<PAGE> 1
Nations
Fund
Equity
Funds Annual Report for the Year Ended March 31, 1996
NATIONS
--FUND-
<PAGE> 2
<TABLE>
<S> <C>
NOT MAY LOSE VALUE
FDIC-INSURED NO BANK GUARANTEE
</TABLE>
NATIONS FUND DISTRIBUTOR: STEPHENS INC. STEPHENS INC., WHICH IS NOT
AFFILIATED WITH NATIONSBANK, N.A., IS NOT A BANK AND SECURITIES OFFERED BY IT
ARE NOT GUARANTEED BY ANY BANK OR INSURED BY THE FDIC. STEPHENS INC., MEMBER
NYSE-SIPC.
NATIONS FUND INVESTMENT ADVISER: NATIONSBANC ADVISORS, INC.
NATIONS FUND INVESTMENT SUB-ADVISER: TRADESTREET INVESTMENT ASSOCIATES,
INC.
<PAGE> 3
NATIONS FUND
DEAR SHAREHOLDER:
We are pleased to present the Nations Fund annual report for the fiscal
period ended March 31, 1996.* Overall, markets have rewarded investors, and
during this period, assets of the Nations Fund family of mutual funds surpassed
the $18 billion level.
As noted in our letter to you dated November 30, 1995, last year marked a
period that many investors will look back upon with great fondness in the years
to come. Four factors coincided to make 1995 a memorable year for the stock and
bond markets: 1) The U.S. economy grew at a moderate pace; 2) Inflation slowed
more than most observers anticipated; 3) Both the executive and legislative
branches of the U.S. government embraced a commitment to reduce the federal
deficit; and 4) U.S. corporations continued to produce strong profitability. As
a result, those who owned financial assets enjoyed strong performance without
having it eroded or undermined by threats of an overheated economy, creeping
inflation or unbridled federal spending.
The first three months of 1996 demonstrated that ideal investment
conditions do not last indefinitely. While inflation remained subdued, the
economy lost some of its balance. In January, the economy softened under the
weight of winter storms and a partial Federal government shut down. By late
February, the economy had reawakened with surprising strength, particularly on
the employment front. However, the strong earnings gains of 1995 showed clear
signs of abating. Meanwhile, the political season opened, complicating budget
negotiations and creating harsh political rhetoric. Under these conditions, bond
prices began to fall and interest rates began to rise. While stocks posted gains
in the first months of 1996, the gains were narrower (fewer stocks participated)
and volatility increased. The early primary season put a great deal of focus on
the flat tax, and voter support for the concept appeared to erode. As a result,
municipal securities, which underperformed U.S. Treasuries last year, closed the
performance gap.
Looking ahead, the cooling and heating of the economy that we have
experienced early in the year should give way to modest growth. We do not think
there will be a boom or a bust in the foreseeable future. Inflation should not
be a significant factor, as global markets and sluggishness in the
industrialized world should keep prices and wages under control. Corporate
profits will, however, be a precious commodity. Although we expect corporate
profits to advance, they should be far less spectacular than in 1995. Clearly,
the races for President and Congress will stir up the markets from time to time.
Fiscal conservatism, which has helped to propel the markets, will get lost at
times as the candidates battle.
In summary, we believe investors will enjoy a reasonable, rather than
ideal, environment for investing. We believe that stocks and bonds will advance.
However, the advances will probably be accompanied by periodic corrections and
volatility as the market continues to adjust to a less-than-perfect investment
world.
Sincerely,
/s/ A. Max Walker /s/ Mark H. Williamson
A. Max Walker Mark H. Williamson
President and Chairman President, NationsBanc
of the Board Advisors, Inc.
March 31, 1996
* THE FISCAL YEAR END CHANGED TO MARCH 31.
<PAGE> 4
THE NATIONS FUND ADVANTAGE
A family of mutual funds provides investors with a number of advantages,
including the ability to shift investment assets among funds as their financial
objectives or market conditions change. The Nations Fund family of mutual funds
includes a broad array of professionally managed domestic and international
stock, bond and money market funds advised by NationsBanc Advisors, Inc. The
family was designed to accommodate a wide variety of investment objectives
across the risk/reward spectrum.
THE NATIONS FUND FAMILY* GRAPH
POTENTIAL RETURN
<TABLE>
<CAPTION>
POTENTIAL RISK (VARIABILITY)
---------------------------------------------------------------------------
CURRENT INCOME GROWTH AND INCOME GROWTH AGGRESSIVE GROWTH
--------------------------------- -------------------------- -------------------------- ----------------------------
STABILITY
- ----------------
Shorter Intermediate Longer Growth Large Small Region
Money Maturity Maturity Maturity Equity And Capitalization International Capitalization Specific
Market Bond Bond Bond Balanced Income Income Growth Equity Growth International
Funds Funds Funds Funds Funds Funds Funds Funds* Funds Funds Funds
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -Nations -Nations -Nations -Nations -Nations -Nations -Nations -Nations -Nations -Nations -Nations
Prime Short- Stragegic Government Balanced Equity Value Capital International Emerging Emerging
Fund Term Fixed Securities Assets Income Fund Growth Equity Fund Growth Market
- -Nations Income Income Fund Fund Fund Fund Fund Fund
Govern- Fund Fund -Nations -Nations -Nations
ment -Nations -Nations Diversified Disciplined Pacific
Money Short- Inter- Income Equity Growth
Market Term mediate- Fund Fund Fund
Fund Municipal Term -Nations
- -Nations Income Municipal Long-Term
Treasury Fund Bond Municipal
Fund -Nations Funds Bond
- -Nations Short- Funds
Tax- Intermediate -Nations
Exempt Government Global
Fund Fund Government
Income Fund
</TABLE>
For specific information on developing an investment portfolio that will more
closely target your investment objectives, contact your investment
representative or Nations Fund for fund brochures and prospectuses at (800)
982-2271.
- ---------------
* The Nations Fund family also includes Nations Equity Index Fund, which
seeks to match the performance of the S&P 500 before fees and expenses.
2
<PAGE> 5
NATIONS BALANCED ASSETS FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
Julie Hale is Senior Portfolio Manager for Nations Balanced Assets Fund.
Ms. Hale has worked in the investment community since 1981. Prior to joining
TradeStreet Investment Associates, Inc., sub-adviser to the Fund, she was Vice
President and Senior Portfolio Manager in the Investment Management Group at
NationsBank, N.A. Her experience includes research analysis and portfolio
management for Mercantile Safe Deposit and Trust, and National City Bank. Ms.
Hale received a B.S. in Business and Finance from Mount St. Mary's College and
an M.B.A. from Kent State University. She holds the Chartered Financial Analyst
designation and is a member of the Association for Investment Management and
Research as well as the North Carolina Society of Security Analysts, Inc. She
also is a member of the National Association for Petroleum Investment Analysts
and the World Affairs Council of Washington D.C.
INVESTMENT OBJECTIVE
The Fund seeks total investment return through a combination of growth of
capital and current income consistent with the preservation of capital.
PERFORMANCE REVIEW
For the one-year period ended March 31, 1996, Nations Balanced Assets Fund
Investor A Shares provided a total return of 23.28%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Ms. Hale shares her views on financial market
conditions and Fund performance for the one-year period ended March 31, 1996.
PLEASE DESCRIBE THE FUND'S INVESTMENT STYLE AND PHILOSOPHY.
The Fund's investment philosophy is based on the premise that a diversified
portfolio allocated among stocks, fixed-income securities and money market
instruments, which have different risk/return characteristics, will reduce
overall portfolio risk relative to expected returns. Most investments are made
in stocks of high quality companies with favorable long-term fundamentals and
earnings growth potential.
BRIEFLY DESCRIBE THE MARKET CONDITIONS THAT PREVAILED OVER THE PAST TWELVE
MONTHS.
The most important factor over the past year was declining interest rates,
driven by both moderate economic growth and low inflation. In this environment,
both the stock and bond markets benefited, as did Nations Balanced Assets Fund.
WHAT SHIFTS WERE MADE IN THE PORTFOLIO'S OVERALL ASSET ALLOCATION OVER THE PAST
YEAR?
At the beginning of the reporting period, asset allocation was 55% stocks,
40% fixed-income securities and 5% cash. Both the stock and bond markets rallied
for the first nine months of the reporting period, as long-term interest rates
declined. The bond allocation bottomed at 33% as the 30-year U.S. Treasury bond
declined from a yield of 7.5% to around 6% late in the year. Proceeds were
reinvested in equities and cash. As we entered 1996, investors became concerned
about a resurgence in economic activity and the bond market made an abrupt
reversal with rising interest rates. Lower bond prices, combined with improving
stock prices, prompted a higher allocation to bonds of 37%.
ON THE EQUITY SIDE, WHAT DO YOU LOOK FOR WHEN YOU CHOOSE COMPANIES FOR FUND
INVESTMENT?
We seek out high-quality companies that have strong long-term fundamentals
and earnings growth potential, and are trading at favorable prices relative to
their earnings outlook.
3
<PAGE> 6
WHERE DID YOU FIND STRONG EQUITY PERFORMANCE?*
Equity performance benefited from the Fund's exposure to the technology and
finance sectors which performed well during the past year. In technology, the
Fund benefited from its exposure to networking companies that provide products
and services for computers to communicate and share data. Strong-performing
names included Bay Networks, Cabletron Systems and cisco Systems, Inc. Finance
holdings that performed very well were in the banking and financial services
areas.
WHAT WERE THE LESS FAVORABLE SECTORS/STOCKS?
Health care and basic materials were sectors that hurt equity performance
over the past year. The health care group outperformed the overall market and
the Fund was underweighted in that sector through the second half of the year.
The basic materials group dramatically lagged the market last year and holdings
underperformed the sector.
WHERE DID YOU FIND GOOD VALUE IN THE BOND MARKET?
For most of the reporting period, long-term U.S. Treasuries provided
outstanding returns. However, for the three months ended March 31, 1996,
exposure to the corporate market provided the strongest performance. Continued
strong credit fundamentals, limited supply and strong demand produced attractive
returns.
HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
As of March 31, 1996, the asset allocation mix is 55% stocks, 37% bonds and
8% cash. We expect moderate economic growth and low inflation for the remainder
of 1996, which should lead to lower interest rates. Positioning is slightly more
defensive this year with a higher cash position and in terms of equity
selection. Currently, the Fund is overweighted in domestic oils, natural gas,
and electric utilities. These sectors offer attractive total return prospects
and have typically been less volatile than the overall stock market.
- ---------------
* Portfolio holdings are subject to change and may not be representative of
current holdings.
4
<PAGE> 7
NATIONS FUND
Nations Balanced Assets Fund
- ---------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO BREAKDOWN AS OF 3/31/96
<S> <C>
Common Stocks 54.3%
U.S. Treasury Securities 16.5%
Mortgage-Backed Securities 10.1%
Repurchase Agreement and Other
Assets and Liabilites (Net) 8.8%
Corporate Bonds and Notes 6.5%
Asset-Backed Securities 3.2%
Certificate of Deposit - (Yankee) 0.3%
Foreign Bond 0.3%
</TABLE>
- -------------------------------------
<TABLE>
<CAPTION>
TOP TEN HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/96
<C> <S> <C>
1. U.S. T-Bond, 8.750% 08/15/20 4.8%
2. U.S. T-Bond, 5.625% 11/30/00 4.6%
3. U.S. T-Note, 5.875% 11/15/05 2.6%
4. U.S. T-Note, 6.875% 03/31/00 2.1%
5. FNMA, TBA, 7.000% 02/15/11 1.9%
6. U.S. T-Note, 6.250% 02/15/03 1.6%
7. FHLMC, Gold, TBA, 7.500% 03/13/26 1.4%
8. GNMA, 8.000% 06/15/22 - 07/15/25 (2 Pools) 1.1%
9. FNMA, TBA, 6.500% 12/01/26 1.0%
10. GNMA, TBA, 6.500% 02/20/26 1.0%
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ----------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ----------------------------------------
<S> <C>
YEAR ENDED 23.28%
03/31/96
--------------------
INCEPTION
(10/02/92) 10.84%
THROUGH
03/31/96
</TABLE>
- ----------------------------------------
- ----------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor A
Shares of Nations Balanced
Assets Fund on October 2,
1992 (inception). Figures
for the Lehman Brothers
Aggregate Bond Index, which
is comprised of the
Government Corporate Bond
Index, the Asset-Backed
Securities Index and the
Mortgage-Backed Securities
Index and includes U.S.
Treasury issues, agency
issues, corporate bond
issues and mortgage-backed
issues, include reinvestment
of dividends. Figures for
the Standard & Poor's 500,
an unmanaged index of 500
widely held common stocks,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of Lehman
Investment Brothers
with Distributions Aggregate Standard
Reinvested Bond Index & Poor's 500
<S> <C> <C> <C>
Oct. 2, 1992 10,000 10,000 10,000
Nov. 30, 1992 10,372 10,027 10,502
10,800 10,441 10,961
11,066 10,718 11,013
11,309 10,998 11,297
Nov. 30, 1993 11,379 11,004 11,559
11,013 10,689 11,121
10,661 10,578 11,167
11,076 10,643 11,712
Nov. 30, 1994 11,000 10,683 11,710
11,621 11,222 12,849
12,584 11,906 14,074
13,252 12,140 15,192
Nov. 30, 1995 13,866 12,657 16,106
Mar. 31, 1996 14,327 12,432 16,970
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during those periods under the new pricing structure.
Portfolio holdings are subject to change and may not be representative of
current holdings.
5
<PAGE> 8
NATIONS FUND
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- -------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- -------------------------------------------
<S> <C> <C>
YEAR ENDED 22.02%* 22.52%
03/31/96
------------------------
INCEPTION
(10/02/92) 10.03% 10.03%
THROUGH
03/31/96
------------------------
Not
*Adjusted adjusted
for maximum for
contingent contingent
deferred deferred
sales charge sales
of 0.50% charge
</TABLE>
- -------------------------------------------
- -------------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor C
Shares of Nations Balanced
Assets Fund on October 2,
1992 (inception). Investor C
Shares that are redeemed
within one year of purchase
are subject to a 0.50%
contingent deferred sales
charge. Figures for the
Lehman Brothers Aggregate
Bond Index, which is
comprised of the Government
Corporate Bond Index, the
Asset-Backed Securities
Index and the
Mortgage-Backed Securities
Index and includes U.S.
Treasury issues, agency
issues, corporate bond
issues and mortgage-backed
issues, include reinvestment
of dividends. Figures for
the Standard & Poor's 500,
an unmanaged index of 500
widely held common stocks,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of Lehman
Investment Brothers
with Distributions Aggregate Standard
Reinvested Bond Index & Poor's 500
<S> <C> <C> <C>
Oct. 2, 1992 10,000 10,000 10,000
Nov. 30, 1992 10,353 10,029 10,502
10,758 10,441 10,961
11,000 10,718 11,013
11,218 10,996 11,297
Nov. 30, 1993 11,268 11,004 11,559
10,889 10,689 11,121
10,519 10,578 11,167
10,910 10,643 11,712
Nov. 30, 1994 10,809 10,683 11,710
11,400 11,222 12,849
12,314 11,906 14,074
12,947 12,140 15,192
Nov. 30, 1995 13,523 12,657 16,106
Mar. 31, 1996 13,967 12,432 16,970
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during those periods under the new pricing structure.
6
<PAGE> 9
NATIONS FUND
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR N SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ----------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ----------------------------------------
<S> <C>
YEAR ENDED 22.60%
03/31/96
--------------------
INCEPTION
(6/7/93) 10.16%
THROUGH
03/31/96
</TABLE>
----------------------------------------
- ----------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor N
Shares of Nations Balanced
Assets Fund on June 7, 1993
(inception). Figures for the
Lehman Brothers Aggregate
Bond Index, which is
comprised of the Government
Corporate Bond Index, the
Asset-Backed Securities
Index and the
Mortgage-Backed Securities
Index and includes U.S.
Treasury issues, agency
issues, corporate bond
issues and mortgage-backed
issues, include reinvestment
of dividends. Figures for
the Standard & Poor's 500,
an unmanaged index of 500
widely held common stocks,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of Lehman
Investment Brothers
with Distributions Aggregate Standard
Reinvested Bond Index & Poor's 500
<S> <C> <C> <C>
June 7, 1993 10,000 10,000 10,000
10,287 10,181 10,029
Nov. 30, 1993 10,498 10,447 10,287
10,546 10,453 10,526
10,198 10,154 10,127
9,860 10,049 10,170
Nov. 30, 1994 10,231 10,110 10,666
10,147 10,148 10,654
10,709 10,660 11,701
11,573 11,310 12,817
Nov. 30, 1995 12,174 11,532 13,834
12,723 12,023 14,667
Mar. 31, 1996 13,129 11,810 15,454
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during those periods under the new pricing structure.
7
<PAGE> 10
NATIONS FUND
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - PRIMARY A SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ----------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ----------------------------------------
<S> <C>
YEAR ENDED 23.43%
03/31/96
--------------------
INCEPTION
(09/30/92) 11.08%
THROUGH
03/31/96
</TABLE>
- ----------------------------------------
- ----------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Primary A
Shares of Nations Balanced
Assets Fund on September 30,
1992 (inception). Figures
for the Lehman Brothers
Aggregate
Bond Index, which is
comprised of the Government
Corporate Bond Index, the
Asset-Backed Securities
Index and the
Mortgage-Backed Securities
Index and includes U.S.
Treasury issues, agency
issues, corporate bond
issues and mortgage-backed
issues, include reinvestment
of dividends. Figures for
the Standard & Poor's 500,
an unmanaged index of 500
widely held common stocks,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of Lehman
Investment Brothers
with Distributions Aggregate Standard
Reinvested Bond Index & Poor's 500
<S> <C> <C> <C>
Sept. 30, 1992 10,000 10,000 10,000
Nov. 30, 1992 10,384 10,027 10,502
10,818 10,441 10,961
11,089 10,718 11,013
11,338 10,998 11,297
Nov. 30, 1993 11,416 11,004 11,559
11,052 10,689 11,121
10,706 10,578 11,167
11,128 10,643 11,712
Nov. 30, 1994 11,059 10,683 11,710
11,701 11,222 12,849
12,665 11,906 14,074
13,345 12,140 15,192
Nov. 30, 1995 13,971 12,657 16,106
Mar. 31, 1996 14,443 12,432 16,970
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during those periods under the new pricing structure
8
<PAGE> 11
NATIONS EQUITY INCOME FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
Eric Williams is Senior Portfolio Manager for Nations Equity Income Fund.
Mr. Williams has worked in the investment community since 1980. Prior to joining
TradeStreet Investment Associates, Inc., sub-adviser to the Fund, he was Senior
Vice President and Senior Portfolio Manager in the Investment Management Group
at NationsBank, N.A. Other experience includes equity research and portfolio
management for National Bank of Detroit. Mr. Williams received a B.S. in
Accounting from East Carolina University, Summa Cum Laude, and an M.B.A. from
Indiana University. He holds the Chartered Financial Analyst designation, is on
the Advisory Board of Indiana University's Investment Management Academy, and is
a member of the Association for Investment Management and Research as well as
the North Carolina Society of Financial Analysts, Inc.
INVESTMENT OBJECTIVE
The Fund seeks to provide high current income primarily through investments
in equity securities (including convertible securities) having a relatively high
current yield.
PERFORMANCE REVIEW
For the one-year period ended March 31, 1996, Nations Equity Income Fund
Investor A Shares provided a total return of 24.07%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Williams shares his views on financial
market conditions and Fund performance for the one-year period ended March 31,
1996.
WHAT IS THE FUND'S INVESTMENT STYLE AND PHILOSOPHY?
Nations Equity Income Fund provides investors with a diversified portfolio
of equities, specializing in undervalued stock selection. The portfolio is
constructed to produce a 50% yield premium over the Standard & Poor's
Corporation 500 Composite Stock Price Index (S&P 500). It is designed to offer
low volatility, but provide returns comparable to the S&P 500 over time with
less risk. Thus, the Fund should capture a large portion of returns in rising
markets, while shielding the portfolio from the full impact of a falling market.
PLEASE DESCRIBE HOW THE FUND PERFORMED UNDER THE MARKET CONDITIONS THAT
PREVAILED OVER THE PAST TWELVE MONTHS.
Market conditions were generally favorable for the overall stock market
this last year. Corporate profits were strong, inflation was relatively benign
and interest rates declined through much of the year. In turn, this presented a
favorable environment for investors in Nations Equity Income Fund.
Over the past twelve months, the Fund attained 75% of the S&P 500 return,
with less volatility.
WHAT PARTICULAR SECTORS/STOCKS WERE FAVORABLE FOR THE FUND?*
Stock selection in the finance sector contributed favorably to Fund
performance. The average return for finance holdings was 58% during the last
twelve months, while financial stocks in the S&P 500 gained 48% on average.
Equities invested in consumer cyclical companies were up 32%, bettering the
average 19% return among consumer cyclical stocks in the S&P 500. These gains
were diluted by a noticeable underperformance in the capital goods sector, with
Fund holdings increasing 18% on average, compared with a 40% average gain in
stocks of capital goods companies found in the S&P 500. Miscellaneous holdings,
primarily containing an investment in the conglomerate Hanson, were down
slightly for the year, although miscellaneous stocks in the S&P 500 returned
close to 26%.
- ---------------
* Portfolio holdings are subject to change and may not be representative of
current holdings.
9
<PAGE> 12
HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
Going forward, the Fund will probably increase its weighting in stocks that
are interest-rate sensitive. Such equities, including banks and insurance
companies, telephone companies and electric utilities, are becoming undervalued
with the recent rise in interest rates. Convertible securities, to the extent
their prices adjust downward, are likely candidates for purchase as well.
Without the anticipated price response to an increase in interest rates, the
Fund may purchase
U.S. Treasury securities to help pursue Fund objectives. Proceeds for any
above-mentioned purchases would occur from previously sold overvalued positions.
10
<PAGE> 13
NATIONS FUND
Nations Equity Income Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS OF 3/31/96
<TABLE>
<S> <C>
Convertible Bonds & Notes
U.S. Treasury Securities,
Repurchase Agreement and
Other Assets and Liabilites (Net) 21.8%
Energy 12.3%
Telecommunications 10.5%
Producer Durables 9.0%
Utilities 8.3%
Financial Services 8.1%
Health Care 5.9%
Consumer Staples 5.9%
Materials/Processing 5.1%
Consumer Discretionary 5.0%
Other 4.6%
Technology 3.5%
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ----------------------------------------
AVERAGE ANNUAL TOTAL RETURN
-----------------------------------
<S> <C>
YEAR ENDED 24.07%
03/31/96
--------------------
INCEPTION
(04/16/91) 13.45%
THROUGH
03/31/96
</TABLE>
- ----------------------------------------
- ----------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor A
Shares of Nations Equity
Income Fund on April 16,
1991 (inception). Figures
for the Standard & Poor's
500, an unmanaged index of
500 widely held common
stocks, include reinvestment
of dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
April 16, 1995 10,000 10,000
9,890 9,952
May 31, 1991 10,618 10,483
11,395 11,361
11,299 11,075
11,593 11,285
May 31, 1992 12,069 11,641
12,509 12,226
13,154 12,759
13,248 12,821
May 31, 1993 13,735 13,151
14,068 13,455
13,506 12,946
13,752 13,000
May 31, 1994 14,273 13,634
13,886 13,632
15,063 14,958
15,970 16,384
May 31, 1995 16,936 17,685
17,685 18,749
Mar. 31, 1996 18,688 19,755
</TABLE>
Assumes the reinvestment of all distributions.
- -------------------------------------
TOP TEN HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/96
<TABLE>
<C> <S> <C>
1. U.S. T-Bond, 5.625% 02/15/06 6.3%
2. U.S. T-Note, 5.625% 02/28/01 3.0
3. USX-Marathon Group, Conv. Sub. Deb., 7.000%
06/15/17 2.4
4. Fleet Financial Group Inc. 1.6
5. Rhone-Poulenc Rorer, Inc. 1.6
6. General Signal Corporation, Conv. Sub. Note,
5.750% 06/01/02 1.6
7. Consolidated Natural Gas Company 1.6
8. AMP Inc. 1.4
9. Royal Dutch Petroleum Company, ADR 1.4
10. Dresser Industries, Inc. 1.4
</TABLE>
[ NEED TO INSERT PLOT POINTS TO BE PROVIDED BY DTP]
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during these periods under the new pricing structure.
Portfolio holdings are subject to change and may not be representative of
current holdings.
11
<PAGE> 14
NATIONS FUND
Nations Equity Income Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ------------------------------------------
AVERAGE TOTAL RETURN
- ------------------------------------------
<S> <C> <C>
YEAR ENDED 22.75%* 23.25%
03/31/96
---------------------
INCEPTION
(06/17/92) 13.11% 13.11%
THROUGH
03/31/96
---------------------
*Adjusted Not
for adjusted
maximum for
contingent contingent
deferred deferred
sales charge sales
of 0.50% charge
</TABLE>
- ------------------------------------------
- ------------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor C
Shares of Nations Equity
Income Fund on June 17, 1992
(inception). Investor C
Shares that are redeemed
within one year of purchase
are subject to a 0.50%
contingent deferred sales
charge. Figures for the
Standard & Poor's 500, an
unmanaged index of 500
widely held common stocks,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
June 17, 1992 10,000 10,000
10,522 10,315
10,932 10,634
11,473 11,306
May 31, 1993 11,536 11,361
11,938 11,653
12,195 11,923
11,694 11,472
May 31, 1994 11,883 11,520
12,309 12,082
11,953 12,080
12,937 13,255
May 31, 1995 13,687 14,518
14,494 15,671
15,090 16,614
Mar. 31, 1996 15,944 17,505
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR N SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ----------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ----------------------------------------
<S> <C>
YEAR ENDED 23.40%
03/31/96
--------------------
INCEPTION
(06/07/93) 12.74%
THROUGH
03/31/96
</TABLE>
- ----------------------------------------
- ----------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor N
Shares of Nations Equity
Income Fund on June 7, 1993
(inception). Figures for the
Standard & Poor's 500, an
unmanaged index of 500
widely held common stocks,
include reinvestment of
dividends.
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
June 7, 1993 10,000 10,000
10,073 10,029
10,429 10,286
10,670 10,526
10,236 10,127
May 31, 1994 10,411 10,170
10,784 10,666
10,480 10,664
11,356 11,701
May 31, 1995 12,016 12,817
12,740 13,834
13,276 14,667
Mar. 31, 1996 14,013 15,454
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual and aggregate total returns are historical in nature and measure
net investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during those periods under the new pricing structure.
12
<PAGE> 15
NATIONS FUND
Nations Equity Income Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - PRIMARY A SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ----------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ----------------------------------------
<S> <C>
YEAR ENDED 24.29%
03/31/96
---------------------
INCEPTION
(4/11/91) 13.82%
THROUGH
03/31/96
</TABLE>
- ----------------------------------------
- ----------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Primary A
Shares of Nations Equity
Income Fund on April 11,
1991 (inception). Figures
for the Standard & Poor's
500, an unmanaged index of
500 widely held common
stocks, include reinvestment
of dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
April 11, 1991 10,000 10,000
9,933 9,976
10,668 10,508
May 31, 1991 11,465 11,388
11,376 11,101
11,687 11,312
12,140 11,669
May 31, 1992 12,634 12,255
13,292 12,790
13,394 12,851
13,894 13,182
May 31, 1993 14,233 13,487
13,682 12,977
13,939 13,031
May 31, 1994 14,475 13,667
14,093 13,665
15,308 14,994
16,224 16,423
May 31, 1995 17,227 17,727
17,982 18,793
Mar. 31, 1996 19,027 19,802
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during those periods under the new pricing structure.
13
<PAGE> 16
NATIONS VALUE FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
Sharon Herrmann is a Director of TradeStreet Investment Associates, Inc.,
sub-adviser to the Fund, and Senior Portfolio Manager for Nations Value Fund.
She has worked in the investment community since 1973. From 1981 to 1996, she
was Senior Vice President and Senior Portfolio Manager in the Investment
Management Group at NationsBank, N.A. Her responsibilities included fund and
portfolio management. Ms. Herrmann attended Virginia Wesleyan College. She holds
the Chartered Financial Analyst designation and is a member of the Association
for Investment Management and Research as well as the North Carolina Society of
Financial Analysts, Inc.
INVESTMENT OBJECTIVE:
The Fund seeks long-term capital growth with income a secondary
consideration.
PERFORMANCE REVIEW
For the one-year period ended March 31, 1996, Nations Value Fund Investor A
Shares provided a total return of 30.41%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Ms. Herrmann shares her views on financial
market conditions and Fund performance for the one-year period ended March 31,
1996.
PLEASE DESCRIBE THE FUND'S INVESTMENT STYLE AND PHILOSOPHY.
Nations Value Fund is based on the premise that a well diversified
portfolio of undervalued companies with low price-to-earnings ratios (P/E)
should, over time, outperform the overall market while incurring lower than
market risk. The Fund utilizes a proprietary multi-factor valuation model, which
incorporates absolute low P/E, sector-relative low P/E, earnings surprise,
earnings momentum and financial strength. The Fund's focus on owning low P/E
stocks provides a cushion during periods of market declines.
PLEASE DESCRIBE HOW THE FUND PERFORMED UNDER THE MARKET CONDITIONS THAT
PREVAILED OVER THE PAST TWELVE MONTHS.
Over the last twelve months, the stock market environment could be viewed
as two different worlds. The first world spanned the last nine months of 1995,
when the stock market had the wind at its back, sailing unencumbered in a
favorable environment of low inflation, moderate, but steady economic growth,
strong corporate profits and the expectation of sound fiscal policy initiatives
emanating from Congress and the White House.
The second world was created during the first quarter of 1996 and can best
be described as slightly turbulent and tense. The expectations of continued
modest inflation and moderate growth were threatened by a few early whiffs of
potential inflation and the probability that the Federal Reserve Board would not
lower interest rates in March as the majority of investors had anticipated.
Throughout this volatile year, Nations Value Fund performed extremely well.
The Fund's style focuses on companies selling at low prices relative to the
earnings they are expected to generate. For the majority of companies owned by
the Fund, earnings met or exceeded Wall Street analysts' expectations,
particularly during the last nine months of 1995. The volatile first quarter of
1996 provided a "reality check" and the Fund continued to perform well, in line
with its peers as well as the S&P 500.
WHAT SECTORS/STOCK SELECTION IN PARTICULAR WERE FAVORABLE FOR THE FUND?*
The Fund's consistent approach of broad diversification across many
industries and companies, coupled with owning attractively priced companies
relative to their inherent value, was a winning formula in this strong market
environment. Consumer staples, finance, health care, capital goods and
conglomerates showed gains that were better than the overall
- ---------------
* Portfolio holdings are subject to change and may not be representative of
current holdings.
14
<PAGE> 17
market. Stock selection was rewarded in technology, as individual companies such
as Sun Microsystems Inc. (among the Fund's top ten holdings) soared over 150%,
gaining recognition as an undervalued way to invest in a company that is a major
supplier of network-based computing systems, such as those utilized by Internet
users. The health care sector made a tremendous recovery from past years, as
drug companies reduced excess costs and focused on bottom-line profitability as
well as top-line growth. Bank stocks were also tremendous performers; the sector
as a whole increased 48.6%. Outstanding names were Chemical Bank (gaining favor
in its merger with Chase Manhattan), Crestar Financial Corporation in the
regional bank area and Citicorp in the major money center area. The Fund also
benefited from its hedge against a decline in the financial sector by investing
in financially sound energy companies such as Mobil Corporation, Royal Dutch
Petroleum Company and Amoco Corporation. In the conglomerate area, ITT was a
great contributor as shareholder value was realized through the breakup of the
company into three separate undervalued companies.
HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
We believe Nations Value Fund will continue to deliver attractive total
return potential relative to the market over the coming year. The portfolio is
structured to continue to take advantage of companies trading at low prices
relative to the earnings they are expected to generate in a broad array of
sectors, such as energy, finance, utilities, capital goods, cyclicals and
transportation. Currently, the Fund's valuation level is more attractive than
the overall stock market, selling at a modest price-to-earnings multiple of just
14.3 times weighted average earnings for 1996. This compares favorably with the
S&P 500 which, according to our estimates, is currently selling at 17 times 1996
earnings. As we move further into 1996, the key will be avoiding companies with
major earnings disappointments. The Fund's broad diversification should reduce
the risk of heavy concentration in any one specific company or industry.
