equity Total Return
Increase (Decrease) In Net Assets From:
<S> <C> <C> <C>
1997 (3) 1997 (1) 1996 (2)
Operations:
Net investment income (loss) $4 $103 $17
Net realized gain (loss) on
investments and foreign
currency transactions (2) 386 36
Net unrealized appreciation
(depreciation) during period 37 784 120
Net increase (decrease) in net
assets resulting from operations 39 1,273 173
Distributions To Shareholders:
From net investment income:
Class A - (98) -
Class B - (8) -
Class C - (10) -
Class T
- (116) -
From net realized gains on
investments and foreign
currency transactions - (379) -
- (495) -
Shares Of Beneficial Interest
Transactions:
Class A:
Proceeds from sale of shares 2,383 3,976 649
Shares issued on reinvestment
of distributions - 382 -
Cost of shares repurchased (110) (1,126) (354)
Net increase (decrease) from
share transactions 2,273 3,232 295
Class B:
Proceeds from sale of shares 1,172 924 132
Shares issued on reinvestment
of distributions - 51 -
Cost of shares repurchased (11) (152) (3)
Net increase (decrease) from
share transactions 1,161 823 129
Class C:
Proceeds from sale of shares 501 996 80
Shares issued on reinvestment
of distributions - 54 -
Cost of shares repurchased (7) (447) (36)
Net increase (decrease) from
share transactions 494 603 44
Class T:
Proceeds from sale of shares
Shares issued on reinvestment
of distributions
Cost of shares repurchased
Net increase (decrease) from
share transactions
Total net increase (decrease)
from share transactions 3,928 4,658 468
Net increase (decrease)
in net assets $3,967 $5,436 $641
Net Assets:
Beginning of period $- $15,220 $14,579
End of period $3,967 $20,656 $15,220
</TABLE>
(1) For the six month period ended April 30, 1997, unaudited.
(2) For the one month ended October 31, 1996.
(3) From commencement of investment operations on February 3, 1997 through
April 30, 1997, unaudited.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
All numbers in thousands
Tactical Asset
Allocation Balanced
Increase (Decrease) In Net Assets From:
<S> <C> <C> <C> <C>
1997 (1) 1996 (2) 1997 (1) 1996 (2)
Operations:
Net investment income (loss) $127 $14 $90 $15
Net realized gain (loss) on
investments and foreign currency
transactions 612 14 341 74
Net unrealized appreciation
(depreciation) during period 493 218 189 (12)
Net increase (decrease) in net
assets resulting from operations 1,232 246 620 77
Distributions To Shareholders:
From net investment income:
Class A (67) - (75) -
Class B (23) - (7) -
Class C (18) - (6) -
Class T (108) - (88) -
(65) - (1,367) -
From net realized gains on
investments and foreign
currency transactions (173) - (1,455) -
Shares Of Beneficial Interest
Transactions:
Class A: 3,361 973 1,928 365
Proceeds from sale of shares 94 - 1,171 -
Shares issued on reinvestment
of distributions (1,544) (89) (864) (84)
Cost of shares repurchased 1,911 884 2,235 281
Net increase (decrease) from
share transactions
Class B: 2,523 204 996 203
Proceeds from sale of shares 41 - 125 -
Shares issued on reinvestment
of distributions (592) (97) (172) (17)
Cost of shares repurchased 1,972 107 949 186
Net increase (decrease) from
share transactions
Class C: 1,654 225 393 26
Proceeds from sale of shares 35 - 114 -
Shares issued on reinvestment
of distributions (2,919) (185) (306) (9)
Cost of shares repurchased (1,230) 40 201 17
Net increase (decrease) from
share transactions 2,653 1,031 3,385 484
Class T: $3,712 $1,277 $2,550 $561
Proceeds from sale of shares
Shares issued on reinvestment of
distributions
Cost of shares repurchased
Net increase (decrease) from
share transactions
Total net increase (decrease)
from share transactions
Net increase (decrease)
in net assets
Net Assets:
Beginning of period $18,167 $16,890 $10,247 $9,686
End of period $21,879 $18,167 $12,797 $10,247
</TABLE>
(1) For the six month period ended April 30, 1997, unaudited.
(2) For the one month ended October 31, 1996.
(3) From commencement of investment operations on February 3, 1997 through
April 30, 1997, unaudited.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
All numbers in thousands
Flexible Income Income Plus
Increase (Decrease) In Net Assets From:
1997 (1) 1996 (2) 1997 (1) 1996 (2)
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $562 $95 $2,538 $327
Net realized gain (loss) on
investments and foreign
currency transactions 162 48 194 227
Net unrealized appreciation
(depreciation) during period (249) 241 (845) 1,216
Net increase (decrease) in net
assets resulting from operations 475 384 1,887 1,770
Distributions To Shareholders:
From net investment income:
Class A (526) (95) (2,434) (397)
Class B (16) (2) (36) (4)
Class C (24) (5) (97) (16)
Class T (566) (102) (2,567) (417)
- - (632) -
From net realized gains on
investments and foreign
currency transactions (566) (102) (3,199) (417)
Shares Of Beneficial Interest
Transactions:
Class A: 436 88 3,337 477
Proceeds from sale of shares 407 74 2,247 287
Shares issued on reinvestment
of distributions (2,303) (487) (6,893) (1,016)
Cost of shares repurchased (1,460) (325) (1,309) (252)
Net increase (decrease) from
share transactions
Class B: 140 25 569 28
Proceeds from sale of shares 13 2 32 3
Shares issued on reinvestment
of distributions (51) (7) (149) (16)
Cost of shares repurchased 102 20 452 15
Net increase (decrease) from
share transactions
Class C: 262 51 1,675 154
Proceeds from sale of shares 22 4 109 13
Shares issued on reinvestment
of distributions (298) (105) (1,988) (123)
Cost of shares repurchased (14) (50) (204) 44
Net increase (decrease) from
share transactions (1,372) (355) (1,061) (193)
Class T: $(1,463) $(73) $(2,373) $1,160
Proceeds from sale of shares
Shares issued on reinvestment
of distributions
Cost of shares repurchased
Net increase (decrease) from
share transactions
Total net increase (decrease)
from share transactions
Net increase (decrease)
in net assets
Net Assets:
Beginning of period $18,369 $18,442 $69,870 $68,710
End of period $16,906 $18,369 $67,497 $69,870
</TABLE>
(1) For the six month period ended April 30, 1997, unaudited.
(2) For the one month ended October 31, 1996.
(3) From commencement of investment operations on February 3, 1997 through
April 30, 1997, unaudited.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
All numbers in thousands
Tax-Exempt
Increase (Decrease) In Net Assets From:
<S> <C> <C>
1997 (1) 1996 (2)
Operations:
Net investment income (loss) $574 $100
Net realized gain (loss) on
investments and foreign
currency transactions 154 (1)
Net unrealized appreciation
(depreciation) during period (231) 97
Net increase (decrease) in net
assets resulting from operations 497 196
Distributions To Shareholders:
From net investment income:
Class A (550) (101)
Class B (4) (1)
Class C (16) (3)
Class T (570) (105)
(173) -
From net realized gains on
investments and foreign
currency transactions (743) (105)
Shares Of Beneficial Interest
Transactions:
Class A: 519 153
Proceeds from sale of shares 486 67
Shares issued on reinvestment
of distributions (1,806) (576)
Cost of shares repurchased (801) (356)
Net increase (decrease) from
share transactions
Class B: 61 9
Proceeds from sale of shares 3 -
Shares issued on reinvestment
of distributions (1) -
Cost of shares repurchased 63 9
Net increase (decrease) from
share transactions
Class C: 143 156
Proceeds from sale of shares 18 3
Shares issued on reinvestment
of distributions (471) (131)
Cost of shares repurchased (310) 28
Net increase (decrease) from
share transactions (1,048) (319)
Class T: $(1,294) $(228)
Proceeds from sale of shares
Shares issued on reinvestment
of distributions
Cost of shares repurchased
Net increase (decrease) from
share transactions
Total net increase (decrease)
from share transactions
Net increase (decrease)
in net assets
Net Assets:
Beginning of period $25,576 $25,804
End of period $24,282 $25,576
</TABLE>
(1) For the six month period ended April 30, 1997, unaudited.
(2) For the one month ended October 31, 1996.
(3) From commencement of investment operations on February 3, 1997 through
April 30, 1997, unaudited.
