<PAGE> 1
[NATIONS FUNDS LOGO] [GRAPHIC OF TREE]
INVESTMENTS FOR A LIFETIME(SM)
DOMESTIC Nations
STOCK Balanced Assets
FUNDS Fund
Nations
Equity Income
Fund
Nations Value Fund
Nations Marsico
Growth & Income
Fund
Nations
Equity Index
Fund
Nations
Capital Growth
Fund
Nations
Disciplined Equity
Fund
Nations Marsico
Focused Equities
Fund
Nations
Emerging Growth
Fund
Nations
SEMI-ANNUAL REPORT FOR THE PERIOD Small Company
ENDED SEPTEMBER 30, 1998 Growth 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 ADVISER:
NATIONSBANC ADVISORS, INC.
-----------------
NOT FDIC-
INSURED
-----------------
MAY LOSE VALUE
-----------------
NO BANK GUARANTEE
-----------------
<PAGE> 3
NATIONS FUNDS
DEAR SHAREHOLDER:
Thus far in 1998, equity investors have experienced a "roller-coaster" ride that
has been both dramatic and ugly. Stock mutual funds of almost every stripe and
color fell sharply during the third quarter. According to Lipper Analytical
Services, Inc., the average diversified U.S. stock fund posted a negative 15%
return during the quarter, with small company funds losing over 21%.
International equity funds also experienced downturns over the last three
months, with diversified international funds losing 16% on average and emerging
markets funds sliding a steep 23%.*
The three months ending September 30 represented the worst quarter for U.S.
stock funds since the third quarter of 1990. At that time, we were in a heated
showdown with Saddam Hussein and Iraq. The obvious question on everyone's mind
today is: what are the drivers causing the extreme volatility being experienced
in the markets? We think the answer may be as simple as a shift in psychology by
investors. From January 1997 through July 1998, investors were comfortable with
assuming risk -- almost too comfortable. Equity valuations reflected a close to
perfect environment. Bond yield comparisons to U.S. Treasuries also reflected a
comfort with credit risk. However, Russia's debt default in August 1998 was the
last in a combination of bad news and uncertainties that changed the prevailing
mind set and compelled investors to run for cover. Global anxieties were
sufficient overall to push investors in one direction: "risk avoidance."
As we look forward, several thoughts come to mind that lead us to remain
optimistic: 1) interest rates have dropped to thirty-year lows and the U.S.
economy is very rate sensitive; 2) inflation remains in check; 3) corporate
profits, while slowing, should pick up if our economy avoids recession; 4)
Japan's government is attacking its banking crisis with an approach similar to
that used in the U.S. savings and loan crisis in the 1980s, and 5) the Federal
Reserve Board has twice moved in the last months to lower the target on the
Federal funds rate in an effort to fend off any "credit crunch."
While the risk for recession in 1999 is growing, we believe that conditions in
the U.S. will remain sound and that next year will be another year of positive
economic activity. Consistent monetary policy, a solid fiscal condition, low
inflation, and high employment are important ingredients for our economic
picture. Investors need to remain alert and appreciate the fact that changing
conditions may translate into further market volatility. On behalf of our
shareholders, we will stay vigilant in our work as we pursue the Funds'
objectives.
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 data: TradeStreet Investment Associates, Inc.
*Lipper Analytical Services, Inc. is an independent fund performance monitor.
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 30
Statements of Changes in Net Assets 32
Schedules of Capital Stock Activity 36
Financial Highlights 46
Notes to Financial Statements 66
</TABLE>
<PAGE> 6
NATIONS FUNDS
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 64.2%
AEROSPACE AND DEFENSE -- 2.7%
13,525 AlliedSignal Inc. .......................... $ 478
13,650 Litton Industries, Inc.++................... 819
6,225 Lockheed Martin Corporation................. 628
23,275 Raytheon Company, Class B................... 1,255
14,275 United Technologies Corporation............. 1,091
--------
4,271
--------
APPAREL AND TEXTILES -- 1.8%
41,500 Liz Clairborne Inc. ........................ 1,087
27,000 National Service Industries Inc. ........... 861
70,950 Reebok International Ltd.++................. 962
--------
2,910
--------
AUTOMOBILE PARTS MANUFACTURERS -- 2.2%
16,500 Eaton Corporation........................... 1,034
13,500 Lear Corporation++.......................... 591
53,685 Snap-On Inc. ............................... 1,654
--------
3,279
--------
BANKS -- 3.8%
19,000 Bank of New York Inc. ...................... 520