15
<PAGE> 18
NATIONS FUND
Nations Value Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS OF 3/31/96
<TABLE>
<S> <C>
Financial Services 13.5%
Energy 11.9%
Producer Durables 11.4%
Consumer Discretionary 10.0%
Health Care 9.9%
Auto & Transportation 7.7%
Telecommunications 7.6%
Repurchase Agreement and
Other Assets and
Liabilities (Net) 5.7%
Technology 5.4%
Other Common Stocks 5.0%
Consumer Staples 4.5%
Utilities 4.2%
Materials and Processing 3.2%
</TABLE>
- --------------------------------------------------------
TOP TEN HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/96
<TABLE>
<C> <S> <C>
1. First Brands Corporation 2.5%
2. Bristol-Myers Squibb Company 2.2
3. Rockwell International Corporation 2.2
4. Ford Motor Company 2.2
5. Raytheon Company 2.0
6. AlliedSignal Inc. 1.9
7. General Electric Company 1.9
8. Pharmacia & Upjohn Inc. 1.9
9. Schering-Plough Corporation 1.9
10. Sun Microsystems Inc. 1.8
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ------------------------------------
<S> <C>
YEAR ENDED 30.41%
03/31/96
---------------------
FIVE YEARS
ENDED 13.77%
03/31/96
---------------------
INCEPTION
(12/06/89) 13.66%
THROUGH
03/31/96
</TABLE>
- ----------------------------
- ----------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor A
Shares of Nations Value Fund
on December 6, 1989
(inception). Figures for the
Standard & Poor's 500, an
unmanaged index of 500
widely held common stocks,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
Dec. 6, 1989 10,000 10,000
10,032 10,240
10,107 9,932
10,634 10,555
9,347 9,106
Nov. 30, 1990 10,386 9,929
11,780 11,360
11,779 11,333
12,296 11,938
Nov. 30, 1991 13,073 12,938
13,149 12,611
13,219 12,851
13,362 13,266
Nov. 30, 1992 14,004 13,922
14,672 14,530
15,010 14,599
15,671 14,975
Nov. 30, 1993 16,254 15,322
15,831 14,742
15,703 14,804
15,971 15,526
Nov. 30, 1994 15,753 15,523
17,216 17,033
18,937 18,657
20,450 20,138
Nov. 30, 1995 21,388 21,350
Mar. 31, 1996 22,450 22,495
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year,
five-year and since inception performance figures provided above reflect how the
Fund would have performed during those periods under the new pricing structure.
Portfolio holdings are subject to change and may not be representative of
current holdings.
16
<PAGE> 19
NATIONS FUND
Nations Value Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ------------------------------------------
<S> <C> <C>
YEAR ENDED 29.15%* 29.65%
03/31/96
----------------------
INCEPTION
(06/17/92) 14.94% 14.94%
THROUGH
03/31/96
----------------------
Not
*Adjusted adjusted
for maximum for
contingent contingent
deferred deferred
sales charge sales
of 0.50% charge
</TABLE>
- ------------------------------------------
- ------------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor C
Shares of Nations Value Fund
on June 17, 1992
(inception). Investor C
Shares that are redeemed
within one year of purchase
are subject to a 0.50%
contingent deferred sales
charge. Figures for the
Standard & Poor's 500, an
unmanaged index of 500
widely held common stocks,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
Jun. 17, 1992 10,000 10,000
10,361 10,315
Nov. 30, 1992 10,830 10,834
11,309 11,308
11,551 11,361
12,031 11,653
Nov. 30, 1993 12,460 11,923
12,116 11,472
11,995 11,520
12,171 12,082
Nov. 30, 1994 11,992 12,080
13,069 13,255
14,358 14,518
15,473 15,671
Nov. 30, 1995 16,147 16,614
Mar. 31, 1996 16,944 17,505
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR N SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ----------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ----------------------------------------
<S> <C>
YEAR ENDED 29.82%
03/31/96
--------------------
INCEPTION
(06/07/93) 15.44%
THROUGH
03/31/96
</TABLE>
- ----------------------------------------
- ----------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor N
Shares of Nations Value Fund
on June 7, 1993 (inception).
Figures for the Standard &
Poor's 500, an unmanaged
index of 500 widely held
common stocks, include
reinvestment of dividends.
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
June 7, 1993 10,000 10,000
10,155 10,029
10,588 10,287
Nov. 30, 1993 10,967 10,526
10,665 10,127
10,577 10,170
10,735 10,666
Nov. 30, 1994 10,585 10,664
11,539 11,701
12,682 12,817
13,677 13,834
Nov. 30, 1995 14,286 14,667
Mar. 31, 1996 14,979 15,454
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during those periods under the new pricing structure.
17
<PAGE> 20
NATIONS FUND
Nations Value Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - PRIMARY A SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ----------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ----------------------------------------
<S> <C>
YEAR ENDED 30.81%
03/31/96
--------------------
FIVE YEARS
ENDED 13.95%
03/31/96
--------------------
INCEPTION
(09/19/89) 13.39%
THROUGH
03/31/96
</TABLE>
- ----------------------------------------
- ----------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Primary A
Shares of Nations Value Fund
on September 19, 1989
(inception). Figures for the
Standard & Poor's 500, an
unmanaged index of 500
widely held common stocks,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
Sept.19, 1989 10,000 10,000
10,080 9,768
Nov. 30, 1989 10,073 10,205
10,148 9,896
10,676 10,520
9,384 9,076
Nov. 30, 1990 10,428 9,666
11,827 11,322
11,826 11,295
12,345 11,890
Nov. 30, 1991 13,125 12,894
13,201 12,569
13,273 12,808
13,417 13,212
Nov. 30, 1992 14,083 13,875
14,758 14,481
15,107 14,550
15,781 14,925
Nov. 30, 1993 16,388 15,271
15,959 14,693
15,828 14,754
16,096 15,474
Nov. 30, 1994 15,898 15,471
17,372 16,976
19,134 18,594
20,661 20,071
Nov. 30, 1995 21,636 21,278
Mar. 31, 1996 22,724 22,420
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year,
five-year and since inception performance figures provided above reflect how the
Fund would have performed during those periods under the new pricing structure.
18
<PAGE> 21
NATIONS EQUITY INDEX FUND
PERFORMANCE & COMMENTARY
PORTFOLIO MANAGER
Greg Golden oversees the management of Nations Equity Index Fund. Mr.
Golden has worked in the investment community since 1990. Prior to joining
TradeStreet Investment Associates, Inc., sub-adviser to the Fund, he was Vice
President and Structured Portfolio Manager in the Investment Management Group at
NationsBank, N.A. His past experience includes portfolio management, derivatives
management and quantitive analysis for NationsBank Investment Management and
Sovran Bank of Tennessee. Mr. Golden received a B.B.A. in Finance from Belmont
University. He is a Chartered Financial Analyst candidate and a member of the
Association for Investment Management and Research as well as the North Carolina
Society of Financial Analysts, Inc.
INVESTMENT OBJECTIVE
The Fund seeks investment results that correspond, before fees and
expenses, to the total return (i.e., the combination of capital changes and
income) of common stocks publicly traded in the United States, as represented by
the Standard & Poor's 500 Composite Stock Price Index ("S&P 500" or the
"Index").
PERFORMANCE SUMMARY AND REVIEW*
For the one-year period ended March 31, 1996, Nations Equity Index Fund
Primary A Shares provided a total return
of 31.62%.
The Nations Equity Index Fund is comprised of essentially all of the
companies within the S&P 500 with market capitalization weights similar to the
Index. Computer programs are used to continuously monitor and rebalance the Fund
so as to "track" the performance of the S&P 500. Portfolio transactions are made
to align the Fund to the S&P 500 composition, invest cash, and provide for
redemptions. In addition, the Fund seeks to minimize trading costs. Stock index
futures and options also are used to manage cash flows in the Fund.
- ---------------
* The performance shown includes the effect of fee waivers and/or expense
reimbursements by the investment adviser. Such fee waivers and/or expense
reimbursements have the effect of increasing total return.
19
<PAGE> 22
NATIONS FUND
Nations Equity Index Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS OF 3/31/96
<TABLE>
<S> <C>
Financial Services 13.3%
Health Care 10.2%
Producer Durables 9.9%
Consumer Discretionary 9.9%
Consumer Staples 9.5%
Telecommunications 9.5%
Energy 9.3%
Materials & Processing 7.6%
Technology 7.4%
Other Common Stocks 5.2%
Auto & Transportation 4.2%
Repurchase Agreement
U.S. Treasury Bills and
Other Assets and Liabilites (Net) 4.0%
</TABLE>
- -------------------------------------
TOP TEN HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/96
<TABLE>
<S> <C> <C>
1. General Electric Company 2.6%
2. Coca-Cola Company 2.1
3. Exxon Corporation 2.0
4. AT&T Corporation 1.9
5. Merck & Company Inc. 1.5
6. Royal Dutch Petroleum Company, ADR 1.5
7. Phillip Morris Companies Inc. 1.5
8. International Business Machines Corporation 1.3
9. Microsoft Corporation 1.2
10. Johnson & Johnson 1.2
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ----------------------------------------
AGGREGATE TOTAL RETURN
- ----------------------------------------
<S> <C>
INCEPTION
(10/10/95) 12.67%
THROUGH
03/31/96
</TABLE>
- ----------------------------------------
- ----------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor A
Shares of Nations Equity
Index Fund on October 10,
1995 (inception). Figures
for the Standard & Poor's
500, an unmanaged index of
500 widely held common
stocks, include reinvestment
of dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
Oct. 10, 1995 10,000 10,000
Nov. 30, 1995 10,504 10,438
10,710 10,640
11,065 11,001
11,165 11,104
Mar. 31, 1996 11,267 11,211
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Aggregate total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the since inception
performance figures provided above reflect how the Fund would have performed
during the period under the new pricing structure.
Portfolio holdings are subject to change and may not be representative of
current holdings.
20
<PAGE> 23
NATIONS FUND
Nations Equity Index Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - PRIMARY A SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ------------------------------------
<S> <C>
YEAR ENDED 31.62%
03/31/96
---------------------
INCEPTION
(12/15/93) 18.21%
THROUGH
03/31/96
</TABLE>
- ----------------------------
- ----------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Primary A
Shares of Nations Equity
Index Fund on December 15,
1993 (inception). Figures
for the Standard & Poor's
500, an unmanaged index of
500 widely held common
stocks, include reinvestment
of dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
Dec. 15, 1993 10,000 10,121
9,681 9,738
9,710 9,778
10,182 10,256
Nov. 30, 1994 10,172 10,254
11,151 11,251
12,208 12,324
13,166 13,302
Nov. 30, 1995 13,938 14,103
Mar. 31, 1996 14,677 14,859
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during those periods under the new pricing structure.
21
<PAGE> 24
NATIONS DISCIPLINED EQUITY FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
Jeff Moser is Senior Portfolio Manager for Nations Disciplined Equity Fund.
Prior to joining TradeStreet Investment Associates, Inc., sub-adviser to the
Fund, he was Senior Vice President and Senior Portfolio Manager in the
Investment Management Group at NationsBank, N.A., where he worked from 1983 to
1996. His responsibilities included institutional portfolio management and
equity analysis.
Mr. Moser graduated Phi Beta Kappa with a B.S. in Mathematics from Wake
Forest University. He holds the Chartered Financial Analyst designation and is a
member of the Association for Investment Management and Research as well as the
North Carolina Society of Financial Analysts, Inc.
INVESTMENT OBJECTIVE
The Fund seeks long-term capital appreciation.
PERFORMANCE REVIEW
For the one-year period ended March 31, 1996, Nations Disciplined Equity
Fund Investor A Shares provided a total return of 30.73%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Moser shares his views on financial market
conditions and Fund performance for the one-year period ended March 31, 1996.
PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE.
The core premise behind Nations Disciplined Equity Fund is that earnings
momentum drives stock prices. Earnings momentum is the pattern established when
growth in earnings per share increases from one period to the next.
To capture earnings momentum, the Fund uses a proprietary tracking system
that follows a set of established rules for the buy, sell and valuation process.
Essentially, this proprietary model, called ALPHA, does three key things:
identifies stock buying opportunities, ensures the Fund doesn't overpay for them
and signals when to sell a stock. Of course, we validate the entire process by
researching company fundamentals.
HAS THE STYLE BEEN SUCCESSFUL FOR THE FUND OVER THE REPORTING PERIOD?
The ALPHA earnings momentum model historically has had a very high success
rate for identifying buys and sells. We use the model as a discipline to rise
above the "noise" of conflicting brokerage firm research. It keeps us focused on
earnings momentum and earnings valuation. As a result, the average price paid
relative to the earnings that the companies are expected to generate is much
less in Nations Disciplined Equity Fund than that of other growth funds.
WHAT WERE THE BEST-PERFORMING SECTORS?
Through September 1995, conditions were extremely favorable for earnings
momentum in sectors where the Fund was slightly overweight the S&P 500:
technology, basic materials and capital goods. These sectors have benefited from
capital expenditures in plant and equipment, technology and productivity tools,
as corporate America seeks to become more efficient and further enhance earnings
growth. However, since September, market leadership has changed somewhat. The
Fund's technology investments have not performed as well, but the Fund's
financial and consumer cyclical investments have been top performers.
HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
Overall, we believe the stock market will continue to perform well, but it
will not have the momentum it did in 1995. Therefore, while we see attractive
opportunities through good stock selection, the Fund may have to pay a premium
for stocks with the best consistency and stability in earnings momentum. The
Fund will continue to slightly overweight the S&P 500 in the technology and
capital goods sectors based on our outlook for sustained, slow growth in the
economy.
Less favorable sectors include utilities, where it has been difficult to
find stocks we want to buy for the Fund. The consumer staples and retail
weighting in the portfolio also will have less exposure than the S&P 500. In a
slow-growth environment, consumer spending will continue to be restrained and
retail companies will not be able to pass along price increases the way they did
in the 1980s.
22
<PAGE> 25
NATIONS FUND
Nations Disciplined Equity Fund
- ---------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO BREAKDOWN AS OF 3/31/96
<S> <C>
Financial Services 13.9%
Materials and Processing 13.6%
Technology 11.5%
Health Care 11.4%
Producer Durables 9.6%
Other Common Stocks 9.0%
Telecommunications 8.4%
Energy 7.6%
Consumer Staples 5.3%
Consumer Discretionary 4.8%
Auto & Transportation 2.5%
Repurchase Agreement and
Other Assets and
Liabilities (Net) 2.4%
</TABLE>
- -------------------------------------------------------
<TABLE>
<CAPTION>
TOP TEN HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/96
<C> <S> <C>
1. Cincinnati Bell Inc. 3.9%
2. Williams Companies Inc. 2.7
3. Nike Inc., Class B 2.7
4. Parametric Technology Corporation 2.6
5. Morgan Stanley Group, Inc. 2.6
6. Liz Claiborne Inc. 2.6
7. British Petroleum Company, ADR 2.6
8. United Technologies Corporation 2.5
9. Goodrich (B.F.) Company 2.5
10. Bank of New York Inc. 2.5
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ------------------------------------
<S> <C>
YEAR ENDED 30.73%
03/31/96
---------------------
INCEPTION
(07/26/93) 14.28%
THROUGH
03/31/96
</TABLE>
- ----------------------------
- ----------------------------
Inception is based on The
Capitol Mutual Funds Special
Equity Portfolio Class B
Shares, which were
reorganized into Investor A
Shares of Nations
Disciplined Equity Fund as
of the close of business on
April 29, 1994. The Capitol
Mutual Funds Special Equity
Portfolio Class B Shares
commenced operations on July
26, 1993. The chart to the
right shows the growth in
value of a hypothetical
$10,000 investment in
Investor A Shares of Nations
Disciplined Equity Fund on
July 26, 1993 (inception).
Figures for the Standard &
Poor's 500, an unmanaged
index of 500 widely held
common stocks, include
reinvestment of dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
July 26, 1993 10,000 10,000
11,894 10,299
Nov. 30, 1993 11,506 10,536
10926 10,139
10,188 10,181
11,012 10,678
Nov. 30, 1994 10,768 10,676
10,938 11,714
12,313 12,831
13,562 13,850
Nov. 30, 1995 13,707 14,683
Mar. 31, 1996 14,300 15,471
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during these periods under the new pricing structure.
Portfolio holdings are subject to change and may not be representative of
current holdings.
23
<PAGE> 26
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR N SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ----------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ----------------------------------------
<S> <C>
YEAR ENDED 29.66%
03/31/96
--------------------
INCEPTION
(05/20/94) 17.59%
THROUGH
03/31/96
</TABLE>
- ----------------------------------------
- ----------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor N
Shares of Nations
Disciplined Equity Fund on
May 20, 1994 (inception).
Figures for the Standard &
Poor's 500, an unmanaged
index of 500 widely held
common stocks, include
reinvestment of dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
May 10, 1995 10,000 10,000
May 31, 1995 10,673 10,646
Aug. 31, 1995 11,744 11,486
Nov. 30, 1995 11,845 12,176
Mar. 31, 1996 12,343 12,829
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- -------------------------------------------
AGGREGATE TOTAL RETURN
- -------------------------------------------
<S> <C> <C>
INCEPTION 22.93%* 23.43%
(05/10/95)
THROUGH
03/31/96
-----------------------
*Adjusted Not
for adjusted
maximum for
contingent contingent
deferred deferred
sales charge sales
of 0.50% charge
</TABLE>
- -------------------------------------------
- -------------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor C
Shares of Nations
Disciplined Equity Fund on
May 10, 1995 (inception).
Investor C Shares that are
redeemed within one year of
purchase are subject to a
0.50% contingent deferred
sales charge. Figures for
the Standard & Poor's 500,
an unmanaged index of 500
widely held common stocks,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
May 20, 1994 10,000 10,000
9,773 9,756
10,548 10,281
Nov. 30, 1994 10,298 10,230
10,431 11,224
11,722 12,294
12,887 13,271
Nov. 30, 1995 12,991 14,069
Mar. 31, 1996 13,524 14,824
</TABLE>
Assumes the reinvestment of all distributions.
[NEED TO INSERT PLOT POINTS TO BE PROVIDED BY DTP]
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual and aggregate total returns are historical in nature and measure
net investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during those periods under the new pricing structure.
24
<PAGE> 27
NATIONS FUND
Nations Disciplined Equity Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - PRIMARY A SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ----------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ----------------------------------------
<S> <C>
YEAR ENDED 30.95%
03/31/96
--------------------
INCEPTION
(10/01/92) 24.52%
THROUGH
03/31/96
</TABLE>
- ----------------------------------------
- ----------------------------------------
Inception is based on The
Capitol Mutual Funds Special
Equity Portfolio Class A
Shares, which were
reorganized into Primary A
Shares of Nations
Disciplined Equity Fund as
of the close of business on
April 29, 1994. The Capitol
Mutual Funds Special Equity
Portfolio Class A Shares
commenced operations on
October 1, 1992. The chart
to the right shows the
growth in value of a
hypothetical $10,000
investment in Primary A
Shares of
Nations Disciplined Equity
Fund on October 1, 1992
(inception). Figures for the
Standard & Poor's 500, an
unmanaged index of 500
widely held common stocks,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
Oct. 1, 1992 10,000 10,000
Nov. 30, 1992 13,311 10,502
14,105 10,961
15,100 11,013
17,923 11,297
Nov. 30, 1993 17,279 11,559
16,409 11,121
15,304 11,167
16,542 11,712
Nov. 30, 1994 16,181 11,710
16,441 12,849
18,521 14,074
20,413 15,192
Nov. 30, 1995 20,636 16,106
Mar. 31, 1996 21,529 16,970
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during those periods under the new pricing structure.
25
<PAGE> 28
NATIONS CAPITAL GROWTH FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
Phil Sanders is Senior Portfolio Manager for Nations Capital Growth Fund.
Prior to joining TradeStreet Investment Associates, Inc., sub-adviser to the
Fund, he was Senior Vice President and Senior Portfolio Manager in the
Investment Management Group at NationsBank, N.A. He has worked in the financial
and investment community since 1981. His experience includes portfolio
management, equity research and financial analysis for NationsBank Investment
Management and Duke Power Company. Mr. Sanders received a B.A. in Economics from
the University of Michigan and an M.B.A. from University of North Carolina at
Charlotte. He holds the Chartered Financial Analyst designation and is a member
of the Association for Investment Management and Research as well as the North
Carolina Society of Financial Analysts, Inc.
INVESTMENT OBJECTIVE
The Fund seeks long-term capital appreciation by investing primarily in
common stocks issued by companies that, in the judgement of the Adviser, have
above-average potential for capital appreciation.
PERFORMANCE REVIEW
For the one-year period ended March 31, 1996, Nations Capital Growth Fund
Investor A Shares provided a total return of 26.25%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Sanders shares his views on financial
market conditions and Fund performance for the one-year period ended March 31,
1996.
IN WHAT TYPES OF STOCKS DOES THE FUND TYPICALLY INVEST?
We look for companies that are well positioned to benefit from sustainable,
secular growth trends currently embedded in the marketplace. These trends can be
associated with demographics, emerging technologies, deregulation, changes in
consumer spending patterns, etc. The companies the Fund invests in tend to be
market leaders and innovators in their respective fields. Furthermore, we look
for a competitive edge that will allow these companies to sustain their
attractive growth rates and potentially report earnings above consensus
expectations.
While the majority of the Fund's holdings are in large capitalization
issues, the flexibility exists to selectively invest in some smaller company
issues that possess superior growth prospects.
HOW DID THE FUND PERFORM UNDER THE MARKET CONDITIONS THAT PREVAILED DURING THE
REPORTING PERIOD?
Market conditions were generally favorable for the overall stock market and
for growth investors over the past year. Corporate profits were strong,
inflation was relatively benign and interest rates declined through much of the
year. In turn, this presented a favorable environment for investors in Nations
Capital Growth Fund.
WHAT SECTORS AND SPECIFIC COMPANIES WERE MOST ATTRACTIVE OVER THE REPORTING
PERIOD?*
The sectors that stood out in particular over the past year were the
technology, health care and financial sectors. The technology sector benefited
from an increase in productivity-driven capital spending, powerful new product
cycles and growing demand for advanced telecommunications services. Within the
sector, particular emphasis was placed on software and computer networking
companies that have seen a surge in global demand for their products and
services. Two specific companies that stood out over the past year were
Microsoft and cisco Systems, Inc. Through the introduction of Windows '95 and
other consumer and corporate productivity software products, Microsoft has
maintained its status as the global leader in software development. This
position is expected to strengthen with the introduction of its new operating
system (Windows NT) and internet-related software. Similarly, cisco Systems,
Inc., the leading data networking company, witnessed accelerating demand for its
products and services as companies invested heavily in
- ---------------
* Portfolio holdings are subject to change and may not be representative of
current holdings.
26
<PAGE> 29
developing internal computer networks. cisco's product line is broad-based and
is a prime beneficiary of the expansion of the internet infrastructure.
Adjusting well to the increasingly competitive operating environment in the
health care sector, major pharmaceutical companies such as Merck and Pfizer
performed very well over the past year. Bottom line results benefited from new
product introductions, continued strong demand for existing products and cost
reduction efforts. Investor sentiment in the industry also has improved with the
reduction in regulatory and political rhetoric that seemed so pervasive a couple
of years ago.
Finally, banks and other financial services companies performed well over
the past year given the favorable interest-rate environment. In particular,
Citicorp and MGIC Investment Corp. (a leading provider of private mortgage
insurance) were especially strong performers.
WHAT SECTORS LOOK ATTRACTIVE GOING FORWARD?
We still see attractive long-term investment opportunities in technology.
This sector continues to benefit from a multitude of positive trends such as
increased focus on productivity driven capital spending, powerful new product
cycles, the proliferation of multi-media personal computers into the consumer
market, and both deregulation and emerging competition in the telecommunications
industry. Despite a recent slowdown in unsustainably high growth rates and some
expected volatility in the group, we believe the sector's long-term fundamentals
remain very favorable.
Also, we still see opportunities in many high quality health care issues
that possess attractive valuations and favorable earnings revision trends. The
group's solid fundamentals and relatively visible earnings outlook appear
increasingly appealing in the current slow growth economic environment. Finally,
despite a generally weak retail environment, we are attracted to certain home
improvement and office supply superstore companies that are well positioned to
benefit from changing consumer spending patterns and industry consolidation
trends.
27
<PAGE> 30
NATIONS FUND
Nations Capital Growth Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS OF 3/31/96
<TABLE>
<S> <C>
Health Care 17.4%
Technology 15.2%
Financial Services 11.5%
Telecommunications 11.4%
Consumer Discretionary 10.0%
Energy 9.2%
Producer Durables 6.0%
Materials & Processing 5.9%
Repurchase Agreement and
Other Assets and
Liabilities (Net) 5.5%
Consumer Staples 5.0%
Other Common Stocks 2.9%
</TABLE>
- -------------------------------------------------------
TOP TEN HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/96
<TABLE>
<C> <S> <C>
1. General Electric Company 2.4%
2. Procter & Gamble Company 2.2
3. Mobil Corporation 2.1
4. PepsiCo Inc. 2.1
5. Glenayre Technologies Inc. 2.0
6. cisco Systems, Inc. 1.9
7. AlliedSignal Inc. 1.9
8. Emerson Electric Company 1.8
9. Baxter International Inc. 1.8
10. Medtronic Inc. 1.7
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ------------------------------------
<S> <C>
YEAR ENDED 26.25%
03/31/96
---------------------
INCEPTION
(10/02/92) 12.97%
THROUGH
03/31/96
</TABLE>
- ----------------------------
- ----------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor A
Shares of Nations Capital
Growth Fund on October 2,
1992 (inception). Figures
for the Standard & Poor's
500, an unmanaged index of
500 widely held common
stocks, include reinvestment
of dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
Oct. 2, 1992 10,000 10,000
Nov. 30, 1992 10,777 10,502
10,964 10,961
10,853 11,013
11,217 11,297
Nov. 30, 1993 11,588 11,559
11,237 11,121
10,897 11,167
11,564 11,712
Nov. 30, 1994 11,408 11,710
12,128 12,849
13,433 14,074
14,612 15,192
Nov. 30, 1995 14,666 16,106
Mar. 31, 1996 15,312 16,970
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during those periods under the new pricing structure.
Portfolio holdings are subject to change and may not be representative of
current holdings.
28
<PAGE> 31
NATIONS FUND
Nations Capital Growth Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ----------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ----------------------------------------
<S> <C> <C>
YEAR ENDED 24.87%* 25.37%
03/31/96
---------------------
INCEPTION
(10/02/92) 12.12% 12.12%
THROUGH
03/31/96
---------------------
*Adjusted Not
for adjusted
maximum for
contingent contingent
deferred deferred
sales charge sales
of 0.50% charge
</TABLE>
- ----------------------------------------
- ----------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor C
Shares of Nations Capital
Growth Fund on October 2,
1992 (inception). Investor C
Shares that are redeemed
within one year of purchase
are subject to a 0.50%
contingent deferred sales
charge. Figures for the
Standard & Poor's 500, an
unmanaged index of 500
widely held common stocks,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
Oct. 2, 1992 10,000 10,000
Nov. 30, 1992 10,752 10,502
10,922 10,961
10,794 11,013
11,135 11,297
Nov. 30, 1993 11,481 11,559
11,109 11,121
10,758 11,167
11,390 11,712
Nov. 30, 1994 11,219 11,710
11,898 12,849
13,144 14,074
14,276 15,192
Nov. 30, 1995 14,298 16,106
Mar. 31, 1996 14,917 16,970
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR N SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ----------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ----------------------------------------
<S> <C>
YEAR ENDED 25.36%
03/31/96
---------------------
INCEPTION
(06/07/93) 13.15%
THROUGH
03/31/96
</TABLE>
- ----------------------------------------
- ----------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor N
Shares of Nations Capital
Growth Fund on June 7, 1993
(inception). Figures for the
Standard & Poor's 500, an
unmanaged index of 500
widely held common stocks,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
Jun. 7, 1993 10,000 10,000
10,239 10,029
10,562 10,287
Nov. 30, 1993 10,889 10,526
10,537 10,127
10,205 10,170
10,813 10,666
Nov. 30, 1994 10,641 10,664
11,293 11,701
12,481 12,817
13,552 13,834
Nov. 30, 1995 13,582 14,667
Mar. 31, 1996 14,157 15,454
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during these periods under the new pricing structure.
29
<PAGE> 32
NATIONS FUND
Nations Capital Growth Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - PRIMARY A SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- -------------------------------------
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
<S> <C>
YEAR ENDED 26.51%
03/31/96
---------------------
INCEPTION
(09/30/92) 13.23%
THROUGH
03/31/96
</TABLE>
- ----------------------------
- ----------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Primary A
Shares of Nations Capital
Growth Fund on September 30,
1992 (inception). Figures
for the Standard & Poor's
500, an unmanaged index of
500 widely held common
stocks, include reinvestment
of dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's 500
<S> <C> <C>
Sep. 30, 1992 10,000 10,000
Nov. 30, 1992 10,780 10,502
10,982 10,961
10,877 11,013
11,248 11,297
Nov. 30, 1993 11,626 11,559
11,279 11,121
10,944 11,167
11,631 11,712
Nov. 30, 1994 11,481 11,710
12,212 12,849
13,520 14,074
14,726 15,192
Nov. 30, 1995 14,778 16,106
Mar. 31, 1996 15,449 16,970
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during these periods under the new pricing structure.
30
<PAGE> 33
NATIONS EMERGING GROWTH FUND
PERFORMANCE AND COMMENTARY
PORTFOLIO MANAGER
Jack Smiley is Senior Portfolio Manager for Nations Emerging Growth Fund.
He has worked in the investment community since 1968. Prior to joining
TradeStreet Investment Associates, Inc., sub-adviser to the Fund, he was Senior
Vice President and Senior Portfolio Manager in the Investment Management Group
at NationsBank, N.A. His experience includes management consulting and portfolio
management for Interfirst Investment Management, Merrill Lynch and Dean Witter.
Mr. Smiley received a B.B.A. in Management from Southern Methodist University.
He holds the Chartered Financial Analyst designation and is a member of the
Association for Investment Management and Research as well as the Dallas
Association of Investment Analysts.
INVESTMENT OBJECTIVE
The Fund seeks capital appreciation by investing in equity securities of
high quality emerging growth companies that are expected to have earnings growth
rates superior to most publicly traded companies.
PERFORMANCE REVIEW
For the one-year period ended March 31, 1996, Nations Emerging Growth Fund
Investor A Shares provided a total return of 34.35%.
PORTFOLIO MANAGER COMMENTARY
In the following interview, Mr. Smiley shares his views on financial market
conditions and Fund performance for the one-year period ended March 31, 1996.
PLEASE DESCRIBE THE FUND'S INVESTMENT STYLE AND PHILOSOPHY.
The Fund invests in high quality companies with sales between $50 million
and $1.5 billion. The earnings growth rates of these companies averaged over 35%
per year for the previous three years. Operating margins and return on equity
are much higher than the average company, reflecting value-added product lines
serving niche markets with good barriers
to entry.
BRIEFLY DESCRIBE HOW THE FUND PERFORMED UNDER THE MARKET CONDITIONS THAT
PREVAILED OVER THE PAST TWELVE MONTHS.
The Fund strongly outperformed its benchmark, the Standard & Poor's Small
Cap 600 Index, for the twelve months ended March 31, 1996. The stock market
thrived in the favorable environment of moderate economic growth and low
inflation. These factors, combined with low interest rates, also provided for an
accommodating bond market. As a result, price-to-earnings multiples expanded,
which increased the expected earnings growth potential for fast-growing
companies.
WHAT PARTICULAR SECTORS/STOCKS WERE FAVORABLE FOR THE FUND?*
Numerous companies in the Fund were up over 50% for the year. The best
industries for the year included: communications products (Aspect Telecom,
Stratacom, and Cascade), information software (Macromedia, PeopleSoft, Informix
and BMC Software) and health care (PhyCor, Nellcor, and Health Management
Association). For the coming year, technology and health care are expected to
continue to offer some of the best earnings growth.
WHAT ABOUT THE LESS FAVORABLE SECTORS/STOCKS?
Weaker industries for the period were retailing and semiconductor
equipment. As such, weightings in these groups were not large at the end of the
Fund's fiscal year.
LARGE-CAPITALIZATION STOCKS TYPICALLY OUTPERFORMED SMALL-CAPITALIZATION STOCKS
OVER THE PAST YEAR. DO YOU THINK THIS WILL CONTINUE OVER THE NEXT TWELVE MONTHS?