The notes to the financial statements are an integral part of these statements.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (unaudited)
For a share of beneficial interest outstanding throughout each period:
<S><C> <C> <C> <C> <C> <C> <C>
Investment Operations
Net Asset
Year or Value, Net Net Realized
Period Beginning Investmentand Unrealized Total
Ended of Period Income (Loss) Gain (Loss) Operations
Aggressive Growth
Class A 04/30/97 15.70 $ (0.07) $ 0.71 $ 0.64
10/31/96 (1) 15.75 (0.01) (0.04) (0.05)
09/30/96 (2) 17.68 (0.15) (0.76) (0.91)
09/30/95 (3) 10.00 (0.14) 7.82 7.68
Class B 04/30/97 15.58 (0.10) 0.71 0.61
10/31/96 (1) 15.63 (0.01) (0.04) (0.05)
09/30/96 (2) 17.64 (0.23) (0.76) (0.99)
Class C 04/30/97 15.60 (0.10) 0.71 0.61
10/31/96 (1) 15.65 (0.01) (0.04) (0.05)
09/30/96 (2) 17.64 (0.21) (0.76) (0.97)
09/30/95 (3) 10.00 (0.18) 7.82 7.64
International Equity
Class A 04/30/97 (4) 10.00 0.01 0.25 0.26
Class B 04/30/97 (4) 10.00 - 0.25 0.25
Class C 04/30/97 (4) 10.00 - 0.25 0.25
Capital Appreciation
Class A 04/30/97 15.49 (0.09) (2.04) (2.13)
10/31/96 (1) 15.75 (0.02) (0.24) (0.26)
09/30/96 (5) 13.54 0.06 3.04 3.10
09/30/95 (3) 10.00 (0.03) 3.57 3.54
Class B 04/30/97 15.42 (0.13) (2.04) (2.17)
10/31/96 (1) 15.69 (0.03) (0.24) (0.27)
09/30/96 13.49 (0.02) 3.04 3.02
Class C 04/30/97 15.43 (0.13) (2.04) (2.17)
10/31/96 (1) 15.70 (0.03) (0.24) (0.27)
09/30/96 (5) 13.49 - 3.04 3.04
09/30/95 (3) 10.00 (0.08) 3.57 3.49
Global
Class A 04/30/97 21.39 0.11 1.92 2.03
10/31/96 (1) 21.40 (0.02) 0.01 (0.01)
09/30/96 17.73 (0.09) 4.38 4.29
09/30/95 15.93 (0.06) 2.42 2.36
09/30/94 13.35 (0.04) 2.62 2.58
09/30/93 10.00 (0.04) 3.39 3.35
Class B 04/30/97 21.13 0.05 1.92 1.97
10/31/96 (1) 21.14 (0.02) 0.01 (0.01)
09/30/96 17.57 (0.19) 4.38 4.19
Class C 04/30/97 21.03 0.06 1.92 1.98
10/31/96 (1) 21.04 (0.02) 0.01 (0.01)
09/30/96 17.46 (0.18) 4.38 4.20
09/30/95 15.74 (0.14) 2.42 2.28
09/30/94 13.35 (0.23) 2.62 2.39
Growth
Class A 04/30/97 21.97 $ 0.01 $ 0.50 $ 0.51
10/31/96 (1) 22.21 - (0.24) (0.24)
09/30/96 22.84 (0.11) 4.66 4.55
09/30/95 16.78 (0.05) 6.18 6.13
09/30/94 (2,8) 18.46 0.01 (1.22) (1.21)
09/30/93 16.46 0.04 2.42 2.46
Class B 04/30/97 21.60 (0.05) 0.50 0.45
10/31/96 (1) 21.85 (0.01) (0.24) (0.25)
09/30/96 22.64 (0.27) 4.66 4.39
Class C 04/30/97 21.65 (0.03) 0.50 0.47
10/31/96 (1) 21.91 (0.02) (0.24) (0.26)
09/30/96 22.64 (0.21) 4.66 4.45
09/30/95 16.68 (0.15) 6.18 6.03
09/30/94 18.46 (0.09) (1.22) (1.31)
Class T 04/30/97 22.17 0.05 0.50 0.55
10/31/96 (1) 22.41 - (0.24) (0.24)
09/30/96 (6) 22.23 - 0.18 0.18
C.A.S.E.
Class A 04/30/97 10.56 1.33 (0.80) 0.53
10/31/96 (1) 10.46 (0.07) 0.17 0.10
09/30/96 (7) 10.00 0.61 (0.15) 0.46
Class B 04/30/97 10.51 1.30 (0.80) 0.50
10/31/96 (1) 10.41 (0.07) 0.17 0.10
09/30/96 (7) 10.00 0.56 (0.15) 0.41
Class C 04/30/97 10.52 1.30 (0.80) 0.50
10/31/96 (1) 10.42 (0.07) 0.17 0.10
09/30/96 (7) 10.00 0.57 (0.15) 0.42
Value Equity
Class A 04/30/97 (4) 10.00 0.01 0.11 0.12
Class B 04/30/97 (4) 10.00 - 0.11 0.11
Class C 04/30/97 (4) 10.00 - 0.11 0.11
Strategic Total Return
Class A 04/30/97 13.43 0.30 0.76 1.06
10/31/96 (1) 13.27 0.01 0.15 0.16
09/30/96 11.74 0.57 1.28 1.85
09/30/95 (3) 10.00 0.09 1.75 1.84
Class B 04/30/97 13.42 0.26 0.76 1.02
10/31/96 (1) 13.27 - 0.15 0.15
09/30/96 11.73 0.50 1.28 1.78
Class C 04/30/97 13.42 0.26 0.76 1.02
10/31/96 (1) 13.27 - 0.15 0.15
09/30/96 11.73 0.52 1.28 1.80
09/30/95 (3) 10.00 0.03 1.75 1.78
Tactical Asset Allocation
Class A 04/30/97 11.19 $ 0.26 $ 0.50 $ 0.76
10/31/96 (1) 11.03 0.02 0.14 0.16
09/30/96 10.00 0.17 0.94 1.11
Class B 04/30/97 11.18 0.22 0.50 0.72
10/31/96 (1) 11.02 0.02 0.14 0.16
09/30/96 10.00 0.09 0.94 1.03
Class C 04/30/97 11.18 0.23 0.50 0.73
10/31/96 (1) 11.03 0.01 0.14 0.15
09/30/96 10.00 0.11 0.94 1.05
Balanced
Class A 04/30/97 13.58 0.34 0.39 0.73
10/31/96 (1) 13.47 0.01 0.10 0.11
09/30/96 11.47 0.72 1.77 2.49
09/30/95 (3) 10.00 0.05 1.47 1.52
Class B 04/30/97 13.56 0.30 0.39 0.69
10/31/96 (1) 13.46 - 0.10 0.10
09/30/96 11.47 0.63 1.77 2.40
Class C 04/30/97 13.57 0.30 0.39 0.69
10/31/96 (1) 13.46 0.01 0.10 0.11
09/30/96 11.47 0.64 1.77 2.41
09/30/95 (3) 10.00 0.01 1.47 1.48
Flexible Income (4)
Class A 04/30/97 9.33 1.13 (0.89) 0.24
10/31/96 (1) 9.19 0.20 (0.01) 0.19
09/30/96 9.17 2.23 (1.63) 0.60
09/30/95 8.83 0.61 0.37 0.98
09/30/94 (8) 9.59 0.65 (0.81) (0.16)
09/30/93 8.95 0.70 0.60 1.30
Class B 04/30/97 9.32 1.11 (0.89) 0.22
10/31/96 (1) 9.18 0.20 (0.01) 0.19
09/30/96 9.17 2.16 (1.63) 0.53
Class C 04/30/97 9.32 1.11 (0.89) 0.22
10/31/96 (1) 9.18 0.20 (0.01) 0.19
09/30/96 9.17 2.17 (1.63) 0.54
09/30/95 8.83 0.56 0.37 0.93
09/30/94 (8) 9.59 0.60 (0.81) (0.21)
Income Plus
Class A 04/30/97 10.61 $ 1.49 $ (1.20) $ 0.29
10/31/96 (1) 10.41 0.22 0.04 0.26
09/30/96 10.36 2.72 (1.96) 0.76
09/30/95 9.75 0.75 0.71 1.46
09/30/94 10.98 0.76 (1.10) (0.34)
09/30/93 10.55 0.83 0.46 1.29
Class B 04/30/97 10.61 1.46 (1.20) 0.26
10/31/96 (1) 10.40 0.23 0.04 0.27
09/30/96 10.35 2.65 (1.96) 0.69
Class C 04/30/97 10.61 1.46 (1.20) 0.26
10/31/96 (1) 10.40 0.23 0.04 0.27
09/30/96 10.35 2.66 (1.96) 0.70
09/30/95 9.74 0.69 0.71 1.40
09/30/94 10.98 0.66 (1.10) (0.44)
Tax-Exempt
Class A 04/30/97 11.40 1.00 (0.77) 0.23
10/31/96 (1) 11.36 0.18 (0.09) 0.09
09/30/96 11.34 2.13 (1.48) 0.65
09/30/95 11.10 0.55 0.29 0.84
09/30/94 12.07 0.56 (0.60) (0.04)
09/30/93 11.62 0.56 0.45 1.01
Class B 04/30/97 11.40 0.96 (0.77) 0.19
10/31/96 (1) 11.36 0.17 (0.09) 0.08
09/30/96 11.34 2.06 (1.48) 0.58
Class C 04/30/97 11.40 0.98 (0.77) 0.21
