<PAGE> 1
[NATIONS FUNDS LOGO] [GRAPHIC OF TREE]
INVESTMENTS FOR A LIFETIME(SM)
INTERNATIONAL Nations
STOCK International
FUNDS Equity Fund
Nations
International
Growth Fund
Nations
Pacific Growth
Fund
SEMI-ANNUAL REPORT FOR THE PERIOD Nations
ENDED SEPTEMBER 30, 1998 Emerging Markets
Fund
<PAGE> 2
[BACKGROUND GRAPHIC DEPICTING BASKETS]
THIS REPORT IS SUBMITTED FOR
THE GENERAL INFORMATION OF
SHAREHOLDERS OF NATIONS FUNDS.
THIS MATERIAL MUST BE PRECEDED OR
ACCOMPANIED BY A CURRENT NATIONS
FUNDS PROSPECTUS.
NATIONS FUNDS DISTRIBUTOR: STEPHENS INC.
STEPHENS INC., WHICH IS NOT AFFILIATED
WITH NATIONSBANK, N.A., IS NOT A BANK,
AND SECURITIES OFFERED BY IT ARE NOT
GUARANTEED BY ANY BANK OR INSURED BY THE
FDIC. STEPHENS INC., MEMBER NYSE, SIPC.
NATIONS FUNDS INVESTMENT ADVISORS
NATIONSBANC ADVISORS, INC.
-----------------
NOT FDIC-
INSURED
-----------------
MAY LOSE VALUE
-----------------
NO BANK GUARANTEE
-----------------
<PAGE> 3
NATIONS FUNDS
DEAR SHAREHOLDER:
We are pleased to report to you on the activities and investment results of the
Nations Funds international mutual funds for the six months ending September 30,
1998.
The last six months have seen a marked change in global financial conditions. By
the end of the period, all of the major equity markets had fallen steeply,
losing much or all of the gains achieved earlier in the year. Economic growth
moderated to about 2.5% in Continental Europe and around 2.0% in the U.K. At the
same time, interest rates in the U.S. have fallen, leading to a pronounced rise
in the value of the Deutschmark and other European currencies against the
dollar. The value of the yen, in contrast, has stayed more or less level with
the dollar over the period. The economies of Asia and Japan have continued to
contract and bankruptcies are widespread. Latin America, meanwhile, has suffered
from 'contagion' effects and markets in that region have also fallen.*
During this period, many investment managers withdrew from the smaller markets
of Asia and maintained substantially underweight stances in Japan. In the major
Western markets, they carefully considered the effects on future earnings
prospects and valuations of the slowdown in Asia, the Russian debt default in
August and the problems in Latin America. In Europe, progress on the European
single currency, a wave of merger activity across many sectors and reasonable
growth helped to buoy equity markets earlier in the period; this was offset by
sharp falls following the Russian debt default in August. Foreign bank stocks
were hit particularly hard -- not only because of the exposure of some to
Russia, but also to Asia and Latin America. Meanwhile, the slow rate of progress
on banking reform in Japan was particularly discouraging with the election of a
new government in July providing little solace. And, political turmoil
throughout Asia -- particularly in Indonesia and Malaysia -- served to further
undermine investor confidence.
Looking forward, we continue to be concerned about the outlook for corporate
profits given the continuing recession in Asia (and now potentially Latin
America) and the slowdown in the U.K. The longer term outlook for equities
globally now rests upon the timeliness of central banks' lowering of interest
rates. While lower earnings are likely in the short-term, very low rates of
inflation, indeed some expect deflation, allow considerable room for monetary
and fiscal stimulation. Overall, in our view, 1999 looks likely to be a year of
consolidation with low growth and falling interest rates. 2000 holds the
prospect of a global recovery. Continental Europe, we believe, offers the best
prospects, as it is behind the U.S. and U.K. in the current economic cycle. The
U.K., with its inverted yield curve as evidence of tight current monetary
conditions, offers the best prospect for cuts in short-term interest rates,
particularly given the longer term expectation that it will join the Euro bloc
at some stage. Asia, albeit facing a lengthy period of recovery, should bottom
while Latin America, particularly Brazil, should make significant progress if it
successfully addresses its budgetary imbalances.
Sincerely,
/s/ A. Max Walker
A. MAX WALKER
President and Chairman of the Board
/s/ Robert H. Gordon
ROBERT H. GORDON
President, NationsBanc Advisors, Inc.
September 30, 1998
*Source for all statistical information: Gartmore Global Partners.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
<PAGE> 4
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 5
Table
Of
Contents
<TABLE>
<S> <C>
FINANCIAL STATEMENTS
Statements of Net Assets 2
Statements of Operations 20
Statements of Changes in Net Assets 21
Schedules of Capital Stock Activity 24
Financial Highlights 30
Notes to Financial Statements 40
</TABLE>
<PAGE> 6
NATIONS FUNDS
Nations International Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 88.7%
ARGENTINA -- 0.4%
357,000 Perez Companc SA, ADR ............... $ 2,901
--------
AUSTRALIA -- 2.8%
545,791 AMP Ltd. +........................... 6,614
1,500,000 Foster's Brewing Group Ltd. ......... 3,271
200,000 National Australia Bank Ltd. ........ 2,416
550,000 News Corporation Ltd. (The).......... 3,546
160,000 Rio Tinto Ltd. ...................... 1,936
60,000 Telstra Corporation Ltd., ADR ....... 3,337
--------
21,120
--------
BRAZIL -- 1.8%
149,000 Companhia Energetica de Minas Gerais,
ADR (CEMIG)......................... 3,434
160,000 Petroleo Brasileiro SA, ADR
(Petrobras)......................... 1,701
120,000 Telecomunicacoes Brasileiras SA, ADR
(Telebras).......................... 8,280
--------
13,415
--------
CHILE -- 0.4%
50,000 Cia de Telecomunicaciones de
Chile SA, ADR....................... 956
85,000 Enersis SA, ADR...................... 1,732
--------
2,688
--------
DENMARK -- 1.4%
105,000 Tele Danmark A/S..................... 10,435
--------
FINLAND -- 1.8%
172,000 Nokia Oyj, A Shares.................. 13,837
--------
FRANCE -- 7.6%
75,000 Axa.................................. 6,871
40,000 Cap Gemini SA ....................... 6,129
12,000 Carrefour SA......................... 7,609
55,000 Elf Aquitaine SA..................... 6,787
57,000 Etablissements Economiques du Casino
Guichard-Perrachon SA............... 5,751
45,000 Societe Generale 'A'................. 4,982
60,000 Suez Lyonnaise des Eaux.............. 10,222
66,000 Total SA, 'B'........................ 8,321
--------
56,672
--------
GERMANY -- 6.9%
3,180 Bayerische Motoren Werke
(BMW) AG, New Shares +.............. 1,999
13,400 Bayerische Motoren Werke
(BMW) AG ........................... 8,626
106,000 HypoVereinsbank ..................... 7,807
100,000 Mannesmann AG........................ 9,162
130,000 VEBA AG.............................. 6,773
25,000 Viag AG.............................. 17,186
--------
51,553
--------
GREAT BRITAIN -- 22.3%
1,600,000 BG PLC............................... 11,125
625,000 British American Tobacco PLC +....... 4,657
1,050,000 British Energy PLC................... 10,291
500,000 British Land Company PLC (The)....... 4,964
700,000 Diageo PLC........................... 6,664
300,000 EMAP PLC............................. 4,667
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -----------------------------------------------------------------
<C> <S> <C>
GREAT BRITAIN -- (CONTINUED)
402,600 Glaxo Wellcome PLC................... $ 11,889
544,000 Kingfisher PLC....................... 5,050
850,000 Legal & General Group PLC............ 9,538
887,200 Lloyds TSB Group PLC................. 9,940
500,000 Misys PLC............................ 4,412
380,000 Orange PLC +......................... 3,650
430,000 Pearson PLC.......................... 8,005
400,000 Railtrack Group PLC.................. 11,533
2,700,000 Shell Transport and Trading
Company............................. 16,353
941,830 SmithKline Beecham PLC............... 10,360
910,740 Southern Electric PLC................ 10,204
1,500,000 Unilever PLC......................... 12,840
900,000 Vodafone Group PLC................... 10,451
--------
166,593
--------
GREECE -- 0.4%
105,556 Hellenic Telecommunication
Organization SA (OTE)............... 2,531
16,320 National Bank of Greece SA, GDR +.... 439
--------
2,970
--------
HONG KONG -- 1.0%
130,000 Cheung Kong (Holdings) Ltd. ......... 602
368,000 CLP Holdings Ltd. ................... 1,795
900,000 Hong Kong Telecommunications Ltd. ... 1,771
57,800 HSBC Holdings PLC.................... 1,059
330,000 Hutchison Whampoa Ltd. .............. 1,738
188,000 Swire Pacific Ltd. 'A'............... 592
--------
7,557
--------
HUNGARY -- 0.1%
32,000 MOL Magyar Olaj-es Gazipari Rt,
GDR................................. 615
--------
IRELAND -- 4.4%
1,350,001 Bank of Ireland ..................... 24,009
121,750 Elan Corporation PLC, ADR +.......... 8,774
--------
32,783
--------
ITALY -- 4.7%
4,250,000 Banca di Roma +...................... 7,595
1,200,000 Credito Italiano SpA................. 5,002
750,000 ENI SpA ............................. 4,598
70,000 ENI SpA, ADR ........................ 4,288
2,000,000 Telecom Italia SpA................... 13,783
--------
35,266
--------
JAPAN -- 9.2%
1,056,000 Daifuku Company Ltd. ................ 3,898
678,000 Fujitsu Ltd. ........................ 5,860
122,000 Fujitsu Support and Service Inc. .... 4,647
210,000 Honda Motor Company Ltd. ............ 6,383
1,210,000 Mycal Corporation.................... 6,913
108,300 Nidec Corporation.................... 8,472
1,100 Nippon Telegraph & Telephone
Corporation (NTT)................... 8,017
106,000 Promise Company Ltd. ................ 4,775
87,100 Sony Corporation..................... 6,054
240,000 Takeda Chemical Industries........... 6,416
393,400 Tokyo Electric Power................. 7,521
--------
68,956
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE> 7
NATIONS FUNDS
Nations International Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -----------------------------------------------------------------
<C> <S> <C>
MEXICO -- 2.5%
325,000 Carso Global Telecom, ADR............ $ 1,586
440,000 Cifra SA de CV, ADR.................. 5,663
780,000 Grupo Carso SA de CV, ADR............ 4,680
150,000 Grupo Televisa SA, GDR +............. 2,897
210,000 Panamerican Beverages Inc., Class
A................................... 3,741
--------
18,567
--------
THE NETHERLANDS -- 5.7%
90,000 AEGON NV............................. 7,135
140,000 Akzo Nobel NV........................ 4,980
140,000 Fortis Amev NV....................... 7,865
200,000 ING Groep NV......................... 9,016
458,000 Koninklijke Ahold NV................. 13,691
--------
42,687
--------
PORTUGAL -- 0.9%
180,000 Portugal Telecom SA.................. 6,556
--------
SINGAPORE -- 0.4%
1,800,000 Singapore Technologies Engineering
Ltd. ............................... 1,727
1,000,000 Singapore Telecommunications Ltd. ... 1,671
--------
3,398
--------
SOUTH KOREA -- 0.2%
167,000 SK Telecom Company Ltd., ADR......... 1,179
--------
SPAIN -- 4.1%
390,000 Banco Central Hispanoamericano
(BCH)............................... 3,613
360,000 Banco Santander SA................... 5,453
300,000 Telefonica SA........................ 10,949
700,000 Union Electrica Fenosa SA............ 10,480
--------
30,495
--------
SWEDEN -- 1.5%
330,000 ForeningsSparbanken AB............... 7,578
200,000 Telefonaktiebolaget LM Ericsson
'B' ................................ 3,776
--------
11,354
--------
SWITZERLAND -- 7.3%
6,700 Nestle SA............................ 13,367
10,360 Novartis............................. 16,654
1,300 Roche Holding AG..................... 14,032
20,000 UBS AG............................... 3,912
13,000 Zurich Allied AG .................... 6,781
--------
54,746
--------
TAIWAN -- 0.1%
67,000 Advanced Semi Conductor Engineering
GDR +............................... 610
--------
UNITED STATES -- 0.8%
173,200 Global TeleSystems Group Inc. +...... 5,846
--------
TOTAL COMMON STOCKS
(Cost $647,844)..................... 662,799
--------
INVESTMENT COMPANIES -- 14.0%
TAIWAN -- 0.2%
100,000 Taiwan American Fund Ltd. ........... 1,300
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -----------------------------------------------------------------
<C> <S> <C>
UNITED STATES -- 13.8%
103,290,785 Nations Cash Reserves (b)............ $103,291
--------
TOTAL INVESTMENT COMPANIES
(Cost $104,637)...................... 104,591
--------
PREFERRED STOCKS -- 1.3%
BRAZIL -- 0.5%
245,000 Companhia Vale do Rio Doce, ADR...... 3,582
--------
GERMANY -- 0.8%
12,450 SAP AG (Systeme, Anwendungen,
Produkte in der Datenverarbeitung).. 5,912
--------
TOTAL PREFERRED STOCKS
(Cost $7,697)....................... 9,494
--------
<CAPTION>
PRINCIPAL
AMOUNT
(000)
------------
<C> <S> <C>
CONVERTIBLE BOND -- 0.4% (Cost $6,388)
CAYMAN ISLANDS -- 0.4%
JPY 1,025,000 STB Cayman Capital Ltd.,
0.500% 10/01/07..................... 3,510
--------
<CAPTION>
SHARES
------------
<C> <S> <C>
RIGHTS -- 0.0%# (Cost $0)
SPAIN -- 0.0%#
560,000 Banco Santander SA +................. 4
--------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS
(Cost $766,566(a))........... 104.4% 780,398
--------
OTHER ASSETS AND LIABILITIES
(NET)........................ (4.4)
Cash.................................. 77,692
Receivable for investments sold....... 49,130
Receivable for forward foreign
currency contracts................... 21,307
Dividends receivable.................. 3,217
Receivable for Fund shares sold....... 309
Other assets.......................... 1,389
Collateral on securities loaned....... (103,291)
Payable for investments purchased..... (46,838)
Payable for forward foreign currency
contracts............................ (32,833)
Payable for Fund shares redeemed...... (922)
Investment advisory fee payable....... (569)
Administration fee payable............ (64)
Shareholder servicing and distribution
fee payable.......................... (155)
Accrued directors' fees payable....... (52)
Accrued expenses and other
liabilities.......................... (1,340)
--------
TOTAL OTHER ASSETS AND
LIABILITIES (NET).................... (33,020)
--------
NET ASSETS.................... 100.0% $747,378
====== ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 8
NATIONS FUNDS
Nations International Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
(000)
- -----------------------------------------------------------------
<C> <S> <C> <C>
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
Primary A Shares:
($709,523,000/55,269,233 shares
outstanding)......................... $12.84
========
Primary B Shares:
($0/1 share outstanding).............. $12.83
========
Investor A Shares:
($9,836,000/772,963 shares
outstanding)......................... $12.73
========
Investor B Shares:
($27,251,000/2,165,645 shares
outstanding)**....................... $12.58
========
Investor C Shares:
($768,000/61,956 shares
outstanding)......................... $12.40
========
AT SEPTEMBER 30, 1998, NET ASSETS
CONSIST OF:
Paid-in capital....................... $669,177
Distributions in excess of net
investment income.................... (5,750)
Accumulated net realized gain on
investments sold, forward foreign
currency contracts, foreign
currencies and net other assets...... 70,234
Unrealized appreciation of
investments, forward foreign currency
contracts, foreign currencies and net
other assets......................... 13,717
--------
NET ASSETS $747,378
========
</TABLE>
- ---------------
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $81,148,000 and gross
depreciation of $67,316,000 for Federal income tax purposes. At September
30, 1998, the aggregate cost of securities for Federal income tax purposes
was $663,275,000.