Small-capitalization stocks started to outperform their
large-capitalization counterparts during the last months of the fiscal year. As
the inflation outlook remains favorable, interest rates should move lower. This
will allow price-to-earnings multiples to expand. Small, rapidly growing
companies should experience attractive returns in this environment.
- ---------------
* Portfolio holdings are subject to change and may not be representative of
current holdings.
31
<PAGE> 34
HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
The Fund will continue to focus on the strongest industries measured by our
monitor list of 350 eligible companies. We do not expect any major shifts in
industry weightings at this time. The banking and financial sectors look
overvalued, retail stocks are under great competitive pressure and, in the
energy sector, only seismic and oil service stocks look attractive. Due to
industry consolidation, the oil service sector is experiencing excellent pricing
and high profit margins. Seismic companies are seeing increased demand for their
products since these high-tech measurement companies can help energy companies
often find new oil fields at reduced costs. The software and service stocks
appear to offer the best earnings potential at this time.
32
<PAGE> 35
NATIONS FUND
Nations Emerging Growth Fund
- ---------------------------------------------
PORTFOLIO BREAKDOWN AS OF 3/31/96
<TABLE>
<S> <C>
Auto & Transportation 2.8%
Repurchase Agreement and
Other Assets and
Liabilities (Net) 10.7%
Consumer Discretionary 17.4%
Telecommunications 15.7%
Technology 13.4%
Health Care 11.2%
Energy 7.8%
Producer Durables 6.6%
Financial Services 6.2%
Other Common Stocks 8.2%
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR A SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- -------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ------------------------------------
<S> <C>
YEAR ENDED 34.35%
03/31/96
------------
INCEPTION
(12/10/92) 16.52%
THROUGH
03/31/96
</TABLE>
- ----------------------------
- ----------------------------
The chart to the right shows the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Emerging Growth Fund on December 10,
1992 (inception). Figures for the Standard & Poor's Smallcap 600 Index, which
measures the performance of selected U.S. stocks with a small market
capitalization, include reinvestment of dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's Smallcap 600 Index
<S> <C> <C>
Dec. 10, 1992 10,000 10,000
10,066 10,685
10,360 10,889
11,252 11,974
Nov. 30, 1993 11,699 12,165
11,073 11,495
10,345 10,982
11,740 11,779
Nov. 30, 1994 11,745 11,456
12,342 11,964
13,418 13,068
14,814 14,703
Nov. 30, 1995 15,234 14,732
March 31, 1996 16,581 15,535
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception, performance figures provided above reflect how the Fund would
have performed during those periods under the new pricing structure.
Portfolio holdings are subject to change and may not be representative of
current holdings.
- -------------------------------------
TOP TEN HOLDINGS AS A
% OF NET ASSETS AS OF 3/31/96
<TABLE>
<C> <S> <C>
1. BJ Services Inc. 1.8%
2. Sports Authority Inc. 1.7
3. Glenayre Technologies Inc. 1.7
4. Health Management Association Inc., Class A 1.6
5. Apple South, Inc. 1.6
6. Tellabs Inc. 1.5
7. Smith International Inc. 1.5
8. Enron Oil & Gas Company 1.5
9. Brinker International Inc. 1.5
10. Nextel Communications Inc., Class A 1.5
</TABLE>
33
<PAGE> 36
NATIONS FUND
Nations Emerging Growth Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR C SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ------------------------------------------
<S> <C> <C>
YEAR ENDED 33.01%* 33.51%
03/31/96
-----------------------
INCEPTION
(12/18/92) 15.77% 15.77%
THROUGH
03/31/96
-----------------------
Not
*Adjusted adjusted
for maximum for
contingent contingent
deferred deferred
sales charge sales
of 0.50% charge
</TABLE>
- ------------------------------------------
- ------------------------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor C
Shares of Nations Emerging
Growth Fund on December 18,
1992 (inception). Investor C
Shares that are redeemed
within one year of purchase
are subject to a 0.50%
contingent deferred sales
charge. Figures for the
Standard & Poor's Smallcap
600 Index, which measures
the performance of selected
U.S. stocks with a small
market capitalization,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's Smallcap 600 Index
<S> <C> <C>
Dec. 18, 1992 10,000 10,000
10,030 10,328
10,303 10,526
11,173 11,575
Nov. 30, 1993 11,589 11,759
10,954 11,111
10,207 10,615
11,568 11,385
Nov. 30, 1994 11,552 11,074
12,115 11,564
13,147 12,632
14,488 14,212
Nov. 30, 1995 14,875 14,240
March 31, 1996 16,176 15,016
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception, performance figures provided above reflect how the Fund would
have performed during these periods under the new pricing structure.
34
<PAGE> 37
NATIONS FUND
Nations Emerging Growth Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - INVESTOR N SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- -------------------------------------
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
<S> <C>
YEAR ENDED 33.36%
03/31/96
---------------------
INCEPTION
(06/07/93) 18.81%
THROUGH
03/31/96
</TABLE>
- ----------------------------
- ----------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Investor N
Shares of Nations Emerging
Growth Fund on June 7, 1993
(inception). Figures for the
Standard & Poor's Smallcap
600 Index, which measures
the performance of selected
U.S. stocks with a small
market capitalization,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's Smallcap 600 Index
<S> <C> <C>
June 7, 1993 10,000 10,000
10,354 10,055
11,235 11,057
Nov. 30, 1993 11,641 11,233
11,005 10,614
10,257 10,140
11,631 10,876
Nov. 30, 1994 11,604 10,579
12,179 11,047
13,211 12,067
14,553 13,577
Nov. 30, 1995 14,953 13,604
Mar. 31, 1996 16,241 14,345
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during these periods under the new pricing structure.
35
<PAGE> 38
NATIONS FUND
Nations Emerging Growth Fund
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON - PRIMARY A SHARES AS OF 3/31/96
<TABLE>
<CAPTION>
- ------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- ------------------------------------
<S> <C>
YEAR ENDED 34.67%
03/31/96
---------------------
INCEPTION
(12/04/92) 16.28%
THROUGH
03/31/96
</TABLE>
[INSERT CHART PLOT POINTS PROVIDED BY DTP]
- ----------------------------
- ----------------------------
The chart to the right shows
the growth in value of a
hypothetical $10,000
investment in Primary A
Shares of Nations Emerging
Growth Fund on December 4,
1992 (inception). Figures
for the Standard & Poor's
Smallcap 600 Index, which
measures the performance of
selected U.S. stocks with a
small market capitalization,
include reinvestment of
dividends.
<TABLE>
<CAPTION>
Growth of
Investment
with Distributions Standard
Reinvested & Poor's Smallcap 600 Index
<S> <C> <C>
Dec. 4, 1992 10,000 10,000
10,342 10,345
9,950 10,685
10,240 10,889
Nov. 30, 1993 11,141 11,974
11,583 12,165
10,975 11,495
10,256 10,982
Nov. 30, 1994 11,644 11,779
11,658 11,456
12,258 11,964
13,342 13,068
Nov. 30, 1995 14,731 14,703
March 31, 1996 15,156 14,732
16,508 15,535
</TABLE>
Assumes the reinvestment of all distributions.
- --------------------------------------------------------------------------------
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST.
Average annual total returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming reinvestment
of dividends.
Effective January 1, 1996, Nations Fund changed the pricing structure for its
Investor A, Investor C and Investor N Shares. Under the new pricing structure,
the front-end sales charge for Investor A Shares was eliminated, the 1 year
contingent deferred sales charge on Investor C Shares was reduced from 1.00% to
0.50% (for new accounts) and the contingent deferred sales charge on Investor N
Shares was eliminated (for new accounts). Please note that the one-year and
since inception performance figures provided above reflect how the Fund would
have performed during those periods under the new pricing structure.
36
<PAGE> 39
NATIONS FUND
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
COMMON STOCKS -- 54.3%
AEROSPACE AND DEFENSE -- 1.2%
<C> <S> <C>
17,200 Lockheed Martin Corporation.......... $ 1,305,050
19,900 Raytheon Company..................... 1,019,875
7,100 Rockwell International Corporation... 418,014
----------
2,742,939
----------
APPAREL AND TEXTILES -- 1.9%
48,000 Reebok International, Ltd. .......... 1,326,000
62,400 Unifi, Inc. ......................... 1,536,600
27,900 V.F. Corporation..................... 1,541,475
----------
4,404,075
----------
AUTOMOBILES -- 0.4%
23,600 Ford Motor Company................... 811,250
----------
AUTOMOTIVE ACCESSORIES -- 1.9%
27,400 Eaton Corporation.................... 1,650,850
37,700 Echlin Inc. ......................... 1,366,625
34,700 Genuine Parts Company................ 1,561,500
----------
4,578,975
----------
BEVERAGES -- 1.6%
20,400 Anheuser-Busch Companies, Inc. ...... 1,374,450
11,500 Coca-Cola Company.................... 950,189
24,400 PepsiCo Inc. ........................ 1,543,300
----------
3,867,939
----------
BUSINESS EQUIPMENT AND
PERIPHERALS -- 1.9%
42,200 Bay Networks, Inc.+.................. 1,297,650
9,000 International Business Machines
Corporation........................ 1,000,125
11,200 Pitney Bowes Inc..................... 548,800
12,415 Xerox Corporation.................... 1,558,082
----------
4,404,657
----------
CHEMICALS -- BASIC -- 0.7%
6,300 Imperial Chemical Industries, Plc,
ADR................................ 359,100
27,000 PPG Industries, Inc. ................ 1,319,625
----------
1,678,725
----------
CHEMICALS -- SPECIALTY -- 0.5%
35,400 Lubrizol Corporation................. 1,044,300
----------
COMPUTER MANUFACTURERS -- 1.0%
17,500 Cabletron Systems Inc.+.............. 1,159,375
33,700 COMPAQ Computer Corporation+......... 1,301,663
----------
2,461,038
----------
DIVERSIFIED HEALTH CARE -- 1.5%
75,000 Beverly Enterprises Inc.+............ 825,000
20,300 Columbia/HCA Healthcare
Corporation........................ 1,172,325
43,900 Mallinckrodt Group Inc. ............. 1,651,737
----------
3,649,062
----------
DRUGS -- 1.7%
15,600 Bristol-Myers Squibb Company......... 1,335,750
52,000 Glaxo Wellcome, Plc, ADR............. 1,306,500
23,200 Schering-Plough Corporation.......... 1,348,500
----------
3,990,750
----------
DRUGS -- MEDICAL SUPPLIES -- 1.8%
39,052 Abbott Laboratories.................. $ 1,591,369
28,100 Baxter International Inc. ........... 1,271,525
7,300 Becton, Dickinson & Company.......... 597,688
14,000 Rhone-Poulenc Rorer, Inc. ........... 854,000
----------
4,314,582
----------
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
ELECTRIC
UTILITIES -- NON-NUCLEAR -- 2.0%
39,300 Baltimore Gas & Electric Company..... $ 1,085,662
14,700 CINergy Corporation.................. 441,000
80,100 New York State Electric & Gas
Company............................ 1,882,350
49,000 PECO Energy Company.................. 1,304,625
----------
4,713,637
----------
ELECTRIC UTILITIES -- NUCLEAR -- 0.5%
58,900 Houston Industries Inc. ............. 1,273,712
----------
ELECTRICAL EQUIPMENT -- 1.4%
18,500 Emerson Electric Company............. 1,493,875
11,400 General Electric Company............. 887,775
28,400 General Signal Corporation........... 1,029,500
----------
3,411,150
----------
ELECTRONIC COMPONENTS -- 1.7%
38,500 AMP Inc. ............................ 1,592,937
27,400 Avnet, Inc. ......................... 1,322,050
7,200 Intel Corporation.................... 409,500
14,600 Motorola, Inc. ...................... 773,800
----------
4,098,287
----------
FINANCE -- SERVICES -- 1.7%
30,000 Avalon Properties, Inc. ............. 645,000
27,800 Dean Witter, Discover & Company...... 1,591,550
68,100 Edwards (A.G.), Inc. ................ 1,693,987
----------
3,930,537
----------
FOOD -- PACKAGED -- 1.0%
26,300 Deans Foods Company.................. 657,500
816 Earthgrains Company.................. 24,378
12,800 Unilever N.V., ADR................... 1,737,600
----------
2,419,478
----------
HOUSEHOLD PRODUCTS -- 0.9%
24,300 Premark International Inc. .......... 1,303,087
9,700 Procter & Gamble Company............. 822,075
----------
2,125,162
----------
INDUSTRIAL CONGLOMERATES -- 1.6%
68,200 Hanson, Plc, ADR..................... 1,023,000
11,300 ITT Corporation...................... 288,150
14,200 Minnesota Mining &
Manufacturing Company.............. 921,225
18,200 TRW Inc. ............................ 1,622,075
----------
3,854,450
----------
INSURANCE -- 1.6%
23,200 ITT Hartford Group Inc. ............. 1,136,800
13,800 Marsh & McLennan Companies Inc. ..... 1,281,675
24,300 MGIC Investment Corporation.......... 1,324,350
----------
3,742,825
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
37
<PAGE> 40
NATIONS FUND
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
LEISURE -- 1.6%
31,800 Circus Circus Enterprises Inc.+...... $ 1,069,275
18,800 Disney (Walt) Company................ 1,200,850
36,554 Time Warner Inc. .................... 1,494,145
----------
3,764,270
----------
LIFE AND SPECIALTY INSURANCE -- 2.0%
15,400 American International Group,
Inc. .............................. 1,441,825
12,200 General Re Corporation............... 1,778,150
30,800 Lincoln National Corporation,
Ltd. .............................. 1,563,100
----------
4,783,075
----------
LONG DISTANCE -- 1.4%
28,500 AT&T Corporation..................... 1,745,625
42,000 Sprint Corporation................... 1,596,000
----------
3,341,625
----------
MONEY CENTER BANKS -- 1.0%
14,000 Bankers Trust N.Y. Corporation....... 992,250
35,600 First Chicago Corporation............ 1,477,400
----------
2,469,650
----------
PAPER AND FOREST PRODUCTS -- 1.6%
17,800 Kimberly-Clark Corporation........... 1,326,100
29,000 Mead Corporation..................... 1,566,000
20,400 Weyerhauser Company.................. 940,950
----------
3,833,050
----------
PETROLEUM -- DOMESTIC -- 2.5%
33,100 Ashland Oil, Inc. ................... 1,270,212
37,500 Murphy Oil Corporation............... 1,607,812
54,700 Sun Company, Inc. ................... 1,579,462
77,700 USX-Marathon Group................... 1,495,725
----------
5,953,211
----------
PETROLEUM -- INTERNATIONAL -- 2.1%
17,100 Exxon Corporation.................... 1,395,788
11,800 Mobil Corporation.................... 1,367,325
15,100 Royal Dutch Petroleum Company, ADR... 2,132,875
----------
4,895,988
----------
PRODUCER GOODS -- MACHINERY -- 1.8%
32,400 Briggs & Stratton Corporation........ 1,397,250
67,000 Keystone International, Inc. ........ 1,507,500
38,300 Parker-Hannifin Corporation.......... 1,436,250
----------
4,341,000
----------
REGIONAL BANKS AND THRIFTS -- 1.6%
42,800 Fleet Financial Group Inc. .......... 1,733,400
19,100 Mellon Bank Corporation.............. 1,052,887
17,700 Republic New York Corporation........ 1,053,150
----------
3,839,437
----------
RETAIL -- MAJOR -- 1.4%
26,500 Federated Department Stores Inc.+.... 854,625
20,500 May Department Stores Company........ 989,125
31,500 Penney (J.C.) Company Inc. .......... 1,567,125
----------
3,410,875
----------
RETAIL -- SPECIALTY -- 1.0%
41,500 Circuit City Stores Inc. ............ 1,239,812
43,100 OfficeMax, Inc.+..................... 1,045,175
----------
2,284,987
----------
SOFTWARE AND SERVICES -- 0.3%
7,900 Microsoft Corporation+............... 814,688
----------
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
TELECOMMUNICATION SYSTEMS AND
SPECIALTY EQUIPMENT -- 1.5%
15,500 British Telecommunications, Plc,
ADR................................ $ 875,750
25,900 DSC Communications Corporation+...... 699,300
22,500 Glenayre Technologies Inc.+.......... 860,625
48,000 360 (Degrees) Communications
Company+........................... 1,146,000
----------
3,581,675
----------
TELEPHONE -- BELL REGIONAL -- 1.2%
25,200 Bell Atlantic Corporation............ 1,556,100
28,000 GTE Corporation...................... 1,228,500
----------
2,784,600
----------
TELEPHONE -- CABLE AND
CELLULAR -- 0.6%
26,400 SBC Communications Inc. ............. 1,389,300
----------
TRANSPORTATION -- SURFACE -- 1.5%
35,800 CSX Corporation...................... 1,633,375
16,600 Federal Express Corporation+......... 1,159,925
28,800 Ryder Systems Inc. .................. 784,800
----------
3,578,100
----------
UTILITIES -- NATURAL GAS -- 2.0%
45,700 Brooklyn Union Gas Company........... 1,222,475
59,200 Equitable Resources Inc. ............ 1,731,600
64,300 NICOR Inc. .......................... 1,720,025
----------
4,674,100
----------
WASTE MANAGEMENT -- 0.7%
49,100 Browning-Ferris Industries Inc. ..... 1,546,650
----------
TOTAL COMMON STOCKS
(Cost $115,549,417)................ 128,803,811
===========
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C>
----------
ASSET-BACKED SECURITIES -- 3.2%
$ 1,500,000 American Express Master Trust,
Series 1994-3,
7.850% 08/15/05................. 1,586,715
1,900,000 AT&T Universal Card Master Trust,
5.950% 10/17/02................. 1,868,517
965,633 Chase Manhattan Grantor Trust,
Series 1996-A,
5.200% 04/15/02................. 953,563
1,250,000 EQCC, Home Equity Loan,
Series 1995-4,
6.350% 10/15/09................. 1,241,406
800,000 Ford Credit Auto Loan Master
Trust, Series 1996-1, Class A,
5.500% 02/15/01................. 767,496
1,250,000 Premier Auto Trust, Series 1996-1,
Class A-4,
6.050% 04/06/00................. 1,240,250
-----------
TOTAL ASSET-BACKED SECURITIES
(Cost $7,833,279)............... 7,657,947
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
38
<PAGE> 41
NATIONS FUND
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
CORPORATE BONDS AND NOTES -- 6.5%
AUTOMOTIVE -- 1.3%
Ford Motor Credit
Company, MTN:
$ 1,000,000 7.450% 07/12/99................... $ 1,030,310
750,000 6.060% 12/27/00................... 732,060
1,250,000 General Motors Acceptance
Corporation, MTN,
6.250% 10/18/99................. 1,241,713
--------------
3,004,083
--------------
BANKING AND FINANCE -- 2.7%
1,250,000 Ahmanson and Company, MTN,
6.530% 06/01/98................. 1,249,425
1,000,000 Beneficial Corporation, MTN,
8.100% 11/23/98................. 1,042,150
1,000,000 Capital One Bank, MTN,
5.650% 02/08/99................. 982,660
1,000,000 International Lease Finance
Corporation,
6.270% 02/10/99................. 997,390
750,000 Nationwide Mutual Insurance
Company,
6.500% 02/15/04++............... 721,650
350,000 Prudential Insurance Company,
Surplus Note,
7.650% 07/01/07++............... 355,299
1,000,000 U.S. West Capital Funding, MTN,
6.200% 11/30/00................. 977,730
--------------
6,326,304
--------------
INDUSTRIAL -- 2.1%
530,000 Auburn Hills Trust, Deb.,
12.000% 05/01/20................ 776,471
1,250,000 News America Holdings, Inc., Sr.
Note,
8.625% 02/01/03................. 1,351,062
750,000 Sears Roebuck Acceptance
Corporation, MTN,
5.600% 11/16/98................. 736,770
1,050,000 Time Warner, Inc.,
7.450% 02/01/98................. 1,067,524
1,000,000 TKR Cable 1, Inc., Deb.,
10.500% 10/30/07................ 1,132,920
--------------
5,064,747
--------------
TRANSPORTATION -- AIRLINE -- 0.4%
1,000,000 Qantas Airways Ltd., Sr. Note,
6.625% 06/30/98++............... 1,000,070
--------------
TOTAL CORPORATE
BONDS AND NOTES
(Cost $15,604,418).............. 15,395,204
==============
FOREIGN BOND -- 0.3% (Cost $727,326)
750,000 Skandia Capital,
6.000% 11/02/98................. 740,070
==============
MORTGAGE-BACKED SECURITIES -- 10.1%
FEDERAL HOME LOAN MORTGAGE
CORPORATION (FHLMC)
CERTIFICATES -- 1.4%
$ 3,300,000 GOLD
7.500%, TBA+++ 03/13/26......... 3,294,819
--------------
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
MORTGAGE-BACKED SECURITIES -- (CONTINUED)
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (FNMA)
CERTIFICATES -- 5.5%
$ 1,176,657 9.000% (1 Pool) 08/01/24.......... $ 1,235,490
1,703,010 7.500% (1 Pool) 09/01/25.......... 1,698,753
1,537,150 8.000% (1 Pool) 09/15/25.......... 1,566,525
4,600,000 7.000%, TBA+++ 02/15/11........... 4,589,926
1,500,000 8.500%, TBA+++ 01/12/24........... 1,552,500
2,500,000 6.500%, TBA+++ 12/01/26........... 2,373,425
--------------
13,016,619
--------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA)
CERTIFICATES -- 3.2%
2,581,122 8.000% (2 Pools)
06/15/22 -07/15/22.............. 2,645,030
1,438,491 9.500% (1 Pool) 02/15/25.......... 1,542,782
2,500,000 6.500%, TBA+++ 02/20/26........... 2,367,950
1,000,000 8.500%, TBA+++ 04/18/26........... 1,044,370
--------------
7,600,132
--------------
TOTAL MORTGAGE-BACKED
SECURITIES
(Cost $24,054,442).............. 23,911,570
==============
CERTIFICATE OF DEPOSIT -- (YANKEE) -- 0.3%
(Cost $760,626)
750,000 Sun Canada Financial Company,
6.625% 12/15/07++............... 718,673
==============
U. S. TREASURY SECURITIES -- 16.5%
U.S. TREASURY BONDS -- 9.9%
11,200,000 5.625% 11/30/00................... 10,979,472
9,365,000 8.750% 08/15/20................... 11,413,594
1,250,000 6.250% 08/15/23................... 1,155,663
------------
23,548,729
------------
U.S. TREASURY NOTES -- 6.6%
660,000 8.250% 07/15/98................... 693,825
4,825,000 6.875% 03/31/00................... 4,959,183
3,900,000 6.250% 02/15/03................... 3,888,417
6,425,000 5.875% 11/15/05................... 6,192,094
------------
15,733,519
------------
TOTAL U.S. TREASURY
SECURITIES
(Cost $39,958,301).............. 39,282,248
============
TOTAL SECURITIES
(Cost $204,487,809)............. 216,509,523
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
39
<PAGE> 42
NATIONS FUND
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
REPURCHASE AGREEMENT -- 14.2%
(Cost $33,799,000)
$33,799,000 Agreement with CS First Boston
Corporation, 5.260% dated
03/29/96, to be repurchased at
$33,813,815 on 04/01/96,
collateralized by: $34,644,017
U.S. Treasury Bonds,
7.500% -- 12.000% due
05/15/05 -- 05/15/18............ $ 33,799,000
============
TOTAL
INVESTMENTS
(Cost $238,286,809*)................. 105.4% 250,308,523
OTHER ASSETS AND (5.4) (12,881,006)
LIABILITIES (NET)....................
---- ------------
NET ASSETS............................. 100.0% $237,427,517
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes is $238,848,342.
+ Non-income producing security.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration to qualified institutional buyers.
+++ Security purchased on a when-issued or delayed delivery basis (Note 1).
ABBREVIATIONS:
<TABLE>
<S> <C>
ADR American Depositary Receipt
GOLD Payments are on an accelerated 45-day payment cycle
instead of 75-day cycle
MTN Medium Term Note
TBA To Be Announced
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
40
<PAGE> 43
NATIONS FUND
Nations Equity Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- 78.2%
AEROSPACE AND DEFENSE -- 1.1%
91,400 Raytheon Company................. $ 4,684,250
------------
APPAREL AND TEXTILES -- 1.4%
77,100 Unifi, Inc....................... 1,898,587
76,800 V.F. Corporation................. 4,243,200
------------
6,141,787
------------
AUTOMOTIVE ACCESSORIES -- 1.3%
128,900 Genuine Parts Company............ 5,800,500
------------
BEVERAGES -- 1.8%
69,100 Anheuser-Busch Companies, Inc.... 4,655,612
52,100 PepsiCo Inc...................... 3,295,325
------------
7,950,937
------------
BUSINESS EQUIPMENT AND
PERIPHERALS -- 3.5%
53,400 International Business Machines
Corporation.................... 5,934,075
84,300 Pitney Bowes Inc................. 4,130,700
39,500 Xerox Corporation................ 4,957,250
------------
15,022,025
------------
CHEMICALS -- BASIC -- 1.2%
40,500 Imperial Chemical Industries,
Plc, ADR....................... 2,308,500
56,700 PPG Industries, Inc.............. 2,771,213
------------
5,079,713
------------
CHEMICALS -- SPECIALTY -- 1.2%
182,400 Lubrizol Corporation............. 5,380,800
------------
DIVERSIFIED HEALTH CARE -- 1.2%
135,700 Mallinckrodt Group Inc........... 5,105,712
------------
DRUGS -- 1.3%
65,155 Bristol-Myers Squibb Company..... 5,578,897
------------
DRUGS -- MEDICAL SUPPLIES -- 3.4%
114,900 Bausch & Lomb Inc................ 4,251,300
46,600 Becton, Dickinson & Company...... 3,815,375
113,000 Rhone-Poulenc Rorer, Inc......... 6,893,000
------------
14,959,675
------------
ELECTRIC UTILITIES -- NON-NUCLEAR -- 5.2%
177,400 Baltimore Gas & Electric
Company........................ 4,900,675
196,400 Central & South West
Corporation.................... 5,597,400
146,000 CINergy Corporation.............. 4,380,000
105,600 PacifiCorp....................... 2,204,400
203,600 PECO Energy Company.............. 5,420,850
------------
22,503,325
------------
ELECTRICAL EQUIPMENT -- 0.6%
67,700 General Signal Corporation....... 2,454,125
------------
ELECTRONIC COMPONENTS -- 3.7%
148,700 AMP Inc.......................... 6,152,462
113,406 Avnet, Inc....................... 5,471,840
81,900 Motorola, Inc.................... 4,340,700
------------
15,965,002
------------
FINANCE -- SERVICES -- 0.4%
79,700 Avalon Properties, Inc........... 1,713,550
------------
FOOD -- PACKAGED -- 2.7%
208,900 Dean Foods Company............... 5,222,500
2,764 Earthgrains Company.............. 82,575
54,500 Hershey Foods Corporation........ 4,060,250
16,100 Unilever N.V., ADR............... 2,185,575
------------
11,550,900
------------
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
HOUSEHOLD PRODUCTS -- 0.9%
44,300 Clorox Company................... $ 3,815,338
------------
INDUSTRIAL CONGLOMERATES -- 3.3%
384,000 Hanson, Plc, ADR................. 5,760,000
28,100 ITT Industries Inc............... 716,550
57,800 Minnesota Mining & Manufacturing
Company........................ 3,749,775
44,100 TRW Inc.......................... 3,930,412
------------
14,156,737
------------
INSURANCE -- 2.5%
115,700 ITT Hartford Group Inc........... 5,669,300
54,000 Marsh & McLennan Companies
Inc............................ 5,015,250
------------
10,684,550
------------
LIFE AND SPECIALTY
INSURANCE -- 0.4%
20,326 Allstate Corporation............. 856,233
21,400 Lincoln National Corporation
Ltd............................ 1,086,050
------------
1,942,283
------------
LONG DISTANCE -- 3.0%
90,700 AT&T Corporation................. 5,555,375
60,500 BCE Inc., ADR.................... 2,140,187
145,900 Sprint Corporation............... 5,544,200
------------
13,239,762
------------
MEDIA -- 0.7%
46,700 Dun & Bradstreet Corporation..... 2,831,187
------------
MONEY CENTER BANKS -- 0.8%
51,700 Chemical Banking Corporation..... 3,644,850
------------
OIL SERVICES AND
EQUIPMENT -- 1.4%
197,300 Dresser Industries, Inc.......... 6,017,650
------------
PAPER AND FOREST PRODUCTS -- 2.7%
41,600 Kimberly-Clark Corporation....... 3,099,200
89,600 Mead Corporation................. 4,838,400
90,780 Potlatch Corporation............. 3,880,845
------------
11,818,445
------------
PETROLEUM -- DOMESTIC -- 7.2%
141,300 Ashland Oil, Inc................. 5,422,387
157,300 Consolidated Natural Gas
Company........................ 6,842,550
122,200 Murphy Oil Corporation........... 5,239,325
168,900 Occidental Petroleum
Corporation.................... 4,518,075
81,000 Pacific Enterprises.............. 2,095,875
122,475 Sun Company, Inc................. 3,536,466
53,200 Union Pacific Resources Group
Inc............................ 1,409,800
116,000 USX-Marathon Group............... 2,233,000
------------
31,297,478
------------
PETROLEUM -- INTERNATIONAL -- 3.7%
61,480 Exxon Corporation................ 5,018,305
43,600 Mobil Corporation................ 5,052,150
43,000 Royal Dutch Petroleum Company,
ADR............................ 6,073,750
------------
16,144,205
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
41
<PAGE> 44
NATIONS FUND
Nations Equity Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
PRODUCER
GOODS -- MACHINERY -- 3.6%
135,400 Briggs & Stratton Corporation.... $ 5,839,125
216,900 Keystone International, Inc. .... 4,880,250
146,800 Trinity Industries Inc. ......... 5,119,650
------------
15,839,025
------------
REGIONAL BANKS AND
THRIFTS -- 4.0%
57,000 BankAmerica Corporation.......... 4,417,500
174,000 Fleet Financial Group Inc. ...... 7,047,000
60,690 KeyCorp Inc. .................... 2,344,151
67,300 Mellon Bank Corporation.......... 3,709,913
------------
17,518,564
------------
RETAIL -- FOOD AND DRUG -- 0.8%
119,000 Supervalu Inc. .................. 3,674,125
------------
RETAIL -- MAJOR -- 1.7%
95,600 May Department Stores Company.... 4,612,700
52,900 Penney (J.C.) Company Inc. ...... 2,631,775
------------
7,244,475
------------
RETAIL -- SPECIALTY -- 1.6%
103,000 Lowe's Companies Inc. ........... 3,682,250
89,000 Melville Corporation............. 3,192,875
------------
6,875,125
------------
TELECOMMUNICATION SYSTEMS AND
SPECIALTY EQUIPMENT -- 3.2%
69,100 British Telecommunications, Plc,
ADR............................ 3,904,150
131,200 Communications Satellite
Corporation, Series 1.......... 3,066,800
41,900 Harris Corporation............... 2,592,562
89,100 Nokia Corporation, Class A,
ADR............................ 3,051,675
52,400 360 (Degrees) Communications
Company+....................... 1,251,050
------------
13,866,237
------------
TELEPHONE -- BELL
REGIONAL -- 1.9%
92,200 BellSouth Corporation............ 3,411,400
112,000 GTE Corporation.................. 4,914,000
------------
8,325,400
------------
TELEPHONE -- CABLE AND
CELLULAR -- 1.7%
58,100 Ameritech Corporation............ 3,166,450
80,100 SBC Communications Inc. ......... 4,215,263
------------
7,381,713
------------
UTILITIES -- NATURAL GAS -- 3.1%
161,200 Brooklyn Union Gas Company....... 4,312,100
175,100 Equitable Resources Inc. ........ 5,121,675
157,700 NICOR Inc. ...................... 4,218,475
------------
13,652,250
------------
TOTAL COMMON STOCKS
(Cost $294,107,031)............ 339,860,597
============
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
CONVERTIBLE BONDS AND NOTES -- 7.4%
AEROSPACE AND DEFENSE -- 0.9%
$ 3,500,000 Unisys Corporation, Conv. Sub.
Note, 8.250% 03/15/06.......... $ 3,815,000
------------
APPAREL AND TEXTILES -- 0.5%
2,000,000 Unifi Inc., Conv. Sub. Note,
6.000% 03/15/02................ 2,080,000
------------
DIVERSIFIED HEALTH CARE -- 1.3%
5,800,000 Integrated Health Services, Conv.