10/31/96 (1) 11.36 0.17 (0.09) 0.08
09/30/96 11.34 2.10 (1.48) 0.62
09/30/95 11.10 0.52 0.29 0.81
09/30/94 12.07 0.53 (0.60) (0.07)
Distributions
Year or From Net From Net In Excess of
Period Investment Realized Net Realized Total
Ended Income Capital Gains Capital Gains Distributions
Aggressive Growth
Class A 04/30/97 $ - $ (0.67) $ - $ (0.67)
10/31/96 (1) - - - -
09/30/96 (2) - (1.02) - (1.02)
09/30/95 (3) - - - -
Class B 04/30/97 - (0.67) - (0.67)
10/31/96 (1) - - - -
09/30/96 (2) - (1.02) - (1.02)
Class C 04/30/97 - (0.67) - (0.67)
10/31/96 (1) - - - -
09/30/96 (2) - - (1.02) (1.02)
09/30/95 (3) - - - -
International Equity
Class A 04/30/97 (4) - - - -
Class B 04/30/97 (4) - - - -
Class C 04/30/97 (4) - - - -
Capital Appreciation
Class A 04/30/97 - (0.21) - (0.21)
10/31/96 (1) - - - -
09/30/96 (5) (0.07) (0.82) - (0.89)
09/30/95 (3) - - - -
Class B 04/30/97 - (0.21) - (0.21)
10/31/96 (1) - - - -
09/30/96 - (0.82) - (0.82)
Class C 04/30/97 - (0.21) - (0.21)
10/31/96 (1) - - - -
09/30/96 (5) (0.01) (0.82) - (0.83)
09/30/95 (3) - - - -
Global
Class A 04/30/97 - (2.10) - (2.10)
10/31/96 (1) - - - -
09/30/96 - (0.62) - (0.62)
09/30/95 - (0.56) - (0.56)
09/30/94 - - - -
09/30/93 - - - -
Class B 04/30/97 - (2.10) - (2.10)
10/31/96 (1) - - - -
09/30/96 - (0.62) - (0.62)
Class C 04/30/97 - (2.10) - (2.10)
10/31/96 (1) - - - -
09/30/96 - (0.62) - (0.62)
09/30/95 - (0.56) - (0.56)
09/30/94 - - - -
Growth
Class A 04/30/97 - (0.47) - (0.47)
10/31/96 (1) - - - -
09/30/96 - (5.18) - (5.18)
09/30/95 - (0.07) - (0.07)
09/30/94 (2,8) - (0.33) (0.14) (0.47)
09/30/93 (0.07) (0.39) - (0.46)
Class B 04/30/97 - (0.47) - (0.47)
10/31/96 (1) - - - -
09/30/96 - (5.18) - (5.18)
Class C 04/30/97 - (0.47) - (0.47)
10/31/96 (1) - - - -
09/30/96 - (5.18) - (5.18)
09/30/95 - (0.07) - (0.07)
09/30/94 - (0.33) (0.14) (0.47)
Class T 04/30/97 - (0.47) - (0.47)
10/31/96 (1) - - - -
09/30/96 (6) - - - -
C.A.S.E.
Class A 04/30/97 (0.51) - - (0.51)
10/31/96 (1) - - - -
09/30/96 (7) - - - -
Class B 04/30/97 (0.45) - - (0.45)
10/31/96 (1) - - - -
09/30/96 (7) - - - -
Class C 04/30/97 (0.46) - - (0.46)
10/31/96 (1) - - - -
09/30/96 (7) - - - -
Value Equity
Class A 04/30/97 (4) - - - -
Class B 04/30/97 (4) - - - -
Class C 04/30/97 (4) - - - -
Strategic Total Return
Class A 04/30/97 (0.10) (0.32) - (0.42)
10/31/96 (1) - - - -
09/30/96 (0.17) (0.15) - (0.32)
09/30/95 (3) (0.10) - - (0.10)
Class B 04/30/97 (0.06) (0.32) - (0.38)
10/31/96 (1) - - - -
09/30/96 (0.09) (0.15) - (0.24)
Class C 04/30/97 (0.06) (0.32) - (0.38)
10/31/96 (1) - - - -
09/30/96 (0.11) (0.15) - (0.26)
09/30/95 (3) (0.05) - - (0.05)
Tactical Asset Allocation
Class A 04/30/97 $(0.08) $ (0.04) $ - $ (0.12)
10/31/96 (1) - - - -
09/30/96 (0.08) - - (0.08)
Class B 04/30/97 (0.04) (0.04) - (0.08)
10/31/96 (1) - - - -
09/30/96 (0.01) - - (0.01)
Class C 04/30/97 (0.05) (0.04) - (0.09)
10/31/96 (1) - - - -
09/30/96 (0.02) - - (0.02)
Balanced
Class A 04/30/97 (0.11) (1.75) - (1.86)
10/31/96 (1) - - - -
09/30/96 (0.21) (0.28) - (0.49)
09/30/95 (3) (0.05) - - (0.05)
Class B 04/30/97 (0.06) (1.75) - (1.81)
10/31/96 (1) - - - -
09/30/96 (0.13) (0.28) - (0.41)
Class C 04/30/97 (0.07) (1.75) - (1.82)
10/31/96 (1) - - - -
09/30/96 (0.14) (0.28) - (0.42)
09/30/95 (3) (0.01) - - (0.01)
Flexible Income (4)
Class A 04/30/97 (0.30) - - (0.30)
10/31/96 (1) (0.05) - - (0.05)
09/30/96 (0.58) - - (0.58)
09/30/95 (0.64) - - (0.64)
09/30/94 (8) (0.60) - - (0.60)
09/30/93 (0.66) - - (0.66)
Class B 04/30/97 (0.27) - - (0.27)
10/31/96 (1) (0.05) - - (0.05)
09/30/96 (0.52) - - (0.52)
Class C 04/30/97 (0.27) - - (0.27)
10/31/96 (1) (0.05) - - (0.05)
09/30/96 (0.53) - - (0.53)
09/30/95 (0.59) - - (0.59)
09/30/94 (8) (0.55) - - (0.55)
Income Plus
Class A 04/30/97 $(0.39) $ (0.10) $ - $ (0.49)
10/31/96 (1) (0.06) - - (0.06)
09/30/96 (0.71) - - (0.71)
09/30/95 (0.75) (0.10) - (0.85)
09/30/94 (0.75) (0.14) - (0.89)
09/30/93 (0.81) (0.05) - (0.86)
Class B 04/30/97 (0.36) (0.10) - (0.46)
10/31/96 (1) (0.06) - - (0.06)
09/30/96 (0.64) - - (0.64)
Class C 04/30/97 (0.36) (0.10) - (0.46)
10/31/96 (1) (0.06) - - (0.06)
09/30/96 (0.65) - - (0.65)
09/30/95 (0.69) (0.10) - (0.79)
09/30/94 (0.66) (0.14) - (0.80)
Tax-Exempt
Class A 04/30/97 (0.26) (0.08) - (0.34)
10/31/96 (1) (0.05) - - (0.05)
09/30/96 (0.56) (0.07) - (0.63)
09/30/95 (0.56) (0.04) - (0.60)
09/30/94 (0.54) (0.39) - (0.93)
09/30/93 (0.54) (0.02) - (0.56)
Class B 04/30/97 (0.23) (0.08) - (0.31)
10/31/96 (1) (0.04) - - (0.04)
09/30/96 (0.49) (0.07) - (0.56)
Class C 04/30/97 (0.25) (0.08) - (0.33)
10/31/96 (1) (0.04) - - (0.04)
09/30/96 (0.53) (0.07) - (0.60)
09/30/95 (0.53) (0.04) - (0.57)
09/30/94 (0.51) (0.39) - (0.90)
Net Asset Net Assets,
Year or Value, End of
Period End Total Period
Ended of Period Return (9) (000's)
Aggressive Growth
Class A 04/30/97 15.67 4.13 % $ 23,670
10/31/96 (1) 15.70 (0.32) 21,938
09/30/96 (2) 15.75 (4.91) 22,078
09/30/95 (3) 17.68 76.80 16,747
Class B 04/30/97 15.52 3.97 3,063
10/31/96 (1) 15.58 (0.32) 1,992
09/30/96 (2) 15.63 (5.33) 1,800
Class C 04/30/97 15.54 3.96 2,524
10/31/96 (1) 15.60 (0.32) 2,129
09/30/96 (2) 15.65 (5.22) 2,250
09/30/95 (3) 17.64 76.40 1,736
International Equity
Class A 04/30/97 (4) 10.26 2.61 1,360
Class B 04/30/97 (4) 10.25 2.51 126
Class C 04/30/97 (4) 10.25 2.51 28
Capital Appreciation
Class A 04/30/97 13.15 (13.87) 17,286
10/31/96 (1) 15.49 (1.59) 19,350
09/30/96 (5) 15.75 24.35 18,713
09/30/95 (3) 13.54 35.40 6,241
Class B 04/30/97 13.04 (14.19) 2,270
10/31/96 (1) 15.42 (1.66) 2,132