(b) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates,
Inc. Represents cash collateral received from securities lending activity
(Note 11).
+ Non-income producing security.
# Amount represents less than 0.1%.
* Amount represents less than $500.
** The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 9
NATIONS FUNDS
Nations International Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
At September 30, 1998, sector diversification was as follows:
<TABLE>
<CAPTION>
% OF NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
Services.................................................... 27.2% $203,388
Finance..................................................... 20.4 152,514
Consumer goods.............................................. 18.2 135,650
Energy...................................................... 15.1 112,820
Capital equipment........................................... 6.2 46,241
Materials................................................... 0.9 6,911
Multi-industry.............................................. 0.7 5,275
------ --------
TOTAL COMMON STOCKS......................................... 88.7 662,799
INVESTMENT COMPANIES........................................ 14.0 104,591
PREFERRED STOCKS............................................ 1.3 9,494
CONVERTIBLE BOND............................................ 0.4 3,510
RIGHTS...................................................... 0.0# 4
------ --------
TOTAL INVESTMENTS........................................... 104.4 780,398
OTHER ASSETS AND LIABILITIES (NET).......................... (4.4) (33,020)
------ --------
NET ASSETS.................................................. 100.0% $747,378
====== ========
</TABLE>
- ---------------
# Amount represents less than 0.1%.
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 10
NATIONS FUNDS
Nations International Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 82.3%
AUSTRALIA -- 5.1%
250,330 AMP Ltd. +......................... $ 3,033
600,000 Colonial Ltd. ..................... 1,695
541,000 News Corporation Ltd. (The)........ 3,488
350,000 Southern Pacific Petroleum NL +.... 373
64,600 Telstra Corporation Ltd., ADR...... 3,593
----------
12,182
----------
BRAZIL -- 0.8%
30,000 Telecomunicacoes Brasileiras SA,
ADR (Telebras).................... 2,070
----------
FRANCE -- 12.5%
20,000 Accor SA........................... 4,197
40,000 Alcatel............................ 3,557
20,000 Elf Aquitaine SA................... 2,468
10,000 L'OREAL............................ 4,652
15,000 Promodes........................... 9,145
30,000 Synthelabo......................... 5,534
----------
29,553
----------
GERMANY -- 7.9%
60,000 Deutsche Pfandbrief-und
Hypothekenbank AG................. 4,312
50,000 HypoVereinsbank.................... 3,683
71,000 Mannesmann AG...................... 6,505
10,000 SAP AG (Systeme, Anwendungen,
Produkte in der
Datenverarbeitung)................ 4,240
----------
18,740
----------
GREAT BRITAIN -- 16.2%
394,702 Amvescap PLC....................... 2,266
1,426,000 Astec (BSR) PLC.................... 1,188
1,500,000 Azlan Group PLC +.................. 1,109
650,000 Bank of Scotland................... 6,205
305,381 Granada Group PLC.................. 3,842
253,369 Hyder PLC.......................... 4,021
3,984 Reckitt & Colman PLC............... 59
500,000 Securicor PLC...................... 3,288
700,000 Shell Transport and Trading
Company........................... 4,240
506,273 SmithKline Beecham PLC............. 5,569
412,894 Standard Chartered PLC............. 2,913
800,000 WPP Group PLC...................... 3,689
----------
38,389
----------
IRELAND -- 4.2%
267,610 Bank of Ireland.................... 4,759
408,991 CRH PLC............................ 5,165
----------
9,924
----------
ITALY -- 2.9%
1,000,000 Telecom Italia SpA................. 6,891
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -----------------------------------------------------------------
<C> <S> <C>
JAPAN -- 7.7%
50,000 Fujitsu Support and Service
Inc. ............................. $ 1,904
50,000 Ito-Yokado Company Ltd. ........... 2,381
300,000 Kao Corporation.................... 4,790
300,000 Matsushita Electric Industrial
Company Ltd. ..................... 4,076
500,000 Toppan Printing Company Ltd. ...... 5,131
----------
18,282
----------
MEXICO -- 0.4%
50,000 Panamerican Beverages Inc., Class
A................................. 891
----------
THE NETHERLANDS -- 7.9%
134,506 Getronics NV....................... 6,106
100,000 ING Groep NV....................... 4,508
241,775 Koninklijke Numico NV.............. 8,229
----------
18,843
----------
PORTUGAL -- 0.8%
50,000 Portugal Telecom SA................ 1,821
----------
SOUTH KOREA -- 0.0%#
134 Samsung Electronics, GDR 1/2
Vtg. ++........................... 2
----------
SPAIN -- 6.4%
200,000 Endessa SA......................... 4,509
100,000 Gas Natural SDG SA................. 6,975
85,000 Repsol SA.......................... 3,593
----------
15,077
----------
SWEDEN -- 2.9%
200,000 Atlas Copco AB 'A'................. 4,210
42,000 Atlas Copco AB 'B'................. 884
100,000 Telefonaktiebolaget LM Ericsson
'B'............................... 1,888
----------
6,982
----------
SWITZERLAND -- 6.6%
3,856 Nestle SA.......................... 7,693
5,000 Novartis........................... 8,038
----------
15,731
----------
TOTAL COMMON STOCKS
(Cost $151,153)................... 195,378
----------
INVESTMENT COMPANY -- 10.0%
(Cost $23,758)
23,758,037 Nations Cash Reserves(b)........... 23,758
----------
PREFERRED STOCK -- 2.4%
(Cost $2,913)
GERMANY -- 2.4%
75,000 Henkel KGaA........................ 5,684
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 11
NATIONS FUNDS
Nations International Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- -----------------------------------------------------------------
<C> <S> <C>
BOND -- 0.2% (Cost $411)
FRANCE -- 0.2%
USD 453 Promodes, Series XW,
3.500% 07/24/03..................... $ 485
--------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (Cost
$178,235(a))................ 94.9% 225,305
--------
OTHER ASSETS AND LIABILITIES
(NET)....................... 5.1
------
Cash................................. 25,493
Receivable for investments sold...... 13,346
Dividends receivable................. 1,112
Other assets......................... 358
Collateral for securities loaned..... (23,758)
Payable for investments purchased.... (4,102)
Investment advisory fee payable...... (160)
Administration fee payable........... (20)
Shareholder servicing and
distribution fee payable............ (17)
Accrued directors' fees payable...... (3)
Accrued expenses and other
liabilities......................... (215)
--------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)............................... 12,034
--------
NET ASSETS................... 100.0% $237,339
====== ========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
Primary A Shares:
($215,887,000/13,124,565 shares
outstanding)........................ $16.45
========
Investor A Shares:
($20,461,000/1,259,211 shares
outstanding)........................ $16.25
========
Investor B Shares:
($595,000/36,947 shares outstanding)
**.................................. $16.09
========
Investor C Shares:
($396,000/24,101 shares
outstanding)........................ $16.44
========
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
VALUE
(000)
<C> <S> <C> <C>
AT SEPTEMBER 30, 1998, NET ASSETS
CONSIST OF:
Paid-in capital...................... $137,030
Distributions in excess of net
investment income................... (5,663)
Accumulated net realized gain on
investments sold, forward foreign
currency contracts, foreign
currencies and net other assets..... 58,907
Unrealized appreciation of
investments, forward foreign
currency contracts, foreign
currencies and net other assets..... 47,065
--------
NET ASSETS $237,339
========
</TABLE>
- ---------------
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $60,573 and gross
depreciation of $13,503 for Federal income tax purposes. At September 30,
1998, the aggregate cost of securities for Federal income tax purposes was
$154,477.
(b) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates,
Inc. Represents cash collateral received from securities lending activity
(Note 11).
+ 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, normally to qualified institutional buyers.
# Amount represents less than 0.1%.
* Amount represents less than $500.
** The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 12
NATIONS FUNDS
Nations International Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
At September 30, 1998, sector diversifications was as follows:
<TABLE>
<CAPTION>
% OF NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
Services.................................................... 30.9% $ 73,399
Consumer goods.............................................. 20.9 49,495
Finance..................................................... 14.0 33,346
Energy...................................................... 9.4 22,246
Capital equipment........................................... 4.9 11,727
Materials................................................... 2.2 5,165
----- --------
TOTAL COMMON STOCKS......................................... 82.3 195,378
INVESTMENT COMPANY.......................................... 10.0 23,758
PREFERRED STOCK............................................. 2.4 5,684
CONVERTIBLE BOND............................................ 0.2 485
----- --------
TOTAL INVESTMENTS........................................... 94.9 225,305
OTHER ASSETS AND LIABILITIES (NET).......................... 5.1 12,034
----- --------
NET ASSETS.................................................. 100.0% $237,339
===== ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 13
NATIONS FUNDS
Nations International Value Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 95.8%
ARGENTINA -- 2.8%
129,250 YPF SA, ADR............................... $ 3,361
--------
AUSTRIA -- 0.6%
24,860 EVN, ADR.................................. 742
--------
BRAZIL -- 5.9%
165,000 Banco Bradesco SA, ADR.................... 966
271,050 Centrais Electricas Brasileiras SA, ADR
(Electrobras)............................ 2,846
20,575 Centrais Geradoras do Sul do Brasil SA,
ADR (Gerasul)............................ 108
179,400 Companhia Cervejaria Brahma, ADR.......... 1,402
137,000 Petroleo Brasileiro SA, ADR (Petrobras)... 1,099
8,800 Telecomunicacoes Brasileiras SA, ADR
(Telebras)............................... 607
--------
7,028
--------
DENMARK -- 7.4%
31,410 Den Danske Bank, ADR...................... 3,559
110,650 Tele Danmark A/S, ADR..................... 5,325
--------
8,884
--------
FRANCE -- 10.5%
10,500 Cie Financiere de Paribas................. 566
106,600 Danone, ADR............................... 5,609
53,600 Elf Aquitaine, ADR........................ 3,333
47,300 PSA Peugeot Citroen, ADR.................. 2,019
47,200 Societe Generale, ADR..................... 1,045
--------
12,572
--------
GERMANY -- 7.3%
21,200 Daimler-Benz AG, ADR...................... 1,737
225,600 Deutsche Telekom AG....................... 7,011
--------
8,748
--------
GREAT BRITAIN -- 14.3%
91,000 BOC Group PLC............................. 1,129
63,200 British Steel PLC, ADR.................... 1,150
410,283 BTR PLC, ADR.............................. 2,949
166,140 Coats Viyella PLC, ADR.................... 300
135,451 Diageo PLC, ADR........................... 4,910
21,100 HSBC Holdings PLC, ADR.................... 3,867
45,200 Imperial Chemical Industries PLC, ADR..... 1,435
108,000 Royal & Sun Alliance Insurance Group PLC.. 936
20,000 Tate & Lyle PLC, ADR...................... 443
--------
17,119
--------
HONG KONG -- 8.6%
999,000 Citic Pacific Ltd. ....................... 1,753
186,000 Hutchison Whampoa Ltd., ADR............... 4,897
283,900 Jardine Matheson Holdings Ltd., ADR....... 582
950,500 Swire Pacific Ltd. 'A', ADR............... 2,993
--------
10,225
--------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
VALUE
SHARES (000)
<C> <S> <C>
ITALY -- 3.7%
65,610 Telecom Italia SpA, ADR................... $ 4,396
--------
JAPAN -- 16.7%
109,000 Hitachi Ltd., ADR......................... 4,728
304,000 Komatsu Ltd. ............................. 1,414
67,800 Kyocera Corporation, ADR ................. 2,949
17,900 Matsushita Electric Industrial Company
Ltd., ADR................................ 2,417
1,213,000 Mitsubishi Heavy Industries Ltd. ......... 4,149
282,000 Nippon Oil Company........................ 744
81,200 Tokio Marine & Fire Insurance Company Ltd.
(The), ADR............................... 3,613
--------
20,014
--------
MEXICO -- 2.7%
73,525 Telefonos de Mexico 'L', ADR ............. 3,253
--------
THE NETHERLANDS -- 4.2%
75,280 ING Groep NV, ADR ........................ 3,303
55,790 KPN NV, ADR............................... 1,674
--------
4,977
--------
SINGAPORE -- 1.8%
136,430 Development Bank of Singapore Ltd., ADR... 2,203
--------
SOUTH AFRICA -- 2.5%
212,000 De Beers, ADR............................. 2,663
131,700 Iscor Ltd., ADR .......................... 294
--------
2,957
--------
SOUTH KOREA -- 1.5%
144,000 Korea Electric Power Corporation, ADR .... 1,296
36,900 Pohang Iron & Steel Company Ltd., ADR..... 510
--------
1,806
--------
SPAIN -- 0.8%
23,400 Corporacion Bancaria de Espana SA, ADR
(Argentaria)............................. 917
--------
SWITZERLAND -- 2.9%
35,300 Nestle SA, ADR............................ 3,512
--------
VENEZUELA -- 1.6%
113,200 Cia Anonima Nacional Telefonos de
Venezuela, ADR (CANTV)................... 1,924
--------
TOTAL COMMON STOCKS
(Cost $138,138).......................... 114,638
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 14
NATIONS FUNDS
Nations International Value Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------------
<C> <S> <C>
INVESTMENT COMPANY -- 22.0%
(Cost $26,268)
UNITED STATES -- 22.0%
26,267,892 Nations Cash Reserves (b) ................ $ 26,268
--------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS
(Cost $164,406(a))............... 117.8% 140,906
--------
OTHER ASSETS AND LIABILITIES
(NET)............................ (17.8)
------
Cash...................................... $ 1
Dividends receivable...................... 510
Receivable for Fund shares sold........... 1,547
Other assets.............................. 662
Collateral for securities loaned.......... (23,056)
Payable for Fund shares redeemed.......... (338)
Investment advisory fee payable........... (453)
Administration fee payable................ (12)
Shareholder servicing and distribution fee
payable.................................. (9)
Accrued directors' fees payable........... (20)
Accrued expenses and other liabilities.... (141)
--------
TOTAL OTHER ASSETS AND LIABILITIES (NET).. (21,309)
--------
NET ASSETS........................ 100.0% $119,597
====== ========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
Primary A Shares:
($111,866,000/9,452,451 shares
outstanding)............................. $11.83
========
Investor A Shares:
($5,386,000/455,445 shares outstanding)... $11.83
========
Investor B Shares:
($2,195,000/185,403 shares
outstanding) **.......................... $11.84
========
Investor C Shares:
($150,000/12,699 shares outstanding)...... $11.84
========
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
VALUE
(000)
<C> <S> <C> <C>
AT SEPTEMBER 30, 1998, NET ASSETS CONSIST
OF:
Paid-in capital........................... $138,605
Undistributed net investment income....... 1,510
Accumulated net realized gain on
investments sold, forward foreign
currency contracts, foreign currencies
and net other assets..................... 2,982
Unrealized depreciation of investments,
forward foreign currency contracts,
foreign currencies and net other
assets................................... (23,500)
--------
NET ASSETS $119,597
========
</TABLE>
- ---------------
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $8,722,000 and gross
depreciation of $32,222,000 for Federal income tax purposes. At September
30, 1998, the aggregate cost of securities for Federal income tax purposes
was $141,350,000.
(b) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates,
Inc. Represents cash collateral received from securities lending activity
(Note 11).
+ Non-income producing security.
* Amount represents less than $500.