Sub. Deb.,
5.750% 01/01/01................ 5,626,000
------------
ELECTRICAL EQUIPMENT -- 1.5%
6,575,000 General Signal Corporation, Conv.
Sub. Note,
5.750% 06/01/02................ 6,879,094
------------
PETROLEUM -- DOMESTIC -- 3.2%
3,500,000 Noble Affiliates, Inc., Conv.
Note, 4.250% 11/01/03.......... 3,605,000
10,975,000 USX-Marathon Group, Conv. Sub.
Deb.,
7.000% 06/15/17................ 10,343,938
------------
13,948,938
------------
TOTAL CONVERTIBLE BONDS AND NOTES
(Cost $31,153,361)............. 32,349,032
============
U.S. TREASURY SECURITIES -- 9.3%
U.S. TREASURY BOND -- 6.3%
29,000,000 5.625% 02/15/06.................. 27,504,760
------------
U.S. TREASURY NOTE -- 3.0%
13,100,000 5.625% 02/28/01.................. 12,842,061
------------
TOTAL U.S. TREASURY SECURITIES
(Cost $40,219,717)............. 40,346,821
============
TOTAL SECURITIES
(Cost $365,480,109)............ 412,556,450
============
REPURCHASE AGREEMENT -- 4.1%
(Cost $17,695,000)
17,695,000 Agreement with CS First Boston
Corporation, 5.260% dated
03/29/96, to be repurchased at
$17,702,756 on 04/01/96,
collateralized by: $18,137,397
U.S. Treasury Bonds,
7.500% -- 12.000% due
05/15/05 - 05/15/18............ 17,695,000
============
TOTAL INVESTMENTS
(Cost $383,175,109*)................... 99.0% 430,251,450
OTHER ASSETS AND
LIABILITIES (NET)...................... 1.0 4,134,074
----- ------------
NET ASSETS............................... 100.0% $434,385,524
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes is $384,380,080.
+ Non-income producing security.
ABBREVIATION:
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
42
<PAGE> 45
NATIONS FUND
Nations Value Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- 94.3%
AEROSPACE AND DEFENSE -- 6.0%
265,600 Lockheed Martin Corporation........ $ 20,152,400
444,800 Raytheon Company................... 22,796,000
432,100 Rockwell International
Corporation...................... 25,439,887
--------------
68,388,287
--------------
APPAREL -- 0.2%
125,097 Limited Inc. ...................... 2,376,843
--------------
AUTOMOBILES -- 2.2%
731,200 Ford Motor Company................. 25,135,000
--------------
AUTOMOTIVE ACCESSORIES -- 2.1%
306,800 Echlin Inc. ....................... 11,121,500
257,000 Goodyear Tire & Rubber Company..... 13,107,000
--------------
24,228,500
--------------
BEVERAGES -- 2.7%
207,700 Anheuser-Busch Companies, Inc. .... 13,993,788
264,700 PepsiCo Inc. ...................... 16,742,275
--------------
30,736,063
--------------
BUSINESS EQUIPMENT AND
PERIPHERALS -- 3.1%
135,600 International Business Machines
Corporation...................... 15,068,550
164,800 Xerox Corporation.................. 20,682,400
--------------
35,750,950
--------------
CHEMICALS -- BASIC -- 1.6%
162,800 du Pont (E.I.) de Nemours &
Company.......................... 13,512,400
109,200 PPG Industries, Inc. .............. 5,337,150
--------------
18,849,550
--------------
COMPUTER MANUFACTURERS -- 2.3%
107,000 Digital Equipment Corporation+..... 5,898,375
475,600 Sun Microsystems Inc.+............. 20,807,500
--------------
26,705,875
--------------
DIVERSIFIED HEALTH CARE -- 1.4%
282,700 Caremark International, Inc. ...... 7,102,838
227,000 Mallinckrodt Group Inc. ........... 8,540,875
--------------
15,643,713
--------------
DRUGS -- 6.0%
299,500 Bristol-Myers Squibb Company....... 25,644,687
543,500 Pharmacia & Upjohn Inc. ........... 21,672,063
371,000 Schering-Plough Corporation........ 21,564,375
--------------
68,881,125
--------------
DRUGS -- MEDICAL SUPPLIES -- 2.5%
122,000 Baxter International Inc. ......... 5,520,500
148,100 Becton, Dickinson & Company........ 12,125,687
185,000 Rhone-Poulenc Rorer, Inc. ......... 11,285,000
--------------
28,931,187
--------------
ELECTRIC UTILITIES -- NON-NUCLEAR -- 4.2%
370,000 Baltimore Gas & Electric Company... 10,221,250
555,061 CINergy Corporation................ 16,651,830
555,000 DPL Inc. .......................... 13,250,625
113,000 General Public Utilities
Corporation...................... 3,729,000
198,000 New York State Electric & Gas
Company.......................... 4,653,000
--------------
48,505,705
--------------
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
ELECTRICAL EQUIPMENT -- 1.9%
279,000 General Electric Company........... $ 21,727,125
--------------
ELECTRONIC COMPONENTS -- 3.5%
204,000 Arrow Electronics Inc.+............ 9,588,000
398,600 Avnet, Inc. ....................... 19,232,450
195,400 Intel Corporation.................. 11,113,375
--------------
39,933,825
--------------
FINANCE -- SERVICES -- 0.9%
218,900 Bear Stearns Companies Inc. ....... 5,417,775
252,000 Paine Webber Group, Inc. .......... 5,544,000
--------------
10,961,775
--------------
FOOD -- PACKAGED -- 1.6%
8,308 Earthgrains Company................ 248,202
241,600 Hershey Foods Corporation.......... 17,999,200
--------------
18,247,402
--------------
HOUSEHOLD PRODUCTS -- 4.2%
1,036,200 First Brands Corporation........... 29,013,600
350,000 Premark International Inc. ........ 18,768,750
--------------
47,782,350
--------------
IMAGING -- 0.5%
122,700 Polaroid Corporation............... 5,521,500
--------------
INDUSTRIAL CONGLOMERATES -- 4.5%
375,800 AlliedSignal Inc. ................. 22,219,175
280,000 Hanson, Plc, ADR................... 4,200,000
225,200 ITT Industries Inc. ............... 5,742,600
605,000 Teradyne Inc.+..................... 10,133,750
100,000 TRW Inc. .......................... 8,912,500
--------------
51,208,025
--------------
INSURANCE -- 2.5%
131,900 CIGNA Corporation.................. 15,069,575
287,200 ITT Hartford Group Inc. ........... 14,072,800
--------------
29,142,375
--------------
LEISURE -- 1.3%
553,125 Mattel, Inc. ...................... 15,003,516
--------------
LIFE AND SPECIALTY INSURANCE -- 4.2%
481,500 AFLAC, Inc. ....................... 15,046,875
97,700 General Re Corporation............. 14,239,775
374,700 Lincoln National Corporation
Ltd.............................. 19,016,025
--------------
48,302,675
--------------
LONG DISTANCE -- 1.6%
296,600 AT&T Corporation................... 18,166,750
--------------
MEDIA -- 0.2%
131,300 World Color Press, Inc. ........... 2,494,700
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
43
<PAGE> 46
NATIONS FUND
Nations Value Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
MONEY CENTER BANKS -- 3.0%
195,000 Chemical Banking Corporation....... $ 13,747,500
170,000 Citicorp........................... 13,600,000
157,700 First Chicago Corporation.......... 6,544,550
--------------
33,892,050
--------------
OIL SERVICES AND EQUIPMENT -- 1.2%
174,200 Schlumberger Ltd. ................. 13,783,575
--------------
PAPER AND FOREST PRODUCTS -- 1.6%
344,900 Mead Corporation................... 18,624,600
--------------
PETROLEUM -- DOMESTIC -- 3.7%
303,900 Coastal Corporation................ 12,004,050
140,000 Consolidated National Gas
Company.......................... 6,090,000
233,000 Phillips Petroleum Company......... 9,203,500
291,000 Williams Companies Inc. ........... 14,659,125
--------------
41,956,675
--------------
PETROLEUM -- INTERNATIONAL -- 7.0%
166,000 Amoco Corporation.................. 11,993,500
66,000 British Petroleum Company, ADS..... 7,012,500
209,800 Exxon Corporation.................. 17,124,925
131,900 Mobil Corporation.................. 15,283,912
131,600 Royal Dutch Petroleum
Company, ADR..................... 18,588,500
114,900 Texaco Inc. ....................... 9,881,400
--------------
79,884,737
--------------
REGIONAL BANKS AND THRIFTS -- 2.9%
173,700 Bank of Boston Corporation......... 8,619,863
276,000 Bank of New York Inc. ............. 14,214,000
195,000 Mellon Bank Corporation............ 10,749,375
--------------
33,583,238
--------------
RETAIL -- FOOD AND DRUG -- 1.4%
561,600 Safeway Inc.+...................... 16,005,600
--------------
RETAIL -- MAJOR -- 2.2%
362,000 Federated Department Stores
Inc.+............................ 11,674,500
292,000 May Department Stores Company...... 14,089,000
--------------
25,763,500
--------------
RETAIL -- SPECIALTY -- 0.9%
345,600 Circuit City Stores Inc. .......... 10,324,800
--------------
TELECOMMUNICATION SYSTEMS AND
SPECIALTY EQUIPMENT -- 1.4%
252,600 Harris Corporation................. 15,629,625
--------------
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
TELEPHONE -- BELL REGIONAL -- 3.4%
540,000 BellSouth Corporation.............. $ 19,980,000
439,500 GTE Corporation.................... 19,283,062
--------------
39,263,062
--------------
TELEPHONE -- CABLE AND CELLULAR -- 1.0%
209,000 SBC Communications Inc. ........... 10,998,625
--------------
TRANSPORTATION -- AIRLINES -- 1.4%
210,000 Delta Air Lines, Inc. ............ 16,143,750
--------------
TRANSPORTATION -- SURFACE -- 2.0%
194,000 Burlington Northern Santa Fe
Inc. ............................ 15,932,250
262,000 Dial Corporation................... 7,336,000
--------------
23,268,250
--------------
TOTAL COMMON STOCKS
(Cost $851,511,506).............. 1,081,746,903
==============
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ----------
<C> <S> <C>
REPURCHASE AGREEMENT -- 6.0%
(Cost $68,358,000)
$68,358,000 Agreement with CS First Boston
Corporation, 5.260% dated
03/29/96, to be repurchased at
$68,387,964 on 04/01/96,
collateralized by: $70,067,035
U.S. Treasury Bonds, 7.500% --
12.000% due 05/15/05 -
05/15/18....................... 68,358,000
==============
TOTAL INVESTMENTS
(Cost $919,869,506*)................ 100.3% 1,150,104,903
OTHER ASSETS AND
LIABILITIES (NET)................... (0.3) (3,313,020)
----- --------------
NET ASSETS............................ 100.0% $1,146,791,883
===== ==============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes is $919,915,500.
+ Non-income producing security.
ABBREVIATIONS:
<TABLE>
<S> <C>
ADR American Depositary Receipt
ADS American Depositary Share
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
44
<PAGE> 47
NATIONS FUND
Nations Equity Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- 96.0%
AEROSPACE AND DEFENSE -- 2.4%
12,958 Boeing Company.................... $ 1,122,487
2,341 General Dynamics Corporation...... 136,949
7,627 Lockheed Martin Corporation....... 578,699
6,194 Loral Corporation................. 303,506
4,115 McDonnell Douglas Corporation..... 377,037
1,936 Northrop Grumman Corporation...... 123,178
1,835 Ogden Corporation................. 35,782
9,729 Raytheon Company.................. 498,611
8,457 Rockwell International
Corporation..................... 497,906
3,316 Rowan Companies Inc.+............. 42,279
3,610 Textron Inc. ..................... 288,800
6,053 Unisys Corporation+............... 36,318
4,798 United Technologies Corporation... 538,576
--------------
4,580,128
--------------
APPAREL AND TEXTILES -- 0.9%
1,264 Armstrong World Industries
Inc. ........................... 78,526
423 Brown Group Inc. ................. 5,711
3,940 Charming Shoppes Inc. ............ 20,316
2,844 Fruit of the Loom Inc., Class
A+.............................. 73,589
5,849 Gap Inc. ......................... 323,888
10,900 Limited Inc. ..................... 207,100
3,235 Liz Claiborne Inc. ............... 110,799
2,340 National Services Industries
Inc. ........................... 84,825
5,611 Nike Inc., Class B................ 455,894
2,257 Reebok International, Ltd. ....... 62,350
1,424 Russell Corporation............... 38,092
528 Springs Industries Inc. .......... 24,288
1,943 Stride Rite Corporation........... 17,730
2,450 V.F. Corporation.................. 135,363
--------------
1,638,471
--------------
AUTOMOBILES -- 2.0%
14,666 Chrysler Corporation.............. 912,959
40,779 Ford Motor Company................ 1,401,778
28,672 General Motors Corporation........ 1,526,784
1,491 Paccar, Inc. ..................... 72,686
--------------
3,914,207
--------------
AUTOMOTIVE ACCESSORIES -- 0.6%
3,514 Cooper Tire & Rubber Company...... 90,486
4,136 Dana Corporation.................. 138,039
3,149 Eaton Corporation................. 189,727
2,318 Echlin Inc. ...................... 84,028
4,616 Genuine Parts Company............. 207,720
5,726 Goodyear Tire & Rubber Company.... 292,026
1,593 Snap On Tools Inc. ............... 74,473
--------------
1,076,499
--------------
BEVERAGES -- 3.8%
9,938 Anheuser-Busch Companies, Inc. ... 669,573
2,677 Brown-Forman Corporation, Class
B............................... 107,415
48,021 Coca-Cola Company................. 3,967,735
1,567 Coors (Adolph) Company, Class B... 28,010
30,336 PepsiCo Inc. ..................... 1,918,752
14,539 Seagram Company, Ltd.............. 470,700
4,159 Whitman Corporation............... 100,856
--------------
7,263,041
--------------
BUILDING AND CONSTRUCTION -- 0.4%
3,696 Black & Decker Corporation........ 139,986
1,205 Centex Corporation................ 37,355
1,155 Foster Wheeler Corporation........ 51,253
1,123 Kaufman & Broad Home
Corporation..................... 17,968
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
BUILDING AND CONSTRUCTION -- (CONTINUED)
6,018 Masco Corporation................. $ 174,522
788 Pulte Corporation................. 21,177
3,695 Sherwin-Williams Company.......... 163,966
1,808 Stanley Works..................... 99,440
--------------
705,667
--------------
BUSINESS EQUIPMENT AND PERIPHERALS -- 2.5%
2,174 Avery Dennison Corporation........ 117,396
6,600 Bay Networks, Inc.+............... 202,950
20,438 cisco Systems, Inc.+.............. 947,812
6,101 Donnelley (R.R.) & Sons Company... 210,484
21,861 International Business Machines
Corporation..................... 2,429,304
6,080 Pitney Bowes Inc. ................ 297,920
4,051 Xerox Corporation................. 508,401
--------------
4,714,267
--------------
CHEMICALS -- BASIC -- 2.2%
4,105 Coastal Corporation............... 162,148
10,270 Dow Chemical Company.............. 892,206
21,147 du Pont (E.I.) de Nemours &
Company......................... 1,755,201
3,359 Eastman Chemical Company.......... 232,191
4,212 Hercules Inc. .................... 261,144
1,753 Owens Corning Fiberglass
Corporation+.................... 70,339
1,889 Perkin Elmer Corporation.......... 102,242
7,372 PPG Industries, Inc. ............. 360,307
2,702 Rohm & Haas Company............... 179,683
5,268 Union Carbide Corporation......... 261,424
--------------
4,276,885
--------------
CHEMICALS -- SPECIALTY -- 1.1%
4,318 Air Products & Chemicals Inc. .... 235,871
1,863 Bemis Inc. ....................... 58,452
4,319 Engelhard Corporation............. 100,957
978 Goodrich (B.F.) Company........... 77,751
3,761 Grace (W.R.) & Company............ 294,298
2,160 Great Lakes Chemical
Corporation..................... 145,530
4,412 Monsanto Company.................. 677,242
5,672 Morton International Inc.,
Industries...................... 217,663
2,366 Nalco Chemical Company............ 72,754
5,084 Praxair Inc. ..................... 202,724
1,844 Sigma-Aldrich Corporation......... 105,569
--------------
2,188,811
--------------
COMPUTER MANUFACTURERS -- 2.0%
4,478 Apple Computer Inc. .............. 109,991
2,698 Cabletron Systems Inc.+........... 178,743
10,303 COMPAQ Computer Corporation+...... 397,953
1,048 Data General Corporation+......... 15,327
5,764 Digital Equipment Corporation+.... 317,740
19,547 Hewlett Packard Company........... 1,837,418
5,200 Honeywell Inc. ................... 287,300
5,741 Silicon Graphics Inc.+............ 143,525
7,801 Sun Microsystems Inc.+............ 341,294
6,300 3Com Corporation+................. 251,213
--------------
3,880,504
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
45
<PAGE> 48
NATIONS FUND
Nations Equity Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
DIVERSIFIED HEALTH CARE -- 1.3%
3,514 Beverly Enterprises Inc.+......... $ 38,654
16,924 Columbia/HCA Healthcare Corporation... 977,361
3,001 Community Psychiatric Centers..... 25,133
2,354 Ecolab Inc. ...................... 70,620
5,900 Humana Inc.+...................... 148,238
3,031 Mallinckrodt Group Inc. .......... 114,041
2,532 Manor Care Inc. .................. 99,381
4,309 Pall Corporation.................. 110,418
7,822 Tenet Healthcare Corporation...... 164,262
6,343 United Healthcare Corporation..... 390,095
6,208 U.S. Healthcare Inc. ............. 284,792
--------------
2,422,995
--------------
DRUGS -- 6.1%
2,704 ALZA Corporation+................. 83,148
11,822 American Home Products
Corporation..................... 1,281,209
10,104 Amgen Inc.+....................... 587,295
19,338 Bristol-Myers Squibb Company...... 1,655,816
20,646 Lilly (Eli) & Company............. 1,341,990
47,015 Merck & Company Inc. ............. 2,926,684
24,208 Pfizer Inc. ...................... 1,621,936
19,134 Pharmacia & Upjohn Inc. .......... 762,968
14,438 Schering-Plough Corporation....... 839,209
4,946 Warner Lambert Company............ 510,675
--------------
11,610,930
--------------
DRUGS -- MEDICAL SUPPLIES -- 2.9%
30,057 Abbott Laboratories............... 1,224,823
2,744 Allergan Inc. .................... 101,185
2,064 Bard (C.R.) Inc. ................. 73,530
2,302 Bausch & Lomb Inc. ............... 85,174
10,761 Baxter International Inc. ........ 486,935
2,770 Becton, Dickinson & Company....... 226,794
3,726 Biomet Inc.+...................... 52,164
6,212 Boston Scientific Corporation+.... 285,752
24,906 Johnson & Johnson................. 2,297,579
8,564 Medtronic Inc. ................... 510,628
2,682 St. Jude Medical Inc.+............ 100,072
2,290 United States Surgical
Corporation..................... 74,997
--------------
5,519,633
--------------
ELECTRIC UTILITIES -- NON-NUCLEAR -- 3.0%
7,030 American Electric Power Inc. ..... 293,503
5,568 Baltimore Gas & Electric
Company......................... 153,816
5,797 Carolina Power & Light Company.... 215,938
7,373 Central & South West
Corporation..................... 210,131
4,781 CINergy Corporation............... 143,430
9,179 Consolidated Edison Company New
York Inc. ...................... 292,581
6,047 Dominion Resources Inc. .......... 239,612
5,956 DTE Energy Company................ 200,270
8,070 Duke Power Company................ 407,535
17,263 Edison International.............. 295,629
9,427 Entergy Corporation, New.......... 263,956
6,706 FPL Group Inc. ................... 303,447
4,445 General Public Utilities
Corporation..................... 146,685
6,012 Niagara Mohawk Power
Corporation..................... 39,829
2,567 Northern States Power
Corporation..................... 125,141
6,005 Ohio Edison Company............... 135,863
16,940 Pacific Gas & Electric Company.... 383,267
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
ELECTRIC UTILITIES -- NON-NUCLEAR -- (CONTINUED)
10,723 PacifiCorp........................ $ 223,843
8,783 PECO Energy Company............... 233,847
6,362 PP&L Resources Inc. .............. 155,074
25,342 Southern Company.................. 605,040
8,514 Texas Utilities Company........... 352,267
8,436 Unicom Corporation................ 227,772
3,615 Union Electric Company............ 148,215
--------------
5,796,691
--------------
ELECTRIC UTILITIES -- NUCLEAR -- 0.1%
9,646 Houston Industries Inc. .......... 208,595
--------------
ELECTRICAL EQUIPMENT -- 4.0%
3,942 Advanced Micro Devices Inc. ...... 67,999
4,258 Cooper Industries Inc. ........... 166,062
8,597 Emerson Electric Company.......... 694,208
63,492 General Electric Company.......... 4,944,439
1,727 General Signal Corporation........ 62,604
1,379 Johnson Controls Inc. ............ 102,908
7,973 Micron Technology, Inc. .......... 250,153
16,115 Minnesota Mining & Manufacturing
Company......................... 1,045,461
2,361 Scientific-Atlanta Inc. .......... 41,908
1,455 Tektronix Inc. ................... 47,287
1,879 Teledyne Inc. .................... 52,612
14,300 Westinghouse Electric
Corporation..................... 275,275
--------------
7,750,916
--------------
ELECTRONIC COMPONENTS -- 2.3%
5,835 Amdahl Corporation+............... 49,598
8,010 AMP Inc. ......................... 331,414
6,678 Applied Materials Inc.+........... 232,895
1,872 E.G. & G. Inc..................... 41,886
1,853 Grainger (W.W.) Inc. ............. 124,383
31,582 Intel Corporation................. 1,796,226
4,800 LSI Logic Corporation+............ 128,400
22,512 Motorola, Inc. ................... 1,193,136
4,686 National Semiconductor
Corporation+.................... 65,018
7,160 Texas Instruments Inc. ........... 364,265
534 Thomas & Betts Corporation........ 40,050
--------------
4,367,271
--------------
ENGINEERING AND CONSTRUCTION -- 0.2%
3,512 Fluor Corporation................. 239,694
4,132 Halliburton Company............... 235,008
--------------
474,702
--------------
FINANCE -- SERVICES -- 3.4%
18,982 American Express Company.......... 937,236
2,196 Beneficial Corporation............ 126,544
6,356 Dean Witter, Discover & Company... 363,881
3,982 Dow Jones & Company Inc. ......... 153,307
6,896 Federal Home Loan Mortgage
Corporation..................... 587,884
41,208 Federal National Mortgage
Association..................... 1,313,505
5,500 Green Tree Financial
Corporation..................... 189,063
3,213 Household International Inc. ..... 216,074
8,507 KeyCorp (New)..................... 328,583
9,066 MBNA Corporation.................. 268,580
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
46
<PAGE> 49
NATIONS FUND
Nations Equity Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
FINANCE -- SERVICES -- (CONTINUED)
6,648 Merrill Lynch & Company Inc. ..... $ 403,866
5,962 Morgan Stanley Group, Inc. ....... 308,534
14,677 Norwest Corporation............... 539,380
12,177 Travelers Group Inc. ............. 803,682
2,782 USF&G Corporation................. 43,121
--------------
6,583,240
--------------
FOOD -- PACKAGED -- 3.1%
20,731 Archer-Daniels-Midland Company.... 380,932
9,180 Campbell Soup Company............. 558,832
9,761 ConAgra Inc. ..................... 396,541
5,562 CPC International Inc. ........... 385,864
398 Earthgrains Company............... 11,876
1,157 Fleming Companies Inc. ........... 16,487
6,141 General Mills Inc. ............... 358,481
14,365 Heinz (H.J.) Company.............. 475,841
2,941 Hershey Foods Corporation......... 219,104
8,485 Kellogg Company................... 642,739
3,122 Pioneer Hi-Bred International..... 164,295
4,952 Quaker Oats Company............... 165,273
3,935 Ralston Purina Group.............. 263,153
18,419 Sara Lee Corporation.............. 600,920
7,214 Sysco Corporation................. 237,160
6,060 Unilever N.V., ADR................ 822,645
4,414 Wrigley (Wm.) Jr. Company......... 258,771
--------------
5,958,914
--------------
HEALTH AND BEAUTY -- 0.8%
996 Alberto-Culver Company, Class B... 38,346
2,376 Avon Products Inc. ............... 203,742
16,967 Gillette Company.................. 878,042
4,081 International Flavors &
Fragrances Inc. ................ 195,378
5,441 Newell Company.................... 145,547
--------------
1,461,055
--------------
HOUSEHOLD PRODUCTS -- 1.8%
2,066 Clorox Company.................... 177,934
5,752 Colgate Palmolive Company......... 447,937
8,138 Corning Inc. ..................... 284,830
4,181 Maytag Corporation................ 84,665
26,238 Procter & Gamble Company.......... 2,223,671
6,217 Rubbermaid Inc. .................. 176,407
2,875 Whirlpool Corporation............. 158,844
--------------
3,554,288
--------------
IMAGING -- 0.5%
12,900 Eastman Kodak Company............. 915,900
1,852 Polaroid Corporation.............. 83,340
--------------
999,240
--------------
INDUSTRIAL CONGLOMERATES -- 0.9%
3,874 Alco Standard Corporation......... 201,932
11,020 AlliedSignal Inc. ................ 651,558
1,002 Ball Corporation.................. 31,062
4,247 Illinois Tool Works Inc. ......... 274,462
4,244 ITT Corporation................... 254,640
4,244 ITT Industries Inc. .............. 108,222
2,653 TRW Inc. ......................... 236,449
--------------
1,758,325
--------------
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
INSURANCE -- 1.1%
1,402 Alexander & Alexander
Services Inc. .................. $ 26,463
3,607 Chubb Corporation................. 338,607
2,708 CIGNA Corporation................. 309,389
4,244 ITT Hartford Group Inc. .......... 207,956
2,556 Jefferson-Pilot Corporation....... 137,704
4,563 Loews Corporation................. 345,077
2,914 Marsh & McLennan Companies
Inc. ........................... 270,638
3,871 Providian Corporation............. 172,743
3,523 St. Paul Companies Inc. .......... 195,527
2,401 Torchmark Corporation............. 108,045
--------------
2,112,149
--------------
JEWELRY -- 0.0%#
1,659 Jostens, Inc. .................... 37,120
--------------
LEISURE -- 1.8%
1,523 Bally Entertainment Corporation... 26,272
3,901 Brunswick Corporation............. 89,723
24,968 Disney (Walt) Company............. 1,594,831
1,712 Fleetwood Enterprises Inc. ....... 42,372
3,766 Harrah's Entertainment Inc. ...... 110,626
3,513 Hasbro Inc. ...................... 129,981
10,768 Mattel, Inc. ..................... 292,082
15,076 Time Warner Inc. ................. 616,231
13,807 Viacom Inc., Class B+............. 581,620
--------------
3,483,738
--------------
LIFE AND SPECIALTY INSURANCE -- 2.2%
4,122 Aetna Life & Casualty Company..... 311,211
17,701 Allstate Corporation.............. 745,654
7,962 American General Corporation...... 274,689
18,101 American International Group,
Inc. ........................... 1,694,706
3,173 General Re Corporation............ 462,465
3,857 Lincoln National Corporation
Ltd. ........................... 195,743
4,782 SAFECO Corporation................ 160,197
2,783 Transamerica Corporation.......... 208,377
2,808 UNUM Corporation.................. 167,076
1,384 USLIFE Corporation................ 40,655
--------------
4,260,773
--------------
LONG DISTANCE -- 2.2%
60,469 AT&T Corporation.................. 3,703,726
13,274 Sprint Corporation................ 504,412
--------------
4,208,138
--------------
MEDIA -- 1.1%
6,206 Dun & Bradstreet Corporation...... 376,239
5,518 Gannet Inc. ...................... 371,085
2,842 Interpublic Group Companies
Inc. ........................... 134,285
1,505 King World Productions Inc.+...... 62,269
1,864 Knight-Ridder Inc. ............... 126,985
1,844 Mcgraw-Hill Companies, Inc. ...... 159,967
782 Meredith Corporation.............. 32,258
3,689 New York Times Company, Class A... 106,981
3,819 Times Mirror Company, Class A..... 150,373
2,461 Tribune Company................... 162,118
18,069 U.S. West Media Group, Inc.+...... 372,673
--------------
2,055,233
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
47
<PAGE> 50
NATIONS FUND
Nations Equity Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
METALS -- 1.7%
9,460 Alcan Aluminum Ltd................ $ 305,085
6,183 Aluminum Company Of America....... 387,210
3,240 Armco Inc.+....................... 17,415
1,589 ASARCO Inc. ...................... 55,615
12,929 Barrick Gold Corporation.......... 392,718
4,001 Bethlehem Steel Corporation+...... 52,513
4,856 Crown Cork & Seal Inc. ........... 236,730
3,700 Cyprus Amax Minerals Company...... 104,525
3,915 Echo Bay Mines Ltd................ 52,853
7,967 Freeport McMoRan Copper and Gold,
Class B......................... 251,956
3,965 Inco Ltd.......................... 125,393
1,856 Inland Steel Industries Inc. ..... 45,936
3,299 Newmont Mining Corporation........ 186,806
3,408 Nucor Corporation................. 201,498
2,793 Phelps Dodge Corporation.......... 191,670
9,302 Placer Dome Inc., ADR............. 268,595
2,434 Reynolds Metals Company........... 143,910
5,306 Santa Fe Pacific Gold
Corporation..................... 84,896
1,112 Timken Company.................... 51,291
3,137 USX-U.S. Steel Group.............. 108,619
3,156 Worthington Industries Inc. ...... 62,726
--------------
3,327,960
--------------
MONEY CENTER BANKS -- 2.0%
2,687 Bankers Trust N.Y. Corporation.... 190,441
6,982 Chase Manhattan Corporation....... 513,177
10,655 Chemical Banking Corporation...... 751,177
18,400 Citicorp.......................... 1,472,000
14,233 First Chicago Corporation......... 590,670
6,439 National City Corporation......... 226,170
--------------
3,743,635
--------------
OIL SERVICES AND EQUIPMENT -- 0.6%
5,491 Baker Hughes Inc. ................ 160,612
6,108 Dresser Industries, Inc. ......... 186,294
9,325 Schlumberger Ltd.................. 737,840
2,066 Western Atlas, Inc.+.............. 123,960
--------------
1,208,706
--------------
PAPER AND FOREST PRODUCTS -- 1.8%
2,818 American Greetings Corporation,
Class A......................... 77,847
2,432 Boise Cascade Corporation......... 102,144
5,090 Burlington Resources Inc. ........ 188,966
3,896 Champion International
Corporation..................... 176,294
3,175 Deluxe Corporation................ 99,616
3,668 Georgia-Pacific Corporation....... 254,467
1,311 Harland (John H.) Company......... 28,842
1,155 Harnischfeger Industries Inc. .... 44,756
11,361 International Paper Company....... 447,338
3,457 James River Corporation........... 89,018
10,694 Kimberly-Clark Corporation........ 796,703
4,380 Louisiana Pacific Corporation..... 106,762
2,097 Mead Corporation.................. 113,238
3,618 Moore Corporation Ltd. ........... 70,551
1,100 Potlatch Corporation.............. 47,025
2,820 Stone Container Corporation....... 39,480
2,088 Temple-Inland Inc. ............... 97,875
2,836 Union Camp Corporation............ 140,737
4,016 Westvaco Corporation.............. 117,970
7,920 Weyerhauser Company............... 365,310
2,086 Willamette Industries Inc. ....... 125,682
--------------
3,530,621
--------------
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
PETROLEUM -- DOMESTIC -- 2.7%
3,751 Amerada Hess Corporation.......... $ 206,305
2,464 Ashland Oil, Inc. ................ 94,556
25,065 Chevron Corporation............... 1,406,773
1,853 Columbia Gas Systems Inc. ........ 85,006
3,551 Consolidated Natural Gas
Company......................... 154,468
642 Eastern Enterprises............... 22,791
9,608 Enron Corporation................. 354,295
2,998 ENSERCH Corporation............... 48,717
668 Helmerich & Payne Inc. ........... 22,545
5,368 Homestake Mining Company.......... 104,005
2,055 Kerr-McGee Corporation............ 130,492
1,232 Louisiana Land & Exploration
Company......................... 57,442
1,976 McDermott International Inc. ..... 38,038
4,984 Noram Energy Corporation.......... 46,102
12,470 Occidental Petroleum
Corporation..................... 333,573
988 ONEOK Inc. ....................... 23,589
3,833 Oryx Energy Company+.............. 53,183
3,216 Pacific Enterprises............... 83,214
4,982 Panhandle Eastern Corporation..... 155,065
1,713 Pennzoil Company.................. 68,092
1,235 Peoples Energy Corporation........ 39,983
10,368 Phillips Petroleum Company........ 409,536
9,642 Public Service Enterprise Group... 265,155
3,359 Santa Fe Energy Resources......... 35,270
3,605 Sonat Inc. ....................... 129,780
3,729 Sun Company, Inc. ................ 107,675
9,250 Unocal Corporation................ 308,719
11,111 USX-Marathon Group................ 213,887
3,614 Williams Companies Inc. .......... 182,055
--------------
5,180,311
--------------
PETROLEUM -- INTERNATIONAL -- 6.0%
18,946 Amoco Corporation................. 1,368,848
6,162 Atlantic Richfield Company........ 733,278
47,506 Exxon Corporation................. 3,877,677
15,000 Mobil Corporation................. 1,738,125
20,422 Royal Dutch Petroleum
Company, ADR.................... 2,884,608
9,855 Texaco Inc. ...................... 847,530
--------------
11,450,066
--------------
PLASTICS -- 0.1%
2,742 Premark International Inc. ....... 147,040
1,501 Raychem Corporation............... 96,814
--------------
243,854
--------------
PRODUCER GOODS -- MACHINERY -- 1.2%
1,201 Briggs & Stratton Corporation..... 51,793
2,200 Case Corporation.................. 111,925
7,634 Caterpillar Inc. ................. 519,112
1,033 Cincinnati Milacron Inc. ......... 27,116
1,111 Crane Company..................... 44,857
2,186 Cummins Engine Inc. .............. 88,260
10,318 Deere & Company................... 430,776
4,494 Dover Corporation................. 205,600