09/30/96 15.69 23.63 2,022
Class C 04/30/97 13.05 (14.18) 1,730
10/31/96 (1) 15.43 (1.66) 2,243
09/30/96 (5) 15.70 23.81 2,369
09/30/95 (3) 13.49 34.90 2,565
Global
Class A 04/30/97 21.32 10.18 177,191
10/31/96 (1) 21.39 (0.05) 135,837
09/30/96 21.40 25.04 131,347
09/30/95 17.73 15.47 89,397
09/30/94 15.93 19.33 81,241
09/30/93 13.35 33.52 17,430
Class B 04/30/97 21.00 10.12 18,667
10/31/96 (1) 21.13 (0.05) 5,966
09/30/96 21.14 24.70 5,000
Class C 04/30/97 20.91 10.17 14,632
10/31/96 (1) 21.03 (0.05) 8,624
09/30/96 21.04 24.91 8,081
09/30/95 17.46 15.14 3,567
09/30/94 15.74 17.90 3,571
Growth
Class A 04/30/97 22.01 2.31 % 563,317
10/31/96 (1) 21.97 (1.09) 565,032
09/30/96 22.21 22.41 567,564
09/30/95 22.84 36.70 485,935
09/30/94 (2,8) 16.78 (6.72) 431,207
09/30/93 18.46 15.13 548,564
Class B 04/30/97 21.58 2.07 8,724
10/31/96 (1) 21.60 (1.14) 5,242
09/30/96 21.85 21.87 4,536
Class C 04/30/97 21.65 2.15 13,089
10/31/96 (1) 21.65 (1.19) 11,016
09/30/96 21.91 22.15 11,167
09/30/95 22.64 36.32 5,593
09/30/94 16.68 (7.72) 3,423
Class T 04/30/97 22.25 2.42 561,475
10/31/96 (1) 22.17 (1.03) 573,884
09/30/96 (6) 22.41 0.81 585,505
C.A.S.E.
Class A 04/30/97 10.58 5.25 2,177
10/31/96 (1) 10.56 0.96 1,675
09/30/96 (7) 10.46 4.60 1,455
Class B 04/30/97 10.56 4.98 1,498
10/31/96 (1) 10.51 0.96 1,159
09/30/96 (7) 10.41 4.10 1,100
Class C 04/30/97 10.56 4.97 1,028
10/31/96 (1) 10.52 0.96 687
09/30/96 (7) 10.42 4.20 613
Value Equity
Class A 04/30/97 (4) 10.12 1.23 2,300
Class B 04/30/97 (4) 10.11 1.13 1,171
Class C 04/30/97 (4) 10.11 1.13 496
Strategic Total Return
Class A 04/30/97 14.07 8.02 15,576
10/31/96 (1) 13.43 1.20 11,744
09/30/96 13.27 16.00 11,314
09/30/95 (3) 11.74 18.43 5,167
Class B 04/30/97 14.06 7.67 2,593
10/31/96 (1) 13.42 1.13 1,684
09/30/96 13.27 15.38 1,537
Class C 04/30/97 14.06 7.72 2,487
10/31/96 (1) 13.42 1.13 1,792
09/30/96 13.27 15.49 1,728
09/30/95 (3) 11.73 17.95 281
Tactical Asset Allocation
Class A 04/30/97 11.83 6.81 % $ 10,802
10/31/96 (1) 11.19 1.45 8,396
09/30/96 11.03 11.07 7,401
Class B 04/30/97 11.82 6.47 7,288
10/31/96 (1) 11.18 1.45 5,013
09/30/96 11.02 10.39 4,848
Class C 04/30/97 11.82 6.52 3,789
10/31/96 (1) 11.18 1.36 4,758
09/30/96 11.03 10.50 4,641
Balanced
Class A 04/30/97 12.45 5.89 9,963
10/31/96 (1) 13.58 0.81 8,402
09/30/96 13.47 22.12 8,056
09/30/95 (3) 11.47 15.27 3,670
Class B 04/30/97 12.44 5.55 1,745
10/31/96 (1) 13.56 0.74 878
09/30/96 13.46 21.38 687
Class C 04/30/97 12.44 5.60 1,089
10/31/96 (1) 13.57 0.81 967
09/30/96 13.46 21.49 943
09/30/95 (3) 11.47 14.77 3,365
Flexible Income (4)
Class A 04/30/97 9.27 2.61 15,458
10/31/96 (1) 9.33 2.08 17,001
09/30/96 9.19 6.73 17,065
09/30/95 9.17 11.57 19,786
09/30/94 (8) 8.83 (1.54) 21,527
09/30/93 9.59 13.66 29,232
Class B 04/30/97 9.27 2.37 620
10/31/96 (1) 9.32 2.04 522
09/30/96 9.18 5.94 494
Class C 04/30/97 9.27 2.42 828
10/31/96 (1) 9.32 2.04 846
09/30/96 9.18 6.03 883
09/30/95 9.17 10.95 558
09/30/94 (8) 8.83 (2.15) 691
Income Plus
Class A 04/30/97 10.41 2.68 % $ 63,740
10/31/96 (1) 10.61 2.53 66,285
09/30/96 10.41 7.64 65,252
09/30/95 10.36 15.85 68,746
09/30/94 9.75 (3.28) 63,995
09/30/93 10.98 12.80 72,401
Class B 04/30/97 10.41 2.39 1,234
10/31/96 (1) 10.61 2.59 804
09/30/96 10.40 6.95 774
Class C 04/30/97 10.41 2.43 2,523
10/31/96 (1) 10.61 2.59 2,781
09/30/96 10.40 7.05 2,684
09/30/95 10.35 15.08 1,980
09/30/94 9.74 (4.55) 2,112
Tax-Exempt
Class A 04/30/97 11.29 2.05 23,400
10/31/96 (1) 11.40 0.76 24,439
09/30/96 11.36 5.89 24,708
09/30/95 11.34 7.75 27,401
09/30/94 11.10 (0.41) 29,096
09/30/93 12.07 8.97 30,717
Class B 04/30/97 11.28 1.62 260
10/31/96 (1) 11.40 0.71 198
09/30/96 11.36 5.21 189
Class C 04/30/97 11.28 1.80 622
10/31/96 (1) 11.40 0.74 939
09/30/96 11.36 5.63 907
09/30/95 11.34 7.48 454
09/30/94 11.10 (0.73) 277
Ratios/Supplemental Data
Year or Ratio of Expenses to Average Net Assets (10) (11)
Period Including Excluding
Ended Credits Gross Credits
Aggressive Growth
Class A 04/30/97 1.85% 2.54% 1.85%
10/31/96 (1) 1.85 2.62 1.85
09/30/96 (2) 1.85 2.60 1.85
09/30/95 (3) 2.85 3.35 2.85
Class B 04/30/97 2.50 3.19 2.50
10/31/96 (1) 2.50 3.27 2.50
09/30/96 (2) 2.50 3.25 2.50
Class C 04/30/97 2.40 3.09 2.40
10/31/96 (1) 2.40 3.17 2.40
09/30/96 (2) 2.40 3.15 2.40
09/30/95 (3) 3.40 3.91 3.40
International Equity
Class A 04/30/97 (4) 1.70 5.20 1.70
Class B 04/30/97 (4) 2.35 5.85 2.35
Class C 04/30/97 (4) 2.25 5.75 2.25
Capital Appreciation
Class A 04/30/97 1.85 2.54 1.85
10/31/96 (1) 1.85 2.48 1.85
09/30/96 (5) 1.85 2.72 1.85
09/30/95 (3) 2.90 4.17 2.85
Class B 04/30/97 2.50 3.19 2.50
10/31/96 (1) 2.50 3.13 2.50
09/30/96 2.50 3.37 2.50
Class C 04/30/97 2.40 3.09 2.40
10/31/96 (1) 2.40 3.03 2.40
09/30/96 (5) 2.40 3.27 2.40
09/30/95 (3) 3.45 4.72 3.40
Global
Class A 04/30/97 1.98 - 1.98
10/31/96 (1) 2.08 - 2.07
09/30/96 2.09 - 2.06
09/30/95 2.10 - 1.97
09/30/94 2.14 - -
09/30/93 2.84 3.65 -
Class B 04/30/97 2.63 - 2.63
10/31/96 (1) 2.73 - 2.72
09/30/96 2.74 - 2.71
Class C 04/30/97 2.53 - 2.53
10/31/96 (1) 2.63 - 2.62
09/30/96 2.64 - 2.61
09/30/95 2.65 - 2.52
09/30/94 4.04 - -
Growth
Class A 04/30/97 1.65% - % 1.65%
10/31/96 (1) 1.68 - 1.68
09/30/96 1.83 - 1.82
09/30/95 1.86 - 1.84
09/30/94 (2,8) 1.76 - -
09/30/93 1.61 - -
Class B 04/30/97 2.30 - 2.30
10/31/96 (1) 2.32 - 2.32
09/30/96 2.46 - 2.45
Class C 04/30/97 2.20 - 2.20
10/31/96 (1) 2.23 - 2.23
09/30/96 2.34 - 2.33
09/30/95 2.41 - 2.38
09/30/94 3.48 - -
Class T 04/30/97 1.30 - 1.30
10/31/96 (1) 1.33 - 1.33
09/30/96 (6) 1.18 - 1.17
C.A.S.E.