21,350 Chase Manhattan Corporation................. 923
5,300 Citicorp.................................... 493
72,050 First Security Corporation.................. 1,207
13,700 Mellon Bank Corporation..................... 754
23,695 One Valley Bancorp.......................... 766
30,225 PNC Bank Corporation........................ 1,360
--------
6,023
--------
BEVERAGES -- 1.7%
28,000 Anheuser-Bush Companies, Inc. .............. 1,512
40,000 PepsiCo Inc. ............................... 1,178
--------
2,690
--------
BUILDING PRODUCTS -- AIR & HEATING -- 0.8%
24,250 Armstrong World Industries, Inc. ........... 1,297
--------
CHEMICALS -- BASIC -- 0.4%
10,725 PPG Industries, Inc. ....................... 585
--------
CHEMICALS -- SPECIALTY -- 1.2%
19,700 Sigma-Aldrich Corporation................... 569
59,495 Witco Corporation........................... 1,249
--------
1,818
--------
COMPUTER INDUSTRY -- 0.8%
60,570 Flowserve Corporation....................... 1,227
--------
COMPUTER SERVICES -- 4.0%
24,200 Compaq Computer Corporation................. 765
46,100 Computer Associates International, Inc. .... 1,706
28,375 Hewlett-Packard Company..................... 1,502
10,900 International Business Machines
Corporation................................ 1,395
18,700 Sun Microsystems Inc.++..................... 931
--------
6,299
--------
COMPUTER SOFTWARE -- 0.7%
46,175 First Data Corporation...................... 1,085
--------
COSMETICS AND TOILETRY -- 1.6%
52,075 Alberto-Culver Company...................... 1,217
33,850 Kimberly-Clark Corporation.................. 1,371
--------
2,588
--------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
VALUE
SHARES (000)
<C> <S> <C>
DRUGS -- 2.6%
4,700 American Home Products Corporation.......... $ 246
10,600 Bristol-Myers Squibb Company................ 1,101
10,000 Merck & Company Inc. ....................... 1,296
13,900 Schering-Plough Corporation................. 1,440
--------
4,083
--------
DURABLE GOODS -- WHOLESALE -- 0.6%
24,545 Avnet, Inc. ................................ 904
--------
ELECTRIC POWER -- 4.2%
10,700 Consolidated Edison Company New York Inc. .. 558
26,250 Dominion Resources Inc. .................... 1,171
32,000 Energy East Corporation..................... 1,632
16,900 Entergy Corporation......................... 520
11,300 Florida Progress Corporation................ 489
61,950 Questar Corporation......................... 1,193
22,600 Texas Utilities Company..................... 1,052
--------
6,615
--------
ELECTRONICS -- 2.5%
16,600 AMP Inc. ................................... 593
72,950 Arrow Electronics, Inc.++................... 957
37,450 Harris Corporation.......................... 1,198
47,050 SCI Systems Inc.++.......................... 1,267
--------
4,015
--------
FINANCIAL SERVICES -- 3.4%
23,300 Ahmanson (H.F.) & Company................... 1,293
37,580 Allstate Corporation........................ 1,567
24,100 Paine Webber Group, Inc. ................... 723
38,275 Southtrust Corporation...................... 1,337
13,900 Travelers Group Inc......................... 521
--------
5,441
--------
FOOD PRODUCERS -- 3.4%
26,300 Interstate Bakeries Corporation............. 815
37,500 Nabisco Holdings Corporation, Class A....... 1,348
17,200 Quaker Oats Company......................... 1,015
26,975 Sara Lee Corporation........................ 1,456
9,200 Suiza Foods Corporation++................... 288
7,400 Unilever N.V., ADR.......................... 453
--------
5,375
--------
FURNITURE AND APPLIANCES -- 0.2%
11,075 Rubbermaid, Inc............................. 265
--------
INSURANCE -- 3.0%
14,000 CIGNA Corporation........................... 926
40,500 Conseco Inc. ............................... 1,238
23,750 Hartford Financial Services Group Inc. ..... 1,127
45,835 St. Paul Companies Inc. .................... 1,490
--------
4,781
--------
MEDIA -- 0.8%
50,200 CBS Corporation............................. 1,217
--------
MEDICAL PRODUCTS AND SUPPLIES -- 1.7%
20,375 Bard (C.R.) Inc. ........................... 751
25,025 Johnson & Johnson........................... 1,958
--------
2,709
--------
MEDICAL SERVICES -- 2.6%
31,100 Beverly Enterprises Inc.++.................. 249
39,600 Columbia/HCA Healthcare Corporation......... 794
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE> 7
NATIONS FUNDS
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ------------------------------------------------------------------
<C> <S> <C>
MEDICAL SERVICES -- (CONTINUED)
54,700 Tenet Healthcare Corporation++.............. $ 1,573
27,800 Wellpoint Health Networks Inc.++............ 1,559
--------
4,175
--------
MISCELLANEOUS MANUFACTURER -- 0.7%
38,225 Olin Corporation............................ 1,097