1,355 FMC Corporation (New)+............ 101,794
1,434 Giddings & Lewis Inc. ............ 27,246
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
48
<PAGE> 51
NATIONS FUND
Nations Equity Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
PRODUCER GOODS -- MACHINERY -- (CONTINUED)
3,939 Ingersoll Rand Company............ $ 160,514
264 Nacco Industries Inc., Class A.... 15,015
535 Outboard Marine Corporation....... 10,232
3,064 Parker-Hannifin Corporation....... 114,900
6,596 Tenneco Inc. ..................... 368,552
1,299 Trinova Corporation............... 41,406
1,694 Varity Corporation+............... 73,266
--------------
2,392,364
--------------
REGIONAL BANKS AND THRIFTS -- 4.7%
4,339 Ahmanson (H.F.) & Company......... 105,221
17,318 Banc One Corporation.............. 616,954
5,119 Bank of Boston Corporation........ 254,030
8,578 Bank of New York Inc. ............ 441,767
15,068 BankAmerica Corporation........... 1,167,770
4,010 Barnett Banks Inc. ............... 249,622
5,186 Boatmen's Bancshares Inc. ........ 203,551
6,900 Comerica Inc. .................... 288,075
5,501 CoreStates Financial
Corporation..................... 233,105
4,000 Fifth Third Bancorp............... 232,000
5,241 First Bank System, Inc. .......... 312,495
3,108 First Interstate Bancorp.......... 539,238
11,582 First Union Corporation........... 700,711
11,949 Fleet Financial Group Inc. ....... 483,935
2,309 Golden West Financial
Corporation..................... 123,820
5,114 Great Western Financial
Corporation..................... 123,375
6,018 Mellon Bank Corporation........... 331,742
7,365 Morgan (J.P.) & Company Inc. ..... 611,295
12,632 PNC Bank Corporation.............. 388,434
1,962 Republic New York Corporation..... 116,739
3,848 Salomon Inc. ..................... 144,300
4,854 SunTrust Banks Inc. .............. 339,780
5,875 U.S. Bancorp...................... 199,750
7,496 Wachovia Corporation.............. 335,446
2,147 Wells Fargo & Company............. 560,367
--------------
9,103,522
--------------
RESTAURANTS AND LODGING -- 1.0%
6,140 Darden Restaurants Inc. .......... 82,890
1,833 Hilton Hotels Corporation......... 172,302
722 Luby's Cafeterias Inc. ........... 16,696
4,309 Marriot International Inc. ....... 204,678
26,749 McDonald's Corporation............ 1,283,952
1,867 Ryan Family Steak Houses Inc.+.... 16,803
1,680 Shoney's Inc.+.................... 15,120
4,235 Wendy's International Inc. ....... 76,759
--------------
1,869,200
--------------
RETAIL -- FOOD AND DRUG -- 0.7%
10,113 Albertsons Inc. .................. 375,445
5,473 American Stores Company........... 180,609
2,410 Giant Food Inc., Class A.......... 79,530
1,366 Great Atlantic & Pacific Tea
Inc. ........................... 42,346
4,166 Kroger Company+................... 168,723
543 Longs Drug Stores Corporation..... 25,656
3,485 Rite Aid Corporation.............. 107,599
2,782 Supervalu Inc. ................... 85,894
5,717 Winn-Dixie Stores Inc. ........... 192,234
--------------
1,258,036
--------------
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
RETAIL -- MAJOR -- 2.4%
6,762 Federated Department Stores
Inc.+........................... $ 218,075
3,230 Harcourt General Inc. ............ 146,561
15,967 Kmart Stores Corporation.......... 149,691
9,773 May Department Stores Company..... 471,547
1,255 Mercantile Stores Inc. ........... 77,026
8,910 Penney (J.C.) Company Inc. ....... 443,272
14,790 Sears, Roebuck & Company.......... 721,012
87,981 Wal-Mart Stores Inc. ............. 2,034,561
9,558 Walgreen Company.................. 311,830
5,026 Woolworth Corporation............. 78,531
--------------
4,652,106
--------------
RETAIL -- SPECIALITY -- 1.3%
4,012 Circuit City Stores Inc. ......... 119,858
2,698 Dayton Hudson Corporation......... 228,993
4,193 Dillard Department Stores Inc.,
Class A......................... 145,183
17,275 Home Depot Inc. .................. 827,041
6,152 Lowe's Companies Inc. ............ 219,934
3,937 Melville Corporation.............. 141,240
3,074 Nordstrom Inc. ................... 148,897
2,330 Pep Boys -- Manny, Moe & Jack..... 78,055
7,902 Price/Costco Inc.+................ 148,162
2,561 Tandy Corporation................. 118,446
2,799 TJX Companies Inc. ............... 70,325
11,160 Toys R Us Inc.+................... 301,320
--------------
2,547,454
--------------
SERVICES -- 0.2%
5,601 CUC International Inc.+........... 163,829
4,375 Service Corporation
International................... 213,281
--------------
377,110
--------------
SOFTWARE AND SERVICES -- 2.9%
2,230 Autodesk Inc. .................... 84,183
11,724 Automatic Data Processing Inc. ... 461,633
3,467 Block (H&R) Inc. ................. 125,245
1,811 Ceridian Corporation+............. 77,873
9,471 Computer Associates International
Inc. ........................... 678,360
2,287 Computer Sciences Corporation..... 160,948
777 Cray Research Inc.+............... 22,630
8,412 First Data Corporation............ 593,046
1,542 Intergraph Corporation+........... 24,672
22,381 Microsoft Corporation+............ 2,308,041
2,125 Millipore Corporation............. 81,281
14,047 Novell Inc.+...................... 187,879
16,737 Oracle Systems Corporation+....... 788,731
757 Shared Medical Systems
Corporation..................... 45,609
4,029 Tandem Computers Inc.+............ 35,757
--------------
5,675,888
--------------
TELECOMMUNICATION SYSTEMS AND
SPECIALITY EQUIPMENT -- 1.1%
7,229 ALLTEL Corporation................ 224,099
2,264 Andrew Corporation+............... 86,598
3,819 DSC Communications Corporation+... 103,113
1,568 Harris Corporation................ 97,020
26,321 MCI Communications Corporation.... 796,210
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
49
<PAGE> 52
NATIONS FUND
Nations Equity Index Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
TELECOMMUNICATION SYSTEMS AND
SPECIALITY EQUIPMENT -- (CONTINUED)
9,812 Northern Telecommunications,
Ltd. ........................... $ 468,523
3,747 Tellabs Inc.+..................... 181,261
4,191 360 (Degrees) Communications
Company+........................ 100,060
--------------
2,056,884
--------------
TELEPHONE -- BELL REGIONAL -- 3.1%
16,628 Bell Atlantic Corporation......... 1,026,779
38,180 BellSouth Corporation............. 1,412,660
37,529 GTE Corporation................... 1,646,585
16,240 NYNEX Corporation................. 809,970
16,149 Pacific Telesis Group............. 446,116
18,169 U.S. West Inc. ................... 588,221
--------------
5,930,331
--------------
TELEPHONE -- CABLE AND CELLULAR -- 2.0%
18,619 AirTouch Communications, Inc.+.... 579,516
20,901 Ameritech Corporation............. 1,139,105
8,556 Comcast Corporation, Class A...... 151,334
23,161 SBC Communications Inc. .......... 1,218,847
25,183 Tele-Communications Inc., Class
A............................... 467,459
6,321 Tyco International Ltd............ 225,976
--------------
3,782,237
--------------
TOBACCO -- 1.7%
7,245 American Brands Inc. ............. 307,007
31,901 Philip Morris Companies Inc. ..... 2,799,313
6,589 UST Inc. ......................... 210,024
--------------
3,316,344
--------------
TRANSPORTATION -- AIRLINES -- 0.3%
2,930 AMR Corporation+.................. 262,235
1,953 Delta Air Lines, Inc. ............ 150,137
5,040 Southwest Airlines Company........ 149,310
2,154 USAir Group Inc. ................. 39,310
--------------
600,992
--------------
TRANSPORTATION -- SURFACE -- 1.3%
5,708 Burlington Northern Santa Fe
Inc. ........................... 468,769
1,374 Caliber Systems Inc. ............. 58,910
2,950 Conrail Inc. ..................... 211,294
1,900 Consolidated Freightways Inc. .... 48,687
7,734 CSX Corporation................... 352,864
3,451 Dial Corporation.................. 96,628
2,088 Federal Express Corporation+...... 145,899
2,637 Navistar International
Corporation+.................... 27,359
4,837 Norfolk Southern Corporation...... 411,145
4,151 Ryder Systems Inc. ............... 113,115
7,771 Union Pacific Corporation......... 533,285
991 Yellow Corporation................ 12,388
--------------
2,480,343
--------------
UTILITIES -- NATURAL GAS -- 0.0%#
2,160 NICOR Inc. ....................... 57,780
--------------
WASTE MANAGEMENT -- 0.5%
8,226 Browning-Ferris Industries
Inc. ........................... 259,119
10,137 Laidlaw Inc., Class B............. 107,706
2,149 Safety-Kleen Corporation.......... 30,892
19,153 WMX Technologies Inc. ............ 608,107
--------------
1,005,824
--------------
TOTAL COMMON STOCKS
(Cost $144,151,408)............. 184,653,994
==============
<CAPTION>
PRINCIPAL
AMOUNT
- ----------
<C> <S> <C>
U.S. TREASURY BILLS -- 0.2%
$ 100,000 4.890%** 05/02/1996++............. $ 99,579
100,000 4.770%** 05/16/1996++............. 99,404
100,000 4.885%** 06/06/1996++............. 99,104
100,000 4.975%** 06/20/1996++............. 98,894
--------------
TOTAL U.S. TREASURY BILLS
(Cost $396,981)................. 396,981
============
TOTAL SECURITIES
(Cost $144,548,389)............. 185,050,975
============
REPURCHASE AGREEMENT -- 4.0%
(Cost $7,736,000)
7,736,000 Agreement with CS First Boston
Corporation, 5.260% dated
03/29/96, to be repurchased at
$7,739,391 on 04/01/96,
collateralized by: $7,929,410
U.S. Treasury Bonds,
7.500% -- 12.000% due
05/15/05 -- 05/15/18............ 7,736,000
============
TOTAL INVESTMENTS
(Cost $152,284,389*).................. 100.2% 192,786,975
OTHER ASSETS AND LIABILITIES (NET)...... (0.2) (304,335)
----- ------------
NET ASSETS.............................. 100.0% $192,482,640
===== ============
</TABLE>
<TABLE>
<CAPTION>
NET
NUMBER OF UNREALIZED
CONTRACTS DEPRECIATION
<C> <S> <C>
- ------------------------------------------------------------
FUTURES CONTRACTS -- LONG POSITION
22 S&P 500 Index Futures, June $ (5,525)
1996...........................
============
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Aggregate cost for Federal tax purposes is $152,902,218.
** Rate represents annualized yield at date of purchase.
+ Non-income producing security.
++ Security segregated as collateral for Futures Contracts.
# Amount represents less than 0.1% of net assets.
</TABLE>
ABBREVIATION:
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
50
<PAGE> 53
NATIONS FUND
Nations Disciplined Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- 97.6%
AEROSPACE AND DEFENSE -- 4.9%
35,500 McDonnell Douglas Corporation..... $ 3,252,688
31,600 United Technologies Corporation... 3,547,100
------------
6,799,788
------------
APPAREL -- 5.3%
107,100 Liz Claiborne Inc................. 3,668,175
46,700 Nike Inc., Class B................ 3,794,375
------------
7,462,550
------------
BUSINESS EQUIPMENT AND
PERIPHERALS -- 2.1%
93,200 Bay Networks, Inc.+............... 2,865,900
------------
CHEMICALS -- BASIC -- 2.1%
45,100 Rohm & Haas Company............... 2,999,150
------------
CHEMICALS -- SPECIALTY -- 4.6%
44,600 Goodrich (B.F.) Company........... 3,545,700
78,800 IMC Global, Inc................... 2,876,200
------------
6,421,900
------------
COMPUTER MANUFACTURERS -- 4.3%
51,100 Digital Equipment Corporation+.... 2,816,888
73,100 Sun Microsystems Inc.+............ 3,198,125
------------
6,015,013
------------
DIVERSIFIED HEALTH CARE -- 2.1%
65,500 U.S. Healthcare Inc............... 3,004,812
------------
DRUGS -- 4.7%
39,100 Bristol-Myers Squibb Company...... 3,347,938
55,700 Schering-Plough Corporation....... 3,237,562
------------
6,585,500
------------
DRUGS -- MEDICAL SUPPLIES -- 4.6%
37,000 Johnson & Johnson................. 3,413,250
49,600 Rhone-Poulenc Rorer, Inc.......... 3,025,600
------------
6,438,850
------------
ELECTRIC UTILITIES -- NON-NUCLEAR -- 1.9%
96,900 Unicom Corporation................ 2,616,300
------------
ELECTRONIC COMPONENTS -- 2.4%
68,700 Avnet, Inc........................ 3,314,775
------------
ENGINEERING AND
CONSTRUCTION -- 2.5%
61,100 Halliburton Company............... 3,475,063
------------
FINANCE -- SERVICES -- 7.0%
71,200 Morgan Stanley Group, Inc......... 3,684,600
39,300 Student Loan Marketing
Association..................... 3,006,450
47,900 Travelers Group Inc............... 3,161,400
------------
9,852,450
------------
IMAGING -- 2.4%
47,700 Eastman Kodak Company............. 3,386,700
------------
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
INDUSTRIAL CONGLOMERATES -- 4.7%
51,900 Illinois Tool Works Inc........... $ 3,354,037
72,000 Norsk Hydro, AS, ADR.............. 3,150,000
------------
6,504,037
------------
INSURANCE -- 4.4%
40,900 Loews Corporation................. 3,093,062
57,300 MGIC Investment Corporation....... 3,122,850
------------
6,215,912
------------
LEISURE -- 2.3%
74,500 Mirage Resorts, Inc............... 3,268,688
------------
LONG DISTANCE -- 2.3%
52,200 AT&T Corporation.................. 3,197,250
------------
PAPER AND FOREST PRODUCTS -- 4.4%
84,900 Harnischfeger Industries Inc. .... 3,289,875
38,200 Kimberly-Clark Corporation........ 2,845,900
------------
6,135,775
------------
PETROLEUM -- DOMESTIC -- 2.7%
76,300 Williams Companies Inc. .......... 3,843,612
------------
PETROLEUM -- INTERNATIONAL -- 4.9%
33,900 British Petroleum Company, ADR.... 3,601,875
39,200 Exxon Corporation................. 3,199,700
------------
6,801,575
------------
PRODUCER GOODS -- MACHINERY -- 2.3%
71,500 Dover Corporation................. 3,271,125
------------
REGIONAL BANKS AND THRIFTS -- 2.5%
68,800 Bank of New York Inc.............. 3,543,200
------------
RETAIL -- FOOD AND DRUG -- 2.5%
120,500 Safeway Inc.+..................... 3,434,250
------------
SOFTWARE AND SERVICES -- 5.1%
61,800 BMC Software, Inc................. 3,383,550
94,400 Parametric Technology
Corporation+.................... 3,693,400
------------
7,076,950
------------
TELEPHONE -- BELL REGIONAL -- 3.9%
104,600 Cincinnati Bell Inc............... 5,439,200
------------
TELEPHONE -- CABLE AND CELLULAR -- 2.2%
56,696 Ameritech Corporation............. 3,089,932
------------
TRANSPORTATION -- AIRLINES -- 2.5%
16,600 UAL Corporation................... 3,461,100
------------
TOTAL COMMON STOCKS
(Cost $119,768,778)............. 136,521,357
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
51
<PAGE> 54
NATIONS FUND
Nations Disciplined Equity Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.1%
(Cost $2,994,000)
$2,994,000 Agreement with CS First Boston
Corporation, 5.260% dated
03/29/96, to be repurchased at
$2,995,312 on 04/01/96,
collateralized by: $3,068,854
U.S. Treasury Bonds, 7.500% -
12.000% due 05/15/05 --
05/15/18........................ $ 2,994,000
============
TOTAL INVESTMENTS
(Cost $122,762,778*)................... 99.7% 139,515,357
OTHER ASSETS AND
LIABILITIES (NET)...................... 0.3 371,398
----- ------------
NET ASSETS............................... 100.0% $139,886,755
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes.
+ Non-income producing security.
ABBREVIATION:
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
52
<PAGE> 55
NATIONS FUND
Nations Capital Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- 94.5%
BEVERAGES -- 3.8%
186,800 Coca-Cola Company.................... $ 15,434,350
300,000 PepsiCo Inc. ........................ 18,975,000
--------------
34,409,350
--------------
BUSINESS EQUIPMENT AND PERIPHERALS -- 5.7%
431,800 Bay Networks, Inc.+.................. 13,277,850
375,700 cisco Systems, Inc.+................. 17,423,088
80,600 International Business Machines
Corporation........................ 8,956,675
303,400 Madge Networks N.V.+................. 12,173,925
--------------
51,831,538
--------------
CHEMICALS -- SPECIALTY -- 0.6%
93,700 Sigma-Aldrich Corporation............ 5,364,325
--------------
COMPUTER MANUFACTURERS -- 1.2%
67,400 Hewlett Packard Company.............. 6,335,600
96,300 Sun Microsystems Inc.+............... 4,213,125
--------------
10,548,725
--------------
DIVERSIFIED HEALTH CARE -- 2.5%
252,500 Columbia/HCA Healthcare
Corporation........................ 14,581,875
182,400 U.S. Healthcare Inc. ................ 8,367,600
--------------
22,949,475
--------------
DRUGS -- 6.2%
177,700 Bristol-Myers Squibb Company......... 15,215,562
140,000 Merck & Company Inc. ................ 8,715,000
228,400 Mylan Labs Inc. ..................... 4,796,400
205,700 Pfizer Inc. ......................... 13,781,900
227,500 Schering-Plough Corporation.......... 13,223,438
--------------
55,732,300
--------------
DRUGS -- MEDICAL SUPPLIES -- 8.7%
350,300 Abbott Laboratories.................. 14,274,725
352,400 Baxter International Inc. ........... 15,946,100
145,000 Becton, Dickinson & Company.......... 11,871,875
145,900 Boston Scientific Corporation+....... 6,711,400
151,500 Johnson & Johnson.................... 13,975,875
262,800 Medtronic Inc. ...................... 15,669,450
--------------
78,449,425
--------------
ELECTRICAL EQUIPMENT -- 4.3%
203,700 Emerson Electric Company............. 16,448,775
282,700 General Electric Company............. 22,015,263
--------------
38,464,038
--------------
ELECTRONIC COMPONENTS -- 1.2%
116,000 Intel Corporation.................... 6,597,500
80,600 Motorola, Inc. ...................... 4,271,800
--------------
10,869,300
--------------
ENGINEERING AND CONSTRUCTION -- 1.2%
159,600 Fluor Corporation.................... 10,892,700
--------------
FINANCE -- SERVICES -- 2.3%
186,600 Dean Witter, Discover & Company...... 10,682,850
200,000 Morgan Stanley Group, Inc. .......... 10,350,000
--------------
21,032,850
--------------
FOOD -- PACKAGED -- 1.2%
159,100 CPC International Inc. .............. 11,037,562
--------------
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
HEALTH AND BEAUTY -- 0.8%
120,000 Gillette Company..................... $ 6,210,000
32,500 Revlon Corporation................... 893,750
--------------
7,103,750
--------------
HOUSEHOLD PRODUCTS -- 2.2%
235,000 Procter & Gamble Company............. 19,916,250
--------------
IMAGING -- 1.0%
122,000 Eastman Kodak Company................ 8,662,000
--------------
INDUSTRIAL CONGLOMERATES -- 1.9%
285,300 AlliedSignal Inc. ................... 16,868,362
--------------
INSURANCE -- 0.9%
143,900 MGIC Investment Corporation.......... 7,842,550
--------------
LEISURE -- 3.6%
282,600 Circus Circus Enterprises Inc.+...... 9,502,425
87,500 Disney (Walt) Company................ 5,589,063
246,000 Time Warner Inc. .................... 10,055,250
172,800 Viacom Inc., Class B+................ 7,279,200
--------------
32,425,938
--------------
LIFE AND SPECIALTY INSURANCE -- 5.2%
325,500 AFLAC, Inc. ......................... 10,171,875
145,600 American International Group,
Inc. .............................. 13,631,800
93,500 General Re Corporation............... 13,627,625
166,800 UNUM Corporation..................... 9,924,600
--------------
47,355,900
--------------
LONG DISTANCE -- 0.9%
135,800 AT&T Corporation..................... 8,317,750
--------------
MEDIA -- 1.1%
442,000 K-III Communications Corporation..... 5,138,250
187,500 Tele-Communications Liberty Media
Group, Class A+.................... 4,945,312
--------------
10,083,562
--------------
METALS -- 2.2%
261,200 Crown Cork & Seal Inc. .............. 12,733,500
118,300 Nucor Corporation.................... 6,994,489
--------------
19,727,989
--------------
MONEY CENTER BANKS -- 0.9%
100,000 Citicorp............................. 8,000,000
--------------
OIL SERVICES AND EQUIPMENT -- 1.8%
64,000 Schlumberger Ltd. ................... 5,064,000
185,900 Western Atlas, Inc.+................. 11,154,000
--------------
16,218,000
--------------
PAPER AND FOREST PRODUCTS -- 1.9%
117,300 Kimberly-Clark Corporation........... 8,738,850
157,650 Mead Corporation..................... 8,513,100
--------------
17,251,950
--------------
PETROLEUM -- DOMESTIC -- 2.6%
368,500 Enron Corporation.................... 13,588,438
148,400 Kerr-McGee Corporation............... 9,423,400
--------------
23,011,838
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
53
<PAGE> 56
NATIONS FUND
Nations Capital Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
PETROLEUM -- INTERNATIONAL -- 4.8%
145,000 Amoco Corporation.................... $ 10,476,250
165,000 Mobil Corporation.................... 19,119,375
100,000 Royal Dutch Petroleum Company, ADR... 14,125,000
--------------
43,720,625
--------------
PRODUCER GOODS -- MACHINERY -- 0.5%
61,900 Caterpillar Inc. .................... 4,209,200
--------------
REGIONAL BANKS AND THRIFTS -- 2.2%
190,000 Bank of New York Inc. ............... 9,785,000
264,200 Norwest Corporation.................. 9,709,350
--------------
19,494,350
--------------
RETAIL -- SPECIALITY -- 3.4%
70,000 Home Depot Inc. ..................... 3,351,250
282,000 Lowe's Companies Inc. ............... 10,081,500
412,700 Office Depot Inc.+................... 8,099,237
390,050 OfficeMax, Inc.+..................... 9,458,712
--------------
30,990,699
--------------
SOFTWARE AND SERVICES -- 8.3%
160,500 BMC Software, Inc.................... 8,787,375
93,900 Broderbund Software Corporation+..... 3,544,725
258,700 Ceridian Corporation+................ 11,124,100
195,300 First Data Corporation............... 13,768,650
152,600 Informix Corporation+................ 4,024,825
150,400 Microsoft Corporation+............... 15,510,000
94,150 Oracle Systems Corporation+.......... 4,436,819
234,000 Parametric Technology Corporation+... 9,155,250
84,000 PeopleSoft, Inc...................... 4,830,000
--------------
75,181,744
--------------
TELECOMMUNICATION SYSTEMS AND
SPECIALTY EQUIPMENT -- 4.9%
201,500 Ericsson (L.M.) Telecommunications
Company, Class B, ADR.............. 4,307,062
470,100 Glenayre Technologies Inc.+.......... 17,981,325
120,900 Nokia Corporation, Class A, ADR...... 4,140,825
264,100 Paging Network Inc.+................. 6,602,500
143,500 QUALCOMM Inc.+....................... 5,955,250
199,100 360 (Degrees) Communications
Company+........................... 4,753,512
--------------
43,740,474
--------------
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
TELEPHONE -- CABLE AND CELLULAR -- 4.5%
238,700 AirTouch Communications, Inc.+....... $ 7,429,537
346,200 Century Telephone Enterprises........ 10,991,850
507,200 Comcast Corporation, Class A......... 8,971,100
190,500 Frontier Corporation................. 6,000,750
196,000 Vodafone Group, ADR.................. 7,350,000
--------------
40,743,237
--------------
TOTAL COMMON STOCKS
(Cost $687,083,861)................ 852,447,756
==============
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
REPURCHASE AGREEMENT -- 5.2%
(Cost $47,084,000)
$47,084,000 Agreement with CS First Boston
Corporation, 5.260% dated
03/29/96, to be repurchased at
$47,104,638 on 04/01/96,
collateralized by: $48,261,159
U.S. Treasury Bonds, 7.500% -
12.000% due 05/15/05 --
05/15/18......................... 47,084,000
============
TOTAL INVESTMENTS
(Cost $734,167,861*).................. 99.7% 899,531,756
OTHER ASSETS AND LIABILITIES (NET)...... 0.3 2,780,117
----- ------------
NET ASSETS.............................. 100.0% $902,311,873
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes is $735,233,512.
+ Non-income producing security.
ABBREVIATION:
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
54
<PAGE> 57
NATIONS FUND
Nations Emerging Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- 89.3%
APPAREL -- 1.0%
190,000 Lands End Inc.+...................... $ 3,325,000
------------
AUTOMOTIVE ACCESSORIES -- 1.0%
130,000 Superior Industries International
Inc. .............................. 3,250,000
------------
BEVERAGES -- 0.1%
12,000 Boston Beer Company Inc. ............ 241,500
------------
BUILDING AND CONSTRUCTION -- 0.6%
29,700 Texas Industries Inc. ............... 1,889,663
------------
BUSINESS EQUIPMENT AND PERIPHERALS -- 1.7%
100,000 Danka Business Systems Plc, ADR...... 4,225,000
39,000 Madge Networks N.V.+................. 1,564,875
------------
5,789,875
------------
CHEMICALS -- SPECIALTY -- 1.2%
107,000 Airgas Inc.+......................... 4,253,250
------------
COMPUTER MANUFACTURERS -- 1.0%
140,000 Comverse Technology Inc. ............ 3,377,500
------------
DIVERSIFIED HEALTH CARE -- 6.5%
71,000 Community Health Systems Inc. ....... 2,911,000
32,000 HCIA Inc.+........................... 1,504,000
155,000 Health Management Association Inc.,
Class A+........................... 5,425,000
80,000 HealthCare COMPARE Corporation+...... 4,030,000
30,800 Pediatrix Medical Group Inc.+........ 1,093,400
80,600 PhyCor Inc.+......................... 3,546,400
105,000 Sierra Health Services Inc.+......... 3,425,625
------------
21,935,425
------------
DRUGS -- 2.0%
225,000 Mylan Labs Inc. ..................... 4,725,000
48,000 Watson Pharmaceuticals Inc.+......... 1,920,000
------------
6,645,000
------------
DRUGS -- MEDICAL SUPPLIES -- 2.7%
54,000 Advanced Technology Laboratories
Inc.+.............................. 1,458,000
66,000 Nellcor Inc.+........................ 4,240,500
70,000 Stryker Corporation.................. 3,443,125
------------
9,141,625
------------
ELECTRIC UTILITIES -- NON-NUCLEAR -- 0.4%
60,000 Sierra Pacific Resources............. 1,507,500
------------
ELECTRICAL EQUIPMENT -- 2.7%
184,300 Gasonics International Corporation... 1,704,775
132,000 Input/Output Inc.+................... 4,092,000
97,000 StrataCom Inc.+...................... 3,552,625
------------
9,349,400
------------
ELECTRONIC COMPONENTS -- 3.0%
68,000 Allen Group Inc. .................... 1,317,500
135,000 Amphenol Corporation, Class A+....... 3,155,625
50,500 Analog Devices Inc.+................. 1,414,000
46,000 Atmel Corporation.................... 1,173,000
90,000 Symbol Technologies Inc.+............ 3,161,250
------------
10,221,375
------------
ENERGY EXPLORATION AND PRODUCTION -- 0.9%
62,000 Pogo Producing Company............... 1,937,500
62,300 Union Texas Petroleum Holdings
Inc. .............................. 1,230,425
------------
3,167,925
------------
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
FINANCE -- SERVICES -- 1.9%
99,300 First USA Payment Technology Inc. ... $ 3,500,325
55,000 Franklin Resources Inc. ............. 3,135,000
------------
6,635,325
------------
INSURANCE -- 0.8%
68,500 American Re Corporation+............. 2,740,000
------------
LEISURE -- 1.1%
5,000 Penske Motorsports Inc. ............. 186,250
41,800 Speedway Motorsports, Inc. .......... 1,180,850
215,000 Station Casinos Inc.+................ 2,499,375
------------
3,866,475
------------
MEDIA -- 3.3%
125,000 Belo (A.H.) Corporation, Series A.... 4,250,000
102,000 Eagle River Interactive Inc. ........ 1,326,000
97,000 Infinity Broadcasting Corporation,
Class A+........................... 4,207,375
87,100 Katz Media Group Inc.+............... 1,437,150
------------
11,220,525
------------
METALS -- 0.4%
58,800 Global Industries Technology Inc. ... 1,411,200
------------
OIL SERVICES AND EQUIPMENT -- 5.4%
182,000 BJ Services Inc.+.................... 6,097,000
85,000 Camco International Companies
Inc. .............................. 2,677,500
195,000 Parker & Parsley Petroleum Company... 4,485,000
205,000 Smith International Inc.+............ 5,176,250
------------
18,435,750
------------
PETROLEUM -- DOMESTIC -- 1.5%
192,000 Enron Oil & Gas Company.............. 5,064,000
------------
PRODUCER GOODS -- MACHINERY -- 0.9%
120,000 Cognex Corporation+.................. 3,075,000
------------
REGIONAL BANKS AND THRIFTS -- 3.5%
33,000 Bank of New York Inc. ............... 1,699,500
57,000 Boatmen's Bancshares Inc. ........... 2,237,250
220,000 Hibernia Corporation, Class A........ 2,337,500
30,000 Northern Trust Company+.............. 1,620,000
105,000 Norwest Corporation.................. 3,858,750
------------
11,753,000
------------
RESTAURANTS AND LODGING -- 10.2%
218,000 Apple South, Inc. ................... 5,341,000
122,000 Boston Chicken Inc. ................. 4,155,625
300,000 Brinker International Inc.+.......... 5,025,000
166,000 La Quinta Inns Inc. ................. 4,876,250
123,000 Outback Steakhouse Inc.+............. 4,635,563
105,000 Papa John's International Inc. ...... 4,685,625
165,000 Promus Hotel Corporation+............ 4,290,000
65,000 Sbarro, Inc. ........................ 1,641,250
------------
34,650,313
------------
RETAIL -- MAJOR -- 0.8%
91,700 Dollar General Corporation........... 2,659,300
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
55
<PAGE> 58
Nations Emerging Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
RETAIL -- SPECIALTY -- 5.3%
82,000 Bed Bath & Beyond Inc.+.............. $ 4,325,500
145,000 General Nutrition Companies Inc.+.... 3,625,000
215,000 Sports Authority Inc................. 5,885,625
80,000 Sunglass Hut International........... 2,650,000
30,000 Viking Office Products Inc.+......... 1,668,750
------------
18,154,875
------------
SERVICES -- 3.3%
55,000 Alternative Resources Corporation+... 1,787,500
53,000 Catalina Marketing Corporation+...... 4,140,625
131,000 Franklin Quest Company+.............. 3,537,000
93,000 Personnel Group of America, Inc. .... 1,697,250
------------
11,162,375
------------
SOFTWARE AND SERVICES -- 10.7%
76,000 Bell & Howell Holdings Company+...... 2,489,000
71,000 BMC Software, Inc. .................. 3,887,250
65,000 Broderbund Software Corporation+..... 2,453,750
11,500 CSG Systems International Inc. ...... 264,500
26,200 Davidson and Associates Inc.+........ 612,425
59,000 Electronic Arts+..................... 1,563,500
35,000 HBO & Company........................ 3,298,750
24,000 Indus Group Inc. .................... 468,000
80,000 Informix Corporation+................ 2,110,000
70,000 Macromedia Inc. ..................... 2,992,500
75,000 Millipore Corporation................ 2,868,750
52,000 Parametric Technology Corporation+... 2,034,500
61,000 PeopleSoft, Inc. .................... 3,507,500
1,300 Raptor Systems, Inc. ................ 38,837
25,000 Shiva Corporation+................... 2,268,750
4,600 Sterling Commerce, Inc. ............. 141,450
110,000 SunGard Data Systems Inc.+........... 3,767,500
143,600 Techforce Corporation................ 1,507,800
------------
36,274,762
------------
TELECOMMUNICATION SYSTEMS AND
SPECIALTY EQUIPMENT -- 12.4%
113,000 ADC Telecommunications Inc.+......... 3,898,500
67,500 Ascend Communications Inc. .......... 3,636,562
75,200 Aspect Telecommunications
Corporation+....................... 3,440,400
25,300 Cascade Communications Corporation... 2,270,675
150,000 Glenayre Technologies Inc.+.......... 5,737,500
126,800 Intercel Inc. ....................... 2,853,000
265,000 Nextel Communications Inc., Class
A+................................. 5,001,875
146,000 Paging Network Inc.+................. 3,650,000
<CAPTION>
VALUE
SHARES (NOTE 1)
<C> <S> <C>
------------------------------------------------------------
COMMON STOCKS -- (CONTINUED)
160,000 Palmer Wireless Inc., Class A+....... $ 3,060,000
63,700 Pia Merchandising Services, Inc. .... 1,186,413
45,000 QUALCOMM Inc.+....................... 1,867,500
108,000 Tellabs Inc.+........................ 5,224,500
7,100 U.S. Satellite Broadcasting
Company............................ 232,525
------------
42,059,450
------------
TRANSPORTATION -- AIRLINES -- 1.2%
113,000 Comair Holdings Inc. ................ 3,926,750
------------
TRANSPORTATION -- SURFACE -- 0.6%
75,000 Railtex, Inc. ....................... 1,921,875
------------
WASTE MANAGEMENT -- 1.2%
108,000 Sanifill Inc.+....................... 4,144,500
------------
TOTAL COMMON STOCKS
(Cost $244,541,430)................ 303,250,513
============
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
REPURCHASE AGREEMENT -- 10.3%
(Cost $34,923,000)
$34,923,000 Agreement with CS First Boston
Corporation, 5.260% dated
03/29/96, to be repurchased at
$34,938,308 on 04/01/96,
collateralized by: $35,796,119
U.S. Treasury Bonds,
7.500% - 12.000% due 05/15/05 --
05/15/18........................ 34,923,000
============
TOTAL INVESTMENTS
(Cost $279,464,430*).................. 99.6% 338,173,513
OTHER ASSETS AND LIABILITIES (NET)...... 0.4 1,317,314
----- ------------
NET ASSETS.............................. 100.0% $339,490,827
===== ============
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes is $279,536,040.