Class A 04/30/97 1.85 5.15 1.85
10/31/96 (1) 1.85 6.79 1.84
09/30/96 (7) 2.85 5.89 2.85
Class B 04/30/97 2.50 5.80 2.50
10/31/96 (1) 2.50 7.44 2.49
09/30/96 (7) 3.50 6.54 3.50
Class C 04/30/97 2.40 5.70 2.40
10/31/96 (1) 2.40 7.34 2.39
09/30/96 (7) 3.40 6.44 3.40
Value Equity
Class A 04/30/97 (4) 1.50 4.81 1.50
Class B 04/30/97 (4) 2.15 5.46 2.15
Class C 04/30/97 (4) 2.05 5.36 2.05
Strategic Total Return
Class A 04/30/97 1.85 2.44 1.85
10/31/96 (1) 1.85 2.76 1.82
09/30/96 1.85 2.79 1.79
09/30/95 (3) 2.99 4.57 2.85
Class B 04/30/97 2.50 3.08 2.50
10/31/96 (1) 2.50 3.40 2.47
09/30/96 2.50 3.44 2.44
Class C 04/30/97 2.40 2.99 2.40
10/31/96 (1) 2.40 3.30 2.37
09/30/96 2.40 3.34 2.34
09/30/95 (3) 3.54 5.12 3.40
Tactical Asset Allocation
Class A 04/30/97 1.85% 2.32% 1.85%
10/31/96 (1) 1.85 2.65 1.85
09/30/96 2.85 3.20 2.85
Class B 04/30/97 2.50 2.97 2.50
10/31/96 (1) 2.50 3.30 2.50
09/30/96 3.50 3.85 3.50
Class C 04/30/97 2.40 2.87 2.40
10/31/96 (1) 2.40 3.20 2.40
09/30/96 3.40 3.75 3.40
Balanced
Class A 04/30/97 1.85 3.00 1.85
10/31/96 (1) 1.85 3.44 1.85
09/30/96 1.85 3.11 1.85
09/30/95 (3) 2.92 4.48 2.85
Class B 04/30/97 2.50 3.65 2.50
10/31/96 (1) 2.50 4.09 2.50
09/30/96 2.50 3.76 2.50
Class C 04/30/97 2.40 3.55 2.40
10/31/96 (1) 2.40 3.99 2.40
09/30/96 2.40 3.66 2.40
09/30/95 (3) 3.47 5.03 3.40
Flexible Income (4)
Class A 04/30/97 1.85 2.22 1.85
10/31/96 (1) 1.85 2.98 1.85
09/30/96 1.85 2.07 1.85
09/30/95 1.87 1.94 1.85
09/30/94 (8) 1.85 2.13 -
09/30/93 1.50 1.56 -
Class B 04/30/97 2.50 2.87 2.50
10/31/96 (1) 2.50 3.63 2.50
09/30/96 2.50 2.72 2.50
Class C 04/30/97 2.40 2.77 2.40
10/31/96 (1) 2.40 3.53 2.40
09/30/96 2.40 2.62 2.40
09/30/95 2.42 2.49 2.40
09/30/94 (8) 2.40 8.59 -
Income Plus
Class A 04/30/97 1.27% - % 1.27%
10/31/96 (1) 1.33 - 1.32
09/30/96 1.33 - 1.31
09/30/95 1.29 - 1.26
09/30/94 1.33 - -
09/30/93 1.33 - -
Class B 04/30/97 1.92 - 1.92
10/31/96 (1) 1.98 - 1.97
09/30/96 1.98 - 1.96
Class C 04/30/97 1.82 - 1.82
10/31/96 (1) 1.88 - 1.87
09/30/96 1.88 - 1.86
09/30/95 1.84 - 1.81
09/30/94 3.52 - -
Tax-Exempt
Class A 04/30/97 1.00 1.49 1.00
10/31/96 (1) 1.00 1.89 1.00
09/30/96 1.00 1.46 1.00
09/30/95 1.02 1.35 1.00
09/30/94 1.00 1.30 -
09/30/93 1.00 1.43 -
Class B 04/30/97 1.65 2.14 1.65
10/31/96 (1) 1.65 2.54 1.65
09/30/96 1.65 2.11 1.65
Class C 04/30/97 1.25 1.74 1.25
10/31/96 (1) 1.25 2.14 1.25
09/30/96 1.25 1.71 1.25
09/30/95 1.27 1.60 1.25
09/30/94 1.25 20.88 -
Net Investment
Year or Income (Loss) Portfolio Average
Period to Average Turnover Commission
Ended Net Assets (11) Rate (12) Rate (13)
Aggressive Growth
Class A 04/30/97 (0.53) 57.50% $ 0.0720
10/31/96 (1) (1.06) 9.40 0.0662
09/30/96 (2) (1.15) 127.49 0.0715
09/30/95 (3) (2.39) 88.28 -
Class B 04/30/97 (0.85) 57.50 0.0720
10/31/96 (1) (1.71) 9.40 0.0662
09/30/96 (2) (1.80) 127.49 0.0715
Class C 04/30/97 (0.81) 57.50 0.0720
10/31/96 (1) (1.62) 9.40 0.0662
09/30/96 (2) (1.70) 127.49 0.0715
09/30/95 (3) (2.94) 88.28 -
International Equity
Class A 04/30/97 (4) 1.14 5.35 0.0355
Class B 04/30/97 (4) 0.48 5.35 0.0355
Class C 04/30/97 (4) 0.59 5.35 0.0355
Capital Appreciation
Class A 04/30/97 (0.67) 51.55 0.0461
10/31/96 (1) (1.41) 10.11 0.0340
09/30/96 (5) (0.35) 160.72 0.0369
09/30/95 (3) 0.75 262.97 -
Class B 04/30/97 (0.99) 51.55 0.0461
10/31/96 (1) (2.06) 10.11 0.0340
09/30/96 (1.00) 160.72 0.0369
Class C 04/30/97 (0.94) 51.55 0.0461
10/31/96 (1) (1.96) 10.11 0.0340
09/30/96 (5) (0.90) 160.72 0.0369
09/30/95 (3) 0.20 262.97 -
Global
Class A 04/30/97 (0.35) 36.33 0.0469
10/31/96 (1) (1.15) 2.59 0.0520
09/30/96 (0.67) 97.94 0.0489
09/30/95 (0.43) 161.48 -
09/30/94 (0.55) 148.01 -
09/30/93 (0.87) 116.98 -
Class B 04/30/97 (0.67) 36.33 0.0469
10/31/96 (1) (1.80) 2.59 0.0520
09/30/96 (1.32) 97.94 0.0489
Class C 04/30/97 (0.62) 36.33 0.0469
10/31/96 (1) (1.70) 2.59 0.0520
09/30/96 (1.22) 97.94 0.0489
09/30/95 (0.98) 161.48 -
09/30/94 (2.46) 148.01 -
Growth
Class A 04/30/97 0.07 % 46.57% $ 0.0418
10/31/96 (1) (0.13) 9.40 0.0360
09/30/96 (0.22) 57.80 0.0385
09/30/95 (0.26) 123.26 -
09/30/94 (2,8) 0.04 63.73 -
09/30/93 0.29 97.40 -
Class B 04/30/97 (0.25) 46.57 0.0418
10/31/96 (1) (0.78) 9.40 0.0360
09/30/96 (0.86) 57.80 0.0385
Class C 04/30/97 (0.20) 46.57 0.0418
10/31/96 (1) (0.68) 9.40 0.0360
09/30/96 (0.77) 57.80 0.0385
09/30/95 (0.81) 123.26 -
09/30/94 (1.68) 63.73 -
Class T 04/30/97 (0.64) 46.57 0.0418
10/31/96 (1) (0.20) 9.40 0.0360
09/30/96 (6) 0.36 57.80 0.0385
C.A.S.E.