--------
OIL -- INTERNATIONAL -- 1.0%
11,650 Mobil Corporation........................... 885
31,025 Occidental Petroleum Corporation............ 667
--------
1,552
--------
OIL -- REFINING & MARKETING -- 3.6%
50,700 Coastal Corporation......................... 1,711
8,800 Columbia Energy Group....................... 516
53,800 Equitable Resources Inc. ................... 1,369
36,250 Phillips Petroleum Company.................. 1,647
22,250 Ultramar Diamond Shamrock Corporation....... 506
--------
5,749
--------
RESTAURANTS AND LODGING -- 1.1%
53,550 Hilton Hotels Corporation................... 914
40,860 Wendy's International....................... 907
--------
1,821
--------
RETAIL -- DISCOUNT -- 0.2%
16,825 Consolidated Stores Corporation++........... 330
--------
RETAIL -- GENERAL -- 0.7%
37,000 Dillards Inc., Class A...................... 1,048
--------
TELECOMMUNICATIONS -- 2.2%
48,025 ALLTEL Corporation.......................... 2,275
5,900 Ericsson (L.M.) Telephone Company, ADR...... 108
55,900 Scientific-Atlanta Inc. .................... 1,181
--------
3,564
--------
TOBACCO -- 1.0%
22,800 Philip Morris Companies Inc. ............... 1,050
17,200 UST Inc. ................................... 508
--------
1,558
--------
TRANSPORTATION -- RAILROADS -- 0.7%
34,545 Burlington Northern Santa Fe Inc. .......... 1,105
--------
TRUCKING AND SHIPPING -- 1.4%
29,050 CNF Transportation Inc. .................... 846
52,475 Ryder Systems Inc. ......................... 1,305
--------
2,151
--------
UTILITIES -- NATURAL GAS -- 0.9%
52,100 Williams Companies Inc. .................... 1,498
--------
UTILITIES -- TELEPHONE -- 4.0%
23,900 AT&T Corporation............................ 1,397
7,100 BellSouth Corporation....................... 534
24,325 GTE Corporation............................. 1,338
15,700 MCI WorldCom Inc.++......................... 767
53,000 SBC Communications Inc. .................... 2,355
--------
6,391
--------
TOTAL COMMON STOCKS (Cost $109,808)......... 101,516
--------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
ASSET-BACKED SECURITIES -- 3.5%
$ 990 Chase Manhattan Credit Card Master Trust,
Series 1996-4, Class A
6.730% 02/15/03............................ $ 999
1,550 CS First Boston Mortgage Securities
Corporation, Series 1996-2, Class A4,
6.620% 09/25/09............................ 1,579
546 EQCC Home Equity Loan Trust, Series 1996-2,
Class A2,
6.700% 09/15/08............................ 549
55 Freddie Mac Certificates, REMIC PAC, Series
138, Class D,
8.500% 02/15/21............................ 56
500 IMC Home Equity Loan Trust, 6.540%
11/20/12................................... 510
Premier Auto Trust:
1,250 Series 1997-7, Class A3,
6.530% 12/06/03............................ 1,291
250 Series 1998-1, Class B,
5.920% 10/06/04............................ 254
325 Standard Credit Card Master Trust, Series
1995-9, Class B,
6.650% 10/07/07............................ 346
--------
TOTAL ASSET-BACKED SECURITIES (Cost
$5,469).................................... 5,584
--------
CORPORATE BONDS AND NOTES -- 10.6%
AEROSPACE -- 0.2%
250 Raytheon Company, Notes,
6.750% 08/15/07............................ 268
--------
BANKING AND FINANCE -- 6.7%
350 American Express Credit, Deb.,
8.500% 06/15/99............................ 357
875 Bell Atlantic Corporation, MTN,
7.630% 10/15/09............................ 1,060
ERAC USA Finance Company:
250 Bonds, 6.950% 03/01/04**................... 263
500 Notes, 6.625% 02/15/05**................... 519
500 FCB/NB Capital Trust I, Gtd. Notes,
8.050% 03/01/28**.......................... 514
660 Federal Home Loan Mortgage Corporation,
Deb.,
6.200% 09/08/08............................ 660
500 Federal National Mortgage Association, Deb.,
6.350% 06/10/05............................ 542
250 First Union Corporation, Bonds,
8.040% 12/01/26............................ 271
500 Ford Motor Credit Company, MTN,
6.800% 04/23/01............................ 520
GMAC, Deb.:
500 8.750% 07/15/05............................ 594
250 8.875% 06/01/10............................ 321
500 Goldman Sachs Group, LP, Notes,
6.625% 12/01/04**.......................... 535
500 Lehman Brothers Holdings, MTN,
7.250% 04/15/03............................ 508
1,000 Merrill Lynch & Company, Notes,
6.700% 08/01/00............................ 1,024
750 Popular Inc., MTN,
6.375% 09/15/03............................ 763
750 Salomon, Inc., Notes,
6.625% 11/30/00............................ 768
500 Spintab AB, Bonds,
7.500% 08/14/49**.......................... 518
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 8
NATIONS FUNDS
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
BANKING AND FINANCE -- (CONTINUED)