+ Non-income producing security.
ABBREVIATION:
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
56
<PAGE> 59
NATIONS FUND
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES MARCH 31, 1996
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS NATIONS NATIONS
BALANCED EQUITY NATIONS EQUITY DISCIPLINED CAPITAL EMERGING
ASSETS INCOME VALUE INDEX EQUITY GROWTH GROWTH
FUND FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at value
(Note 1).
See accompanying
schedules:
Securities........... $216,509,523 $412,556,450 $1,081,746,903 $185,050,975 $136,521,357 $852,447,756 $303,250,513
Repurchase
agreements......... 33,799,000 17,695,000 68,358,000 7,736,000 2,994,000 47,084,000 34,923,000
-------------- ------------ -------------- -------------- -------------- -------------- -------------
Total
investments...... 250,308,523 430,251,450 1,150,104,903 192,786,975 139,515,357 899,531,756 338,173,513
Cash................... 229 -- 621 -- 771 254,944 3,643
Dividends receivable... 291,906 670,719 1,621,578 304,113 224,019 650,620 58,490
Interest receivable.... 1,094,825 799,341 29,964 3,391 1,312 20,639 15,308
Receivable for Fund
shares sold.......... 208,386 485,637 1,935,615 321,150 322,194 2,251,490 435,434
Receivable for
investment securities
sold................. 3,868,374 4,306,207 -- -- -- 5,950,341 2,514,476
Unamortized
organization costs
(Note 6)............. 6,049 1,581 -- 4,000 -- 6,053 7,598
Prepaid expenses and
other assets......... 2,488 -- 11,665 -- -- -- 3,269
-------------- ------------ -------------- -------------- -------------- -------------- -------------
Total Assets......... 255,780,780 436,514,935 1,153,704,346 193,419,629 140,063,653 908,665,843 341,211,731
-------------- ------------ -------------- -------------- -------------- -------------- -------------
LIABILITIES:
Variation margin/due to
broker (Note 1)...... -- -- -- 38,500 -- -- --
Due to custodian....... -- 101,774 -- 486,213 -- -- --
Payable for Fund shares
redeemed............. 155,500 512,789 2,140,349 314,886 14,519 5,450,616 74,768
Payable for investment
securities
purchased............ 17,905,187 1,047,138 3,620,701 -- -- -- 1,281,792
Investment advisory fee
payable (Note 2)..... 151,263 245,865 730,053 30,698 89,014 575,943 208,936
Administration fee
payable (Note 2)..... 20,169 36,743 97,341 16,021 11,869 76,792 27,858
Shareholder servicing
and distribution fees
payable (Note 3)..... 46,919 80,080 73,350 -- 17,311 42,742 33,301
Transfer agent fees
payable
(Note 2)............. 25,861 46,217 120,986 1,559 15,613 96,557 34,687
Custodian fees payable
(Note 2)............. 4,737 5,590 12,381 2,446 2,217 10,142 5,562
Accrued
Trustees'/Directors'
fees and expenses
(Note 2)............. 5,452 8,202 25,767 3,654 3,079 21,000 7,167
Accrued expenses and
other
payables............. 38,175 45,013 91,535 43,012 23,276 80,178 46,833
-------------- ------------ -------------- -------------- -------------- -------------- -------------
Total Liabilities.... 18,353,263 2,129,411 6,912,463 936,989 176,898 6,353,970 1,720,904
-------------- ------------ -------------- -------------- -------------- -------------- -------------
NET ASSETS............. $237,427,517 $434,385,524 $1,146,791,883 $192,482,640 $139,886,755 $902,311,873 $339,490,827
============== ============ ============== ============== ============== ============== =============
Investments, at cost... $238,286,809 $383,175,109 $ 919,869,506 $152,284,389 $122,762,778 $734,167,861 $279,464,430
============== ============ ============== ============== ============== ============== =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
57
<PAGE> 60
NATIONS FUND
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) MARCH 31, 1996
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS NATIONS NATIONS
BALANCED EQUITY NATIONS EQUITY DISCIPLINED CAPITAL EMERGING
ASSETS INCOME VALUE INDEX EQUITY GROWTH GROWTH
FUND FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Undistributed net investment
income...................... $ 133,734 $ 163,990 $ 260,308 $ 68,696 $ 90,294 $ 139,587 $ --
Accumulated net realized
gain/(distributions
in excess of net realized
gain) on
investments and futures
contracts................... 13,775,418 20,422,211 29,532,310 (39,679) (29,908) 63,202,468 14,193,828
Net unrealized appreciation of
investments,
futures contracts and
foreign currency
transactions................ 12,021,714 47,076,422 230,235,397 40,497,061 16,752,579 165,363,895 58,709,083
Paid-in capital............... 211,496,651 366,722,901 886,763,868 151,956,562 123,073,790 673,605,923 266,587,916
------------ ------------ -------------- ------------ ------------ ------------ ------------
$237,427,517 $434,385,524 $1,146,791,883 $192,482,640 $139,886,755 $902,311,873 $339,490,827
============ ============ ============== ============ ============ ============ ============
NET ASSETS:
Primary A Shares (formerly
Trust A Shares)............. $164,215,286 $283,141,704 $ 998,956,774 $192,387,936 $116,469,461 $839,300,160 $295,764,325
============ ============ ============== ============ ============ ============ ============
Investor A Shares............. $ 6,261,097 $ 42,605,872 $ 54,341,434 $ 94,704 $ 4,722,082 $ 18,311,125 $ 7,802,237
============ ============ ============== ============ ============ ============ ============
Investor C Shares............. $ 1,186,761 $ 4,611,719 $ 4,633,085 $ -- $ 283,184 $ 3,655,183 $ 935,687
============ ============ ============== ============ ============ ============ ============
Investor N Shares............. $ 65,764,373 $104,026,229 $ 88,860,590 $ -- $ 18,412,028 $ 41,045,405 $ 34,988,578
============ ============ ============== ============ ============ ============ ============
SHARES OUTSTANDING:
Primary A Shares (formerly
Trust A Shares)............. 14,093,557 21,548,744 60,194,485 14,162,800 6,776,625 62,500,885 21,066,869
============ ============ ============== ============ ============ ============ ============
Investor A Shares............. 538,100 3,249,950 3,273,745 6,975 275,181 1,365,645 560,784
============ ============ ============== ============ ============ ============ ============
Investor C Shares............. 102,351 349,635 280,801 -- 16,564 275,575 68,996
============ ============ ============== ============ ============ ============ ============
Investor N Shares............. 5,660,862 7,939,860 5,369,859 -- 1,083,246 3,084,488 2,571,555
============ ============ ============== ============ ============ ============ ============
PRIMARY A SHARES (formerly
Trust A Shares):
Net asset value, offering and
redemption
price per share............. $11.65 $13.14 $16.60 $13.58 $17.19 $13.43 $14.04
----- ----- ----- ----- ----- ----- -----
INVESTOR A SHARES:
Net asset value, offering and
redemption
price per share............. $11.64 $13.11 $16.60 $13.58 $17.16 $13.41 $13.91
----- ----- ----- ----- ----- ----- -----
INVESTOR C SHARES:
Net asset value and offering
price per share*............ $11.60 $13.19 $16.50 N/A $17.10 $13.26 $13.56
----- ----- ----- ---- ----- ----- -----
INVESTOR N SHARES:
Net asset value, offering and
redemption
price per share............. $11.62 $13.10 $16.55 N/A $17.00 $13.31 $13.61
----- ----- ----- ---- ----- ----- -----
</TABLE>
- ---------------
* Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
58
<PAGE> 61
NATIONS FUND
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS NATIONS NATIONS
BALANCED EQUITY NATIONS EQUITY DISCIPLINED CAPITAL EMERGING
ASSETS INCOME VALUE INDEX EQUITY GROWTH GROWTH
FUND(a) FUND(b) FUND(a) FUND(a) FUND(a) FUND(a) FUND(a)
<S> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends (Net of foreign withholding
taxes of $0, $127,783, $0, $1,274,
$0, $14,747 and $0, respectively).... $ 1,082,197 $ 8,724,166 $ 7,387,480 $ 1,148,798 $ 747,022 $ 3,210,477 $ 249,208
Interest............................... 1,999,591 4,244,852 1,079,914 111,954 82,181 820,912 709,442
----------- ----------- ----------- ----------- ---------- ----------- -----------
Total investment income.......... 3,081,788 12,969,018 8,467,394 1,260,752 829,203 4,031,389 958,650
----------- ----------- ----------- ----------- ---------- ----------- -----------
EXPENSES:
Investment advisory fee (Note 2)....... 590,332 2,329,896 2,808,328 269,188 339,082 2,253,497 777,193
Administration fee (Note 2)............ 78,711 346,633 374,444 53,838 45,211 300,466 103,626
Registration and filing fees........... 15,210 49,734 20,753 12,242 9,807 24,906 15,937
Transfer agent fees (Note 2)........... 52,402 231,904 242,014 4,669 30,859 167,565 68,452
Custodian fees (Note 2)................ 17,353 55,499 49,365 14,110 11,483 38,476 22,526
Legal and audit fees................... 17,203 71,699 29,636 17,104 11,255 1,819 17,783
Trustees'/Directors' fees and expenses
(Note 2)............................. 4,726 9,625 22,337 3,244 2,760 17,878 6,192
Amortization of organization costs
(Note 6)............................. 1,344 12,723 -- 500 -- 1,345 1,520
Interest expense (Note 7).............. -- -- -- 219 -- -- --
Other.................................. 14,017 24,319 57,350 18,018 8,651 87,337 11,601
----------- ----------- ----------- ----------- ---------- ----------- -----------
Subtotal........................... 791,298 3,132,032 3,604,227 393,132 459,108 2,893,289 1,024,830
Shareholder servicing and distribution
fees (Note 3):
Investor A Shares.................... 4,780 81,571 42,080 -- 1,261 14,003 5,258
Investor C Shares.................... 2,219 31,412 9,165 -- 624 7,151 1,731
Investor N Shares.................... 165,024 576,503 217,913 -- 58,115 135,419 109,426
Fees waived by investment adviser (Note
2)................................... -- -- -- (204,455) -- -- --
----------- ----------- ----------- ----------- ---------- ----------- -----------
Total expenses..................... 963,321 3,821,518 3,873,385 188,677 519,108 3,049,862 1,141,245
----------- ----------- ----------- ----------- ---------- ----------- -----------
NET INVESTMENT INCOME/(LOSS)........... 2,118,467 9,147,500 4,594,009 1,072,075 310,095 981,527 (182,595)
----------- ----------- ----------- ----------- ---------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS (NOTES 1 AND 4):
Net realized gain from:
Security transactions................ 14,455,458 30,002,607 29,675,624 235,921 48,753 47,329,423 15,075,593
Forward foreign currency contracts
and foreign currency
transactions....................... -- 694 -- 3 -- -- --
Futures contracts.................... -- -- -- 598,360 -- -- --
----------- ----------- ----------- ----------- ---------- ----------- -----------
Net realized gain on investments during
the period........................... 14,455,458 30,003,301 29,675,624 834,284 48,753 47,329,423 15,075,593
----------- ----------- ----------- ----------- ---------- ----------- -----------
Change in unrealized
appreciation/(depreciation) of:
Securities........................... (5,436,802) 29,185,267 42,735,333 9,118,745 3,017,862 (21,206,435) 15,018,790
Futures contracts.................... -- -- -- (340,075) -- -- --
Foreign currency and other assets and
liabilities........................ -- 81 -- -- -- -- --
----------- ----------- ----------- ----------- ---------- ----------- -----------
Net unrealized
appreciation/(depreciation) of
investments during the period........ (5,436,802) 29,185,348 42,735,333 8,778,670 3,017,862 (21,206,435) 15,018,790
----------- ----------- ----------- ----------- ---------- ----------- -----------
Net realized and unrealized gain on
investments.......................... 9,018,656 59,188,649 72,410,957 9,612,954 3,066,615 26,122,988 30,094,383
----------- ----------- ----------- ----------- ---------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS...................... $11,137,123 $68,336,149 $77,004,966 $10,685,029 $3,376,710 $27,104,515 $29,911,788
=========== =========== =========== =========== ========== =========== ===========
</TABLE>
- ---------------
SEE NOTES TO FINANCIAL STATEMENTS.
59
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30. The numbers reflected are for the period December 1, 1995
through March 31, 1996.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
May 31. The numbers reflected are for the period June 1, 1995 through March
31, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
59
<PAGE> 62
NATIONS FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
PERIOD ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS NATIONS NATIONS
BALANCED EQUITY NATIONS EQUITY DISCIPLINED CAPITAL EMERGING
ASSETS INCOME VALUE INDEX EQUITY GROWTH GROWTH
FUND(a) FUND(b) FUND(a) FUND(a) FUND(a) FUND(a) FUND(a)
<S> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------
Net investment
income/(loss)............... $ 2,118,467 $ 9,147,500 $ 4,594,009 $ 1,072,075 $ 310,095 $ 981,527 $ (182,595)
Net realized gain on
investments................. 14,455,458 30,003,301 29,675,624 834,284 48,753 47,329,423 15,075,593
Change in unrealized
appreciation/(depreciation)
of investments.............. (5,436,802) 29,185,348 42,735,333 8,778,670 3,017,862 (21,206,435) 15,018,790
---------- ---------- ---------- ---------- ---------- ----------- -----------
Net increase in net assets
resulting from operations... 11,137,123 68,336,149 77,004,966 10,685,029 3,376,710 27,104,515 29,911,788
Distributions to shareholders
from net investment income:
Primary A Shares............ (2,467,317) (8,311,787) (7,025,227) (1,562,737) (296,322) (1,419,446) --
Investor A Shares........... (80,162) (1,066,734) (305,858) (409) (8,626) (8,022) --
Investor C Shares........... (12,721) (92,984) (15,847) -- -- -- --
Investor N Shares........... (748,956) (2,055,224) (311,522) -- -- -- --
Distributions to shareholders
from net realized gain on
investments:
Primary A Shares............ (18,117,978) (7,936,013) (36,610,566) (1,570,449) (1,539,467) (71,272,931) (28,361,668)
Investor A Shares........... (595,662) (1,171,580) (1,870,135) (121) (47,181) (1,406,184) (619,620)
Investor C Shares........... (111,125) (131,358) (161,172) -- (4,072) (279,954) (87,424)
Investor N Shares........... (7,278,939) (2,870,773) (3,233,929) -- (232,704) (3,421,039) (3,491,112)
Net increase/(decrease) in net
assets from Fund share
transactions:
Primary A Shares............ 13,795,014 (29,783,390) 18,468,272 39,816,491 5,483,120 19,219,932 28,496,495
Investor A Shares........... 1,387,867 2,761,972 4,616,735 82,377 1,442,029 2,447,353 2,020,515
Investor C Shares........... 272,530 (156,882) 331,035 -- (41,211) 515,851 137,265
Investor N Shares........... 5,507,130 18,595,995 2,911,585 -- 1,386,136 2,510,778 3,081,992
---------- ---------- ---------- ---------- ---------- ----------- -----------
Net increase/(decrease) in net
assets...................... 2,686,804 36,117,391 53,798,337 47,450,181 9,518,412 (26,009,147) 31,088,231
NET ASSETS:
Beginning of period........... 234,740,713 398,268,133 1,092,993,546 145,032,459 130,368,343 928,321,020 308,402,596
----------- ----------- ------------- ----------- ----------- ----------- -----------
End of period................. $237,427,517 $434,385,524 $1,146,791,883 $192,482,640 $139,886,755 $902,311,873 $339,490,827
=========== =========== ============= =========== =========== =========== ===========
Undistributed net investment
income
at end of period............ $ 133,734 $ 163,990 $ 260,308 $ 68,696 $ 90,294 $ 139,587 $ --
=========== =========== ============= =========== =========== =========== ===========
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30. The numbers reflected are for the period December 1, 1995
through March 31, 1996.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
May 31. The numbers reflected are for the period June 1, 1995 through March
31, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
60
<PAGE> 63
NATIONS FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEARS ENDED MAY 31, 1995 AND NOVEMBER 30, 1995
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS NATIONS NATIONS
BALANCED EQUITY NATIONS EQUITY DISCIPLINED CAPITAL EMERGING
ASSETS INCOME VALUE INDEX EQUITY GROWTH GROWTH
FUND(a) FUND(b) FUND(a) FUND(a) FUND(a) FUND(a) FUND(a)
<S> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------
Net investment
income/(loss)............... $ 6,606,684 $ 13,092,025 $ 17,735,422 $ 3,144,404 $ 410,998 $ 5,565,970 $ (63,181)
Net realized gain on
investments................. 26,614,217 14,003,911 43,961,096 1,136,791 2,168,165 92,498,431 32,794,949
Change in unrealized
appreciation of
investments................. 16,197,493 23,887,774 220,609,103 35,066,801 13,293,665 128,143,733 33,098,767
---------- ---------- ---------- ---------- ---------- ----------- -----------
Net increase in net assets
resulting from operations... 49,418,394 50,983,710 282,305,621 39,347,996 15,872,828 226,208,134 65,830,535
Distributions to shareholders
from net investment income:
Primary A Shares............ (4,576,371) (9,856,745) (16,893,397) (3,222,774) (309,779) (6,313,403) --
Investor A Shares........... (130,629) (1,156,262) (703,768) -- (4,337) (72,934) --
Investor C Shares........... (15,606) (112,439) (36,550) -- (480) -- --
Investor N Shares........... (1,244,431) (1,729,944) (742,442) -- (11,255) -- --
Distributions to shareholders
from net realized gain on
investments:
Primary A Shares............ (310,575) (17,409,491) (41,049,376) (1,600,973) -- (16,868,479) (6,438,849)
Investor A Shares........... (9,212) (2,096,836) (1,840,132) -- -- (256,976) (114,778)
Investor C Shares........... (1,861) (258,136) (155,670) -- -- (56,236) (19,503)
Investor N Shares........... (102,838) (3,677,792) (2,225,891) -- -- (556,449) (574,543)
Net increase/(decrease) in net
assets from Fund share
transactions:
Primary A Shares............ (29,781,844) 46,987,917 (37,565,902) (12,649,164) 85,720,261 (40,958,622) 35,062,583
Investor A Shares........... (565,148) 504,212 3,694,114 10,620 2,725,119 2,444,605 1,452,905
Investor C Shares........... (121,760) (82,344) 372,284 -- 291,675 221,512 110,631
Investor N Shares........... 1,231,005 26,477,537 27,133,808 -- 15,707,758 9,592,962 10,950,858
---------- ---------- ---------- ---------- ---------- ----------- -----------
Net increase in net assets.... 13,789,124 88,573,387 212,292,699 21,885,705 119,991,790 173,384,114 106,259,839
NET ASSETS:
Beginning of year............. 220,951,589 309,694,746 880,700,847 123,146,754 10,376,553 754,936,906 202,142,757
----------- ----------- ----------- ----------- ---------- ----------- -----------
End of year................... $234,740,713 $398,268,133 $1,092,993,546 $145,032,459 $130,368,343 $928,321,020 $308,402,596
=========== =========== ============= =========== =========== =========== ===========
Undistributed net investment
income
at end of year.............. $ 1,336,901 $ 2,542,525 $ 3,324,753 $ 559,764 $ 85,147 $ 623,439 $ --
=========== =========== ============= =========== =========== =========== ===========
</TABLE>
- ---------------
(a) Nations Balanced Assets Fund, Nations Value Fund, Nations Equity Index Fund,
Nations Disciplined Equity Fund, Nations Capital Growth Fund and Nations
Emerging Growth Fund reflect information for the year ended November 30,
1995.
(b) Nations Equity Income Fund reflects information for year ended May 31, 1995.
SEE NOTES TO FINANCIAL STATEMENTS.
61
<PAGE> 64
NATIONS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY
<TABLE>
<CAPTION>
NATIONS BALANCED ASSETS FUND NATIONS EQUITY INCOME FUND
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
MARCH 31, 1996(a) NOVEMBER 30, 1995 MARCH 31, 1996(b) MAY 31, 1995
------------------------- ------------------------- ------------------------- -------------------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS SHARES DOLLAR
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............ 1,627,504 $ 19,005,092 4,299,646 $ 49,368,656 3,718,032 $ 46,321,022 10,384,693 $117,673,123
Issued as
reinvestment
of dividends.. 1,460,066 16,518,081 310,934 3,525,690 496,722 6,174,413 1,562,311 16,446,517
Redeemed........ (1,866,524) (21,728,159) (7,276,293) (82,676,190) (6,643,314) (82,278,825) (7,712,497) (87,131,723)
--------- ---------- --------- ---------- ---------- ---------- ---------- ----------
Net
increase/
(decrease)...... 1,221,046 $ 13,795,014 (2,665,713) $(29,781,844) (2,428,560) $(29,783,390) 4,234,507 $ 46,987,917
========= ========== ========= ========= ========== ========== ========= ==========
INVESTOR A SHARES:
Sold............ 79,026 $ 917,766 79,414 $ 918,636 563,095 $ 6,929,846 518,086 $ 5,797,756
Issued as
reinvestment
of dividends.. 59,206 669,237 12,227 138,700 172,862 2,135,967 294,458 3,116,118
Redeemed........ (16,962) (199,136) (143,047) (1,622,484) (503,098) (6,303,841) (748,735) (8,409,662)
--------- ---------- --------- ---------- ---------- ---------- ---------- ----------
Net
increase/
(decrease)...... 121,270 $ 1,387,867 (51,406) $ (565,148) 232,859 $ 2,761,972 63,809 $ 504,212
========= ========== ========= ========= ========== ========== ========= ==========
INVESTOR C SHARES:
Sold............ 17,356 $ 204,071 10,542 $ 128,058 51,611 $ 639,206 35,127 $ 407,413
Issued as
reinvestment
of dividends.. 10,995 123,846 1,510 17,114 16,403 204,720 32,384 343,436
Redeemed........ (4,725) (55,387) (25,005) (266,932) (79,843) (1,000,808) (74,185) (833,193)
--------- ---------- --------- ---------- ---------- ---------- ---------- ----------
Net
increase/
(decrease)... 23,626 $ 272,530 (12,953) $ (121,760) (11,829) $ (156,882) (6,674) $ (82,344)
========= ========== ========= ========= ========== ========== ========= ==========
INVESTOR N SHARES:
Sold............ 82,001 $ 983,660 868,040 $ 10,073,071 1,897,032 $ 23,134,481 2,674,147 $ 30,201,050
Issued as
reinvestment
of dividends.. 690,732 7,789,521 113,740 1,291,982 377,701 4,668,166 480,155 5,062,261
Redeemed........ (280,373) (3,266,051) (899,309) (10,134,048) (740,696) (9,206,652) (786,116) (8,785,774)
--------- ---------- --------- ---------- ---------- ---------- ---------- ----------
Net increase.... 492,360 $ 5,507,130 82,471 $ 1,231,005 1,534,037 $ 18,595,995 2,368,186 $ 26,477,537
========= ========== ========= ========= ========== ========== ========= ==========
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
May 31.
SEE NOTES TO FINANCIAL STATEMENTS.
62
<PAGE> 65
NATIONS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
NATIONS VALUE FUND NATIONS EQUITY INDEX FUND
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
MARCH 31, 1996(a) NOVEMBER 30, 1995 MARCH 31, 1996(a) NOVEMBER 30, 1995
------------------------- --------------------------- ------------------------- -------------------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRIMARY A
SHARES:
Sold............ 5,163,241 $ 83,903,398 14,348,782 $ 200,019,718 3,799,411 $ 51,306,974 5,782,359 $ 65,557,132
Issued as
reinvestment
of dividends.. 772,660 12,302,609 2,007,735 24,844,400 149,543 1,957,962 211,023 2,255,552
Redeemed........(4,762,096) (77,737,735) (18,925,597) (262,430,020) (1,015,063) (13,448,445) (7,275,709) (80,461,848)
--------- ---------- ---------- ----------- --------- ---------- --------- ----------
Net
increase/
(decrease)...... 1,173,805 $ 18,468,272 (2,569,080) $ (37,565,902) 2,933,891 $ 39,816,491 (1,282,327) $(12,649,164)
========= ========== ========= ========== ========= ========== ========= ==========
<CAPTION>
PERIOD ENDED
NOVEMBER 30, 1995*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------
INVESTOR A
SHARES:
Sold............ 319,822 $ 5,256,765 632,785 $ 9,169,259 6,381 $ 85,961 865 $ 10,620
Issued as
reinvestment
of dividends.. 132,526 2,100,814 196,415 2,460,725 40 530 -- --
Redeemed........ (167,588) (2,740,844) (569,919) (7,935,870) (311) (4,114) -- --
--------- ---------- ---------- ----------- --------- ---------- --------- ----------
Net
increase.... 284,760 $ 4,616,735 259,281 $ 3,694,114 6,110 $ 82,377 865 $ 10,620
========= ========== ========== =========== ========= ========== ========= ==========
INVESTOR C
SHARES:
Sold............ 11,386 $ 184,896 64,912 $ 937,227
Issued as
reinvestment
of dividends.. 11,236 176,989 15,572 191,440
Redeemed........ (1,872) (30,850) (51,592) (756,383)
--------- ----------- ---------- ------------
Net
increase...... 20,750 $ 331,035 28,892 $ 372,284
========= =========== ========== ============
INVESTOR N
SHARES:
Sold............ 158,863 $ 2,584,045 2,207,667 $ 31,834,371
Issued as
reinvestment
of dividends.. 220,922 3,487,288 232,059 2,893,160
Redeemed........ (193,665) (3,159,748) (541,393) (7,593,723)
--------- ----------- ---------- ------------
Net
increase...... 186,120 $ 2,911,585 1,898,333 $ 27,133,808
========= =========== ========== ============
</TABLE>
- ---------------
* Nations Equity Index Fund's Investor A Shares commenced operations on
October 10, 1995.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
63
<PAGE> 66
NATIONS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
NATIONS DISCIPLINED EQUITY FUND NATIONS CAPITAL GROWTH FUND
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
MARCH 31, 1996(a) NOVEMBER 30, 1995 MARCH 31, 1996(a) NOVEMBER 30, 1995
----------------------- ------------------------- ------------------------- ---------------------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............ 911,868 $ 15,134,115 6,862,543 $103,834,207 6,424,814 $ 84,086,502 16,298,665 $ 198,460,477
Issued as
reinvestment
of dividends.. 28,609 471,692 6,766 106,057 2,017,491 26,088,676 1,313,582 14,351,770
Redeemed........ (606,825) (10,122,687) (1,187,030) (18,220,003) (6,830,234) (90,955,246) (20,650,669) (253,770,869)
--------- ---------- --------- ---------- --------- ---------- ---------- -----------
Net
increase/
(decrease)...... 333,652 $ 5,483,120 5,682,279 $ 85,720,261 1,612,071 $ 19,219,932 (3,038,422) $ (40,958,622)
========= ========== ========= ========== ========= ========== ========== ===========
INVESTOR A SHARES:
Sold............ 100,461 $ 1,696,841 175,763 $ 2,801,016 172,211 $ 2,283,677 1,641,993 $ 22,288,613
Issued as
reinvestment
of dividends.. 3,205 52,884 258 4,102 96,898 1,250,258 29,457 322,885
Redeemed........ (18,305) (307,696) (5,530) (79,999) (82,799) (1,086,582) (1,476,579) (20,166,893)
--------- ---------- --------- ---------- --------- ---------- ---------- -----------
Net increase.... 85,361 $ 1,442,029 170,491 $ 2,725,119 186,310 $ 2,447,353 194,871 $ 2,444,605
========= ========== ========= ========== ========= ========== ========== ===========
<CAPTION>
PERIOD ENDED
NOVEMBER 30, 1995*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------
INVESTOR C SHARES:
Sold............ 5,687 $ 97,764 24,963 $ 391,195 27,178 $ 357,906 43,310 $ 526,572
Issued as
reinvestment
of dividends.. 249 4,072 30 480 21,940 279,954 5,274 55,903
Redeemed........ (8,353) (143,047) (6,012) (100,000) (9,283) (122,009) (27,820) (360,963)
--------- ---------- --------- ---------- --------- ---------- ---------- -----------
Net
increase/
(decrease)...... (2,417) $ (41,211) 18,981 $ 291,675 39,835 $ 515,851 20,764 $ 221,512
========= ========== ========= ========== ========= ========== ========== ===========
<CAPTION>
YEAR ENDED
NOVEMBER 30, 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------
INVESTOR N SHARES:
Sold............ 125,083 $ 2,067,580 1,007,447 $ 16,060,453 77,138 $ 996,095 1,110,085 $ 13,768,914
Issued as
reinvestment
of dividends.. 14,132 230,061 681 11,015 259,521 3,353,011 50,490 537,215
Redeemed........ (54,982) (911,505) (22,740) (363,710) (140,659) (1,838,328) (383,634) (4,713,167)
--------- ---------- --------- ---------- --------- ---------- ---------- -----------
Net increase.... 84,233 $ 1,386,136 985,388 $ 15,707,758 196,000 $ 2,510,778 776,941 $ 9,592,962
========= ========== ========= ========== ========= ========== ========== ===========
</TABLE>
- ---------------
* Nations Disciplined Equity Fund's Investor C Shares commenced operations on
May 10, 1995.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
64
<PAGE> 67
NATIONS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
NATIONS EMERGING GROWTH FUND
PERIOD ENDED YEAR ENDED
MARCH 31, 1996(A) NOVEMBER 30, 1995
-------------------------- ---------------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold............................................................. 2,658,154 $ 34,716,876 4,681,228 $ 57,544,918
Issued as reinvestment of dividends.............................. 325,489 4,156,484 425,966 4,485,418
Redeemed......................................................... (792,108) (10,376,865) (2,225,688) (26,967,753)
--------- ----------- ---------- -----------
Net increase..................................................... 2,191,535 $ 28,496,495 2,881,506 $ 35,062,583
========= =========== ========== ===========
INVESTOR A SHARES:
Sold............................................................. 140,607 $ 1,866,999 227,306 $ 2,782,921
Issued as reinvestment of dividends.............................. 43,193 546,812 10,673 111,756
Redeemed......................................................... (29,783) (393,296) (116,033) (1,441,772)
--------- ----------- ---------- -----------
Net increase..................................................... 154,017 $ 2,020,515 121,946 $ 1,452,905
========= =========== ========== ===========
INVESTOR C SHARES:
Sold............................................................. 4,050 $ 52,274 21,665 $ 257,913
Issued as reinvestment of dividends.............................. 7,063 87,224 1,887 19,492
Redeemed......................................................... (191) (2,233) (13,822) (166,774)
--------- ----------- ---------- -----------
Net increase..................................................... 10,922 $ 137,265 9,730 $ 110,631
========= =========== ========== ===========
INVESTOR N SHARES:
Sold............................................................. 73,737 $ 949,462 1,133,417 $ 13,763,774
Issued as reinvestment of dividends.............................. 275,050 3,410,621 53,315 552,878
Redeemed......................................................... (100,262) (1,278,091) (278,464) (3,365,794)
--------- ----------- ---------- -----------
Net increase..................................................... 248,525 $ 3,081,992 908,268 $ 10,950,858
========= =========== ========== ===========
</TABLE>
- ---------------
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
SEE NOTES TO FINANCIAL STATEMENTS.