** The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 15
NATIONS FUNDS
Nations International Value Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
At September 30, 1998, sector diversification was as follows:
<TABLE>
<CAPTION>
% OF NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
Telecommunications.......................................... 20.1% $ 24,039
Multi-industry.............................................. 11.0 13,156
Banking..................................................... 10.9 13,036
Food & household products................................... 8.0 9,568
Energy sources.............................................. 7.4 8,850
Insurance................................................... 6.5 7,774
Electrical & electronics.................................... 5.9 7,056
Beverages & tobacco......................................... 5.2 6,219
Other....................................................... 20.8 24,940
----- --------
TOTAL COMMON STOCKS......................................... 95.8 114,638
INVESTMENT COMPANY.......................................... 22.0 26,268
----- --------
TOTAL INVESTMENTS........................................... 117.8 140,906
OTHER ASSETS AND LIABILITIES (NET).......................... (17.8) (21,309)
----- --------
NET ASSETS.................................................. 100.0% $119,597
===== ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 16
NATIONS FUNDS
Nations Pacific Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 87.9%
AUSTRALIA -- 33.6%
41,643 AMP Ltd. +............................. $ 505
49,000 Commonwealth Bank of Australia......... 580
199,000 Foster's Brewing Group Ltd. ........... 434
109,000 Goodman Fielder Ltd. .................. 143
18,000 Lend Lease Corporation Ltd. ........... 384
26,000 National Australia Bank Ltd. .......... 314
38,000 News Corporation Ltd. (The)............ 245
55,292 Southern Pacific Petroleum NL +........ 59
188,000 TAB Ltd. +............................. 310
18,000 Telstra Corporation Ltd., ADR.......... 1,001
39,000 Woodside Petroleum Ltd. ............... 204
--------
4,179
--------
HONG KONG -- 29.7%
66,000 Cheung Kong (Holdings) Ltd. ........... 306
108,000 CLP Holdings Ltd. ..................... 527
209,000 Hong Kong Telecommunications Ltd. ..... 411
161,000 Hongkong Electric Holdings Ltd. ....... 554
28,000 HSBC Holdings PLC...................... 513
130,000 Hutchison Whampoa Ltd. ................ 685
60,000 Television Broadcasts Ltd. ............ 153
138,000 VTech Holdings Ltd. ................... 550
--------
3,699
--------
INDONESIA -- 1.8%
26,000 Gulf Indonesia Resources Ltd. ......... 216
--------
MALAYSIA -- 1.7%
28,000 Malaysia International Shipping Berhad,
Foreign Shares........................ 23
47,000 Petronas Gas Berhad.................... 66
33,000 Rothmans of Pall Mall (Malaysia)
Berhad................................ 118
--------
207
--------
NEW ZEALAND -- 1.0%
19,000 Telecom Corporation of
New Zealand Ltd. ..................... 73
30,000 Telecom Corporation of
New Zealand Ltd., IR Shares........... 53
--------
126
--------
PHILIPPINES -- 1.5%
103,000 Ayala Corporation, Class B............. 12
300,000 Ayala Land Inc., Class B............... 44
6,100 Philippine Long Distance Telephone
Company............................... 128
--------
184
--------
SINGAPORE -- 11.1%
11,000 Creative Technology Ltd. +............. 101
43,564 Singapore Press Holdings Ltd., Alien
Shares................................ 361
326,073 Singapore Technologies Engineering
Ltd. ................................. 313
241,000 Singapore Telecommunications Ltd. ..... 403
67,000 Venture Manufacturing
(Singapore) Ltd. ..................... 206
--------
1,384
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ----------------------------------------------------------------
<C> <S> <C>
SOUTH KOREA -- 3.2%
13,000 Korea Electric Power Corporation ...... $ 180
4,700 Pohang Iron & Steel
Company Ltd., ADR..................... 65
800 Samsung Electronics.................... 22
77 Samsung Electronics, GDR 1/2 Vtg. ++... 1
19,000 SK Telecom Company Ltd., ADR........... 134
--------
402
--------
TAIWAN -- 2.9%
16,640 ASE Test Ltd., GDR +................... 152
9,840 Siliconware Precision Industries
Company, GDR +........................ 81
10,150 Taiwan Semiconductor Manufacturing
Company Ltd., ADR +................... 124
--------
357
--------
THAILAND -- 1.4%
20,000 PTT Exploration and Production Public
Company Ltd., Alien Shares............ 176
--------
TOTAL COMMON STOCKS (Cost $11,930)..... 10,930
--------
INVESTMENT COMPANIES -- 15.8%
TAIWAN -- 5.3%
51,000 Taiwan American Fund Ltd. ............. 663
--------
UNITED STATES -- 10.5%
1,309,113 Nations Cash Reserves (b).............. 1,309
--------
TOTAL INVESTMENT COMPANIES
(Cost $2,255)......................... 1,972
--------
<CAPTION>
PRINCIPAL
AMOUNT
(000)
- ----------
U.S. TREASURY OBLIGATION -- 5.0%
(Cost $625)
USD 625 U.S. Treasury Bill, Discount Note,
10/01/98.............................. 625
--------
CONVERTIBLE BOND -- 1.3%
(Cost $163)
SINGAPORE -- 1.3%
USD 180 Fullerton Global Corporation, Discount
Note, 04/02/03........................ 163
--------
<CAPTION>
SHARES
- ----------
WARRANTS -- 0.2%
INDONESIA -- 0.0%#
230,000 PT Bank Dagang Nasional Indonesia Tbk,
Expire 02/14/20 + *................... 0
--------
PHILIPPINES -- 0.2%
118,000 Jollibee Foods Company, Expire
03/25/03.............................. 25
--------
TOTAL WARRANTS (Cost $126)............. 25
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 17
NATIONS FUNDS
Nations Pacific Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ----------------------------------------------------------------
<C> <S> <C>
RIGHTS -- 0.0%# (Cost $0)
TAIWAN -- 0.0%#
37 Asustek Computer Inc. + *.............. $ 0
--------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS
(Cost $15,099(a))................ 110.2% 13,715
OTHER ASSETS AND
LIABILITIES (NET)................ (10.2)
-----
Cash..................................... 416
Receivable for investments sold.......... 232
Receivable for forward foreign currency
contracts............................... 85
Dividends receivable..................... 70
Receivable for Fund shares sold.......... 23
Unamortized organization costs........... 55
Other assets............................. 61
Collateral for securities loaned......... (1,309)
Payable for investments purchased........ (110)
Payable for forward foreign currency
contracts............................... (98)
Payable for Fund shares redeemed......... (522)
Investment advisory fee payable.......... (10)
Administration fee payable............... (1)
Shareholder servicing and distribution
fee payable............................. (7)
Accrued directors' fees payable.......... (31)
Accrued expenses and other liabilities... (126)
--------
TOTAL OTHER ASSETS AND
LIABILITIES (NET)....................... (1,272)
--------
NET ASSETS........................ 100.0% $ 12,443
===== ========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE
Primary A Shares:
($11,086,000/2,085,527 shares
outstanding)............................ $5.32
========
Primary B Shares:
($10,000/1,851 shares outstanding)....... $5.32
========
Investor A Shares:
($497,000/93,736 shares outstanding)..... $5.30
========
Investor B Shares:
($819,000/155,033 shares
outstanding) **......................... $5.28
========
Investor C Shares:
($31,000/5,932 shares outstanding)....... $5.26
========
</TABLE>
<TABLE>
<CAPTION>
VALUE
(000)
- ------------------------------------------------------------------
<C> <S> <C> <C>
AT SEPTEMBER 30, 1998, NET ASSETS CONSIST
OF:
Paid-in capital.......................... $ 58,076
Distributions in excess of net investment
income.................................. (203)
Accumulated net realized loss on
investments sold, forward foreign
currency contracts, foreign currencies,
futures and net other assets............ (44,025)
Unrealized depreciation of investments,
forward foreign currency contracts,
foreign currencies, futures and net
other assets............................ (1,405)
--------
NET ASSETS $ 12,443
========
</TABLE>
- ---------------
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $765,000 and gross
depreciation of $2,149,000 for Federal income tax purposes. At September
30, 1998, the aggregate cost of securities for Federal income tax purposes
was $13,790,000.
(b) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates,
Inc. Represents cash collateral received from securities lending activity
(Note 11).
+ 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, normally to qualified institutional buyers.
# Amount represents less than 0.1%.
* Amount represents less than $500.
** The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 18
NATIONS FUNDS
Nations Pacific Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
At September 30, 1998, sector diversification was as follows:
<TABLE>
<CAPTION>
% OF NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
- ---------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
Services.................................................... 27.9% $ 3,476
Finance..................................................... 21.3 2,645
Energy...................................................... 15.9 1,973
Capital equipment........................................... 11.1 1,377
Consumer goods.............................................. 5.6 698
Multi-industry.............................................. 5.6 696
Materials................................................... 0.5 65
----- -------
TOTAL COMMON STOCKS......................................... 87.9 10,930
INVESTMENT COMPANIES........................................ 15.8 1,972
U.S. TREASURY BILL.......................................... 5.0 625
CONVERTIBLE BOND............................................ 1.3 163
WARRANTS.................................................... 0.2 25
RIGHTS...................................................... 0.0# 0*
----- -------
TOTAL INVESTMENTS........................................... 110.2 13,715
OTHER ASSETS AND LIABILITIES (NET).......................... (10.2) (1,272)
----- -------
NET ASSETS.................................................. 100.0% $12,443
===== =======
</TABLE>
- ---------------
# Amount represents less than 0.1%.
* Amount represents less than $500.
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 19
NATIONS FUNDS
Nations Emerging Markets Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 80.1%
ARGENTINA -- 4.0%
150,000 Astra Cia Argentina De Petroleo
SA................................ $ 166
11,000 Banco De Galicia y Buenos Aires SA
de CV, ADR ....................... 174
24,000 Perez Companc SA, ADR.............. 195
75,000 Siderca SA......................... 90
--------
625
--------
BRAZIL -- 6.6%
11,700 Companhia Brasileira de
Distribuicao Grupo Pao de Acucar,
ADR............................... 153
14,500 Companhia Energetica de Minas
Gerais, ADR (CEMIG)............... 334
8,000 Telecomunicacoes Brasileiras SA,
ADR (Telebras).................... 552
--------
1,039
--------
CHILE -- 4.5%
18,000 Cia de Telecomunicaciones de Chile
SA, ADR........................... 344
17,500 Enersis SA, ADR.................... 357
--------
701
--------
EGYPT -- 1.7%
18,000 Suez Cement Company, GDR........... 269
--------
GREECE -- 8.7%
4,500 Alpha Credit Bank.................. 335
6,000 Hellenic Bottling Company SA....... 148
21,224 Hellenic Telecommunication
Organization SA (OTE)............. 509
8,000 National Bank Of Greece SA,
GDR +............................. 215
5,000 STET Hellas Telecommunications SA,
ADR +............................. 155
--------
1,362
--------
HONG KONG -- 2.5%
18,000 CLP Holdings Ltd. ................. 88
58,000 Hutchison Whampoa Ltd. ............ 305
--------
393
--------
HUNGARY -- 4.1%
13,000 Demaz Rt, GDR...................... 156
11,000 Magyar Tavkozlesi Rt, ADR
(Matav)........................... 238
13,100 MOL Magyar Olaj-es Gazipari Rt,
GDR............................... 252
--------
646
--------
INDIA -- 4.8%
70,000 Reliance Industries Ltd., GDR...... 378
35,000 Videsh Sanchar Nigam Ltd., GDR..... 385
--------
763
--------
ISRAEL -- 4.7%
160,000 Bank Hapoalim +.................... 391
239,000 Bank Leumi Le-Israel............... 353
--------
744
--------
MALAYSIA -- 3.1%
185,000 Berjaya Sports Toto Berhad......... 121
200,000 Malaysia International Shipping
Berhad, Foreign Shares............ 166
150,000 Telekom Malaysia Berhad............ 196
--------
483
--------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
VALUE
SHARES (000)
<C> <S> <C>
MEXICO -- 13.8%
6,000 ARA SA de CV, ADR + ++............. $ 122
77,000 Carso Global Telecom, ADR.......... 376
23,000 Cifra SA de CV, ADR +.............. 296
21,500 Empresas ICA Sociedad Controladora
SA de CV, ADR +................... 126
60,000 Grupo Carso SA de CV, ADR.......... 360
500,000 Grupo Corvi SA, UBL Shares......... 79
18,000 Grupo Imsa SA de CV, ADR........... 176
8,000 Grupo Televisa SA, GDR +........... 155
90,000 Kimberly-Clark de Mexico SA de CV
'A'............................... 216
15,500 Panamerican Beverages Inc., Class
A................................. 276
--------
2,182
--------
POLAND -- 1.2%
18,000 Bank Handlowy W Warszawie.......... 185
--------
PORTUGAL -- 4.5%
7,000 Cimpor-Cimentos de Portugal, SGPS
SA................................ 195
13,500 Companhia de Seguros Mundial
Confianca SA +.................... 278
6,500 Portugal Telecom SA, ADR........... 234
--------
707
--------
SOUTH AFRICA -- 5.7%
43,500 ABSA Group Ltd. ................... 158
15,000 Liberty Life Association of Africa
Ltd. ............................. 228
11,500 Nedcor Ltd., GDR +................. 188
23,000 Rembrandt Group Ltd. .............. 138
12,500 South African Breweries Ltd. ...... 188
--------
900
--------
SOUTH KOREA -- 4.9%
35,000 LG Electronics..................... 286
10,500 Samsung Electronics................ 287
27,000 SK Telecom Company Ltd., ADR....... 191
--------
764
--------
TAIWAN -- 4.0%
35,000 Siliconware Precision Industries
Company, GDR +.................... 289
28,000 Taiwan Semiconductor Manufacturing
Company Ltd., ADR +............... 343
--------
632
--------
TURKEY -- 1.3%
18,000,000 Yapi ve Kredi Bankasi AS........... 204
--------
TOTAL COMMON STOCKS
(Cost $19,032).................... 12,599
--------
INVESTMENT COMPANIES -- 26.0%
SAUDI ARABIA -- 2.3%
55,000 The Saudi Arabia Investment
Fund +............................ 358
--------
SUPRANATIONAL -- 0.8%
10,000 East Europe Development Fund +..... 138
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 20
NATIONS FUNDS
Nations Emerging Markets Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ----------------------------------------------------------------
<C> <S> <C>
TAIWAN -- 3.2%
53,000 Taiwan Index Fund.................. $ 501
--------
TURKEY -- 0.5%
5,200,000 Haci Omer Sabanci Holding AS....... 80
--------
UNITED STATES -- 19.2%
3,005,739 Nations Cash Reserves (b).......... 3,006
--------
TOTAL INVESTMENT COMPANIES
(Cost $4,655)..................... 4,083
--------
PREFERRED STOCKS -- 5.5%
BRAZIL -- 5.5%
24,000,000 Banco Bradesco SA NPV.............. 142
540,000 Companhia Cervejaria Brahma NPV.... 212
14,500 Companhia Vale do Rio Doce, ADR.... 212
1,150,000 Petroleo Brasileiro SA NPV
(Petrobras)....................... 118
1,249,998 Telecomunicacoes de Sao Paulo SA
NPV (Telesp)...................... 181
--------
TOTAL PREFERRED STOCKS
(Cost $1,338)..................... 865
--------
<CAPTION>
PRINCIPAL
AMOUNT
(000)
- --------------
CONVERTIBLE BOND -- 3.0%
(Cost $526)
GERMANY -- 3.0%
DEM 800 Elektrim SA Conv.,
2.000% 05/30/04................... 467
--------
<CAPTION>
SHARES
- --------------
RIGHTS -- 0.0%#
BRAZIL -- 0.0%#
2,902,850 Banco Bradesco SA NPV *............ 0
--------
SOUTH KOREA -- 0.0%#
1,156 Samsung Electronics................ 7
--------
TOTAL RIGHTS
(Cost $0)......................... 7
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ----------------------------------------------------------------
<C> <S> <C>
WARRANTS -- 0.0%#
BRAZIL -- 0.0%#
59,969 Companhia Cervejaria Brahma,
Expire 04/30/03 +................. $ 2
4,990 Companhia Cervejaria Brahma,
Preferred,
Expire 04/30/03 + *............... 0
--------
TOTAL WARRANTS
(Cost $3)......................... 2
--------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS
(Cost $25,554 (a))......... 114.6% 18,023
OTHER ASSETS AND LIABILITIES
(NET)...................... (14.6)
-----
Cash............................... 68
Receivable for investments sold.... 4,377
Dividends and interest
receivable........................ 144
Receivable for Fund shares sold.... 1
Unamortized organization costs..... 51
Collateral for securities loaned... (3,006)
Payable for forward foreign
currency contracts................ (595)
Payable for Fund shares redeemed... (3,197)
Investment advisory fee payable.... (17)
Administration fee payable......... (2)
Shareholder servicing and
distribution fee payable.......... (4)
Accrued directors' fees payable.... (35)
Accrued expenses and other
liabilities....................... (75)
--------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)............................. (2,290)
--------
NET ASSETS.................. 100.0% $ 15,733
===== ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 21
NATIONS FUNDS
Nations Emerging Markets Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
(000)
- ----------------------------------------------------------------
<C> <S> <C> <C>
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
Primary A Shares:
($14,649,000/2,282,589 shares
outstanding)...................... $6.42
========
Primary B Shares:
($11,000/1,751 shares
outstanding)...................... $6.38
========
Investor A Shares:
($345,000/54,027 shares
outstanding)...................... $6.38
========
Investor B Shares:
($668,000/105,757 shares
outstanding) **................... $6.32
========
Investor C Shares:
($60,000/9,511 shares
outstanding)...................... $6.30
========
AT SEPTEMBER 30, 1998, NET ASSETS
CONSIST OF:
Paid-in capital.................... $ 43,072
Distributions in excess of net
investment income................. (852)
Accumulated net realized loss on
investments sold, forward foreign
currency contracts, foreign
currencies and net other assets... (18,962)
Unrealized depreciation of
investments, forward foreign
currency contracts, foreign
currencies and net other assets... (7,525)
--------
NET ASSETS $ 15,733
========
</TABLE>
- ---------------
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $342,000 and gross
depreciation of $7,873,000 for Federal income tax purposes. At September
30, 1998, the aggregate cost of securities for Federal income tax purposes
was $22,548,000.