$ 250 Union Planters Corporation, Sub. Notes,
8.200% 12/15/26............................ $ 258
250 Wells Fargo Capital I, Gtd. Notes,
7.960% 12/15/26............................ 269
250 Zurich Capital Trust I, Gtd. Notes,
8.376% 06/01/37**.......................... 273
--------
10,537
--------
INDUSTRIAL -- 1.4%
500 Auburn Hills Trust Certificates, Deb.,
12.000% 05/01/20........................... 836
500 Ford Motor Company, Deb.,
7.400% 11/01/46............................ 569
250 Healthsouth Corporation, Sr. Notes,
6.875% 06/15/05**.......................... 264
500 Xerox Capital Trust I, Gtd. Notes,
8.000% 02/01/27............................ 534
--------
2,203
--------
INSURANCE -- 0.1%
250 American Re Corporation, Sr. Note,
7.450% 12/15/26............................ 276
--------
TELECOMMUNICATIONS -- 0.2%
250 GTE Corporation, Notes,
6.600% 09/22/05............................ 267
--------
TRANSPORTATION -- 0.2%
250 Norfolk Southern Corporation, Notes,
7.350% 05/15/07............................ 281
--------
UTILITY -- ELECTRIC -- 0.6%
1,000 Northern State Power, Minnesota, First
Mortgage,
5.500% 02/01/99............................ 1,001
--------
UTILITY -- TELEPHONE -- 0.7%
400 AT&T Corporation, Deb.,
8.125% 01/15/22............................ 438
500 Ches Pot Telephone, Maryland, Deb.,
8.000% 10/15/29............................ 627
--------
1,065
--------
WASTE DISPOSAL -- 0.2%
250 U.S.A. Waste Services Inc., Sr. Notes,
7.125% 10/01/07............................ 272
--------
OTHER -- 0.3%
500 Dominion Resources Capital Trust I, Gtd.
Notes,
7.830% 12/01/27**.......................... 521
--------
TOTAL CORPORATE BONDS AND NOTES (Cost
$15,857)................................... 16,691
--------
MORTGAGE-BACKED SECURITIES -- 6.1%
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC)
CERTIFICATES -- 3.0%
199 8.000% 07/01/10............................ 205
Gold:
1,779 6.500% 08/01/10............................ 1,816
702 7.000% 06/01/11............................ 722
71 8.000% 06/01/99............................ 72
1,656 8.000% 09/01/25............................ 1,715
193 8.500% 02/01/00............................ 196
--------
4,726
--------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
- ------------------------------------------------------------------
<C> <S> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA)
CERTIFICATES -- 1.2%
$ 587 7.000% 01/25/21............................ $ 613
231 7.500% 02/01/25............................ 239
94 8.000% 06/01/99............................ 94
886 8.500% 08/01/11............................ 931
--------
1,877
--------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA)
CERTIFICATES -- 1.9%
2,176 7.500% 10/15/27............................ 2,255
747 7.500% 12/15/23............................ 775
8 10.000% 02/15/18........................... 8
--------
3,038
--------
TOTAL MORTGAGE-BACKED SECURITIES (Cost
$9,437).................................... 9,641
--------
U.S. TREASURY SECURITIES -- 13.9%
U.S. TREASURY BOND -- 5.2%
2,900 6.250% 08/15/23............................ 3,319
575 6.750% 08/15/26............................ 706
2,400 7.500% 05/15/02............................ 2,649
500 9.250% 02/15/16............................ 736
500 12.000% 08/15/13........................... 782
--------
8,192
--------
U.S. TREASURY NOTES -- 8.7%
3,000 5.375% 02/15/01............................ 3,068
4,200 5.500% 02/15/08............................ 4,543
425 5.750% 11/15/00............................ 437
50 5.750% 11/30/02............................ 53
1,200 6.125% 08/15/07............................ 1,343
1,500 7.500% 10/31/99............................ 1,545
2,550 7.875% 08/15/01............................ 2,787
--------
13,776
--------
TOTAL U.S. TREASURY SECURITIES (Cost
$20,597)................................... 21,968
--------
<CAPTION>
SHARES
- --------
<C> <S> <C>
INVESTMENT COMPANY -- 1.3% (Cost $1,990)
1,990,000 Nations Cash Reserves(a).................... 1,990
--------
TOTAL INVESTMENTS
(Cost $163,158*).................. 99.6% 157,390
--------
OTHER ASSETS AND LIABILITIES........ 0.4%
Receivable for investment securities....... 626
Receivable for fund shares sold............ 139
Dividends and interest receivable.......... 884
Payable for investment securities.......... (209)
Shareholder servicing and distribution fees
payable.................................. (475)
Investment advisory fee payable............ (98)
Accrued Trustees'/Directors' fees and
expenses................................. (13)
Administration fee payable................. (13)
Accrued expenses and other liabilities..... (139)
--------
TOTAL OTHER ASSETS AND LIABILITIES (NET)...