65
<PAGE> 68
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS TOTAL NET ASSET
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET DIVIDENDS VALUE
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED AND END OF
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS PERIOD
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NATIONS BALANCED ASSETS FUND
PRIMARY A
Period ended
03/31/1996(a)... $ 12.68 $ 0.11 $ 0.45 $ 0.56 $(0.18) $ (1.41) $ (1.59) $ 11.65
Year ended
11/30/1995...... 10.44 0.38 2.21 2.59 (0.33) (0.02) (0.35) 12.68
Year ended
11/30/1994...... 10.87 0.25 (0.43) (0.18) (0.25) -- (0.25) 10.44
Year ended
11/30/1993...... 10.24 0.29 0.64 0.93 (0.30) -- (0.30) 10.87
Period ended
11/30/1992*..... 10.00 0.06 0.18# 0.24 -- -- -- 10.24
INVESTOR A
Period ended
03/31/1996(a)... $ 12.66 $ 0.11 $ 0.45 $ 0.56 $(0.17) $ (1.41) $ (1.58) $ 11.64
Year ended
11/30/1995...... 10.42 0.34 2.23 2.57 (0.31) (0.02) (0.33) 12.66
Year ended
11/30/1994...... 10.86 0.22 (0.44) (0.22) (0.22) -- (0.22) 10.42
Year ended
11/30/1993...... 10.24 0.29 0.62 0.91 (0.29) -- (0.29) 10.86
Period ended
11/30/1992*..... 10.00 0.01 0.23# 0.24 -- -- -- 10.24
INVESTOR C
Period ended
03/31/1996(a)... $ 12.61 $ 0.09 $ 0.45 $ 0.54 $(0.14) $ (1.41) $ (1.55) $ 11.60
Year ended
11/30/1995...... 10.38 0.26 2.21 2.47 (0.22) (0.02) (0.24) 12.61
Year ended
11/30/1994...... 10.82 0.14 (0.43) (0.29) (0.15) -- (0.15) 10.38
Year ended
11/30/1993...... 10.23 0.23 0.59 0.82 (0.23) -- (0.23) 10.82
Period ended
11/30/1992*..... 10.00 0.01 0.22# 0.23 -- -- -- 10.23
INVESTOR N
Period ended
03/31/1996(a)... $ 12.63 $ 0.09 $ 0.45 $ 0.54 $(0.14) $ (1.41) $ (1.55) $ 11.62
Year ended
11/30/1995...... 10.40 0.28 2.22 2.50 (0.25) (0.02) (0.27) 12.63
Year ended
11/30/1994...... 10.85 0.17 (0.44) (0.27) (0.18) -- (0.18) 10.40
Period ended
11/30/1993*..... 10.61 0.14 0.23 0.37 (0.13) -- (0.13) 10.85
NATIONS EQUITY INCOME FUND
PRIMARY A
Period ended
03/31/1996(b)... $ 11.81 $ 0.30 $ 1.77 $ 2.07 $(0.37) $ (0.37) $ (0.74) $ 13.14
Year ended
05/31/1995...... 11.43 0.42 1.11 1.53 (0.42) (0.73) (1.15) 11.81
Year ended
05/31/1994...... 12.06 0.38 0.22 0.60 (0.42) (0.81) (1.23) 11.43
Year ended
05/31/1993...... 11.41 0.37 1.08 1.45 (0.35) (0.45) (0.80) 12.06
Year ended
05/31/1992...... 10.19 0.34 1.25 1.59 (0.30) (0.07) (0.37) 11.41
Period ended
05/31/1991**.... 10.00 0.05 0.14 0.19 -- -- -- 10.19
INVESTOR A
Period ended
03/31/1996(b)... $ 11.78 $ 0.27 $ 1.77 $ 2.04 $(0.34) $ (0.37) $ (0.71) $ 13.11
Year ended
05/31/1995...... 11.41 0.40 1.10 1.50 (0.40) (0.73) (1.13) 11.78
Year ended
05/31/1994...... 12.02 0.37 0.21 0.58 (0.38) (0.81) (1.19) 11.41
Year ended
05/31/1993...... 11.40 0.34 1.05 1.39 (0.32) (0.45) (0.77) 12.02
Year ended
05/31/1992...... 10.19 0.29 1.27 1.56 (0.28) (0.07) (0.35) 11.40
Period ended
05/31/1991**.... 10.04 0.05 0.10 0.15 -- -- -- 10.19
INVESTOR C
Period ended
03/31/1996(b)... $ 11.83 $ 0.21 $ 1.78 $ 1.99 $(0.26) $ (0.37) $ (0.63) $ 13.19
Year ended
05/31/1995...... 11.47 0.32 1.08 1.40 (0.31) (0.73) (1.04) 11.83
Year ended
05/31/1994...... 12.04 0.28 0.21 0.49 (0.25) (0.81) (1.06) 11.47
Period ended
05/31/1993**.... 11.13 0.32 1.32 1.64 (0.28) (0.45) (0.73) 12.04
INVESTOR N
Period ended
03/31/1996(b)... $ 11.77 $ 0.22 $ 1.76 $ 1.98 $(0.28) $ (0.37) $ (0.65) $ 13.10
Year ended
05/31/1995...... 11.40 0.34 1.11 1.45 (0.35) (0.73) (1.08) 11.77
Period ended
05/31/1994**.... 11.98 0.37 0.22 0.59 (0.36) (0.81) (1.17) 11.40
</TABLE>
- ---------------
* Nations Balanced Assets Fund's Primary A, Investor A, Investor C and
Investor N Shares commenced operations on September 30, 1992, October 2,
1992, October 2, 1992 and June 7, 1993, respectively.
** Nations Equity Income Fund's Primary A, Investor A, Investor C and Investor
N Shares commenced operations on April 11, 1991, April 16, 1991, June 17,
1992 and June 7, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# The amount shown at this caption for each share outstanding throughout the
period may not accord with the change in the aggregate gains and losses in
the portfolio securities for the period because of the timing of purchases
and withdrawals of shares in relation to the fluctuating market value of the
portfolio.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Fiscal year changed to March 31. Prior to this, the fiscal year end was May
31.
(c) Average commission rate paid per share of securities purchased and sold by
the Fund.
SEE NOTES TO FINANCIAL STATEMENTS.
66
<PAGE> 69
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
-------------------------------
RATIO OF RATIO OF RATIO OF
NET ASSETS OPERATING NET INVESTMENT OPERATING
END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO NET INVESTMENT AVERAGE
TOTAL PERIOD AVERAGE AVERAGE TURNOVER AVERAGE INCOME/(LOSS) COMMISSION RATE
RETURN++ (IN 000'S) NET ASSETS NET ASSETS RATE NET ASSETS PER SHARE PAID(c)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
4.90% $ 164,215 1.00%+ 2.91%+ 83% 1.00%+ $ 0.11 $0.0598
25.27 163,198 0.99 3.25 174 0.99 0.38 N/A
(1.73) 162,215 0.98 2.31 156 0.99 0.25 N/A
9.22 178,270 0.90 2.82 50 0.97 0.29 N/A
2.40+++ 111,953 0.30+ 3.85+ 79 1.05+ 0.05 N/A
4.86% $ 6,261 1.25%+ 2.66%+ 83% 1.25%+ $ 0.11 $0.0598
25.01 5,276 1.24 3.00 174 1.24 0.34 N/A
(2.02) 4,881 1.23 2.06 156 1.24 0.22 N/A
8.93 5,191 1.15 2.57 50 1.22 0.28 N/A
2.40+++ 547 0.55+ 3.60+ 79 1.30+ 0.01 N/A
4.71% $ 1,187 1.62%+ 2.29%+ 83% 1.62%+ $ 0.09 0.0598
24.03 992 1.99 2.25 174 1.99 0.26 N/A
(2.72) 951 1.98 1.31 156 1.99 0.14 N/A
8.06 1,196 1.90 1.82 50 1.97 0.22 N/A
2.30+++ 156 1.30+ 2.85+ 79 2.05+ 0.01 N/A
4.69% $ 65,764 1.75%+ 2.16%+ 83% 1.75%+ $ 0.09 $0.0598
24.35 65,275 1.74 2.50 174 1.74 0.28 N/A
(2.51) 52,905 1.73 1.56 156 1.74 0.17 N/A
3.45 27,982 1.65+ 2.07+ 50 1.72+ 0.14 N/A
17.98% $ 283,142 0.90%+ 2.84%+ 59% 0.90%+ $ 0.30 $0.0287
14.79 283,082 0.92 3.75 158 0.93 0.42 N/A
5.00 225,740 0.94 3.41 116 0.95 0.38 N/A
13.30 175,949 0.92 3.37 55 1.04 0.36 N/A
15.91+++ 18,104 1.10 3.15 84 2.21 0.22 N/A
1.90+++ 10,194 1.12+ 3.66+ 9 1.80+ (0.06) N/A
17.75% $ 42,606 1.15%+ 2.59%+ 59% 1.15%+ $ 0.27 $0.0287
14.53 35,538 1.17 3.50 158 1.18 0.40 N/A
4.74 33,691 1.19 3.16 116 1.20 0.37 N/A
12.78 32,760 1.17 3.12 55 1.29 0.33 N/A
15.59+++ 3,418 1.35 2.90 84 2.46 0.18 N/A
1.49+++ 497 1.37+ 3.40+ 9 15.09+ (1.30) N/A
17.20% $ 4,612 1.75%+ 1.99%+ 59% 1.75%+ $ 0.21 $0.0287
13.49 4,278 1.92 2.75 158 1.93 0.32 N/A
3.96 4,221 1.94 2.41 116 1.95 0.28 N/A
15.31 4,377 1.92+ 2.37+ 55 2.04+ 0.31 N/A
17.21% $ 104,026 1.65%+ 2.09%+ 59% 1.65%+ $ 0.22 $0.0287
14.03 75,371 1.67 3.00 158 1.68 0.34 N/A
4.84 46,043 1.69+ 2.66+ 116 1.70+ 0.37 N/A
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
67
<PAGE> 70
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET REALIZED
AND
NET ASSET UNREALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS TOTAL NET ASSET
VALUE NET GAIN/(LOSS) (DECREASE) IN FROM NET FROM NET DIVIDENDS VALUE
BEGINNING INVESTMENT ON NET ASSET VALUE INVESTMENT REALIZED AND END OF
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS PERIOD
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NATIONS VALUE FUND
PRIMARY A
Period ended
03/31/1996(a)... $ 16.21 $0.07 $ 1.06 $ 1.13 $(0.12) $ (0.62) $ (0.74) $ 16.60
Year ended
11/30/1995...... 12.98 0.27 3.91 4.18 (0.28) (0.67) (0.95) 16.21
Year ended
11/30/1994...... 13.74 0.24 (0.23) 0.01 (0.23) (0.54) (0.77) 12.98
Year ended
11/30/1993...... 12.45 0.24 1.38 1.62 (0.24) (0.09) (0.33) 13.74
Year ended
11/30/1992...... 11.16 0.28 1.57 1.85 (0.27) (0.29) (0.56) 12.45
Year ended
11/30/1991...... 9.71 0.34 1.47 1.81 (0.36) -- (0.36) 11.16
Year ended
11/30/1990...... 10.04 0.35 (0.36) (0.01) (0.32) -- (0.32) 9.71
Period ended
11/30/1989*#.... 10.00 0.08 (0.04) 0.04 -- -- -- 10.04
INVESTOR A
Period ended
03/31/1996(a)... $ 16.21 $0.05 $ 1.06 $ 1.11 $(0.10) $ (0.62) $ (0.72) $ 16.60
Year ended
11/30/1995...... 12.98 0.23 3.92 4.15 (0.25) (0.67) (0.92) 16.21
Year ended
11/30/1994...... 13.72 0.20 (0.20) 0.00 (0.20) (0.54) (0.74) 12.98
Year ended
11/30/1993...... 12.45 0.22 1.35 1.57 (0.21) (0.09) (0.30) 13.72
Year ended
11/30/1992...... 11.16 0.26 1.59 1.85 (0.27) (0.29) (0.56) 12.45
Year ended
11/30/1991...... 9.71 0.34 1.47 1.81 (0.36) -- (0.36) 11.16
Period ended
11/30/1990*..... 10.04 0.35 (0.36) (0.01) (0.32) -- (0.32) 9.71
INVESTOR C
Period ended
03/31/1996(a)... $ 16.09 $0.04 $ 1.05 $ 1.09 $(0.06) $ (0.62) $ (0.68) $ 16.50
Year ended
11/30/1995...... 12.90 0.13 3.88 4.01 (0.15) (0.67) (0.82) 16.09
Year ended
11/30/1994...... 13.64 0.12 (0.22) (0.10) (0.10) (0.54) (0.64) 12.90
Year ended
11/30/1993...... 12.41 0.13 1.32 1.45 (0.13) (0.09) (0.22) 13.64
Period ended
11/30/1992*..... 11.63 0.07 0.78 0.85 (0.07) -- (0.07) 12.41
INVESTOR N
Period ended
03/31/1996(a)... $ 16.15 $0.03 $ 1.05 $ 1.08 $(0.06) $ (0.62) $ (0.68) $ 16.55
Year ended
11/30/1995...... 12.94 0.17 3.89 4.06 (0.18) (0.67) (0.85) 16.15
Year ended
11/30/1994...... 13.71 0.15 (0.22) (0.07) (0.16) (0.54) (0.70) 12.94
Period ended
11/30/1993*..... 13.08 0.11 0.63 0.74 (0.11) -- (0.11) 13.71
NATIONS EQUITY INDEX FUND
PRIMARY A
Period ended
03/31/1996(a)... $ 12.91 $0.08 $ 0.86 $ 0.94 $(0.13) $ (0.14) $ (0.27) $ 13.58
Year ended
11/30/1995...... 9.84 0.28 3.20 3.48 (0.28) (0.13) (0.41) 12.91
Period ended
11/30/1994**.... 10.00 0.24 (0.21) 0.03 (0.19) -- (0.19) 9.84
INVESTOR A
Period ended
03/31/1996(a)... $ 12.91 $0.06 $ 0.87 $ 0.93 $(0.12) $ (0.14) $ (0.26) $ 13.58
Period ended
11/30/1995**.... 12.29 0.03 0.59 0.62 -- -- -- 12.91
</TABLE>
- ---------------
* Nations Value Fund's Primary A, Investor A, Investor C and Investor N
Shares commenced operations on September 19, 1989, December 6, 1989, June
17, 1992 and June 7, 1993, respectively.
** Nations Equity Index Fund's Primary A and Investor A Shares commenced
operations on December 15, 1993 and October 10, 1995, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Per share numbers have been calculated using the monthly average share
method, which more appropriately represents the per share data for the
period since use of the undistributed income method did not accord with the
results of operations.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Average commission rate paid per share of securities purchased and sold by
the Fund.
SEE NOTES TO FINANCIAL STATEMENTS.
68
<PAGE> 71
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF
RATIO OF OPERATING RATIO OF
NET ASSETS OPERATING EXPENSES TO NET INVESTMENT
END OF EXPENSES TO AVERAGE NET INCOME TO
TOTAL PERIOD AVERAGE ASSETS INCLUDING AVERAGE
RETURN++ (IN 000'S) NET ASSETS INTEREST EXPENSE NET ASSETS
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7.20% $998,957 0.96%+ -- 1.30%+
34.53 956,669 0.94 -- 1.90
(0.08) 799,743 0.93 -- 1.85
13.19 707,185 0.96 -- 1.98
17.00+++ 282,138 0.90 -- 2.31
18.79+++ 82,360 0.53 -- 3.33
(0.16)+++ 19,769 0.21 -- 4.19
0.40+++ 5,161 0.49+ -- 4.41+
7.07% $ 54,341 1.21%+ -- 1.05%+
34.22 48,440 1.19 -- 1.65
(0.17) 35,445 1.18 -- 1.60
12.80 32,607 1.21 -- 1.73
16.96+++ 24,536 1.06 -- 2.15
18.79+++ 13,514 0.53 -- 3.33
(0.16)+++ 7,020 0.21+ -- 4.19+
6.99% $ 4,633 1.58%+ -- 0.68%+
33.15 4,185 1.94 -- 0.90
(0.92) 2,983 1.93 -- 0.85
11.85 2,997 1.96 -- 0.98
7.33+++ 1,286 1.98+ -- 1.22+
6.90% $ 88,861 1.71%+ -- 0.55%+
33.55 83,699 1.69 -- 1.15
(0.69) 42,530 1.68 -- 1.10
5.65 10,449 1.71+ -- 1.23+
7.33% $192,388 0.35%+ 0.35%+ 1.99%+
36.35 145,021 0.37 0.38 2.44
0.29 123,147 0.35+ -- 2.64+
7.26% $ 95 0.35%+ 0.35%+ 1.99%+
5.04 11 0.62+ 0.63+ 2.19+
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
------------------------------
RATIO OF
OPERATING
PORTFOLIO EXPENSES TO NET INVESTMENT AVERAGE
TURNOVER AVERAGE INCOME COMMISSION RATE
RATE NET ASSETS PER SHARE PAID(b)
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
12% 0.96%+ $ 0.07 $0.0648
63 0.94 0.27 N/A
75 0.93 0.24 N/A
64 0.97 0.24 N/A
60 0.97 0.27 N/A
51 0.99 0.30 N/A
24 1.11 0.26 N/A
-- 1.41+ 0.06 N/A
12% 1.21%+ $ 0.05 $0.0648
63 1.19 0.23 N/A
75 1.18 0.21 N/A
64 1.22 0.22 N/A
60 1.15 0.25 N/A
51 0.99 0.30 N/A
24 1.11+ 0.26 N/A
12% 1.58%+ $ 0.04 $0.0648
63 1.94 0.13 N/A
75 1.93 0.12 N/A
64 1.97 0.13 N/A
60 1.98+ 0.07 N/A
12% 1.71%+ $ 0.03 $0.0648
63 1.69 0.17 N/A
75 1.68 0.15 N/A
64 1.72+ 0.11 N/A
2% 0.73%+ $ 0.07 $0.0291
18 0.78 0.23 N/A
14 0.79+ 0.20 N/A
2% 0.73%+ $ 0.05 $0.0291
18 1.03+ 0.02 N/A
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
69
<PAGE> 72
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET REALIZED
NET ASSET AND NET INCREASE/ DIVIDENDS
VALUE NET UNREALIZED (DECREASE) IN FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE INVESTMENT
OF PERIOD INCOME/(LOSS) ON INVESTMENTS FROM OPERATIONS INCOME
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS DISCIPLINED EQUITY FUND
PRIMARY A
Period ended 03/31/1996(a)............... $17.06 $ 0.05 $ 0.35 $ 0.40 $(0.04)
Year ended 11/30/1995.................... 13.08 0.10 3.96 4.06 (0.08)
Period ended 11/30/1994*................. 13.31 0.01 (0.23)# (0.22) (0.01)
Period ended 04/29/1994*................. 13.65 (0.05) 2.66 2.61 --
Period ended 04/30/1993*................. 10.00 (0.03) 3.74 3.71 --
INVESTOR A
Period ended 03/31/1996(a)............... $17.04 $ 0.04 $ 0.35 $ 0.39 $(0.04)
Year ended 11/30/1995.................... 13.06 0.09 3.96 4.05 (0.07)
Period ended 11/30/1994**................ 13.30 0.00(b) (0.23)# (0.23) (0.01)
Period ended 04/30/1994**................ 14.94 (0.04) 1.35 1.31 --
INVESTOR C
Period ended 03/31/1996(a)............... $16.97 $ 0.01 $ 0.35 $ 0.36 --
Period ended 11/30/1995***............... 14.08 (0.00)(b) 2.92 2.92 $(0.03)
INVESTOR N
Period ended 03/31/1996(a)............... $16.89 $ (0.01) $ 0.35 $ 0.34 --
Year ended 11/30/1995.................... 13.02 0.03 3.87 3.90 $(0.03)
Period ended 11/30/1994***............... 12.77 (0.02) 0.28 0.26 (0.01)
NATIONS CAPITAL GROWTH FUND
PRIMARY A
Period ended 03/31/1996(a)............... $14.24 $ 0.02 $ 0.38 $ 0.40 $(0.02)
Year ended 11/30/1995.................... 11.23 0.09 3.28 3.37 (0.10)
Year ended 11/30/1994.................... 11.08 0.09 0.14 0.23 (0.08)
Year ended 11/30/1993.................... 10.68 0.09 0.42 0.51 (0.10)
Period ended 11/30/1992****.............. 10.00 0.02 0.66# 0.68 --
INVESTOR A
Period ended 03/31/1996(a)............... $14.22 $ 0.01 $ 0.38 $ 0.39 $(0.01)
Year ended 11/30/1995.................... 11.21 0.06 3.28 3.34 (0.07)
Year ended 11/30/1994.................... 11.06 0.07 0.14 0.21 (0.06)
Year ended 11/30/1993.................... 10.67 0.07 0.41 0.48 (0.08)
Period ended 11/30/1992****.............. 10.00 0.01 0.66# 0.67 --
INVESTOR C
Period ended 03/31/1996(a)............... $14.09 $ 0.00(b) $ 0.36 $ 0.36 --
Year ended 11/30/1995.................... 11.14 (0.03) 3.24 3.21 --
Year ended 11/30/1994.................... 11.01 (0.02) 0.15 0.13 --
Year ended 11/30/1993.................... 10.67 (0.00)(b) 0.38 0.38 $(0.03)
Period ended 11/30/1992****.............. 10.00 (0.00)(b) 0.67# 0.67 --
INVESTOR N
Period ended 03/31/1996(a)............... $14.15 $ (0.02) $ 0.37 $ 0.35 --
Year ended 11/30/1995.................... 11.17 (0.03) 3.27 3.24 --
Year ended 11/30/1994.................... 11.05 (0.01) 0.13 0.12 --
Period ended 11/30/1993****.............. 10.55 (0.01) 0.53 0.52 $(0.02)
<CAPTION>
DISTRIBUTIONS TOTAL
FROM NET RETURN DIVIDENDS
REALIZED OF AND
CAPITAL GAINS CAPITAL DISTRIBUTIONS
----------------------------------------------------
<S> <C> <C> <C>
NATIONS DISCIPLINED EQUITY FUND
PRIMARY A
Period ended 03/31/1996(a)............... $ (0.23) -- $ (0.27)
Year ended 11/30/1995.................... -- -- (0.08)
Period ended 11/30/1994*................. -- $(0.00)(b) (0.01)
Period ended 04/29/1994*................. (2.95) -- (2.95)
Period ended 04/30/1993*................. (0.06) -- (0.06)
INVESTOR A
Period ended 03/31/1996(a)............... $ (0.23) -- $ (0.27)
Year ended 11/30/1995.................... -- -- (0.07)
Period ended 11/30/1994**................ -- $(0.00)(b) (0.01)
Period ended 04/30/1994**................ (2.95) -- (2.95)
INVESTOR C
Period ended 03/31/1996(a)............... $ (0.23) -- $ (0.23)
Period ended 11/30/1995***............... -- -- (0.03)
INVESTOR N
Period ended 03/31/1996(a)............... $ (0.23) -- $ (0.23)
Year ended 11/30/1995.................... -- -- (0.03)
Period ended 11/30/1994***............... -- $(0.00)(b) (0.01)
NATIONS CAPITAL GROWTH FUND
PRIMARY A
Period ended 03/31/1996(a)............... $ (1.19) -- $ (1.21)
Year ended 11/30/1995.................... (0.26) -- (0.36)
Year ended 11/30/1994.................... (0.00)(b) -- (0.08)
Year ended 11/30/1993.................... (0.01) -- (0.11)
Period ended 11/30/1992****.............. -- -- --
INVESTOR A
Period ended 03/31/1996(a)............... $ (1.19) -- $ (1.20)
Year ended 11/30/1995.................... (0.26) -- (0.33)
Year ended 11/30/1994.................... (0.00)(b) -- (0.06)
Year ended 11/30/1993.................... (0.01) -- (0.09)
Period ended 11/30/1992****.............. -- -- --
INVESTOR C
Period ended 03/31/1996(a)............... $ (1.19) -- $ (1.19)
Year ended 11/30/1995.................... (0.26) -- (0.26)
Year ended 11/30/1994.................... (0.00)(b) -- (0.00)(b)
Year ended 11/30/1993.................... (0.01) -- (0.04)
Period ended 11/30/1992****.............. -- -- (0.00)(b)
INVESTOR N
Period ended 03/31/1996(a)............... $ (1.19) -- $ (1.19)
Year ended 11/30/1995.................... (0.26) -- (0.26)
Year ended 11/30/1994.................... (0.00)(b) -- (0.00)(b)
Period ended 11/30/1993****.............. -- -- (0.02)
</TABLE>
- ---------------
<TABLE>
<C> <S>
* The period for the Nations Disciplined Equity Fund's Primary A Shares reflects operations from April 30, 1994 through
November 30, 1994. The financial information for the fiscal periods through April 29, 1994 is based on the financial
information for The Capitol Mutual Funds Special Equity Portfolio Class A Shares, which were reorganized into Primary A
Shares of Nations Disciplined Equity Fund (then named Nations Special Equity Fund) as of the close of business on April 29,
1994. The Capitol Mutual Funds', Special Equity Portfolio Class A Shares commenced operations on October 1, 1992.
** The period for the Nations Disciplined Equity Fund's Investor A Shares reflects operations from April 30, 1994 through
November 30, 1994. The financial information for the fiscal periods through April 29, 1994 is based on the financial
information for The Capitol Mutual Funds Special Equity Portfolio Class B Shares, which were reorganized into Investor A
Shares of Nations Disciplined Equity Fund (then named Nations Special Equity Fund) as of the close of business on April 29,
1994. The Capitol Mutual Funds Special Equity Portfolio Class B Shares commenced operations on July 26, 1993.
*** The Nations Disciplined Equity Fund's Investor C and Investor N Shares commenced operations on May 10, 1995 and May 20,
1994, respectively.
**** The Nations Capital Growth Fund's Primary A, Investor A, Investor C and Investor N Shares commenced operations on September
30, 1992, October 2, 1992, October 2, 1992 and June 7, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and does not reflect the deduction of any applicable
sales charges.
+++ Unaudited.
# The amount shown at this caption for each share outstanding throughout the period may not accord with the change in the
aggregate gains and losses in the portfolio securities for the period because of the timing of purchases and withdrawals of
shares in relation to the fluctuating market value of the portfolio.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was November 30.
(b) Amount represents less than $0.01 per share.