(b) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates,
Inc. Represents cash collateral received from securities lending activity
(Note 11).
+ 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.
# Amount represents less than 0.1%.
* Amount represents less than $500.
** The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 22
NATIONS FUNDS
Nations Emerging Markets Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
At September 30, 1998, sector diversification was as follows:
<TABLE>
<CAPTION>
% OF NET VALUE
SECTOR DIVERSIFICATION ASSETS (000)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
Transportation.............................................. 28.8% $ 4,524
Manufacturing............................................... 20.4 3,212
Finance..................................................... 18.1 2,841
Wholesale trade............................................. 4.2 661
Construction................................................ 3.3 526
Mining...................................................... 2.7 418
Agriculture................................................. 1.4 223
Services.................................................... 1.2 194
----- -------
TOTAL COMMON STOCKS......................................... 80.1 12,599
INVESTMENT COMPANIES........................................ 26.0 4,083
PREFERRED STOCKS............................................ 5.5 865
CONVERTIBLE BOND............................................ 3.0 467
RIGHTS...................................................... 0.0# 7
WARRANTS.................................................... 0.0# 2
----- -------
TOTAL INVESTMENTS........................................... 114.6 18,023
OTHER ASSETS AND LIABILITIES (NET).......................... (14.6) (2,290)
----- -------
NET ASSETS.................................................. 100.0% $15,733
===== =======
</TABLE>
- ---------------
# Amount represents less than 0.1%.
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 23
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
Comprehensive Abbreviation Listing for all 09/30/98 Nations
International Stock Funds:
GENERAL ABBREVIATIONS:
ADR American Depository Receipt
GDR Global Depository Receipt
CURRENCY ABBREVIATIONS:
DEM German Deutschmark
JPY Japanese Yen
The following abbreviations are found in Note 5 in the Notes to
Financial Statements:
ARS Argentine Peso
AUD Australian Dollar
ESP Spanish Peseta
FRF French Franc
GBP British Pound
GRD Greek Drachma
HKD Hong Kong Dollar
ITL Italian Lira
MXN Mexican Peso
MYR Malaysian Ringgit
NLG Dutch Guilder
PHP Philippine Peso
PLN Polish Zlotty
PTE Portuguese Escudo
TRL Turkish Lira
TWD Taiwan Dollar
ZAR South African Rand
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE> 24
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
INTERNATIONAL VALUE
-------------------------------
FOR THE PERIOD FOR THE PERIOD
MAY 17, 1998 DECEMBER 1,
TO 1997 TO
INTERNATIONAL INTERNATIONAL SEPTEMBER 30, MAY 17, PACIFIC EMERGING
EQUITY GROWTH 1998 1998(a) GROWTH MARKETS
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
INVESTMENT INCOME:
Dividends (Net of foreign withholding
taxes of $1,525, $231, $287, $93,
$0, and $50, respectively)......... $ 9,941 $ 1,943 $ 1,343 993 $ 687 $ 944
Interest............................. 1,258 831 127 97 118 21
Securities lending income............ 685 232 77 -- 33 51
--------- -------- -------- ------- -------- --------
Total investment income.......... 11,884 3,006 1,547 1,090 838 1,016
--------- -------- -------- ------- -------- --------
EXPENSES:
Investment advisory fee.............. 3,967 1,480 480 330 167 289
Administration fee................... 440 165 47 26 19 27
Transfer agent fees.................. 217 87 23 25 13 17
Custodian fees....................... 204 110 44 2 48 39
Legal and audit fees................. 39 26 15 8 18 20
Registration and filing fees......... 31 32 26 17 29 30
Directors' fees and expenses......... 8 3 1 -- 12 16
Amortization of organization costs... -- -- -- -- 16 15
Other................................ 45 81 22 11 7 13
--------- -------- -------- ------- -------- --------
Subtotal......................... 4,951 1,984 658 419 329 466
Shareholder servicing and
distribution fees:
Primary B Shares................... -- -- -- -- -- --
Investor A Shares.................. 16 30 4 11 1 1
Investor B Shares.................. 163 3 5 -- 5 1
Investor C Shares.................. 5 2 -- -- -- 5
--------- -------- -------- ------- -------- --------
Total expenses................... 5,135 2,019 667 430 335 473
Fees waived by investment advisor
and/or distributor............... -- (116) (51) (4) -- --
--------- -------- -------- ------- -------- --------
NET INVESTMENT INCOME................ 6,749 1,103 931 664 503 543
--------- -------- -------- ------- -------- --------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS:
Net realized gain/(loss) from:
Security transactions.............. 73,736 55,050 2,996 5,461 (12,419) (10,577)
Futures contracts.................. (39) 33 -- (216) --
Forward foreign exchange contracts
and foreign currency
transactions..................... (1,377) (542) -- (12) (388) (67)
--------- -------- -------- ------- -------- --------
Net realized gain/(loss) on
investments........................ 72,320 54,541 2,996 5,449 (13,023) (10,644)
--------- -------- -------- ------- -------- --------
Change in unrealized
appreciation/(depreciation) of:
Securities......................... (178,773) (86,056) (32,628) 5,638 (2,403) (12,316)
Futures contracts.................. -- -- -- -- (72) --
Forward foreign exchange contracts,
foreign currencies, and other net
assets........................... (7,625) 207 -- -- 1 (883)
--------- -------- -------- ------- -------- --------
Net change in unrealized
appreciation/
(depreciation) of investments...... (186,398) (85,849) (32,628) 5,638 (2,474) (13,199)
--------- -------- -------- ------- -------- --------
Net realized and unrealized
gain/(loss) on investments......... (114,078) (31,308) (29,632) 11,087 (15,497) (23,843)
--------- -------- -------- ------- -------- --------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.......... $(107,329) $(30,205) $(28,701) $11,751 $(14,994) $(23,300)
========= ======== ======== ======= ======== ========
</TABLE>
- ---------------
(a) Represents financial information for the Emerald International Equity Fund,
which was reorganized into International Value on May 22, 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE> 25
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INTERNATIONAL GROWTH
-------------------------------- --------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
09/30/98 YEAR ENDED 09/30/98 YEAR ENDED
(UNAUDITED) 03/31/98 (UNAUDITED) 03/31/98
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
Net investment income..................................... $ 6,749 $ 7,358 $ 1,103 $ 1,013
Net realized gain on investments.......................... 72,320 28,467 54,541 10,453
Net change in unrealized appreciation/(depreciation) of
investments............................................. (186,398) 104,356 (85,849) 8,102
--------- ---------- --------- ---------
Net increase/(decrease) in net assets resulting from
operations.............................................. (107,329) 140,181 (30,205) 19,568
Distributions to shareholders from net investment income:
Primary A Shares........................................ (6,816) (12,161) -- --
Primary B Shares........................................ -- (21) -- --
Investor A Shares....................................... (97) (135) -- --
Investor B Shares....................................... (196) -- -- --
Investor C Shares....................................... (6) (7) -- --
Distributions to shareholders in excess of net investment
income:
Primary A Shares........................................ -- (3,213) -- --
Primary B Shares........................................ -- (6) -- --
Investor A Shares....................................... -- (36) -- --
Investor B Shares....................................... -- -- -- --
Investor C Shares....................................... -- (2) -- --
Distributions to shareholders from net realized gain on
investments:
Primary A Shares........................................ (1,898) (11,817) (14,342) (10,545)
Primary B Shares........................................ -- (31) -- --
Investor A Shares....................................... (26) (166) (1,436) (474)
Investor B Shares....................................... (74) (423) (41) (6)
Investor C Shares....................................... (2) (14) (26) (10)
Net (decrease) in net assets from Fund share
transactions............................................ (70,060) (207,777) (143,034) (310,432)
--------- ---------- --------- ---------
Net (decrease) in net assets.............................. (186,504) (95,628) (189,084) (301,899)
NET ASSETS:
Beginning of period....................................... 933,882 1,029,510 426,423 728,322
--------- ---------- --------- ---------
End of period............................................. $ 747,378 $ 933,882 $ 237,339 $ 426,423
========= ========== ========= =========
Distributions in excess of net investment income at end of
period.................................................. $ (5,750) $ (5,384) $ (5,663) $ (6,766)
========= ========== ========= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE> 26
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERNATIONAL VALUE
-------------------------------------------
PERIOD ENDED
09/30/98 PERIOD ENDED YEAR ENDED
(UNAUDITED) 05/15/98(a) 11/30/97(a)
-------------------------------------------
<S> <C> <C> <C>
(IN THOUSANDS)
Net investment income....................................... $ 931 $ 664 $ 343
Net realized gain on investments............................ 2,996 5,449 1,530
Change in unrealized appreciation/(depreciation) of
investments............................................... (32,628) 5,638 2,556
-------- -------- -------
Net increase/(decrease) in net assets resulting from
operations................................................ (28,701) 11,751 4,429
Distributions to shareholders from net investment income:
Primary A Shares.......................................... -- -- (335)
Primary B Shares.......................................... -- -- --
Investor A Shares......................................... -- -- (5)
Investor B Shares......................................... -- -- --
Investor C Shares......................................... -- -- --
Distributions to shareholders in excess of net investment
income:
Primary A Shares.......................................... -- -- (57)
Primary B Shares.......................................... -- -- --
Investor A Shares......................................... -- -- (15)
Investor B Shares......................................... -- -- --
Investor C Shares......................................... -- -- --
Distributions to shareholders from net realized gain on
investments:
Primary A Shares.......................................... (5,566) (1,210) (43)
Primary B Shares.......................................... -- -- --
Investor A Shares......................................... (240) (96) --
Investor B Shares......................................... -- -- --
Investor C Shares......................................... -- -- --
Net increase/(decrease) in net assets from Fund share
transactions.............................................. 29,564 55,558 36,920
-------- -------- -------
Net increase in net assets.................................. (4,943) 66,003 40,894
NET ASSETS:
Beginning of period......................................... 124,540 58,537 17,643
-------- -------- -------
End of period............................................... $119,597 $124,540 $58,537
======== ======== =======
Undistributed net investment income/(distributions in excess
of net investment income) at end of period................ $ 1,510 $ 579 $ (85)
======== ======== =======
</TABLE>
- ---------------
(a) Represents financial information for the Emerald International Equity Fund,
which was reorganized into International Value on May 22, 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE> 27
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PACIFIC GROWTH EMERGING MARKETS
------------------------------ ------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
09/30/98 YEAR ENDED 09/30/98 YEAR ENDED
(UNAUDITED) 03/31/98 (UNAUDITED) 03/31/98
----------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
Net investment income.................................. $ 503 $ 910 $ 543 $ 303
Net realized (loss) on investments..................... (13,023) (24,859) (10,644) (8,221)
Change in unrealized (depreciation) of investments..... (2,474) (8,490) (13,199) (2,211)
-------- -------- ----------- --------
Net (decrease) in net assets resulting from
operations........................................... (14,994) (32,439) (23,300) (10,129)
Distributions to shareholders from net investment
income:
Primary A Shares..................................... -- (2,135) (437) (728)
Primary B Shares..................................... -- (5) (0)* (1)
Investor A Shares.................................... -- (34) (4) (7)
Investor B Shares.................................... -- (5) (1) (0)*
Investor C Shares.................................... -- (1) (5) (1)
Net increase/(decrease) in net assets from Fund share
transactions......................................... (29,108) (37,290) (36,546) 7,489
-------- -------- ----------- --------
Net (decrease) in net assets........................... (44,102) (71,909) (60,293) (3,377)
NET ASSETS:
Beginning of period.................................... 56,545 128,454 76,026 79,403
-------- -------- ----------- --------
End of period.......................................... $ 12,443 $ 56,545 $ 15,733 $ 76,026
======== ======== =========== ========
Distributions in excess of net investment income at end
of period............................................ $ (203) $ (706) $ (852) $ (948)
======== ======== =========== ========
</TABLE>
- ---------------
* Amount represents less than $500.