702
--------
NET ASSETS.......................... 100.0% $158,092
========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 9
NATIONS FUNDS
Nations Balanced Assets Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
(000)
- -----------------------------------------------------------------
<S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share ($57,480,000/6,029,978
shares outstanding)...................... $9.53
-------
-------
PRIMARY B SHARES:
Net asset value, offering and redemption
price per share ($1,655,000/173,511
shares outstanding)...................... $9.54
-------
-------
INVESTOR A SHARES:
Net asset value, offering and redemption
price per share ($25,256,000/2,653,608
shares outstanding)...................... $9.52
-------
-------
INVESTOR B SHARES:
Net asset value and offering price per
share# ($72,181,000/7,602,260 shares
outstanding)............................. $9.49
-------
-------
INVESTOR C SHARES:
Net asset value, offering and redemption
price per share ($1,521,000/160,807
shares outstanding)...................... $9.46
-------
-------
AT SEPTEMBER 30, 1998, NET ASSETS
CONSIST OF:
Paid-in capital............................ $165,287
Undistributed net investment income........ 125
Accumulated net realized loss on
investments sold......................... (1,552)
Unrealized depreciation of investments..... (5,768)
--------
NET ASSETS.......................... $158,092
========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized depreciation of investment
securities was comprised of gross appreciation of $6,733,000 and gross
depreciation of $12,501,000 for federal income tax purposes. At September 30,
1998, the aggregate cost of securities for federal income tax purposes was
$163,158,000.
** Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended ("the 1933 Act"). These securities may be resold in
transactions exempt from registration, normally to qualified institutional
buyers.
++ Non-income producing security.
# Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
(a) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates, Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 10
NATIONS FUNDS
Nations Equity Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 93.3%
AEROSPACE AND DEFENSE -- 5.3%
133,200 Allied Signal Inc. ......................... $ 4,712
91,550 Lockhead Martin Corporation................. 9,229
281,100 Raytheon Company............................ 15,162
210,700 TRW Inc. ................................... 9,350
93,300 United Technologies Corporation............. 7,132
--------
45,585
--------
APPAREL AND TEXTILES -- 1.2%
393,775 Liz Claiborne Inc. ......................... 10,312
--------
AUTOMOBILE PARTS MANUFACTURERS -- 4.2%
598,225 Cooper Tire & Rubber Company................ 10,768
120,375 Eaton Corporation........................... 7,546
536,350 Genuine Parts Company....................... 16,124
48,300 Snap-On Inc. ............................... 1,488
--------
35,926
--------
BANKS -- 5.4%
167,400 Banc One Corporation........................ 7,136
82,750 Bankers Trust Corporation................... 4,882
189,300 Chase Manhattan Corporation................. 8,187
175,400 Crestar Financial Corporation............... 9,954
128,100 Fleet Financial Group Inc. ................. 9,407
159,625 PNC Bank Corporation........................ 7,183
--------
46,749
--------
BEVERAGES -- 1.4%
27,600 Anheuser-Busch Companies Inc. .............. 1,490
357,350 PepsiCo Inc. ............................... 10,520
--------
12,010
--------
BUILDING PRODUCTS -- 2.2%
205,250 Armstrong World Industries Inc. ............ 10,981
224,625 York International Corporation.............. 7,497
--------
18,478
--------
CHEMICALS -- BASIC -- 1.9%
178,900 Imperial Chemical Industries PLC, ADR....... 5,680
376,300 Mallinckrodt Group Inc. .................... 7,643
221,150 Wellman Inc. ............................... 2,820
--------
16,143
--------
CHEMICALS -- SPECIALTY -- 4.3%
456,250 Engelhard Corporation....................... 8,070
356,325 Lubrizol Corporation........................ 9,465
1,068,875 RPM Inc. ................................... 15,432
201,240 Witco Corporation........................... 4,226
--------
37,193
--------
COMPUTER RELATED -- 2.6%
77,225 Adobe Systems Inc. ......................... 2,679
282,350 Autodesk Inc. .............................. 7,412
226,250 Hewlett-Packard Company..................... 11,977
--------
22,068
--------
COMPUTER SERVICES -- 1.2%
287,750 Computer Associates International Inc. ..... 10,647
--------
CONTAINERS -- 0.9%
291,800 Crown Cork & Seal Inc. ..................... 7,806
--------
COSMETICS AND TOILETRY -- 1.2%
250,700 Kimberly-Clark Corporation.................. 10,153
--------
DATA PROCESSING/MANAGEMENT -- 0.8%
276,700 First Data Corporation...................... 6,502