Class A 04/30/97 (0.07) 67.81 0.0602
10/31/96 (1) 0.27 20.69 0.0603
09/30/96 (7) 10.00 654.49 0.0396
Class B 04/30/97 (0.40) 67.81 0.0602
10/31/96 (1) 0.38 20.69 0.0603
09/30/96 (7) 9.35 654.49 0.0396
Class C 04/30/97 (0.35) 67.81 0.0602
10/31/96 (1) 0.28 20.69 0.0603
09/30/96 (7) 9.45 654.49 0.0396
Value Equity
Class A 04/30/97 (4) 0.20 0.98 0.0688
Class B 04/30/97 (4) 0.05 0.98 0.0688
Class C 04/30/97 (4) 0.07 0.98 0.0688
Strategic Total Return
Class A 04/30/97 0.65 27.86 0.0593
10/31/96 (1) 1.47 5.50 0.0591
09/30/96 1.67 40.58 0.0622
09/30/95 (3) 0.85 34.67 -
Class B 04/30/97 0.33 27.86 0.0593
10/31/96 (1) 0.82 5.50 0.0591
09/30/96 1.02 40.58 0.0622
Class C 04/30/97 0.38 27.86 0.0593
10/31/96 (1) 0.92 5.50 0.0591
09/30/96 1.12 40.58 0.0622
09/30/95 (3) 0.30 34.67 -
Tactical Asset Allocation
Class A 04/30/97 0.79 % 41.49% $ 0.0830
10/31/96 (1) 1.26 2.38 0.0800
09/30/96 0.72 56.22 0.0828
Class B 04/30/97 0.46 41.79 0.0830
10/31/96 (1) 0.61 2.38 0.0800
09/30/96 0.07 56.22 0.0828
Class C 04/30/97 0.51 41.49 0.0830
10/31/96 (1) 0.71 2.38 0.0800
09/30/96 0.17 56.22 0.0828
Balanced
Class A 04/30/97 0.84 56.19 0.0466
10/31/96 (1) 1.84 9.08 0.0408
09/30/96 1.87 175.78 0.0443
09/30/95 (3) 0.56 82.48 -
Class B 04/30/97 0.52 56.19 0.0466
10/31/96 (1) 1.18 9.08 0.0408
09/30/96 1.22 175.78 0.0443
Class C 04/30/97 0.57 56.19 0.0466
10/31/96 (1) 1.28 9.08 0.0408
09/30/96 1.32 175.78 0.0443
09/30/95 (3) 0.01 82.48 -
Flexible Income (4)
Class A 04/30/97 3.20 74.69 -
10/31/96 (1) 6.15 16.16 -
09/30/96 6.46 135.38 -
09/30/95 7.03 149.58 -
09/30/94 (8) 6.57 105.40 -
09/30/93 7.76 138.86 -
Class B 04/30/97 2.88 74.69 -
10/31/96 (1) 5.50 16.16 -
09/30/96 5.81 135.38 -
Class C 04/30/97 2.93 74.69 -
10/31/96 (1) 5.60 16.16 -
09/30/96 5.91 135.38 -
09/30/95 6.48 149.58 -
09/30/94 (8) 6.03 105.40 -
Income Plus
Class A 04/30/97 3.66 % 27.60% -
10/31/96 (1) 5.60 1.58 -
09/30/96 6.89 65.96 -
09/30/95 7.53 25.07 -
09/30/94 7.35 48.12 -
09/30/93 7.73 54.51 -
Class B 04/30/97 3.34 27.60 -
10/31/96 (1) 4.95 1.58 -
09/30/96 6.24 65.96 -
Class C 04/30/97 3.39 27.60 -
10/31/96 (1) 5.05 1.58 -
09/30/96 6.34 65.96 -
09/30/95 6.98 25.07 -
09/30/94 5.16 48.12 -
Tax-Exempt
Class A 04/30/97 2.32 27.73 -
10/31/96 (1) 4.60 3.79 -
09/30/96 4.88 71.05 -
09/30/95 4.83 126.48 -
09/30/94 4.83 59.84 -
09/30/93 4.83 91.03 -
Class B 04/30/97 2.00 27.73 -
10/31/96 (1) 3.94 3.79 -
09/30/96 4.23 71.05 -
Class C 04/30/97 2.19 27.73 -
10/31/96 (1) 4.34 3.79 -
09/30/96 4.63 71.05 -
09/30/95 4.58 126.48 -
09/30/94 4.58 59.84 -
</TABLE>
Notes to Financial Highlights
(1) For the one month ended October 31, 1996.
(2) Distributions from net realized capital gains include distributions in
excess of current net realized capital gains.
(3) From commencement of investment operations, December 2, 1994.
(4) From commencement of operations, February 3, 1997.
(5) Dividends from net investment income include distributions in excess of
current net investment income.
(6) From commencement of operations, September 20, 1996.
(7) From commencement of operations, February 1, 1996.
(8) On October 1, 1993, Flexible Income Class A initiated a 12b-1 plan of
distribution. On October 1, 1993, Growth changed its distribution rate to 0.35%
from 0.25%.
(9) Total return has been calculated for the applicable period without
deduction of a sales load, if any, on an initial purchase for Class A or Class T
Shares.
Periods of less than one year are not annualized.
(10) Ratio of expenses to average net assets show:
Including Credits (expenses less amounts waived/reimbursed by the
investment adviser and reduced by affiliated brokerage and custoody earnings
credits).
Gross (total expenses not taking into account waived/reimbursed amounts
by the investment adviser or affiliated brokerage and custody earnings credits).
Excluding Credits (total expenses less amounts waived/reimbursed by the
investment adviser).
(11) Periods of less than one year are annualized.
(12) This rate is calculated by dividing the lesser of the Portfolio's
respective long-term purchases or sales by the average value of its long-term
investments during the period. Growth's acquisition of investment securities of
IDEX Fund and IDEX Fund 3 has been eliminated from the September 30, 1996
portfolio turnover calculation. Periods of less than one year are not
annualized.
(13) This rate is calculated by dividing total commissions paid on purchases
and sales of securities during the period by total shares purchased or sold in
those same transactions and is reported for periods ended September 30, 1996 and
forward to the extent that commissionable trades constitute more than 10% of
average net assets for the period.
The notes to the financial statements are an integral part of these statements.
IDEX SERIES FUND
NOTES TO FINANCIAL STATEMENTS (unaudited)
April 30, 1997
NOTE 1. Organization:
IDEX Series Fund ("IDEX Series") is a Massachusetts business trust registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management investment company. IDEX Series is comprised of thirteen
portfolios (each a "Portfolio" and collectively the "Portfolios"): IDEX
Aggressive Growth Portfolio ("Aggressive Growth"), IDEX International Equity
Portfolio ("International Equity"), IDEX Capital Appreciation Portfolio
("Capital Appreciation"), IDEX Global Portfolio ("Global"), IDEX Growth
Portfolio ("Growth"), IDEX C.A.S.E. Portfolio ("C.A.S.E."), IDEX Value Equity
Portfolio ("Value Equity"), IDEX Equity-Income Portfolio ("Equity-Income"), IDEX
Tactical Asset Allocation Portfolio ("Tactical Asset Allocation"), IDEX Balanced
Portfolio ("Balanced"), IDEX Flexible Income Portfolio ("Flexible Income"),
IDEX Income Plus Portfolio ("Income Plus"), and IDEX Tax-Exempt Portfolio ("Tax-
Exempt"). All Portfolios are diversified except Capital Appreciation. Effective
February 1, 1997, Equity-Income changed its name to IDEX Strategic Total Return
Portfolio ("Strategic Total Return"). Effective February 3, 1997, International
Equity and Value Equity commenced investment operations.