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE> 28
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY
SIX MONTHS ENDED
SEPTEMBER 30, 1998 YEAR ENDED
(UNAUDITED) MARCH 31, 1998
-------------------- --------------------
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 7,987 $ 118,224 16,262 $ 225,114
Issued as reinvestment of dividends....................... 183 1,525 652 8,725
Redeemed.................................................. (12,677) (185,120) (31,547) (431,169)
------- --------- ------- ---------
Net (decrease)............................................ (4,507) $ (65,371) (14,633) $(197,330)
======= ========= ======= =========
PRIMARY B SHARES:
Sold...................................................... -- $ -- 42 $ 589
Issued as reinvestment of dividends....................... -- -- 3 39
Redeemed.................................................. (2) (25) (465) (6,273)
------- --------- ------- ---------
Net (decrease)............................................ (2) $ (25) (420) $ (5,645)
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 1,245 $ 17,715 2,454 $ 33,606
Issued as reinvestment of dividends....................... 8 112 23 295
Redeemed.................................................. (1,399) (19,951) (2,284) (31,594)
------- --------- ------- ---------
Net increase/(decrease)................................... (146) $ (2,124) 193 $ 2,307
======= ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 68 $ 980 108 $ 1,475
Issued as reinvestment of dividends....................... 18 258 32 414
Redeemed.................................................. (264) (3,745) (657) (8,842)
------- --------- ------- ---------
Net (decrease)............................................ (178) $ (2,507) (517) $ (6,953)
======= ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 23 $ 329 57 $ 755
Issued as reinvestment of dividends....................... 1 8 2 22
Redeemed.................................................. (27) (370) (71) (932)
------- --------- ------- ---------
Net (decrease)............................................ (3) $ (33) (12) $ (155)
======= ========= ======= =========
Total net (decrease)...................................... (4,836) $ (70,060) (15,389) $(207,776)
======= ========= ======= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE> 29
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH
SIX MONTHS ENDED
SEPTEMBER 30, 1998 PERIOD ENDED PERIOD ENDED
(UNAUDITED) MARCH 31, 1998(b) MAY 16, 1997(a)
-------------------- -------------------- -------------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold................................................. 1,290 $ 24,887 3,038 $ 53,329 8,260 $142,214
Issued as reinvestment of dividends.................. -- -- 407 7,111 755 13,088
Redeemed............................................. (8,817) (167,978) (20,833) (367,654) (4,945) (85,373)
------ --------- ------- --------- ------- --------
Net increase/(decrease).............................. (7,527) $(143,091) (17,388) $(307,214) 4,070 $ 69,929
====== ========= ======= ========= ======= ========
INVESTOR A SHARES:
Sold................................................. 702 $ 12,931 361 $ 6,487 32 $ 546
Issued as reinvestment of dividends.................. -- -- 17 288 27 471
Redeemed............................................. (710) (13,080) (574) (10,349) (177) (3,088)
------ --------- ------- --------- ------- --------
Net (decrease)....................................... (8) $ (149) (196) $ (3,574) (118) $ (2,071)
====== ========= ======= ========= ======= ========
INVESTOR B SHARES:
Sold................................................. 13 $ 241 27 $ 485 24 $ 405
Issued as reinvestment of dividends.................. -- -- -- 6 1 11
Redeemed............................................. (2) (38) (31) (582) (5) (77)
------ --------- ------- --------- ------- --------
Net increase/(decrease).............................. 11 $ 203 (4) $ (91) 20 $ 339
====== ========= ======= ========= ======= ========
INVESTOR C SHARES:
Sold................................................. 1 $ 26 30 $ 550 -- $ --
Issued as reinvestment of dividends.................. -- -- -- 8 -- --
Redeemed............................................. (1) (23) (6) (111) -- --
------ --------- ------- --------- ------- --------
Net increase......................................... -- $ 3 24 $ 447 -- --
====== ========= ======= ========= ======= ========
Total net increase/(decrease)........................ (7,524) $(143,034) (17,564) $(310,432) 3,972 $ 68,197
====== ========= ======= ========= ======= ========
</TABLE>
- ---------------
(a) Represents financial information for the Pilot International Equity Fund,
which was reorganized into International Growth Fund on May 23, 1997.
(b) International Growth Investor C Shares commenced operations on September 19,
1997.
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE> 30
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL VALUE
PERIOD ENDED
SEPTEMBER 30, 1998(b) PERIOD ENDED YEAR ENDED
(UNAUDITED) MAY 15, 1998(a) NOVEMBER 30, 1997(a)
---------------------- ------------------- ---------------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold............................................... 2,319 $ 55,022 4,183 $64,837 3,256 $41,549
Issued as reinvestment of dividends................ -- -- 34 451 2 24
Redeemed........................................... (778) (29,434) (650) (9,773) (688) (8,726)
----- -------- ----- ------- ----- -------
Net increase....................................... 1,541 $ 25,588 3,567 $55,515 2,570 $32,847
===== ======== ===== ======= ===== =======
INVESTOR A SHARES:
Sold............................................... 177 $ 4,537 110 $ 1,552 370 $ 4,813
Issued as reinvestment of dividends................ -- -- 7 98 0* 1
Redeemed........................................... (69) (3,307) (110) (1,607) (55) (740)
----- -------- ----- ------- ----- -------
Net increase....................................... 108 $ 1,230 7 $ 43 315 $ 4,074
===== ======== ===== ======= ===== =======
INVESTOR B SHARES:
Sold............................................... 188 $ 2,615 -- $ -- -- $ --
Issued as reinvestment of dividends................ -- -- -- -- -- --
Redeemed........................................... (3) (37) -- -- -- --
----- -------- ----- ------- ----- -------
Net increase....................................... 185 $ 2,578 -- $ -- -- $ --
===== ======== ===== ======= ===== =======
INVESTOR C SHARES:
Sold............................................... 15 $ 193 -- $ -- -- $ --
Issued as reinvestment of dividends................ -- -- -- -- -- --
Redeemed........................................... (2) (25) -- -- -- --
----- -------- ----- ------- ----- -------
Net increase....................................... 13 $ 168 -- $ -- -- $ --
===== ======== ===== ======= ===== =======
Total net increase................................. 1,847 $ 29,564 3,574 $55,558 2,885 $36,921
===== ======== ===== ======= ===== =======
</TABLE>
- ---------------
(a) Represents financial information for the Emerald International Equity Fund,
which was reorganized into the International Value Fund on May 22, 1998.
(b) International Value's Investor B and Investor C Shares commenced operations
on May 28, 1998 and June 15, 1998, respectively.
* Amount represents less than 500 shares.
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE> 31
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
PACIFIC GROWTH
SIX MONTHS ENDED
SEPTEMBER 30, 1998 YEAR ENDED
(UNAUDITED) MARCH 31, 1998
-------------------- ------------------
SHARES DOLLARS SHARES DOLLARS
------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 294 $ 1,747 5,065 $ 48,259
Issued as reinvestment of dividends....................... -- -- 69 634
Redeemed.................................................. (5,684) (30,660) (9,468) (83,858)
------ -------- ------ --------
Net (decrease)............................................ (5,390) $(28,913) (4,334) $(34,965)
====== ======== ====== ========
PRIMARY B SHARES:
Sold...................................................... -- $ -- 12 $ 131
Issued as reinvestment of dividends....................... -- -- -- 4
Redeemed.................................................. (2) (9) (68) (609)
------ -------- ------ --------
Net (decrease)............................................ (2) $ (9) (56) $ (474)
====== ======== ====== ========
INVESTOR A SHARES:
Sold...................................................... 20 $ 112 2,478 $ 25,161
Issued as reinvestment of dividends....................... -- -- 3 30
Redeemed.................................................. (46) (267) (2,600) (26,398)
------ -------- ------ --------
Net (decrease)............................................ (26) $ (155) (119) $ (1,207)
====== ======== ====== ========
INVESTOR B SHARES:
Sold...................................................... 19 $ 129 17 $ 140
Issued as reinvestment of dividends....................... -- -- 1 5
Redeemed.................................................. (28) (161) (83) (755)
------ -------- ------ --------
Net (decrease)............................................ (9) $ (32) (65) $ (610)
====== ======== ====== ========
INVESTOR C SHARES:
Sold...................................................... 0* $ 1 1 $ 10
Issued as reinvestment of dividends....................... -- -- -- 1
Redeemed.................................................. -- -- (5) (45)
------ -------- ------ --------
Net increase/(decrease)................................... -- $ 1 (4) $ (34)
====== ======== ====== ========
Total net increase/(decrease)............................. (5,427) $(29,108) (4,578) $(37,290)
====== ======== ====== ========
</TABLE>
- ---------------
* Amount represents less than 500 shares.
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE> 32
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
EMERGING MARKETS
SIX MONTHS ENDED
SEPTEMBER 30, 1998 YEAR ENDED
(UNAUDITED) MARCH 31, 1998
-------------------- ------------------
SHARES DOLLARS SHARES DOLLARS
------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 244 $ 2,111 3,664 $ 43,349
Issued as reinvestment of dividends....................... 18 155 18 217
Redeemed.................................................. (4,940) (38,482) (3,424) (35,666)
------ -------- ------ --------
Net increase/(decrease)................................... (4,678) $(36,216) 258 $ 7,900
====== ======== ====== ========
PRIMARY B SHARES:
Sold...................................................... -- $ -- 18 $ 213
Issued as reinvestment of dividends....................... -- -- 0* 1
Redeemed.................................................. (2) (11) (41) (447)
------ -------- ------ --------
Net (decrease)............................................ (2) $ (11) (23) $ (233)
====== ======== ====== ========
INVESTOR A SHARES:
Sold...................................................... 9 $ 83 172 $ 1,807
Issued as reinvestment of dividends....................... 0* 3 1 7
Redeemed.................................................. (17) (165) (189) (1,949)
------ -------- ------ --------
Net (decrease)............................................ (8) $ (79) (16) $ (135)
====== ======== ====== ========
INVESTOR B SHARES:
Sold...................................................... 12 $ 113 22 $ 245
Issued as reinvestment of dividends....................... 0* 6 -- --
Redeemed.................................................. (26) (233) (36) (370)
------ -------- ------ --------
Net (decrease)............................................ (14) $ (114) (14) $ (125)
====== ======== ====== ========
INVESTOR C SHARES:
Sold...................................................... 4 $ 44 10 $ 106
Issued as reinvestment of dividends....................... 0* 1 0* 1
Redeemed.................................................. (23) (171) (2) (25)
------ -------- ------ --------
Net increase/(decrease)................................... (19) $ (126) 8 $ 82
====== ======== ====== ========
Total net increase/(decrease)............................. (4,721) $(36,546) 213 $ 7,489
====== ======== ====== ========
</TABLE>
- ---------------
* Amount represents less than 500 shares.
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE> 33
[THIS PAGE INTENTIONALLY LEFT BLANK]
29
<PAGE> 34
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE INVESTMENT AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF
BEGINNING INCOME/ GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT NET INVESTMENT
OF PERIOD (LOSS) INVESTMENTS FROM OPERATIONS INCOME INCOME
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL EQUITY:
PRIMARY A SHARES
Six months ended 09/30/1998 # +++.... $14.81 $ 0.11 $(1.93) $(1.82) $(0.12) $ --
Year ended 03/31/1998 #.............. 13.13 0.11 1.95 2.06 (0.17) (0.05)
Year ended 03/31/1997 #.............. 13.50 0.08 0.11 0.19 (0.11) (0.00)***
Period ended 03/31/1996 (a) #........ 11.75 0.07 1.80 1.87 (0.06) (0.04)
Year ended 05/31/1995 #.............. 12.06 0.14 (0.20) (0.06) (0.03) --
Year ended 05/31/1994 #.............. 10.60 0.09 1.44 1.53 (0.05) --
Year ended 05/31/1993 #.............. 10.40 0.09 0.21 0.30 (0.08) --
PRIMARY B SHARES
Six months ended 09/30/1998 # +++.... $14.80 $ 0.07 $(1.91) $(1.84) $(0.10) $ --
Year ended 03/31/1998 #.............. 13.11 0.04 1.91 1.95 (0.08) (0.02)
Period ended 03/31/1997 * #.......... 13.65 0.01 (0.09)(b) (0.08) (0.01) (0.00)***
INVESTOR A SHARES
Six months ended 09/30/1998 # +++.... $14.67 $ 0.09 $(1.89) $(1.80) $(0.11) $ --
Year ended 03/31/1998 #.............. 13.01 0.07 1.94 2.01 (0.15) (0.04)
Year ended 03/31/1997 #.............. 13.39 0.05 0.11 0.16 (0.09) (0.00)***
Period ended 03/31/1996 (a) #........ 11.67 0.04 1.78 1.82 (0.04) (0.04)
Year ended 05/31/1995 #.............. 12.00 0.11 (0.20) (0.09) (0.02) --
Year ended 05/31/1994 #.............. 10.56 0.06 1.44 1.50 (0.04) --
Period ended 05/31/1993 * #.......... 10.38 0.07 0.21 0.28 (0.08) --
INVESTOR B SHARES
Six months ended 09/30/1998 # +++.... $14.56 $ 0.04 $(1.90) $(1.86) $(0.09) $ --
Year ended 03/31/1998 #.............. 12.83 (0.03) 1.92 1.89 -- --
Year ended 03/31/1997 #.............. 13.27 (0.05) 0.10 0.05 (0.04) (0.00)***
Period ended 03/31/1996 (a) #........ 11.56 (0.02) 1.78 1.76 -- (0.03)
Year ended 05/31/1995 #.............. 11.96 0.05 (0.22) (0.17) (0.01) --
Period ended 05/31/1994 * #.......... 10.51 (0.00)*** 1.51 1.51 (0.04) --
INVESTOR C SHARES
Six months ended 09/30/1998 # +++.... $14.34 $ 0.04 $(1.86) $(1.82) $(0.09) $ --
Year ended 03/31/1998 #.............. 12.74 (0.01) 1.89 1.88 (0.10) (0.02)
Year ended 03/31/1997 #.............. 13.13 0.02 0.10 0.12 (0.06) (0.00)***
Period ended 03/31/1996 (a) #........ 11.45 (0.03) 1.75 1.72 -- (0.02)
Year ended 05/31/1995 #.............. 11.86 0.02 (0.21) (0.19) -- --
Year ended 05/31/1994 #.............. 10.49 (0.03) 1.43 1.40 (0.01) --
Period ended 05/31/1993 * #.......... 10.10 0.00*** 0.48 0.48 (0.07) --
<CAPTION>
DISTRIBUTIONS
FROM NET
REALIZED
CAPITAL GAINS
-------------
<S> <C>
INTERNATIONAL EQUITY:
PRIMARY A SHARES
Six months ended 09/30/1998 # +++.... $(0.03)
Year ended 03/31/1998 #.............. (0.16)
Year ended 03/31/1997 #.............. (0.42)
Period ended 03/31/1996 (a) #........ (0.02)
Year ended 05/31/1995 #.............. (0.12)
Year ended 05/31/1994 #.............. (0.02)
Year ended 05/31/1993 #.............. (0.02)
PRIMARY B SHARES
Six months ended 09/30/1998 # +++.... $(0.03)
Year ended 03/31/1998 #.............. (0.16)
Period ended 03/31/1997 * #.......... (0.42)
INVESTOR A SHARES
Six months ended 09/30/1998 # +++.... $(0.03)
Year ended 03/31/1998 #.............. (0.16)
Year ended 03/31/1997 #.............. (0.42)
Period ended 03/31/1996 (a) #........ (0.02)
Year ended 05/31/1995 #.............. (0.12)
Year ended 05/31/1994 #.............. (0.02)
Period ended 05/31/1993 * #.......... (0.02)
INVESTOR B SHARES
Six months ended 09/30/1998 # +++.... $(0.03)
Year ended 03/31/1998 #.............. (0.16)
Year ended 03/31/1997 #.............. (0.42)
Period ended 03/31/1996 (a) #........ (0.02)
Year ended 05/31/1995 #.............. (0.12)
Period ended 05/31/1994 * #.......... (0.02)
INVESTOR C SHARES
Six months ended 09/30/1998 # +++.... $(0.03)
Year ended 03/31/1998 #.............. (0.16)
Year ended 03/31/1997 #.............. (0.42)
Period ended 03/31/1996 (a) #........ (0.02)
Year ended 05/31/1995 #.............. (0.12)
Year ended 05/31/1994 #.............. (0.02)
Period ended 05/31/1993 * #.......... (0.02)
</TABLE>
- ---------------
<TABLE>
<C> <S>
* International Equity Primary A, Primary B, Investor A,
Investor B and Investor C Shares commenced operations on
December 2, 1991, June 28, 1996, June 3, 1992, June 7, 1993
and June 17, 1992, respectively.