--------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
VALUE
SHARES (000)
<C> <S> <C>
DIVERSIFIED -- 3.5%
186,879 Cooper Industries Inc. ..................... $ 7,615
225,900 Fluor Corporation........................... 9,276
214,100 National Service Industries................. 6,825
113,100 PPG Industries Inc. ........................ 6,171
--------
29,887
--------
DURABLE GOODS -- WHOLESALE -- 0.7%
172,400 Avnet, Inc. ................................ 6,346
--------
ELECTRIC POWER -- 4.4%
271,700 CINergy Corporation......................... 10,393
139,045 Duke Power Company.......................... 9,203
230,760 PacifiCorp.................................. 4,428
331,300 SCANA Corporation........................... 11,119
62,900 Texas Utilities Company..................... 2,929
--------
38,072
--------
ELECTRICAL EQUIPMENT -- 0.4%
130,700 Raychem Corporation......................... 3,186
--------
ELECTRONICS -- 2.4%
141,825 AMP Inc. ................................... 5,070
216,125 Harris Corporation.......................... 6,916
227,800 Thomas & Betts Corporation.................. 8,671
--------
20,657
--------
FINANCIAL SERVICES -- 0.4%
93,700 Travelers Group Inc. ....................... 3,514
--------
FOOD PRODUCERS -- 3.6%
115,400 Bestfoods................................... 5,590
54,700 Chiquita Brands International Inc. ......... 578
119,400 General Mills Inc. ......................... 8,358
305,350 McCormack & Company......................... 8,874
138,960 Sara Lee Corporation........................ 7,504
--------
30,904
--------
FOOD RETAILERS -- 0.8%
315,800 Supervalu Inc. ............................. 7,362
--------
FURNITURE AND APPLIANCES -- 0.5%
168,917 Rubbermaid Inc. ............................ 4,043
--------
GAS DISTRIBUTION -- 2.3%
29,500 AGL Resources Inc. ......................... 572
217,700 MarketSpan Corporation...................... 6,245
119,000 NICOR Inc. ................................. 4,931
404,800 Questar Corporation......................... 7,792
--------
19,540
--------
HOTELS -- 0.6%
302,975 Hilton Hotels Corporation................... 5,170
--------
INSURANCE -- 5.1%
111,450 Aetna Inc. ................................. 7,746
135,300 Allstate Corporation........................ 5,640
143,000 Conseco Inc. ............................... 4,370
47,800 Lincoln National Corporation Ltd............ 3,932
178,500 SAFECO Corporation.......................... 7,441
452,100 St. Paul Companies Inc. .................... 14,693
--------
43,822
--------
MACHINERY AND EQUIPMENT -- 2.4%
118,900 Dover Corporation........................... 3,671
262,000 Federal Signal Corporation.................. 5,518
497,700 Pall Corporation............................ 11,043
--------
20,232
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 11
NATIONS FUNDS
Nations Equity Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
MEDIA -- 0.8%
275,275 CBS Corporation............................. $ 6,675
--------
MEDICAL PRODUCTS AND SUPPLIES -- 1.4%
158,200 Johnson & Johnson Company................... 12,379
--------
OIL -- DOMESTIC -- 3.1%
164,518 Atlantic Richfield Company.................. 11,670
351,000 Occidental Petroleum Corporation............ 7,547
224,669 Sun Company Inc. ........................... 7,189
--------
26,406
--------
OIL -- INTERNATIONAL -- 2.1%
43,000 Chevron Corporation......................... 3,615
189,200 Mobil Corporation........................... 14,367
--------
17,982
--------
OIL SERVICES -- 3.7%
335,200 Apache Corporation.......................... 8,988
667,425 Baker Hughes Inc. .......................... 13,974
238,000 Halliburton Company......................... 6,798
60,900 Murphy Oil Corporation...................... 2,360
--------
32,120
--------
PAPER AND FOREST PRODUCTS -- 3.4%
131,100 Potlatch Corporation........................ 4,465
383,262 Sonoco Products Company..................... 9,198
193,600 Union Camp Corporation...................... 7,623
216,900 Westvaco Corporation........................ 5,206
72,000 Weyerhaeuser Company........................ 3,038
--------
29,530
--------
PRINTING AND PUBLISHING -- 0.8%
191,800 Donnelley (R.R.) & Sons Company............. 6,749
--------
RECREATION -- 1.3%
712,950 Brunswick Corporation....................... 9,224
69,600 Disney (Walt) Company....................... 1,762
--------
10,986
--------
RESTAURANTS AND LODGING -- 2.7%
188,300 McDonald's Corporation...................... 11,239
556,500 Wendy's International Inc. ................. 12,347
--------
23,586
--------
RETAIL -- GENERAL -- 2.8%
273,900 Dillars Department Stores Inc., Class A..... 7,755
204,750 May Department Stores Company............... 10,545
125,450 Penney (J.C.) Company Inc. ................. 5,637
--------
23,937
--------
SERVICES -- 1.3%
401,200 Ogden Corporation........................... 11,409
--------
TOBACCO -- 0.1%