(c) Average commission rate paid per share of securities purchased and sold by the Fund.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
70
<PAGE> 73
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
NET ASSET NET ASSETS OPERATING NET INVESTMENT
VALUE END OF EXPENSES TO INCOME/(LOSS)
END OF TOTAL PERIOD AVERAGE TO AVERAGE
PERIOD RETURN++ (IN 000'S) NET ASSETS NET ASSETS
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 17.19 2.44% $ 116,469 1.02%+ 0.82%+
17.06 31.13 109,939 1.30 0.85
13.08 (1.62) 9,947 1.13+ 0.12+
13.31 18.79 8,079 1.20+ (0.60)+
13.65 37.13 4,638 1.20+ (0.58)+
$ 17.16 2.35% $ 4,722 1.12%+ 0.72%+
17.04 31.05 3,234 1.40 0.75
13.06 (1.71) 252 1.23+ 0.02+
13.30 8.31 165 1.30+ (0.62)+
$ 17.10 2.19% $ 283 1.65%+ 0.19%+
16.97 20.78 322 2.30+ (0.15)+
$ 17.00 2.08% $ 18,412 2.02%+ (0.18)%+
16.89 29.94 16,874 2.30 (0.15)
13.02 2.02 177 2.09+ (0.84)+
$ 13.43 3.14% $ 839,300 0.96%+ 0.38%+
14.24 30.96 867,361 0.98 0.71
11.23 2.14 717,914 0.90 0.85
11.08 4.84 646,661 0.80 0.84
10.68 6.80+++ 728,629 0.30+ 1.33+
$ 13.41 3.02% $ 18,311 1.21%+ 0.13%+
14.22 30.70 16,770 1.23 0.46
11.21 1.93 11,038 1.15 0.60
11.06 4.56 11,182 1.05 0.59
10.67 6.70+++ 1,225 0.55+ 1.08+
$ 13.26 2.86% $ 3,655 1.58%+ (0.24)%+
14.09 29.61 3,322 1.98 (0.29)
11.14 1.22 2,394 1.90 (0.15)
11.01 3.61 2,919 1.80 (0.16)
10.67 6.70+++ 406 1.30+ 0.33+
$ 13.31 2.77% $ 41,045 1.96%+ (0.62)%+
14.15 29.80 40,868 1.98 (0.29)
11.17 1.12 23,591 1.90 (0.15)
11.05 4.95 9,511 1.80+ (0.16)+
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
--------------------------
RATIO OF
OPERATING
PORTFOLIO EXPENSES TO NET INVESTMENT AVERAGE
TURNOVER AVERAGE INCOME/(LOSS) COMMISSION
RATE NET ASSETS PER SHARE PAID(c)
- --------------------------- ------------------------------
<S> <C> <C> <C> <C>
47% 1.02%+ $ 0.05 $0.0627
124 1.30 0.10 N/A
177 1.56+ (0.03) N/A
475 1.53+ (0.08) N/A
203 1.31+ (0.03) N/A
47% 1.12%+ $ 0.04 $0.0627
124 1.40 0.09 N/A
177 1.66+ (0.07) N/A
475 1.74+ (0.07) N/A
47% 1.65%+ $ 0.01 $0.0627
124 2.30+ (0.00)(b) N/A
47% 2.02%+ $(0.01) $0.0627
124 2.30 0.03 N/A
177 2.52+ (0.03) N/A
25% 0.96%+ $ 0.02 $0.0632
80 0.98 0.09 N/A
56 0.91 0.09 N/A
81 0.89 0.08 N/A
7 1.05+ 0.01 N/A
25% 1.21%+ $ 0.01 $0.0632
80 1.23 0.06 N/A
56 1.16 0.07 N/A
81 1.14 0.06 N/A
7 1.30+ 0.00(b) N/A
25% 1.58%+ $ 0.00(b) $0.0632
80 1.98 (0.03) N/A
56 1.91 (0.02) N/A
81 1.89 0.00(b) N/A
7 2.05+ 0.00(b) N/A
25% 1.96%+ $(0.02) $0.0632
80 1.98 (0.03) N/A
56 1.91 (0.01) N/A
81 1.89+ (0.02) N/A
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
71
<PAGE> 74
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET REALIZED
NET ASSET AND NET INCREASE DISTRIBUTIONS TOTAL NET ASSET
VALUE NET UNREALIZED IN NET FROM NET DIVIDENDS VALUE
BEGINNING INVESTMENT GAIN ASSET VALUE REALIZED AND END OF
OF PERIOD INCOME/(LOSS) ON INVESTMENTS FROM OPERATIONS CAPITAL GAINS DISTRIBUTIONS PERIOD
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NATIONS EMERGING GROWTH FUND
PRIMARY A
Period ended
03/31/1996#(a)... $14.28 $ (0.00)(b) $ 1.26 $ 1.26 $ (1.50) $ (1.50) $ 14.04
Year ended
11/30/1995..... 11.41 0.01 3.26 3.27 (0.40) (0.40) 14.28
Year ended
11/30/1994#.... 10.87 (0.03) 0.71 0.68 (0.14) (0.14) 11.41
Period ended
11/30/1993*.... 10.00 (0.01) 0.89 0.88 (0.01) (0.01) 10.87
INVESTOR A
Period ended
03/31/1996#(a)... $14.17 $ (0.01) $ 1.25 $ 1.24 $ (1.50) $ (1.50) $ 13.91
Year ended
11/30/1995..... 11.35 (0.01) 3.23 3.22 (0.40) (0.40) 14.17
Year ended
11/30/1994#.... 10.85 (0.06) 0.70 0.64 (0.14) (0.14) 11.35
Period ended
11/30/1993*.... 9.87 (0.03) 1.02 0.99 (0.01) (0.01) 10.85
INVESTOR C
Period ended
03/31/1996#(a)... $13.87 $ (0.03) $ 1.22 $ 1.19 $ (1.50) $ (1.50) $ 13.56
Year ended
11/30/1995..... 11.20 (0.08) 3.15 3.07 (0.40) (0.40) 13.87
Year ended
11/30/1994#.... 10.78 (0.14) 0.70 0.56 (0.14) (0.14) 11.20
Period ended
11/30/1993*.... 9.89 (0.09) 0.98 0.89 -- -- 10.78
INVESTOR N
Period ended
03/31/1996#(a)... $13.93 $ (0.05) $ 1.23 $ 1.18 $ (1.50) $ (1.50) $ 13.61
Year ended
11/30/1995..... 11.24 (0.07) 3.16 3.09 (0.40) (0.40) 13.93
Year ended
11/30/1994#.... 10.82 (0.14) 0.70 0.56 (0.14) (0.14) 11.24
Period ended
11/30/1993*.... 9.88 (0.02) 0.96 0.94 -- -- 10.82
</TABLE>
- ---------------
* Nations Emerging Growth Fund's Primary A, Investor A, Investor C and
Investor N Shares commenced operations on December 4, 1992, December 10,
1992, December 18, 1992 and June 7, 1993, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Per share numbers have been calculated using the monthly average share
method, which more appropriately represents the per share data for the period
since use of the undistributed income method did not accord with the results
of operations.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Amount represents less than $0.01 per share.
(c) Average commission rate paid per share of securities purchased and sold by
the Fund.
SEE NOTES TO FINANCIAL STATEMENTS.
72
<PAGE> 75
NATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
NET ASSETS OPERATING NET INVESTMENT
END OF EXPENSES TO INCOME/(LOSS)
TOTAL PERIOD AVERAGE TO AVERAGE
RETURN++ (IN 000'S) NET ASSETS NET ASSETS
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
9.87% $295,764 0.99%+ (0.06)%+
29.95 269,484 0.98 0.08
6.26 182,459 1.01 (0.29)
8.81 121,281 0.80+ (0.15)+
9.80% $ 7,802 1.24%+ (0.31)%+
29.65 5,765 1.23 (0.17)
5.90 3,234 1.26 (0.54)
9.99 2,095 1.05+ (0.40)+
9.64% $ 936 1.61%+ (0.68)%+
28.67 805 1.98 (0.92)
5.19 542 2.01 (1.29)
9.00 469 1.80+ (1.15)+
9.52% $ 34,989 1.99%+ (1.06)%+
28.75 32,349 1.98 (0.92)
5.17 15,909 2.01 (1.29)
9.51 3,594 1.80+ (1.15)+
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
--------------------------------
RATIO OF
OPERATING
PORTFOLIO EXPENSES TO NET INVESTMENT AVERAGE
TURNOVER AVERAGE INCOME/(LOSS) COMMISSION RATE
RATE NET ASSETS PER SHARE PAID(c)
- ----------------------------------------------------------------------
<S><C> <C> <C> <<C>
39% 0.99%+ $(0.00) $0.0599 (b)
139 0.98 0.01 N/A
129 1.01 (0.03) N/A
159 1.01+ (0.03) N/A
39% 1.24%+ $(0.01) $0.0599
139 1.23 (0.01) N/A
129 1.26 (0.05) N/A
159 1.26+ (0.04) N/A
39% 1.61%+ $(0.03) $0.0599
139 1.98 (0.08) N/A
129 2.01 (0.12) N/A
159 2.01+ (0.11) N/A
39% 1.99%+ $(0.05) $0.0599
139 1.98 (0.07) N/A
129 2.01 (0.09) N/A
159 2.01+ (0.03) N/A
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
73
<PAGE> 76
NATIONS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES.
Nations Fund Trust (the "Trust") and Nations Fund, Inc. (the "Company") are
registered under the Investment Company Act of 1940, as amended, (the "1940
Act"), as open-end investment companies. As of the date of this report, the
Trust offers thirty-one separate portfolios and the Company offers five separate
portfolios. The Trust changed its fiscal year end from November 30 to March 31
and the Company changed its fiscal year end from May 31 to March 31. The
information presented for the Trust is for the period from December 1, 1995 to
March 31, 1996. The information presented for the Company is for the period from
June 1, 1995 to March 31, 1996. Information presented in these financial
statements pertains only to the following funds: Nations Balanced Assets Fund,
Nations Equity Income Fund, Nations Value Fund, Nations Equity Index Fund,
Nations Disciplined Equity Fund, Nations Capital Growth Fund and Nations
Emerging Growth Fund (individually, the "Fund", collectively the "Funds"). The
financial statements for the remaining funds of the Trust and the Company are
presented under separate cover. On February 28, 1996, a special meeting of the
Board of Trustees of the Trust and Board of Directors of the Company was held to
approve the name change from Trust A and Trust B Shares to Primary A and Primary
B Shares, respectively. The Funds (except Nations Equity Index Fund) currently
offer four classes of shares: Primary A Shares (formerly known as Trust A
Shares), Investor A Shares, Investor C Shares and Investor N Shares. The Equity
Index Fund currently offers only Primary A Shares and Investor A Shares. The
relevant Board of Trustees and Board of Directors have authorized the issuance
of Primary B Shares (formerly known as Trust B Shares), for all Funds. As of
March 31, 1996, no Primary B Shares have been issued. Shareholders of a Fund
have equal voting rights on matters affecting all shareholders of the Fund
equally. In addition, each class of shares of a Fund has exclusive voting rights
on matters that relate solely to its class, and separate voting rights on
matters in which the interests of one class of shares differ from the interests
of any other class. The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Funds
in the preparation of their financial statements.
Securities Valuation: The Funds' portfolio securities which are traded on a
recognized stock exchange are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sale price
on the national securities market. Securities traded only on over-the-counter
markets are valued on the basis of the closing over-the-counter bid prices or if
no sale occurred on such day at the mean of the current bid and asked prices.
Certain securities may be valued by one or more principal market makers.
Restricted securities, securities for which market quotations are not readily
available and other assets are valued at fair value under the supervision of the
Board of Trustees or the Board of Directors. Short-term investments that mature
in 60 days or less are valued at amortized cost.
Repurchase Agreements: Each Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
This arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The value of the collateral is at
least equal at all times to the total amount of the repurchase obligations,
including interest. Generally, in the event of counterparty default, the Fund
has the right to use the collateral to offset losses incurred. There is
potential loss to the Fund in the event the Fund is delayed or prevented from
exercising its right to dispose of the collateral securities, including the risk
of a possible decline in the value of the underlying securities during the
period while the Fund seeks to assert its right. Unless permitted by the
Securities and Exchange Commission, the Fund will not enter into repurchase
agreements with the investment adviser, the distributor or any of their
affiliates. The Funds' investment adviser, acting under the supervision of the
Board of Trustees or the Board of Directors, monitors the value of collateral
received as well as the creditworthiness of those banks and dealers with which
the Funds enter into repurchase agreements to evaluate potential risks.
Futures Contracts: Nations Equity Income Fund and Nations Equity Index Fund may
engage in futures contracts for the purpose of hedging against changes in values
of the Funds' securities or changes in the prevailing levels of interest rates
or currency exchange rates. Upon entering into a futures contract, the Fund is
required to deposit with the broker an amount of cash or cash equivalents equal
to a certain percentage of the contract amount. This is known as the "initial
margin." Subsequent payments ("variation margin") are made or received by the
Fund each day, depending on the daily fluctuation of the value of the contract.
74
<PAGE> 77
NATIONS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
During the period the futures contract is open, changes in the value of the
contract are recognized as unrealized gains or losses by "marking-to-market" on
a daily basis to reflect the market value of the contract at the end of each
day. The Fund recognizes a realized gain or loss when the contract is closed
equal to the difference between the proceeds from (or cost of) the closing
transaction and the Fund's basis in the contract.
Risks arise in the possible movement of the securities or indices underlying
those investments. Risks also include the possibility that there may not be a
liquid secondary market for these contracts, that a change in the value of the
contract may not correlate with changes in the value of the underlying
securities or that the counterparty to a contract may default on its obligation
to perform.
Securities Transactions and Investment Income: Securities transactions are
accounted for on a trade date basis. Realized gains and losses are computed on
the specific identification of the securities sold. Interest income, adjusted
for amortization of market discounts and premiums on investments and
amortization of original issue discounts on the effective yield method, is
earned from settlement date and is recorded on the accrual basis. Dividend
income is recorded on the ex-dividend date. Each Fund's investment income and
realized and unrealized gains and losses are allocated among its classes based
upon the relative net assets of each class of shares.
Dividends and Distributions to Shareholders: It is the policy of each Fund to
declare and pay dividends from net investment income each calendar quarter. Each
Fund will distribute net realized capital gains (including net short-term
capital gains), unless offset by any available capital loss carryforward,
annually after the fiscal year in which earned. Additional distributions of net
investment income and capital gains may be made at the discretion of the Board
of Trustees or Board of Directors in order to avoid application of the 4%
non-deductible Federal excise tax. Income distributions and capital gain
distributions on a Fund level are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund as a whole.
Reclassifications are made to each Funds' capital accounts to reflect income and
gains available for distribution (or available capital loss carryforwards) under
Federal income tax regulations. Certain reclassification adjustments are made
between undistributed net investment income and realized gain and loss due to
different book and tax accounting for foreign currency, paydowns and net
operating loss.
Reclassifications for the period ended March 31, 1996 were as follows:
<TABLE>
<CAPTION>
INCREASE/(DECREASE) INCREASE/(DECREASE)
UNDISTRIBUTED NET ACCUMULATED NET
INVESTMENT INCOME REALIZED GAIN/(LOSS)
-----------------------------------------
<S> <C> <C>
Nations Balanced Assets Fund............................. $ (12,478) $ 12,478
Nations Equity Income Fund............................... 694 (694)
Nations Equity Index Fund................................ 3 (3)
Nations Capital Growth Fund.............................. (37,911) 37,911
Nations Emerging Growth Fund............................. 182,595 (182,595)
</TABLE>
Federal Income Tax: Each Fund intends to qualify as a regulated investment
company by complying with the requirements of the Internal Revenue Code of 1986,
as amended, applicable to regulated investment companies and by distributing
substantially all of its earnings to its shareholders. Therefore, no Federal
income or excise tax provision is required.
Expenses: General expenses of the Trust or the Company are allocated to the
relevant Funds based upon relative net assets. Operating expenses directly
attributable to a Fund or class of shares are charged to that Fund's or class'
operations. Expenses of each Fund not directly attributable to the operations of
any class of shares are prorated among the classes based on the relative average
net assets of each class of shares.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS.
Each of the Trust and the Company has, on behalf of its Funds, entered into an
Investment Advisory Agreement with NationsBanc Advisors, Inc. ("NBAI"), a
wholly-owned subsidiary of NationsBank, N.A., pursuant to which NBAI
75
<PAGE> 78
NATIONS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
provides investment advisory services to the Funds. Prior to January 1, 1996,
NationsBank, N.A. acted as investment adviser. The investment advisory fees
under the new Investment Advisory Agreements are the same as those under the
prior agreements.
Under the terms of these Investment Advisory Agreements, NBAI is entitled to
receive an advisory fee at the following annual rates of average daily net
assets of each Fund:
<TABLE>
<CAPTION>
ANNUAL RATE
----------
<S> <C>
Nations Balanced Assets Fund, Nations Value Fund, Nations Disciplined Equity
Fund, Nations Capital Growth Fund and Nations Emerging Growth Fund............. 0.75%
Nations Equity Index Fund........................................................ 0.50%
</TABLE>
<TABLE>
<CAPTION>
FEES ON
FEES ON ASSETS BETWEEN FEES ON
ASSETS UP TO $100 AND ASSETS EXCEEDING
$100 MILLION $250 MILLION $250 MILLION
---------------------------------------------------
<S> <C> <C> <C>
Nations Equity Income Fund......................... 0.75% 0.70% 0.60%
</TABLE>
The Trust and the Company and NBAI have entered into Sub-Advisory Agreements
with TradeStreet Investment Associates, Inc. ("TradeStreet"), a wholly-owned
subsidiary of NationsBank, N.A. Under the terms of these Sub-Advisory
Agreements, TradeStreet is entitled to receive from NBAI a sub-advisory fee for
each Fund at the following annual rates of each Fund's average daily net assets:
<TABLE>
<CAPTION>
ANNUAL RATE
----------
<S> <C>
Nations Balanced Assets Fund..................................................... 0.25%
Nations Equity Income Fund....................................................... 0.20%
Nations Value Fund............................................................... 0.25%
Nations Equity Index Fund........................................................ 0.10%
Nations Disciplined Equity Fund.................................................. 0.25%
Nations Capital Growth Fund...................................................... 0.25%
Nations Emerging Growth Fund..................................................... 0.25%
</TABLE>
Stephens Inc. ("Stephens") serves as the administrator of the Trust and the
Company pursuant to Administration Agreements. First Data Investor Services
Group, Inc., a wholly-owned subsidiary of First Data Corporation, serves as the
co-administrator of the Trust and the Company pursuant to Co-Administration
Agreements. Pursuant to the Administration and Co-Administration Agreements, the
administrator and the co-administrator are entitled to receive a combined fee,
computed daily and paid monthly, at the annual rate of 0.10% of average daily
net assets of the Trust, the Company and the investment portfolios of Nations
Fund Portfolios, Inc. (another registered investment company which is part of
the Nations Fund family) on a combined basis. NationsBank, N.A. serves as the
sub-administrator of the Trust and the Company pursuant to the
Sub-Administration Agreements with Stephens. For the period ended March 31,
1996, Stephens earned $838,691 (after fee waivers) from the Funds for its
administration services of which $55,374 was paid to NationsBank, N.A.
The investment adviser, sub-adviser, administrator and co-administrator may,
from time to time, reduce their fees payable by each Fund (either voluntarily or
pursuant to applicable state limitations). For the period ended March 31, 1996,
the investment adviser voluntarily waived fees of $204,455 for Nations Equity
Index Fund.
NationsBank of Texas, N.A. acts as the custodian for the Funds and, for the
period ended March 31, 1996, earned $208,812 for providing such services. First
Data Investor Services Group, Inc. serves as the transfer agent for the Funds'
shares. NationsBank of Texas, N.A. acts as the sub-transfer agent for the
Primary A Shares of the Funds, and for the period ended March 31, 1996, earned
approximately $16,433 for providing such services.
Stephens acts as distributor of the Funds' shares. For the period ended March
31, 1996, the Funds were informed that the distributor received $31,851,
representing commissions (sales charges) on sales of Investor A Shares of the
Funds. For the period ended March 31, 1996, the Funds were informed that the
distributor received $352,034 in contingent deferred
76
<PAGE> 79
NATIONS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
sales charges from Investor C and Investor N Shares of the Funds. A substantial
portion of these fees are paid to affiliates of NationsBank, N.A.
No officer, director or employee of NBAI, TradeStreet, Stephens or First Data
Investor Services Group, Inc., or any affiliate thereof, receives any
compensation from the Trust or the Company for serving as a trustee, director or
officer of the Trust or the Company. Both the Trust and the Company pay each
Trustee or Director an annual fee of $1,000 ($3,000 for the Chairman of the
Board), plus $500 per Fund and an additional $1,000 for each in-person board
meeting, and $500 for each telephonic board meeting attended. The Trust and the
Company also reimburse expenses incurred by each Trustee or Director in
attending such meetings.
The Funds' eligible Trustees or Directors may participate in a nonqualified
deferred compensation plan and retirement plan which may be terminated at any
time. All benefits provided under these plans are unfunded and any payments to
plan participants are paid solely out of the Funds' assets. Income earned on
each plan participant's deferral account is tied to the rate of return of the
eligible mutual funds selected by the participants or, if no funds are selected,
to the rate of return of Nations Treasury Fund, a Fund of the Company. The
expense for the deferred compensation plan is included in the
"Trustees'/Directors' fees and expenses" line of Statements of Operations.
A summary of the above expenses is as follows:
<TABLE>
<CAPTION>
SUB TRANSFER
SUB AGENT CUSTODIAN
ADVISORY ADMINISTRATION ADMINISTRATION FEES(c) FEES(d)
FEES* FEES(a) FEES(b) (NATIONSBANK (NATIONSBANK
FUND (NBIA) (STEPHENS) (NATIONSBANK, N.A.) OF TEXAS) OF TEXAS)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONS FUND TRUST
Nations Balanced Assets Fund...... $ 590,332 $ 47,321 $ 3,911 $ 1,946 $ 17,353
Nations Value Fund................ 2,808,328 225,120 18,859 1,946 49,365
Nations Equity Index Fund......... 64,733 32,371 2,887 1,946 14,110
Nations Disciplined Equity Fund... 339,082 27,182 2,300 1,946 11,483
Nations Capital Growth Fund....... 2,253,497 180,642 15,012 1,946 38,476
Nations Emerging Growth Fund...... 777,193 62,303 5,303 1,946 22,526
---------- -------- ------- ------- --------
6,833,165 574,939 48,272 11,676 153,313
---------- -------- ------- ------- --------
NATIONS FUND, INC.
Nations Equity Income Fund........ 2,329,896 208,378 7,102 4,757 55,499
---------- -------- ------- ------- --------
Total............................. $9,163,061 $783,317 $55,374 $16,433 $ 208,812
========== ======== ======= ======= ========
</TABLE>
* Advisory fees are shown net of waivers for the period ended March 31, 1996.
This amount includes fees paid to NationsBank, N.A. under the prior advisory
agreement.
(a) Represents the portion of the administration fees paid to Stephens Inc. for
the period ended March 31, 1996.
(b) Represents the sub-administration fees paid to NationsBank, N.A. for the
period ended March 31, 1996.
(c) Represents the sub-transfer agent fees paid to NationsBank of Texas, N.A.
for the period ended March 31, 1996.
(d) Represents the custodian fees paid to NationsBank of Texas, N.A. for the
period ended March 31, 1996.
3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS.
The Trust and the Company each have adopted shareholder servicing and
distribution plans pursuant to Rule 12b-1 under the 1940 Act for Investor A
Shares of each Fund ("Investor A Plan"), a shareholder servicing plan
("Servicing Plan") for Investor C Shares and Investor N Shares of each Fund
(except Nations Equity Index Fund) and a distribution plan ("Distribution Plan")
pursuant to Rule 12b-1 under the 1940 Act for Investor C Shares and Investor N
Shares of each Fund (except Nations Equity Index Fund). The Investor A Plan
permits the Funds to compensate (i) Servicing Agents and Selling Agents that
have entered into a servicing agreement with the Funds for services provided to
their customers that own Investor A Shares and (ii) Stephens for
distribution-related expenses incurred in connection with Investor A Shares. The
Servicing Plan permits the Funds to compensate Servicing Agents for services
provided to their customers that own Investor C Shares and Investor N Shares,
respectively. The Distribution Plan permits the Funds to compensate or reimburse
Stephens for any activities or expenses primarily intended to result in the sale
of the Funds' Investor C
77
<PAGE> 80
NATIONS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Shares or Investor N Shares, respectively. Payments under the plans are accrued
daily and paid monthly at a rate set from time to time by the Funds. Fees paid
pursuant to the plans are charged as expenses of Investor A Shares, Investor C
Shares and Investor N Shares, respectively, of each Fund as accrued.
For the period ended March 31, 1996, the effective rates paid by the Funds, as a
percentage of average daily net assets, pursuant to the plans are as follows:
<TABLE>
<CAPTION>
INVESTOR C INVESTOR C INVESTOR N INVESTOR N
INVESTOR A DISTRIBUTION SERVICING DISTRIBUTION SERVICING
FUND PLAN PLAN PLAN PLAN PLAN
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nations Balanced Assets Fund.............. 0.25% 0.37% 0.25% 0.50% 0.25%
Nations Equity Income Fund................ 0.25% 0.60% 0.25% 0.50% 0.25%
Nations Value Fund........................ 0.25% 0.37% 0.25% 0.50% 0.25%
Nations Disciplined Equity Fund........... 0.10% 0.38% 0.25% 0.75% 0.25%
Nations Capital Growth Fund............... 0.25% 0.37% 0.25% 0.75% 0.25%
Nations Emerging Growth Fund.............. 0.25% 0.37% 0.25% 0.75% 0.25%
</TABLE>
A substantial portion of the fees paid pursuant to the plans described above are
paid to affiliates of NationsBank, N.A.
and NBAI.
4. PURCHASES AND SALES OF SECURITIES.
The aggregate cost of purchases and proceeds from sales of securities, excluding
U.S. government securities and short-term investments, for the period ended
March 31, 1996 was as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-----------------------------
<S> <C> <C>
Nations Balanced Assets Fund...................................... $ 76,966,691 $ 91,525,831
Nations Equity Income Fund........................................ 248,465,707 207,187,577
Nations Value Fund................................................ 129,368,994 154,903,947
Nations Equity Index Fund......................................... 45,045,251 3,636,977
Nations Disciplined Equity Fund................................... 70,712,577 62,031,027
Nations Capital Growth Fund....................................... 218,646,205 278,596,826
Nations Emerging Growth Fund...................................... 110,004,109 113,739,105
</TABLE>
The aggregate cost of purchases and proceeds from sales of long-term U.S.
government securities for the period ended March 31, 1996 was as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-----------------------------
<S> <C> <C>
Nations Balanced Assets Fund...................................... $102,265,057 $ 92,230,437
</TABLE>
At March 31, 1996, aggregate gross unrealized appreciation and unrealized
depreciation for tax purposes was as follows:
<TABLE>
<CAPTION>
TAX BASIS TAX BASIS
UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION
-----------------------------
<S> <C> <C>
Nations Balanced Assets Fund....................................... $ 13,974,456 $ 2,514,275
Nations Equity Income Fund......................................... 48,950,447 3,079,077
Nations Value Fund................................................. 237,512,531 7,323,128
Nations Equity Index Fund.......................................... 41,269,595 1,384,838
Nations Disciplined Equity Fund.................................... 20,398,466 3,645,887
Nations Capital Growth Fund........................................ 177,307,223 13,008,979
Nations Emerging Growth Fund....................................... 62,148,378 3,510,905
</TABLE>
5. SHARES OF BENEFICIAL INTEREST/CAPITAL STOCK.
As of March 31, 1996, an unlimited number of shares without par value were
authorized for the Trust and 270,000,000,000 shares of $.001 par value capital
stock were authorized for the Company. The Trust's Declaration of
78
<PAGE> 81
NATIONS FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Trust authorizes the Board of Trustees to classify or reclassify any authorized,
but unissued shares into one or more additional classes or series of shares. See
Schedule of Capital Stock Activity.
6. ORGANIZATION COSTS.
The Funds bear all costs in connection with their organization, including the
fees and expenses of registering and qualifying their shares for distribution
under Federal and state securities regulations. All such costs are being
amortized on the straight-line method over a period of five years from
commencement of operations. In the event that any of the shares issued by the
Funds to their sponsor prior to the commencement of the Funds' public offering
("initial shares") are redeemed during such amortization period by any holder
thereof, the Funds will be reimbursed by the holder for any unamortized
organization costs in the same proportion as the number of initial shares
redeemed bears to the number of initial shares outstanding at the time of
redemption. All such costs for Nations Value Fund and Nations Disciplined Equity
Fund have been fully amortized.
7. LINE OF CREDIT.
The Trust and the Company participate in a $25 million line of credit provided
by Mellon Bank, N.A. (the "Bank") under a Line of Credit Agreement (the
"Agreement") dated March 17, 1996. Advances under the Agreement are taken
primarily for temporary or emergency purposes, including the meeting of
redemption requests that otherwise might require the untimely disposition of
securities. Under the Agreement, each Fund may borrow up to the lesser of $10
million or 5% of its net assets. Interest on borrowings is payable either at the
higher of the Bank's Money Market Rate or the London Interbank Offered Rate
(LIBOR) plus 0.25% on an annualized basis. The Funds and the other affiliated
entities which are parties to the Agreement are charged an aggregate commitment
fee of 0.25% per annum on the amount of the line of credit. Each Fund is liable
only for that portion of any commitment with respect to such Fund and shall not
be liable for the portion of the commitment fee of any other fund. The Agreement
requires, among other things, that each participating Fund maintain a ratio of
net assets (not including funds borrowed pursuant to the Agreement) to aggregate
amount of indebtedness pursuant to the Agreement of no less than 4 to 1.
During the period ended March 31, 1996, the following Fund had borrowings under
the Agreement:
<TABLE>
<CAPTION>
AMOUNT
OUTSTANDING AT MAXIMUM AVERAGE AVERAGE INTEREST RATE
MARCH 31, AMOUNT AMOUNT AVERAGE DEBT --------------- INTEREST
FUND 1996 OUTSTANDING OUTSTANDING SHARES PER SHARE HIGH LOW EXPENSE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nations Equity Index
Fund............... -- $ 500,000 $12,295 12,386,561 $0.00(a) 6.25% 5.75% $219
</TABLE>
(a) Amount represents less than $0.01 per share.
The average amount outstanding was calculated by adding the borrowings at the
end of each day and dividing the sum by the number of days in the period ended
March 31, 1996.
8. CAPITAL LOSS CARRYFORWARD.
At March 31, 1996, Nations Disciplined Equity Fund had available for Federal
income tax purposes unused capital losses of $29,908 expiring March 31, 2004.
79
<PAGE> 82
NATIONS FUND
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS, DIRECTORS AND TRUSTEES OF NATIONS FUND
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Nations Balanced Assets Fund,
Nations Equity Income Fund, Nations Value Fund, Nations Equity Index Fund,
Nations Disciplined Equity Fund, Nations Capital Growth Fund, and Nations
Emerging Growth Fund, (collectively referred to as the "Funds") at March, 31,
1996 and the results of each of their operations, the changes in each of their
net assets and the financial highlights for the periods indicated, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at March 31, 1996 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
May 17, 1996
80
<PAGE> 83
NATIONS FUND
- --------------------------------------------------------------------------------
TAX INFORMATION (UNAUDITED)
For the year ended March 31, 1996, the amount of long term capital gain
distributed to shareholders by the Trust and the Company was as follows:
<TABLE>
<S> <C>
Nations Balanced Assets Fund..................................................... $14,741,501
Nations Equity Income Fund....................................................... 65,993
Nations Value Fund............................................................... 22,215,113
Nations Equity Index Fund........................................................ 582,312
Nations Disciplined Equity Fund.................................................. 90,359
Nations Capital Growth Fund...................................................... 58,988,357
Nations Emerging Growth Fund..................................................... 13,437,439
</TABLE>
Of the ordinary income (including short-term capital gain) distributions made by
the Trust and the Company during the fiscal year ended March 31, 1996, the
following percentages qualify for the dividend received deduction available to
corporate shareholders:
<TABLE>
<S> <C>
Nations Balanced Assets Fund..................................................... 9.30%
Nations Equity Income Fund....................................................... 28.72%
Nations Value Fund............................................................... 78.36%
Nations Equity Index Fund........................................................ 92.60%
Nations Disciplined Equity Fund.................................................. 100.00%
Nations Capital Growth Fund...................................................... 35.31%
Nations Emerging Growth Fund..................................................... 3.93%
</TABLE>
81
<PAGE> 84
THE NATIONS FUND FAMILY
EQUITY FUNDS
GROWTH
Nations Capital Growth Fund
Nations Disciplined Equity Fund
Nations Emerging Growth Fund
Nations Emerging Markets Fund
Nations Equity Index Fund
Nations International Equity Fund
Nations Pacific Growth Fund
GROWTH AND INCOME
Nations Balanced Assets Fund
Nations Equity Income Fund
Nations Value Fund
BOND FUNDS
INCOME
Nations Diversified Income Fund
Nations Global Government Income Fund
Nations Government Securities Fund
Nations Short-Intermediate Government Fund
Nations Short-Term Income Fund
Nations Strategic Fixed Income Fund
TAX-EXEMPT INCOME
Nations Florida Municipal Bond Fund
Nations Florida Intermediate Municipal Bond Fund
Nations Georgia Municipal Bond Fund
Nations Georgia Intermediate Municipal Bond Fund
Nations Maryland Municipal Bond Fund
Nations Maryland Intermediate Municipal Bond Fund
Nations North Carolina Municipal Bond Fund
Nations North Carolina Intermediate Municipal Bond Fund
Nations South Carolina Municipal Bond Fund
Nations South Carolina Intermediate Municipal Bond Fund
Nations Tennessee Municipal Bond Fund
Nations Tennessee Intermediate Municipal Bond Fund
Nations Texas Municipal Bond Fund
Nations Texas Intermediate Municipal Bond Fund
Nations Virginia Municipal Bond Fund
Nations Virginia Intermediate Municipal Bond Fund
Nations Municipal Income Fund
Nations Intermediate Municipal Bond Fund
Nations Short-Term Municipal Income Fund
MONEY MARKET FUNDS
Nations Government Money Market Fund
Nations Prime Fund
Nations Tax Exempt Fund
Nations Treasury Fund
<PAGE> 85
This report is submitted for the general information of shareholders of Nations
Fund. This material must be accompanied or preceded by a Nations Fund
prospectus.
<PAGE> 86
------------
NATIONS BULK RATE
- --FUND- U.S. POSTAGE
PAID
P.O. Box 34602 BOSTON, MA
Charlotte, NC 28234-4602 PERMIT NO.
Toll Free 1-800-982-2271 54201
------------
AR1 IN-96116-596