** Amount represents less than $500.00.
*** Amount represents less than $0.01 per share.
+ 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 net investment income/(loss) has been calculated
using the monthly average shares method.
## Amount represents less than 0.01%.
(a) Fiscal year end changed to March 31. Prior to this, the
fiscal year end was May 31.
(b) The amount shown at this caption for each share outstanding
throughout the period may not accord with the net realized
and unrealized gain/(loss) for the period because of the
timing of purchases and withdrawals of shares in relation to
the fluctuating market values of the portfolio.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE> 35
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
----------------------------------------------------------
OPERATING
DISTRIBUTIONS TOTAL NET ASSET NET ASSETS EXPENSES
IN EXCESS OF DIVIDENDS VALUE END OF WITHOUT WAIVERS PORTFOLIO
NET REALIZED AND END OF TOTAL PERIOD OPERATING NET INVESTMENT AND/OR TURNOVER
CAPITAL GAINS DISTRIBUTIONS PERIOD RETURN ++ (000) EXPENSES INCOME/(LOSS) REIMBURSEMENTS RATE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ -- $(0.15) $12.84 (12.41)% $709,523 1.12%+ 1.57%+ 1.12%+ 71%
-- (0.38) 14.81 16.06 885,329 1.14 0.76 1.14 64
(0.03) (0.56) 13.13 1.32 976,855 1.16 0.62 1.16 36
-- (0.12) 13.50 16.01 849,731 1.17+ 0.65+ 1.18+ 26
(0.10) (0.25) 11.75 (0.46) 572,940 1.03 1.17 1.04 92
-- (0.07) 12.06 14.37 401,559 1.17 0.75 1.18 39
-- (0.10) 10.60 3.14 118,873 1.30 1.03 1.32 41
$ -- $(0.13) $12.83 (12.59)% $ 0** 1.62%+ 1.07%+ 1.72%+ 71%
-- (0.26) 14.80 15.09 25 1.64 0.26 1.64 64
(0.03) (0.46) 13.11 (0.66) 5,526 1.66+ 0.12+ 1.66+ 36
$ -- $(0.14) $12.73 (12.44)% $ 9,836 1.37%+ 1.32%+ 1.37%+ 71%
-- (0.35) 14.67 15.77 13,477 1.39 0.51 1.39 64
(0.03) (0.54) 13.01 1.08 9,443 1.41 0.37 1.41 36
-- (0.10) 13.39 15.66 7,643 1.42+ 0.40+ 1.43+ 26
(0.10) (0.24) 11.67 (0.69) 4,877 1.28 0.92 1.29 92
-- (0.06) 12.00 14.00 3,219 1.42 0.50 1.43 39
-- (0.10) 10.56 2.91 839 1.55+ 0.78+ 1.62+ 41
$ -- $(0.12) $12.58 (12.89)% $ 27,251 2.12%+ 0.57%+ 2.12%+ 71%
-- (0.16) 14.56 14.93 34,119 2.14 (0.24) 2.14 64
(0.03) (0.49) 12.83 0.28 36,698 2.16 (0.38) 2.16 36
-- (0.05) 13.27 15.25 40,426 1.99+ (0.17)+ 2.00+ 26
(0.10) (0.23) 11.56 (1.30) 31,372 1.78 0.42 1.79 92
-- (0.06) 11.96 14.32 17,349 1.92+ (0.00)+## 1.93+ 39
$ -- $(0.12) $12.40 (12.81)% $ 768 2.12%+ 0.57%+ 2.12%+ 71%
-- (0.28) 14.34 15.05 933 1.97 (0.07) 1.97 64
(0.03) (0.51) 12.74 0.77 988 1.66 0.12 1.66 36
-- (0.04) 13.13 15.09 652 2.09+ (0.27)+ 2.10+ 26
(0.10) (0.22) 11.45 (1.56) 495 2.03 0.17 2.04 92
-- (0.03) 11.86 13.21 339 2.17 (0.25) 2.18 39
-- (0.09) 10.49 4.97 200 2.30+ 0.03+ 2.32+ 41
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<PAGE> 36
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME/(LOSS) ON INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL GROWTH:
PRIMARY A SHARES *
Six months ended 09/30/1998 # +++... $19.42 $ 0.06 $(2.30) $(2.24) $ -- $(0.73)
Period ended 03/31/1998 #........... 18.43 0.03 1.30 1.33 -- (0.34)
Period ended 05/16/1997............. 17.05 0.05 1.84 1.89 (0.17) (0.34)
Year ended 08/31/1996............... 16.24 0.18 1.48 1.66 (0.46) (0.39)
Year ended 08/31/1995 #............. 16.34 0.13 0.17 0.30 (0.11) (0.29)
Year ended 08/31/1994 #............. 14.14 0.11 2.24 2.35 -- (0.15)
Period ended 08/31/1993 # (a)....... 13.15 (0.01) 1.00 0.99 -- --
INVESTOR A SHARES *
Six months ended 09/30/1998 # +++... $19.21 $ 0.04 $(2.27) $(2.23) $ -- $(0.73)
Period ended 03/31/1998 #........... 18.27 (0.01) 1.29 1.28 -- (0.34)
Period ended 05/16/1997............. 16.90 (0.05) 1.90 1.85 (0.14) (0.34)
Year ended 08/31/1996............... 16.14 0.04 1.57 1.61 (0.46) (0.39)
Year ended 08/31/1995 #............. 16.29 0.08 0.17 0.25 (0.11) (0.29)
Year ended 08/31/1994 #............. 14.13 0.07 2.24 2.31 -- (0.15)
Period ended 08/31/1993 # (b)....... 11.85 0.02 2.26 2.28 -- --
INVESTOR B SHARES *
Six months ended 09/30/1998 # +++... $19.11 $(0.03) $(2.26) $(2.29) $ -- $(0.73)
Period ended 03/31/1998 #........... 18.32 (0.11) 1.24 1.13 -- (0.34)
Period ended 05/16/1997............. 17.04 (0.05) 1.79 1.74 (0.12) (0.34)
Period ended 08/31/1996 (c)......... 17.54 -- (0.50) (0.50) -- --
INVESTOR C SHARES **
Six months ended 09/30/1998 # +++... $19.42 $(0.03) $(2.22) $(2.25) -- $(0.73)
Period ended 03/31/1998 #........... 18.49 (0.09) 1.36 1.27 -- (0.34)
</TABLE>
- ---------------
<TABLE>
<C> <S>
* The financial information for the fiscal periods through May
23, 1997 reflect the financial information for the Pilot
International Equity Fund's Pilot Shares, Class A Shares and
Class B Shares, which were reorganized into the Primary A
Shares, Investor A Shares and Investor B Shares,
respectively, as of May 23, 1997.
** International Growth Investor C Shares commenced operations
on September 19, 1997.
(a) Shares were initially issued on July 26, 1993.
(b) Prior to a tax-free reorganization into Pilot Administration
Shares (subsequently renamed Class A Shares) effective July
12, 1993, the Pilot Kleinwort Benson International Equity
Portfolio (subsequently renamed the Pilot International
Equity Fund) was a separate portfolio of Kleinwort Benson
Investment Strategies known as Kleinwort Benson
International Equity Fund. The predecessor portfolio had a
December 31 year end.
(c) Shares were initially issued on July 1, 1996.
(d) Excludes transfer of assets effective August 6, 1993 from a
collective trust for which Boatmen's Trust Company served as
Trustee.
+ 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 net investment income/(loss) has been calculated
using the monthly average shares method.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
32
<PAGE> 37
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
--------------------------------------------------------
OPERATING
NET ASSET NET ASSETS EXPENSES
TOTAL VALUE END OF WITHOUT WAIVERS PORTFOLIO
DIVIDENDS AND END OF TOTAL PERIOD OPERATING NET INVESTMENT AND/OR TURNOVER
DISTRIBUTIONS PERIOD RETURN ++ (000) EXPENSES INCOME/(LOSS) REIMBURSEMENTS RATE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.73) $16.45 (12.26)% $215,887 1.14%+ 0.69%+ 1.21%+ 6%
(0.34) 19.42 7.39 401,105 1.15+ 0.21+ 1.17+ 11
(0.51) 18.43 11.28 701,033 1.18+ 0.47+ 1.18+ 34
(0.85) 17.05 10.64 579,019 1.08 0.69 1.08 22
(0.40) 16.24 2.08 363,212 1.18 0.82 1.18 36
(0.15) 16.34 16.75 307,561 1.12 0.75 1.12 35
-- 14.14 7.53 195,548 1.31+ (0.56)+ 1.31+ 27(d)
$(0.73) $16.25 (12.44)% $ 20,461 1.39%+ 0.44%+ 1.46%+ 6%
(0.34) 19.21 7.18 24,353 1.40+ (0.04)+ 1.42+ 11
(0.48) 18.27 11.14 26,730 1.42+ 0.29+ 1.42+ 34
(0.85) 16.90 10.40 26,730 1.32 0.48 1.32 22
(0.40) 16.14 1.77 27,625 1.42 0.50 1.42 36
(0.15) 16.29 16.48 44,990 1.37 0.48 1.37 35
-- 14.13 19.24 55,816 2.17+ 0.25+ 2.17+ 27(d)
$(0.73) $16.09 (12.69)% $ 595 2.14%+ (0.31)%+ 2.21%+ 6%
(0.34) 19.11 6.34 500 2.15+ (0.79)+ 2.17+ 11
(0.46) 18.32 10.37 560 2.18+ (0.61)+ 2.18+ 34
-- 17.04 (2.85) 184 2.06+ (0.32)+ 2.06+ 22
$(0.73) $16.44 (12.37)% $ 396 2.14%+ (0.31)%+ 2.21%+ 6%
(0.34) 19.42 7.04 465 2.15+ (0.79)+ 2.17+ 11
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
33
<PAGE> 38
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT NET INVESTMENT
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME INCOME
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL VALUE:
PRIMARY A SHARES *
Period ended 09/30/1998 # +++.......... $15.53 $0.12 $(3.10) $(2.98) $ -- $ --
Period ended 05/15/1998................ 13.17 0.09 2.56 2.65 -- --
Year ended 11/30/1997.................. 11.29 0.09 1.91 2.00 (0.09) (0.01)
Period ended 11/30/1996 ***............ 10.00 0.06 1.29 1.35 (0.06) --
INVESTOR A SHARES *
Period ended 09/30/1998 # +++.......... $15.44 $0.10 $(2.99) $(2.89) $ -- $ --
Period ended 05/15/1998................ 13.13 0.08 2.52 2.60 -- --
Year ended 11/30/1997.................. 11.29 0.01 1.91 1.92 (0.01) (0.05)
Period ended 11/30/1996 ***............ 10.00 0.04 1.31 1.35 (0.04) --
INVESTOR B SHARES **
Period ended 09/30/1998 # +++.......... $14.33 $0.05 $(2.54) $(2.49) $ -- $ --
INVESTOR C SHARES **
Period ended 09/30/1998 # +++.......... $13.33 $0.05 $(1.54) $(1.49) $ -- $ --
</TABLE>
- ---------------
<TABLE>
<C> <S>
* The financial information for the fiscal periods through May
15, 1998 reflect the financial information for the Emerald
International Equity Fund's Institutional Shares and Retail
Shares, which were reorganized into the Primary A Shares and
Investor A Shares, respectively, as of May 15, 1998.
** Commencement of operations for Investor B Shares and
Investor C Shares was May 28, 1998 and June 15, 1998,
respectively.
*** Commencement of operations was December 27, 1995.
+ 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 net investment income has been calculated using
the monthly average shares method.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
34
<PAGE> 39
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
-------------------------------------------------------
OPERATING
EXPENSES
DISTRIBUTIONS TOTAL NET ASSET NET ASSETS WITHOUT
FROM NET DIVIDENDS VALUE END OF WAIVERS PORTFOLIO
REALIZED AND END OF TOTAL PERIOD OPERATING NET INVESTMENT AND/OR TURNOVER
CAPITAL GAINS DISTRIBUTIONS PERIOD RETURN ++ (000) EXPENSES INCOME REIMBURSEMENTS RATE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(0.72) $(0.72) $11.83 (21.54)% $111,866 1.27%+ 1.85%+ 1.37%+ 22%
(0.29) (0.29) 15.53 20.54 119,412 1.25+ 2.05+ 1.26+ 88
(0.02) (0.12) 13.17 17.75 54,277 1.21 0.89 1.21 29
-- (0.06) 11.29 13.47 17,528 0.00+ 1.99+ 3.46+ 50
$(0.72) $(0.72) $11.83 (21.11)% $ 5,386 1.52+ 1.60%+ 1.62%+ 22%
(0.29) (0.29) 15.44 20.22 5,128 1.81+ 1.21+ 1.82+ 88
(0.02) (0.08) 13.13 17.11 4,259 1.73 0.26 1.93 29
(0.02) (0.06) 11.29 13.54 115 0.00+ 1.83+ 57.40+ 50
$ -- $ -- $11.84 (17.38)% $ 2,195 2.27%+ 0.85%+ 2.37%+ 22%
$ -- $ -- $11.84 (11.18)% $ 150 2.27%+ 0.85%+ 2.37%+ 22%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
35
<PAGE> 40
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE INVESTMENT AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF
BEGINNING INCOME/ GAINS/(LOSS) NET ASSET VALUE INVESTMENT NET INVESTMENT
OF PERIOD (LOSS) ON INVESTMENTS FROM OPERATIONS INCOME INCOME
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PACIFIC GROWTH:
PRIMARY A SHARES
Six months ended 09/30/1998 # +++....... $ 7.28 $ 0.09* $(2.05) $(1.96) $ -- $ --
Year ended 03/31/1998 #................. 10.41 0.09 (3.01) (2.92) (0.21) --
Year ended 03/31/1997................... 10.24 0.04 0.19 0.23 (0.03) (0.03)
Period ended 03/31/1996 ** #............ 10.00 (0.02) 0.29 0.27 -- (0.03)
PRIMARY B SHARES
Six months ended 09/30/1998 # +++....... $ 7.31 $ 0.07 $(2.06) $(1.99) $ -- $ --
Year ended 03/31/1998 #................. 10.39 0.05 (3.01) (2.96) (0.12) --
Year ended 03/31/1997 **................ 10.34 0.01 0.07 0.08 (0.02) (0.01)
INVESTOR A SHARES
Six months ended 09/30/1998 # +++....... $ 7.29 $ 0.08 $(2.07) $(1.99) $ -- $ --
Year ended 03/31/1998 #................. 10.37 0.07 (2.98) (2.91) (0.17) --
Year ended 03/31/1997................... 10.23 0.00* 0.19 0.19 (0.03) (0.02)
Period ended 03/31/1996 ** #............ 10.00 (0.04) 0.29 0.25 -- (0.02)
INVESTOR B SHARES
Six months ended 09/30/1998 # +++....... $ 7.28 $ 0.05 $(2.05) $(2.00) $ -- $ --
Year ended 03/31/1998 #................. 10.30 (0.01) (2.98) (2.99) (0.03) --
Year ended 03/31/1997................... 10.18 (0.05) 0.19 0.14 (0.01) (0.01)
Period ended 03/31/1996 ** #............ 10.00 (0.10) 0.29 0.19 -- (0.01)
INVESTOR C SHARES
Six months ended 09/30/1998 # +++....... $ 7.24 $ 0.05 $(2.03) $(1.98) $ -- $ --
Year ended 03/31/1998 #................. 10.34 0.01 (2.98) (2.97) (0.13) --
Year ended 03/31/1997................... 10.20 0.00* 0.14 0.14 -- --
Period ended 03/31/1996 ** #............ 10.00 (0.09) 0.29 0.20 -- --
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Amount represents less than $0.01 per share.