Each Portfolio of IDEX Series in operation is authorized to offer investors a
choice of three classes of shares (four classes of shares for Growth), each with
a public offering price that reflects different sales charges, if any, and
expense levels. Each class of shares has equal rights with respect to portfolio
assets and voting privileges. Each class has exclusive rights with respect to
its distribution plan or any other matters involving only that class. Income,
non-class specific expenses, realized and unrealized gains and losses are
allocated daily to each class of shares based on a simultaneous equation
methodology. Dividends and other distributions are calculated in a similar
manner and are paid at the same time for each class of shares.
On October 1, 1996, IDEX Series Fund changed its fiscal year end from September
30, 1996 to October 31, 1996.
NOTE 2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed
consistently by the Portfolios in the preparation of their financial statements;
the policies are in conformity with generally accepted accounting principles.
A.Security valuations: Investments of the Portfolios traded on a national
securities exchange and the NASDAQ National Market System are stated at the last
reported sales price on the day of valuation; securities traded in the over-the-
counter market and listed securities for which no sale was reported on that date
are valued at the last quoted bid price. Foreign securities are converted to
U.S. dollars using exchange rates at the close of the New York Stock Exchange.
Long-term debt securities are valued by major independent providers of pricing
services. Short-term debt securities are valued at amortized cost, which
approximates market. Other securities for which quotations are not readily
available are valued at fair value determined in such manner as the sub-
advisers, under the supervision of the Board of Trustees, decide in good faith.
B.Security transactions and related investment income: Security transactions
are accounted for on the trade date (date the order to buy or sell is executed).
Securities gains and losses are calculated on the specific identification basis
and dividend income is recorded on the ex-dividend date for both financial and
Federal tax reporting purposes; interest income is recorded on the accrual
basis, including amortization of premium and discount. Original issue discount
(as defined in the Internal Revenue Code) and market premium and discount are
amortized for both financial and Federal tax reporting purposes over the
remaining life of the related bonds.
C.Foreign currency translation: Securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollars at the
closing exchange rate each day. The cost of foreign securities is translated at
the exchange rate in effect when the investment was acquired. The Portfolios
combine fluctuations from currency exchange rates and fluctuations in market
value when computing net realized and unrealized gain or loss from investments.
Transaction gains or losses resulting from changes in exchange rates during the
reporting period or upon settlement of the foreign currency transactions are
reported in the Statement of Operations for the current period. Foreign
denominated assets and the use of forward contracts may involve risks not
typically associated with domestic transactions, including unanticipated
movements in exchange rates, the degree of government supervision and regulation
of security markets, and the possibility of political or economic instability.
D.Federal taxes: It is the policy of the Portfolios to distribute all income
and realized net capital gains to shareholders and otherwise qualify as
regulated investment companies under Subchapter M of the Internal Revenue Code.
In addition, the Portfolios intend to pay distributions as required to avoid
excise taxes. Accordingly, no provisions have been made for Federal taxes.
IDEX SERIES FUND
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
April 30, 1997
NOTE 2. Significant Accounting Policies (continued):
E.Distributions to shareholders: Dividends and distributions are recorded by
the Portfolios on the ex-dividend date. Income and capital gain distributions
are determined in accordance with Federal income tax regulations which may
differ from generally accepted accounting principles. Accordingly, permanent
book and tax basis differences relating to Portfolio earnings and shareholder
distributions are reclassified as necessary among components of net assets.
Additionally, certain amounts have been reclassified between undistributed net
investment income and undistributed net realized gains to more appropriately
conform financial accounting and tax characterizations of dividend
distributions.
F.Estimates: The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from these estimates.
NOTE 3. Investment Advisory and Other Payments To/From Affiliates:
A.Investment Advisory: Under each Portfolio's Management and Investment
Advisory Agreement, the Portfolios pay management fees based upon average daily
net assets to their respective investment advisers. The Portfolios will be
reimbursed by their advisers to the extent that certain operating expenses
exceed the stated annual limitation. The Portfolios have a 12b-1 distribution
plan under the 1940 Act pursuant to which an annual fee based on daily net
assets is paid to ISI for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Portfolios. The 12b-1 fee
for all Portfolios is comprised of a 0.25% service fee and the remaining amount
is an asset-based sales charge/distribution fee. Each Portfolio pays the
transfer agent an annual per-account charge of $15.55 for each of its
shareholder accounts in existence, $2.71 for each new account opened and $1.62
for each closed account.
<TABLE>
<CAPTION>
For the period ended April 30, 1997:
Annual Rates Underwriter Commissions
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Expense
Limit
(excl.
12b-1 Cls A Cls B Cls C Received Retained Contngnt
Mgmt fees) 12b-1 12b-1 12b-1 by by Sales
fee (1) (2) Fee Fee Fee ISI ISI Charges
Aggressive
Growth 1.00% 1.50% 0.35% 1.00% 0.90% 138,739 19,840 2,122
International
Equity 1.00% 1.35% 0.35% 1.00% 0.90% 5,426 811 -
Capital
Appreciation 1.00% 1.50% 0.35% 1.00% 0.90% 163,326 25,815 4,183
Global 1.00% -none- 0.35% 1.00% 0.90% 1,102,443 160,600 4,366
Growth 0.85% 1.50% 0.35% 1.00% 0.90% 1,391,779 213,109 7,803
C.A.S.E. 1.00% 1.50% 0.35% 1.00% 0.90% 31,784 4,963 1,525
Value Equity 1.00% 1.15% 0.35% 1.00% 0.90% 24,768 3,245 -
Strategic
Total Return 1.00% 1.50% 0.35% 1.00% 0.90% 115,423 18,091 4,035
Tactical
Asset
Allocation 1.00% 1.50% 0.35% 1.00% 0.90% 107,735 17,709 2,642
Balanced 1.00% 1.50% 0.35% 1.00% 0.90% 74,815 11,942 2,488
Flexible Income0.90% 1.50% 0.35% 1.00% 0.90% 14,499 2,579 280
Income Plus 0.60% 1.25% 0.35% 1.00% 0.90% 51,234 8,960 1,158
Tax-Exempt 0.60% 0.65% 0.35% 1.00% 0.60% 15,394 2,665 -
</TABLE>
(1)The rates for Aggressive Growth, International Equity, Capital Appreciation,
Global, C.A.S.E., Value Equity, Tactical Asset Allocation, Strategic Total
Return, Balanced, Income Plus and Tax-Exempt apply to the first $750 million in
average net assets. The rate for Growth applies to the first $750 million in
average net assets at 1.00%, the next $250 million at 0.90% and average net
assets over $1 billion at 0.85%. The rate for Flexible Income applies to the
first $100 million in average net assets.
(2) International Equity and Value Equity rates are in effect for the first nine
months of operations, through October 31, 1997.
(3)Underwriter commissions relate only to front-end sales charges imposed for
Class A and Class T shares and contingent deferred sales charges imposed on
Class B share redemptions.
IDEX SERIES FUND
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
April 30, 1997
NOTE 3. Investment Advisory and Other payments To/From Affiliates
(continued):
B.Affiliates: Idex Management, Inc. ("IMI") is the investment adviser for
Capital Appreciation, Global, Growth, Balanced and Flexible Income;
InterSecurities, Inc. ("ISI") is the investment adviser for Aggressive Growth,
International Equity, C.A.S.E., Value Equity, Tactical Asset Allocation,
Strategic Total Return, Income Plus and Tax-Exempt. In addition, ISI is the
Portfolios' underwriter. Idex Investor Services, Inc. ("IIS") is the
Portfolios' transfer agent. IMI is owned equally by AUSA Holding Company ("AUS
A") and Janus Capital Corporation ("JCC"). ISI and IIS are 100% owned by AUSA.
AUSA is a wholly-owned subsidiary of AEGON NV, a Netherlands corporation.
The total affiliated brokerage commissions (transactions placed by the Sub-
Adviser with an affiliate of the Sub-Adviser or the Investment Adviser) paid by
Aggressive Growth were $20,144 for the six month period ended April 30, 1997.
C.Deferred Compensation Plan: Each eligible trustee of the Fund who is not an
officer or affiliated person as defined under the Investment Company Act of
1940, as amended, may elect to participate in the Deferred Compensation Plan for
trustees of IDEX Series Fund (the Plan). Under the Plan, such trustees may
elect to defer payment of a percentage of their total fees earned as a trustee
of the Fund. These deferred amounts may be invested in any Portfolio of the
IDEX Series. Invested plan amounts are included in other assets. The total
liability for deferred compensation to trustees under the Plan at April 30,
1997, is included in other liabilities as follows:
Aggressive Growth 1,827 Strategic Total Return 1,255
International Equity 80 Tactical Asset Allocation 1,364
Capital Appreciation 1,403 Balanced 804
Global 12,919 Flexible Income 1,106
Growth 70,677 Income Plus 4,387
C.A.S.E. 284 Tax-Exempt 1,576
Value Equity 202 Total 97,884
NOTE 4. Investment Transactions:
The cost of securities purchased and proceeds from securities sold (excluding
non-U.S. Government short-term securities) for the period ended April 30, 1997
were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Non-U.S. Non-U.S. U.S. U.S.