** Pacific Growth Primary A, Investor A, Investor B and
Investor C Shares commenced operations on June 30, 1995.
Pacific Growth Primary B Shares commenced operations on June
28, 1996.
+ 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 net investment income/(loss) has been calculated
using the monthly average shares method.
(a) Operating expenses without waiver was 2.37% for the period.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
36
<PAGE> 41
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
NET ASSET NET ASSETS ----------------------------------------------
TOTAL VALUE END OF PORTFOLIO
DIVIDENDS AND END OF TOTAL PERIOD OPERATING NET INVESTMENT TURNOVER
DISTRIBUTIONS PERIOD RETURN ++ (000) EXPENSES INCOME/(LOSS) RATE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ -- $ 5.32 (26.92)% $ 11,086 1.77%+ 2.74%+ 37%
(0.21) 7.28 (28.35) 54,409 1.37 0.94 123
(0.06) 10.41 2.18 122,887 1.42 0.39 78
(0.03) 10.24 2.66 95,210 1.76+ (0.27)+ 23
$ -- $ 5.32 (27.22)% $ 10 2.27%+(a) 2.24%+ 37%
(0.12) 7.31 (28.77) 27 1.87 0.44 123
(0.03) 10.39 0.75 618 1.92+ (0.11)+ 78
$ -- $ 5.30 (27.10)% $ 497 2.02%+ 2.49%+ 37%
(0.17) 7.29 (28.59) 871 1.62 0.69 123
(0.05) 10.37 1.86 2,480 1.67 0.14 78
(0.02) 10.23 2.52 1,375 2.01+ (0.52)+ 23
$ -- $ 5.28 (27.47)% $ 819 2.77%+ 1.74%+ 37%
(0.03) 7.28 (29.04) 1,196 2.37 (0.06) 123
(0.02) 10.30 1.18 2,367 2.42 (0.61) 78
(0.01) 10.18 1.88 2,324 2.76+ (1.27)+ 23
$ -- $ 5.26 (27.45)% $ 31 2.77%+ 1.74%+ 37%
(0.13) 7.24 (28.91) 42 2.20 0.11 123
-- 10.34 1.57 102 1.92 (0.11) 78
-- 10.20 2.00 60 2.65+ (1.16)+ 23
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
37
<PAGE> 42
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE INVESTMENT AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF
BEGINNING INCOME/ GAIN/(LOSS) NET ASSET VALUE INVESTMENT NET INVESTMENT
OF PERIOD (LOSS) INVESTMENTS FROM OPERATIONS INCOME INCOME
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EMERGING MARKETS:
PRIMARY A SHARES Six months ended
09/30/1998 # +++..................... $10.60 $ 0.10 $(4.21) $(4.11) $(0.07) $ --
Year ended 03/31/1998 #.............. 11.41 0.04 (0.76) (0.72) (0.09) --
Year ended 03/31/1997 #.............. 10.34 0.01 1.21 1.22 (0.02) (0.07)
Period ended 03/31/1996 * #.......... 10.00 (0.03) 0.37 0.34 -- 0.00**
PRIMARY B SHARES
Six months ended 09/30/1998 # +++.... $10.57 $ 0.08 $(4.21) $(4.13) $(0.06) $ --
Year ended 03/31/1998 #.............. 11.40 (0.02) (0.75) (0.77) (0.06) --
Period ended 03/31/1997 * #.......... 10.71 (0.04) 0.82 0.78 (0.01) (0.02)
INVESTOR A SHARES
Six months ended 09/30/1998 # +++.... $10.57 $ 0.08 $(4.21) $(4.13) $(0.06) $ --
Year ended 03/31/1998 #.............. 11.39 0.01 (0.75) (0.74) (0.08) --
Year ended 03/31/1997 #.............. 10.32 (0.01) 1.21 1.20 (0.02) (0.05)
Period ended 03/31/1996 * #.......... 10.00 (0.05) 0.37 0.32 -- --
INVESTOR B SHARES
Six months ended 09/30/1998 # +++.... $10.49 $ 0.05 $(4.17) $(4.12) $(0.05) --
Year ended 03/31/1998 #.............. 11.31 (0.07) (0.75) (0.82) -- --
Year ended 03/31/1997 #.............. 10.26 (0.09) 1.20 1.11 -- --
Period ended 03/31/1996 * #.......... 10.00 (0.11) 0.37 0.26 -- --
INVESTOR C SHARES
Six months ended 09/30/1998 # +++.... $10.47 $ 0.05 $(4.17) $(4.12) $(0.05) $ --
Year ended 03/31/1998 #.............. 11.34 (0.05) (0.75) (0.80) (0.07) --
Year ended 03/31/1997 #.............. 10.27 (0.04) 1.20 1.16 (0.01) (0.02)
Period ended 03/31/1996 * #.......... 10.00 (0.10) 0.37 0.27 -- --
<CAPTION>
DISTRIBUTIONS
FROM NET
REALIZED
CAPITAL GAINS
-------------
<S> <C>
EMERGING MARKETS:
PRIMARY A SHARES Six months ended
09/30/1998 # +++..................... $ --
Year ended 03/31/1998 #.............. --
Year ended 03/31/1997 #.............. (0.06)
Period ended 03/31/1996 * #.......... --
PRIMARY B SHARES
Six months ended 09/30/1998 # +++.... $ --
Year ended 03/31/1998 #.............. --
Period ended 03/31/1997 * #.......... (0.06)
INVESTOR A SHARES
Six months ended 09/30/1998 # +++.... $ --
Year ended 03/31/1998 #.............. --
Year ended 03/31/1997 #.............. (0.06)
Period ended 03/31/1996 * #.......... --
INVESTOR B SHARES
Six months ended 09/30/1998 # +++.... $ --
Year ended 03/31/1998 #.............. --
Year ended 03/31/1997 #.............. (0.06)
Period ended 03/31/1996 * #.......... --
INVESTOR C SHARES
Six months ended 09/30/1998 # +++.... $ --
Year ended 03/31/1998 #.............. --
Year ended 03/31/1997 #.............. (0.06)
Period ended 03/31/1996 * #.......... --
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Emerging Market Primary A, Investor A, Investor B and
Investor C Shares commenced operations on June 30, 1995.
Emerging Market Primary B Shares commenced operations on
June 28, 1996.
** Amount represents less than $0.01 per share.
+ 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 net investment income/(loss) has been calculated
using the monthly average shares method.
(a) Operating expenses without waiver was 2.37% for the period.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
38
<PAGE> 43
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
TOTAL NET ASSETS -----------------------------------------------
DIVIDENDS NET ASSET END OF PORTFOLIO
AND VALUE TOTAL PERIOD OPERATING NET INVESTMENT TURNOVER
DISTRIBUTIONS END OF PERIOD RETURN ++ (000) EXPENSES INCOME/(LOSS) RATE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.07) $ 6.42 (38.86)% $14,649 1.77%+ 2.09%+ 19%
(0.09) 10.60 (6.39) 73,797 1.57 0.36 63
(0.15) 11.41 11.97 76,483 1.74 0.13 31
0.00** 10.34 3.42 47,560 2.13+ (0.38)+ 17
$(0.06) $ 6.38 (39.04)% $ 11 2.27%+(a) 1.59%+ 19%
(0.06) 10.57 (6.80) 37 2.07 (0.14) 63
(0.09) 11.40 7.34 301 2.24+ (0.37)+ 31
$(0.06) $ 6.38 (39.01)% $ 345 2.02%+ 1.84%+ 19%
(0.08) 10.57 (6.60) 652 1.82 0.11 63
(0.13) 11.39 11.74 894 1.99 (0.12) 31
-- 10.32 3.20 477 2.38+ (0.63)+ 17
$(0.05) $ 6.32 (39.24)% $ 668 2.77%+ 1.09%+ 19%
-- 10.49 (7.25) 1,247 2.57 (0.64) 63
(0.06) 11.31 10.88 1,499 2.74 (0.87) 31
-- 10.26 2.60 1,209 3.13+ (1.38)+ 17
$(0.05) $ 6.30 (39.22)% $ 60 2.77%+ 1.09%+ 19%
(0.07) 10.47 (7.17) 293 2.40 (0.47) 63
(0.09) 11.34 11.34 226 2.24 (0.37) 31
-- 10.27 2.70 23 3.02+ (1.27)+ 17
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
39
<PAGE> 44
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Nations Fund, Inc. (the "Company") and Nations Fund Portfolios, Inc. ("Nations
Portfolios") are each registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end investment company. At September 30,
1998, the Company offered nine separate portfolios and Nations Portfolios
offered three separate portfolios. These financial statements pertain to the
international stock portfolios of the Company and Nations Portfolios (each a
"Fund" and collectively, the "Funds"). Financial statements for the other
portfolios of the Company and Nations Portfolios are presented under separate
cover. The Funds currently offer five classes of shares: Primary A Shares,
Primary B Shares, Investor A Shares, Investor B Shares and Investor C Shares.
Shareholders of a Fund have equal voting rights on matters affecting all
shareholders of the Fund. In addition, each class of shares has exclusive voting
rights on matters that relate solely to its class and separate voting rights on
matters in which the interests of one class of shares differ from the interests
of any other class.
1. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of the
significant accounting policies followed by the Funds in the preparation of
their financial statements.
Securities Valuation: Equity securities traded on a recognized exchange or on
NASDAQ are valued at the last sales price on the exchange or market on which
such securities are primarily traded. Securities traded over-the-counter are
valued at the closing bid prices or, if no sale occurred on such day, at the
mean of the current bid and asked prices. Certain securities may be valued by
one or more market makers. Debt obligations are valued by an independent pricing
service approved by the Directors. Prices provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as yield, type of issue, coupon rate, maturity and
general market conditions. Securities for which market quotations are not
readily available and certain other assets are valued by the investment advisor
under the supervision of the respective Board of Directors. Short-term
investments that mature in sixty days or less are valued at amortized cost.
Foreign Currency Translation: The books and records of the Funds are maintained
in U.S. dollars. Foreign currencies, investments and other assets and
liabilities are translated into U.S. dollars at the current exchange rates.
Purchases and sales of investment securities, income and expenses are translated
on the respective dates of such transactions. Net realized foreign currency
gains and losses resulting from changes in exchange rates include foreign
currency gains and losses between trade date and settlement date of securities
transactions, foreign currency transactions and the difference between the
amounts of interest and dividends recorded on the books of a Fund and the
amounts actually received. The effects of changes in foreign currency exchange
rates on securities are not separately stated in the Statements of Operations
from the effects of changes in market prices of those securities, but are
included with the net realized and unrealized gain or loss on securities.
Forward Foreign Currency Transactions: Generally, a Fund may enter into forward
currency exchange contracts only under two circumstances: (i) when the Fund
enters into a contract for the purchase or sale of a security denominated in a
foreign currency, to "lock" in the U.S. exchange rate of the transaction, with
such period being a short-dated contract covering the period between transaction
date and settlement date; and (ii) when the investment advisor or sub-advisor
believes that the currency of a particular foreign country may experience a
substantial movement against the U.S. dollar. Forward foreign currency contracts
are valued at the forward rate and are marked-to-market daily. The change in
market value is recorded by the Fund as an unrealized gain or loss. When the
contract is closed or offset with the same counterparty, the Fund records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed or offset.
Forward foreign currency contracts will be used primarily to protect the Funds
from adverse currency movements and will generally not be entered into for terms
greater than one year. The use of forward foreign currency contracts does not
eliminate
40
<PAGE> 45
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
fluctuations in the underlying prices of the Fund's investment securities;
however, it does establish a rate of exchange that can be achieved in the
future. The use of forward contracts involves the risk that anticipated currency
movements will not be accurately predicted. A forward contract would limit the
risk of loss due to a decline in the value of a particular currency; however, it
also would limit any potential gain that might result should the value of the
currency increase instead of decrease. These contracts may involve market risk
in excess of the unrealized gain or loss reflected in the Statements of Net
Assets. In addition, the Funds could be exposed to risks if counterparties to
the contracts are unable to meet the terms of their contracts. The counterparty
risk exposure is, therefore, closely monitored and contracts are only executed
with high credit quality financial institutions.
Federal Income Tax: Each Fund intends to continue to qualify as a regulated
investment company by complying with the applicable requirements of the Internal
Revenue Code of 1986, as amended, and by distributing substantially all of its
earnings to shareholders. Therefore, no provision is made for Federal income or
excise taxes.
The Funds may be subject to foreign taxes on income, gains on investments or
currency repatriation, a portion of which may be recoverable. The Funds will
accrue such taxes and recoveries as applicable, based upon their current
interpretation of tax rules and regulations that exist in the markets in which
they invest.
Securities Transactions and Investment Income: Securities transactions are
accounted for on trade date. Realized gains and losses are computed based on the
specific identification of the securities sold. Interest income, adjusted for
accretion of discounts and amortization of premiums, is earned from settlement
date and recorded on the accrual basis. Dividend income is recorded on
ex-dividend date, except that if the ex-dividend date has passed, certain
dividends from foreign securities are recorded as soon as the Funds are informed
of 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: Distributions from net investment
income, if any, for the Funds are declared and paid each calendar quarter. These
distributions are recorded on ex-date. Each Fund will distribute net realized
capital gains (including net short-term capital gains) annually after the fiscal
year in which the capital gains were earned, unless offset by any available
capital loss carryforward. Income distributions and capital gain distributions
on a Fund level are determined in accordance with Federal income tax
regulations, which may differ from generally accepted accounting principles.
Expenses: General expenses of the Company or Nations Portfolios are allocated
to the Funds based upon relative net assets. Expenses directly attributable to a
Fund or a class of shares are charged to such Fund or class. Expenses not
directly attributable to any class of shares are prorated based on the relative
net assets of each class. The Funds bear all costs in connection with their
organization, including the fees and expenses of registering and qualifying
their shares for distribution under Federal and state securities regulations.
All such costs are being amortized on a straight-line basis over a period of
five years from commencement of operations.
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS
Each of the Company and Nations Portfolios has entered into an investment
advisory agreement (the "Investment Advisory Agreements") with NationsBanc
Advisors, Inc. ("NBAI"), a wholly-owned subsidiary of NationsBank, N.A.
("NationsBank"), pursuant to which NBAI provides investment advisory services to
the Funds. Under these Investment Advisory Agreements, NBAI is entitled to
receive an advisory fee calculated daily and payable monthly based on the
following annual rates multiplied by the average daily net assets of each Fund:
<TABLE>
<CAPTION>
ANNUAL
RATE
------
<S> <C>
International Equity, International Growth and Pacific
Growth................................................. 0.90%
International Value..................................... 1.00
Emerging Markets........................................ 1.10
</TABLE>
41
<PAGE> 46
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Each of the Company and Nations Portfolios has entered into a sub-advisory
agreement (the "Sub-Advisory Agreements") with NBAI and Gartmore Global Partners
("Gartmore"). Gartmore is a joint venture structured as a general partnership
between NB Partner Corp., a wholly-owned subsidiary of NationsBank, and Gartmore
U.S. Ltd., an indirect wholly-owned subsidiary of Gartmore Investment Management
PLC ("Gartmore PLC"), which is a United Kingdom ("U.K.") holding company for a
leading U.K. based international fund management group of companies. National
Westminster Bank PLC and its affiliated entities own 100% of the equity of
Gartmore PLC.
Under the Sub-Advisory Agreements, Gartmore is entitled to receive a
sub-advisory fee from NBAI at the following annual rates of each Funds' average
daily net assets:
<TABLE>
<CAPTION>
ANNUAL
RATE
------
<S> <C>
International Equity and Pacific Growth................. 0.70%
International Growth.................................... 0.40
Emerging Markets........................................ 0.85
</TABLE>
The Company has, on behalf of International Value, entered into a sub-advisory
agreement with NBAI and Brandes Investment Partners, L.P. ("Brandes"), whereby
Brandes is entitled to a fee from NBAI at the annual rate of 0.50% of
International Value's average daily net assets.
Stephens Inc. ("Stephens") serves as the administrator of the Company and
Nations Portfolios. First Data Investor Services Group Inc. ("First Data"), a
wholly-owned subsidiary of First Data Corporation, serves as co-administrator.
Stephens and First Data are entitled to receive a combined fee, computed daily
and paid monthly, at the annual rate of 0.10% of the average daily net assets of
each Fund. NBAI is the sub-administrator of the Company and Nations Portfolios.
For the six months ended September 30, 1998, Stephens earned $263,000 from the
Funds for its administration services, of which $70,000 was paid to NBAI for its
services as sub-administrator.
The investment advisor, sub-advisor, administrator and co-administrator may,
from time to time, voluntarily reduce their fees payable by each Fund. For the
period ended September 30, 1998, the fee waivers were as follows:
<TABLE>
<CAPTION>
FEES WAIVED
BY ADVISOR
-----------
<S> <C>
International Growth................................ $116,000
International Value................................. $ 51,000
</TABLE>
The Bank of New York ("BNY") acts as custodian of the Funds' assets. First Data
also serves as the transfer agent for the Funds' shares. NationsBank of Texas,
N.A. ("NationsBank of Texas") served as the sub-transfer agent for the Primary
Shares of the Funds until it merged into NationsBank on May 6, 1998. NationsBank
began serving as sub-transfer agent for the Primary Shares of the Funds on that
date and is providing the same services as were previously provided by
NationsBank of Texas. For the six months ended September 30, 1998, NationsBank
of Texas and NationsBank earned approximately $2,000 and $9,000, respectively,
for providing such services.
Stephens serves as the distributor of the Funds' shares. For the six months
ended September 30, 1998, the Funds were informed that the distributor received
$44,000 in contingent deferred sales charges from shares which were subject to
such charges. A substantial portion of these fees was paid to affiliates of
NationsBank and NBAI.
The Company and Nations Portfolios pay each unaffiliated 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 Company and Nations Portfolios also reimburse
expenses incurred by each unaffiliated Director in attending such meetings.
The Company's and Nations Portfolio's eligible Directors may participate in
non-qualified deferred compensation and retirement plans, which may be
terminated at any time. All benefits provided under these plans are unfunded and
any payments to plan participants are paid solely out of the Funds' assets.
Income earned on each plan participant's deferral account is tied to the rate of
return of the eligible mutual funds selected by the participants or, if no funds
are selected, to the rate of return of Nations Treasury Fund, another portfolio
of the Company. The expense for the deferred compensation and
42
<PAGE> 47
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
retirement plans is included in "Directors' fees and expenses" in the Statements
of Operations.
The Funds placed a portion of their portfolio transactions with firms that could
be deemed to be affiliates of Gartmore plc.
International Value has made daily investments of cash balances in Nations Cash
Reserves, a portfolio of Nations Institutional Reserves, pursuant to an
exemptive order received from the Securities and Exchange Commission. For the
period ended September 30, 1998, International Value earned $127,000 from such
investments.
A significant portion of each Fund's Primary A Shares represents investments by
fiduciary accounts over which NationsBank has either sole or joint investment
discretion.
On September 30, 1998, NationsBank Corporation, the parent company of
NationsBank, merged with BankAmerica Corporation.
3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS
The Company and Nations Portfolios each have adopted a shareholder
administration plan for Primary B Shares of each Fund and shareholder servicing
plans and distribution plans for the Investor A, Investor B and Investor C
Shares of each Fund. The administration plan permits the Funds to compensate
institutions for shareholder administration services provided to their customers
that own Primary B Shares. The shareholder servicing plans permit the Funds to
compensate or reimburse servicing agents for shareholder services provided by
the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, permit the Funds to compensate or
reimburse the distributor (and for Investor A shares, the distributor and/or
selling agents) for activities or expenses primarily intended to result in the
sale of the classes' shares. Payments are made at an annual rate, as a
percentage of average daily net assets set from time to time by the Board of
Directors, and are charged as expenses of each Fund directly to the applicable
class. A substantial portion of the expenses incurred pursuant to these plans is
paid to affiliates of NationsBank and NBAI.
At September 30, 1998, the rates in effect and plan limits, as a percentage of
average daily net assets, were as follows:
<TABLE>
<CAPTION>
PLAN
CURRENT RATE LIMIT
---------------------
<S> <C> <C>
Primary B Administration Plan............. 0.50% 0.60%
Investor A Shareholder Servicing and
Distribution Plan........................ 0.25 0.25
Investor B and Investor C Shareholder
Servicing Plans.......................... 0.25 0.25
Investor B and Investor C
Distribution Plan........................ 0.75 0.75
</TABLE>
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
September 30, 1998 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
(000) (000)
---------------------
<S> <C> <C>
International Equity..................... $585,520 $685,614
International Growth..................... 18,461 204,157
International Value...................... 156,255 21,163
Pacific Growth........................... 12,918 41,418
Emerging Markets......................... 9,391 45,150
</TABLE>
There were no purchases or sales of long-term U.S. government securities for the
period ended September 30, 1998.
5. FORWARD FOREIGN CURRENCY CONTRACTS
Under the terms of the forward foreign currency contracts open at September 30,
1998, the following Funds are obligated to deliver currency in exchange for U.S.
dollars as indicated in the table:
<TABLE>
<CAPTION>
IN NET UNREALIZED
LOCAL VALUE EXCHANGE APPRECIATION
CURRENCY IN USD FOR USD OF CONTRACT
MATURITY DATE (000) (000) (000) (000)
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
International Equity
10/02/98 FRF 89,025 $15,898 $15,855 $43
10/01/98 DEM 13,933 8,344 8,275 69
10/02/98 ITL 6,145,989 3,723 3,704 19
10/01/98 ESP 436,437 3,075 3,062 13
10/01/98 PTE 333,368 1,947 1,937 10
Pacific Growth
10/05/98 AUD 166 98 98 --
</TABLE>
43
<PAGE> 48
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
IN NET UNREALIZED
LOCAL VALUE EXCHANGE APPRECIATION
CURRENCY IN USD FOR USD OF CONTRACT
MATURITY DATE (000) (000) (000) (000)
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Emerging Markets
10/06/98 ZAR 956 163 163 --
10/02/98 GRD 44,424 155 154 1
10/02/98 DEM 145 88 87 1
10/06/98 PTE 10,588 63 62 1
10/05/98 HKD 396 52 51 1
10/05/98 PLN 147 41 40 1
10/05/98 ARS 20 20 20 --
10/01/98 TRL 3,251,081 13 12 1
10/02/98 MXN 57 6 6 --
</TABLE>
Under the terms of the forward foreign currency contracts open at September 30,
1998, the following Funds are entitled to receive currency in exchange for U.S.
dollars as indicated in the table:
<TABLE>
<CAPTION>
NET UNREALIZED
IN APPRECIATION/
LOCAL VALUE EXCHANGE (DEPRECIATION)
CURRENCY IN USD FOR USD OF CONTRACT
MATURITY DATE (000) (000) (000) (000)
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
International Equity
10/02/98 NLG 16,289 $8,649 $ 8,633 $(16)
10/05/98 GBP 3,967 6,744 6,764 20
10/01/98 DEM 9,664 5,787 5,745 (42)
10/01/98 ESP 23,412 165 163 (2)
10/01/98 TWD 53 2 2 --
Pacific Growth
11/11/98 MYR 113 25 29 4
10/05/98 HKD 212 27 28 1
10/05/98 PHP 1,205 27 28 1
</TABLE>
6. FUTURES CONTRACTS
At September 30, 1998, the following Fund had futures contracts open:
<TABLE>
<CAPTION>
AGGREGATE
NUMBER FACE UNREALIZED
OF VALUE EXPIRATION (DEPRECIATION)
SECURITY CONTRACTS (000) DATE (000)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Growth
MSCI Taiwan
Index (a)......... 24 628 October 1998 (15)
</TABLE>
- ---------------
(a) Cash of $625,000 has been segregated at the broker at September 30, 1998 as
collateral for open futures contracts.
7. CAPITAL STOCK
As of September 30, 1998, 420,000,000,000 shares of $.001 par value capital
stock were authorized for the Company and 150,000,000,000 shares of $.001 par
value capital stock were authorized for Nations Portfolios. The Company's and
Nations Portfolios' Articles of Incorporation authorize the Boards of Directors
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.
8. FOREIGN SECURITIES
Each Fund may invest in foreign securities. Investing in securities of foreign
companies and foreign governments involves special risks and considerations not
typically associated with investing in U.S. companies and the U.S. government.
These risks include revaluation of currencies, less reliable information about
issuers, different securities transaction clearance and settlement practices,
and future adverse political and economic developments. These risks are
heightened for investments in emerging markets countries. Moreover, securities
of many foreign companies and foreign governments and their markets may be less
liquid and their prices more volatile than those of securities of comparable
U.S. companies and the U.S. government.
9. PRINCIPAL SHAREHOLDERS
At September 30, 1998, shareholders holding more than 10% of shares outstanding
were as follows:
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
FUND SHAREHOLDERS SHARES OUTSTANDING
- -----------------------------------------------------------------
<S> <C> <C>
International Value........... 1 36%
</TABLE>
10. LINE OF CREDIT
The Company and Nations Portfolios participate in an uncommitted line of credit
provided by BNY under an agreement (the "Agreement") dated July 10, 1998.
Advances under the Agreement are taken primarily for temporary or emergency
purposes, including meeting redemption requests that otherwise might require the
untimely disposition of securities. Interest on borrowings is payable at the
Federal funds rate plus 0.50% on an annualized basis. Each participating Fund
maintains a ratio of no less than 4 to 1 net assets (not including funds
borrowed pursuant to the Agreement) to aggregate amount of indebtedness pursuant
to the Agreement.
At September 30, 1998, there were no loans outstanding under this Agreement. For
the six
44
<PAGE> 49
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
months ended September 30, 1998, borrowing by the Funds under the Agreement was
as follows:
<TABLE>
<CAPTION>
AVERAGE AVERAGE AVERAGE
AMOUNT AVERAGE DEBT INTEREST
FUND OUTSTANDING SHARES PER SHARE RATE
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
International
Growth.............. $765,000 17,784,974 $0.04 5.87%
Pacific Growth....... 27,000 5,939,666 0.00(a) 6.27
Emerging
Markets............. 71,000 5,605,036 0.01 6.06
</TABLE>
- ---------------
(a) Amount represents less than $0.01 per share
The average amount outstanding was calculated based on daily balances in the
period.
11. LENDING OF PORTFOLIO SECURITIES
Under an agreement with BNY, the Funds can lend their portfolio securities to
approved brokers, dealers and other financial institutions. Loans are
collateralized by cash in an amount at least equal to the market value of the
securities on loan. The cash collateral received is invested in Nations Cash
Reserves, a portfolio of Nations Institutional Reserves. A portion of the income
generated by the investment of collateral, net of any rebate paid by BNY to
borrowers, is remitted to BNY as lending agent, and the remainder is paid to the
Fund. Generally, in the event of counterparty default, the Fund has the right to
use the collateral to offset losses incurred. There would be potential loss to
the Fund in the event the Fund is delayed or prevented from exercising its right
to dispose of the collateral. The Fund bears risk in the event that invested
collateral is not sufficient to meet obligations due on the loans.
At September 30, 1998 the following Funds had securities on loan:
<TABLE>
<CAPTION>
MARKET VALUE OF
LOANED MARKET VALUE
FUND SECURITIES OF COLLATERAL
- -------------------------------------------------------------------
<S> <C> <C>
International Equity............ $93,735,000 $103,291,000
International Growth............ 21,151,000 23,758,000
International Value............. 20,784,000 23,056,000
Pacific Growth.................. 1,226,000 1,309,000
Emerging Markets................ 2,766,000 3,006,000
</TABLE>
12. CAPITAL LOSS CARRYFORWARD
At September 30, 1998, the following Funds had available for Federal income tax
purposes the following unused capital losses expiring March 31:
<TABLE>
<CAPTION>
FUND 2004 2005 2006
- -----------------------------------------------------------------
<S> <C> <C> <C>
Pacific Growth............. $103,000 $3,865,000 $8,012,000
Emerging Markets........... -- -- 3,825,000
</TABLE>
Under current tax law, capital and currency losses realized after October 31 may
be deferred and treated as occurring on the first day of the following fiscal
year. For the fiscal year ended March 31, 1998, the following Funds elected to
defer losses occurring between November 1, 1997 and March 31, 1998 under these
rules:
<TABLE>
<CAPTION>
POST-OCTOBER CAPITAL
SHORT-TERM
FUND LOSS DEFERRAL
- --------------------------------------------------------------
<S> <C>
Pacific Growth.......................... $18,406,000
Emerging Markets........................ 4,493,000
</TABLE>
13. REORGANIZATIONS
On May 23, 1997, the International Growth Fund, a newly established portfolio,
acquired the assets and certain liabilities of the Pilot International Equity
Fund pursuant to a plan of reorganization approved by its shareholders. The
acquisition was accomplished by a tax-free exchange of shares of the
International Growth Fund in an amount equal to the outstanding shares of the
Pilot International Equity Fund. The financial statements of the International
Growth Fund reflect the historical financial results of the Pilot International
Equity Fund prior to the reorganization. Additionally, the fiscal year-end of
the Pilot International Equity Fund for reporting purposes was changed to
coincide with that of the Company.
On May 22, 1998, the International Value Fund, a newly established portfolio,
acquired the assets and liabilities of the Emerald International Equity Fund
pursuant to a plan of reorganization approved by its shareholders. The
acquisition was accomplished by a tax-free exchange of shares of the
International Value Fund in an amount equal to the outstanding shares of the
Emerald International Equity Fund. The financial statements of the International
Value Fund reflect the historical financial results of the Emerald International
Equity Fund prior to the reorganization. Additionally, the fiscal year-end of
45
<PAGE> 50
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
the Emerald International Equity Fund for reporting purposes was changed to
coincide with that of the Company.
14. SUBSEQUENT EVENTS
On November 5, 1998, the Boards of Directors of each of the Company and Nations
Portfolios approved changes in the Funds' administration arrangements whereby
NBAI and Stephens will each serve as co-administrators for the Funds, and Bank
of New York will serve as sub-administrator. These changes, which will become
effective for the Funds in the first quarter of 1999, will reflect an increase
in the overall administration fees paid by the Funds.
46
<PAGE> 51
NATIONS FUNDS
- --------------------------------------------------------------------------------
TAX INFORMATION(UNAUDITED)
For the tax year ended October 31, 1998, the amount of long-term capital gain
designated by International Value Fund was $4,050,602.
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[BACKGROUND GRAPHIC DEPICTING BASKETS]
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[NATIONS FUNDS LOGO] BULK RATE
P.O. BOX 32602 U.S. POSTAGE
CHARLOTTE, NC 28234-4602 PAID
TOLL FREE 1-800-982-2271 N READING, MA
PERMIT NO. 105
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SAR3 97495 9/98