Government Government Government Government
Purchases Sales Purchases Sales
Aggressive Growth 17,368,848 15,632,556 - -
International Equity 1,415,419 60,848 - -
Capital Appreciation 11,108,824 12,323,605 - -
Global 115,509,538 60,711,211 49,531 50,000
Growth 457,876,838 580,359,186 - -
C.A.S.E. 3,821,739 2,454,733 - -
Value Equity 3,054,986 21,537 - -
Strategic Total Return 9,208,225 4,816,202 - -
Tactical Asset Allocation 6,345,313 3,912,379 3,973,906 3,157,609
Balanced 6,512,007 5,108,531 1,907,133 1,145,358
Flexible Income 10,358,335 13,864,484 2,025,625 -
Income Plus 20,330,866 17,716,455 - -
Tax-Exempt 6,480,410 8,634,808 - -
</TABLE>
IDEX SERIES FUND
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
April 30, 1997
NOTE 5. Futures, Forward Currency Contracts And Other Derivative
Transactions:
When a Portfolio enters into a stock index or U.S. Treasury securities futures
contract, the Portfolio is required to pledge to the broker an amount of U.S.
Government securities, equal to a portion of the contract's value, as "initial
margin" on the contract. Subsequently, the Portfolio receives or makes delivery
of cash equal to a specific dollar amount times the difference between the stock
index value (or for Treasury securities futures, the per contract value) at the
close of the valuation day and the contract's opening strike price. These
payments, called "variation margin", are recorded by the Portfolio as unrealized
gains or losses. To the extent variation margin is unsettled and is due to or
owed by the Portfolio on open futures contracts, a receivable or payable will
exist and is included in other assets and/or other liabilities in the Statement
of Assets and Liabilities and indicated in the Schedule of Investments. When a
futures contract expires or is closed, the Portfolio may realize a gain or loss.
Realized net gains/(losses) on futures contracts for the six months ended April
30, 1997 were ($14,934) and $6,439 for Global and Flexible Income, respectively.
Forward foreign currency contracts are contracts for delayed delivery of
financial interests in which the seller agrees to make delivery at a specified
future date of a specified financial instrument, at a specified price or yield.
Risks arise from changes in the market value of the underlying instruments and
from the possible inability of counterparties to meet the terms of their
contracts.
Forward foreign currency contracts are valued at the forward rate, and are
marked to market daily. The change in market value is recorded by a Portfolio
as an unrealized gain or loss. When the contract is closed, the Portfolio
records a realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
NOTE 6. Information for Federal Income Tax Purposes:
<TABLE>
<CAPTION>
At April 30, 1997:
<S> <C> <C> <C> <C>
Cost of Unrealized Unrealized Net
Securities appreciation depreciation unrealized
of of appreciation
investments investments
Aggressive Growth 26,122,675 4,055,590 (754,390) 3,301,200
International Equity 1,528,539 52,131 (35,782) 16,349
Capital Appreciation 20,123,655 1,993,163 (782,681) 1,210,482
Global 184,802,306 32,600,482 (4,055,283) 28,545,199
Growth 874,835,368 277,034,858 (6,077,808) 270,957,050
C.A.S.E. 4,150,523 398,767 (176,408) 222,359
Value Equity 3,914,041 111,233 (74,224) 37,009
Strategic Total Return 18,602,849 2,411,150 (309,716) 2,101,434
Tactical Asset Allocation 20,707,873 1,737,196 (539,784) 1,197,412
Balanced 11,851,123 1,028,704 (207,914) 820,790
Flexible Income 16,546,166 312,063 (205,546) 106,517
Income Plus 64,981,412 2,171,413 (830,134) 1,341,279
Tax-Exempt 23,767,685 296,898 (210,080) 86,818
</TABLE>
Realized net capital gains available to distribute were paid to shareholders in
December, 1996. Capital loss carryforwards utilized by Flexible Income during
the fiscal year ended October 31, 1996 were $56,485. Capital loss carryforwards
for Aggressive Growth, Capital Appreciation and Tax-Exempt aggregated
$2,547,037, $68,919 and $766, respectively, and are available through October
31, 2004. Capital loss carryforwards for Flexible Income aggregated $2,740,919
and are available to offset future realized net capital gains through October
31, 1997; of this amount, $480,919 is available through October 31, 1998 and
$188,609 is available through October 31, 2002. Flexible Income and C.A.S.E.
will make net capital gain distributions in future years to the extent that net
capital gains are realized in excess of available loss carryforwards.
IDEX Series Fund
TRUSTEES
Peter R. Brown
Largo, Florida
Chairman of the Board,
Peter Brown Construction Company
Daniel Calabria
South Pasadena, Florida
Retired; former President/CEO,
Templeton Funds Management, Inc.
James L. Churchill
Hilton Head, South Carolina
Retired; former President of the Avionics
Group of Rockwell International Corporation
Charles C. Harris
Belleair, Florida
Retired; former Senior Vice President,
Western Reserve Life Assurance Co. of Ohio
G. John Hurley
Largo, Florida
President and Chief Executive Officer
of the Fund;
President and Chief Executive Officer
of InterSecurities, Inc.
John R. Kenney
Largo, Florida
Chairman of the Board of the Fund;
Chairman of the Board of InterSecurities, Inc.
Julian Lerner
Dallas, Texas
Advisor to the Board of Associated
Financial Group;
former Investment Consultant and Senior Vice
President, AIM Capital Management
William W. Short, Jr.
Largo, Florida
President, Shorts, Inc.
Chairman, Southern Apparel Corporation
and S.A.C. Distributors
Jack E. Zimmerman
Dayton, Ohio
Retired; former Director, Regional Marketing,
Martin Marietta Corporation
CORPORATE ADDRESS
201 Highland Avenue
Largo Florida, 33770-2597
OFFICERS
John R. Kenney
Chairman of the Board
G. John Hurley
President and Chief Executive Officer
Ronald L. Hall
Senior Vice President - Sales & Marketing
Thomas R. Moriarty
Senior Vice President and Treasurer
Becky A. Ferrell
Vice President, Counsel and Secretary
William H. Geiger
Vice President and Assistant Secretary
Christopher G. Roetzer
Vice President and Assistant Treasurer
SEND YOUR CORRESPONDENCE TO:
Idex Investor Services, Inc.
P.O. Box 9015
Clearwater, Florida 34618-9015
CUSTOMER SERVICE
(800) 851-9777
Hours: 8 a.m. to 7 p.m. Monday - Thursday,
8 a.m. to 6 p.m. Friday Eastern time
IDEX ASSIST LINE
(800) 421-IDEX (4339)
24-hour automated account information
INVESTMENT ADVISERS
Idex Management, Inc.
201 Highland Avenue
Largo, Florida 33770-2597
InterSecurities, Inc.
201 Highland Avenue
Largo, Florida 33770-2597
SUB-ADVISERS
AEGON USA
Investment Management, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499
C.A.S.E. Management, Inc.
2255 Glades Road, Suite 221-A
Boca Raton, Florida 33431
Dean Investment Associates
2480 Kettering Tower
Dayton, Ohio 45423
Fred Alger Management Incorporated
30 Montgomery Street
Jersey City, New Jersey 07302
GE Investment Management Incorporated
3003 Summer Street
Stanford, Connecticut 06905
Janus Capital Corporation
100 Fillmore Street, Suite 300
Denver, Colorado 80206
Luther King Capital
Management Corporation
301 Commerce Street, Suite 1600
Fort Worth, Texas 76102
NWQ Investment Management
Company, Inc.
655 South Hope Street, 11th Floor
Los Angeles, California 90017
Scottish Equitable Investment
Management Limited
Edinburgh Park,
Edinburgh EH12 9SE, Scotland
PRINCIPAL UNDERWRITER
InterSecurities, Inc.
201 Highland Avenue
Largo, Florida 33770-2597
CUSTODIAN
Investors Fiduciary Trust Company
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1055 Broadway
Kansas City, Missouri 64105
If you receive duplicate mailings because you have more than one account in the
same Portfolio or in the IDEX Series Fund, at the same household, you may wish
to save your Fund money by consolidating your accounts by address. Please call
IDEX Customer Service at (800) 851-9777.