13,600 Philip Morris Companies Inc. ............... 626
--------
TOYS -- 0.5%
139,000 Hasbro Inc. ................................ 4,101
--------
TRANSPORTATION -- RAILROADS -- 1.9%
220,995 Burlington Northern Santa Fe................ 7,072
218,400 CSX Corporation............................. 9,186
--------
16,258
--------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
VALUE
SHARES (000)
<C> <S> <C>
TRUCKING AND SHIPPING -- 0.2%
71,740 Ryder Systems Inc. ......................... $ 1,785
--------
UTILITIES -- NATURAL GAS -- 3.5%
303,300 Consolidated Natural Gas Company............ 16,530
517,900 Equitable Resources Inc. ................... 13,174
--------
29,704
--------
UTILITIES -- TELEPHONE -- 4.0%
299,725 ALLTEL Corporation.......................... 14,199
296,300 Frontier Corporation........................ 8,111
216,294 GTE Corporation............................. 11,896
--------
34,206
--------
TOTAL COMMON STOCKS
(Cost $809,816)............................. 800,746
--------
CONVERTIBLE PREFERRED STOCKS -- 3.8%
BANKS -- 2.1%
679,900 National Australia Bank,
Conv., 7.875%.............................. 18,102
--------
FOOD PRODUCERS -- 1.3%
241,000 Chiquita Brands International Inc.,
Series B, Conv., $3.750.................... 11,086
--------
HEALTH CARE -- 0.4%
50,590 AETNA Inc.,
Class C, 6.250%............................ 3,545
--------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $33,110).............................. 32,733
--------
<CAPTION>
PRINCIPAL
AMOUNT
(000)
---------
<C> <S> <C>
CONVERTIBLE BONDS AND NOTES -- 2.4%
INSURANCE -- 0.5%
$ 4,200 NAC Re Corporation, Conv. Sub. Note, 5.250%
12/15/02................................... 4,536
--------
METALS AND MINING -- 1.3%
15,000 Barrick Gold Conv. Note (Trizec Hahn
Corporation), 3.250% 12/10/18.............. 10,725
--------
OIL -- 0.3%
1,030 Pennzoil Company, Conv., 4.750% 10/01/03.... 1,401
1,455 Pennzoil Company, Conv., 4.950% 08/15/08.... 1,480
--------
2,881
--------
PHARMACEUTICALS -- 0.3%
3,000 Dura Pharmaceuticals Inc.,
3.500% 07/15/02............................ 2,070
--------
TOTAL CONVERTIBLE BONDS AND NOTES
(Cost $19,522).............................. 20,212
--------
<CAPTION>
SHARES
- ---------
<C> <S> <C>
INVESTMENT COMPANY -- 0.9% (Cost $8,053)
8,053,000 Nations Cash Reserves (a)................... 8,053
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 12
NATIONS FUNDS
Nations Equity Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
(000)
- -------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL INVESTMENTS
(Cost $870,501*)......................100.4% $861,744
--------
OTHER ASSETS AND LIABILITIES (NET).......... (0.4)%
Cash........................................ 1
Dividends and interest receivable........... 2,248
Receivable for fund shares sold............. 705
Payable for fund shares redeemed............ (4,456)
Shareholder servicing and distribution fees
payable.................................... (851)
Investment advisory fee payable............. (454)
Accrued Trustees'/Directors' fees and
expenses................................... (35)
Administration fee payable.................. (72)
Accrued expenses and other liabilities...... (436)
--------
TOTAL OTHER ASSETS AND LIABILITIES (NET).... (3,350)
--------
NET ASSETS............................100.0% $858,394
========
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share ($686,202,000/64,748,343
shares outstanding)........................ $10.60
========
PRIMARY B SHARES:
Net asset value, offering and redemption
price per share ($0##/1 share
outstanding)............................... $10.50
========
INVESTOR A SHARES:
Net asset value, offering and redemption
price per share ($52,743,000/4,997,958
shares outstanding)........................ $10.55
========
INVESTOR B SHARES:
Net asset value and offering price per
share# ($112,844,000/10,711,330 shares
outstanding)............................... $10.54
========
INVESTOR C SHARES:
Net asset value, offering and redemption
price per share ($6,605,000/619,867 shares
outstanding)............................... $10.65
========
</TABLE>
<TABLE>
<CAPTION>
VALUE
(000)
<S> <C> <C> <C>
AT SEPTEMBER 30, 1998, NET ASSETS CONSIST
OF:
Paid-in capital............................. $833,784
Undistributed net investment income......... 384
Accumulated net realized gain on investments
sold....................................... 32,983
Unrealized depreciation of investments...... (8,757)
--------
NET ASSETS.................................. $858,394
========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized depreciation of investment
securities was comprised of gross appreciation of $73,590,000 and gross
depreciation of $82,347,000 for federal income tax purposes. At September 30,
1998, the aggregate cost of securities for federal income tax purposes was
$870,501,000.
# Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
## Amount represents less than $500.
(a) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates, Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 13
NATIONS FUNDS
Nations Value Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 99.4%
AEROSPACE AND DEFENSE -- 5.1%
283,525 Lockheed Martin Corporation............... $ 28,583
751,934 Raytheon Company, Class B................. 40,557
533,250 United Technologies Corporation........... 40,760
----------
109,900
----------
APPAREL AND TEXTILES -- 0.4%
331,100 Liz Claiborne Inc. ....................... 8,671
----------
AUTOMOBILE AND TRUCK MANUFACTURERS -- 1.0%
464,775 Chrysler Corporation...................... 22,251
----------
AUTOMOBILE PARTS MANUFACTURERS -- 1.2%
269,350 B.F. Goodrich Company..................... 8,804
304,562 Dana Corporation.......................... 11,364
132,125 Lear Corporation++........................ 5,780
----------
25,948
----------
BANKS -- 6.6%
779,205 Banc One Corporation...................... 33,214
378,400 BankBoston Corporation.................... 12,487
664,900 Bank of New York Inc. .................... 18,202
454,629 Chase Manhattan Corporation............... 19,663
177,075 Citicorp.................................. 16,457
718,150 Mellon Bank Corporation................... 39,543
----------
139,566
----------
BEVERAGES -- 1.2%
834,425 PepsiCo Inc. ............................. 24,563
----------
CHEMICALS -- BASIC -- 2.1%
132,575 Dow Chemical Company...................... 11,327
584,675 du Pont (E.I.) de Nemours & Company....... 32,815
----------
44,142
----------
CHEMICALS -- SPECIALTY -- 0.2%
233,650 Cytec Industries Inc.++................... 4,176
----------
COAL, GAS AND PIPELINE -- 3.7%
1,259,050 Coastal Corporation....................... 42,493
636,700 Columbia Energy Group..................... 37,327
----------
79,820
----------
COMPUTER RELATED -- 8.2%
553,400 Ceridian Corporation++.................... 31,751
1,215,975 Compaq Computer Corporation++............. 38,455
448,075 International Business Machines
Corporation.............................. 57,354
951,750 Sun Microsystems Inc.++................... 47,409
----------
174,969
----------
CONSTRUCTION -- 1.6%
541,200 Centex Corporation........................ 18,671
657,200 Masco Corporation......................... 16,184
----------
34,855
----------
CONSUMER PRODUCTS -- 0.9%
325,900 Avon Products Inc. ....................... 9,146
153,050 Unilever NV ADR........................... 9,374
----------
18,520
----------
DIVERSIFIED -- 1.0%
581,300 AlliedSignal Inc. ........................ 20,563
----------
DRUGS -- 5.1%
92,400 American Home Products Corporation........ 4,839
424,800 Bristol-Myers Squibb Company.............. 44,126
567,950 Schering-Plough Corporation............... 58,818
----------
107,783
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
ELECTRIC POWER -- 4.8%
220,050 Consolidated Edison Inc. ................. $ 11,470
1,168,800 Energy East Corporation................... 59,609
232,550 Florida Progress Corporation.............. 10,072
466,400 Texas Utilities Company................... 21,717
----------
102,868
----------
ELECTRONICS -- 1.3%
544,200 Harris Corporation........................ 17,414
231,250 Sundstrand Corporation.................... 10,724
----------
28,138
----------
FINANCIAL SERVICES -- 3.3%
709,900 Ahmanson (H.F.) & Company................. 39,399
1,030,000 Paine Webber Group Inc. .................. 30,900
----------
70,299
----------
FOOD PRODUCERS -- 5.2%
768,125 Interstate Bakeries Corporation........... 23,812
635,650 Kroger Company++.......................... 31,783
507,375 Nabisco Holdings Corporation, Class A..... 18,234
543,075 Quaker Oats Company....................... 32,041
189,650 Suiza Foods Corporation++................. 5,927
----------
111,797
----------
INSURANCE -- 7.0%
603,920 CIGNA Corporation......................... 39,934
57,983 General Re Corporation.................... 11,771
847,150 Hartford Financial Services Group Inc. ... 40,187
696,450 Lincoln National Corporation Ltd. ........ 57,283
----------
149,175
----------
MACHINERY AND EQUIPMENT -- 1.1%
553,913 Cooper Industries Inc. ................... 22,572
122,050 Foster Wheeler Corporation................ 1,678
----------
24,250
----------
MEDICAL SERVICES -- 5.6%
799,500 Columbia/HCA Healthcare Corporation....... 16,040
2,653,775 Beverly Enterprises++..................... 21,230
1,373,750 Tenet Healthcare Corporation++............ 39,495
775,075 Wellpoint Health Networks Inc.++.......... 43,453
----------
120,218
----------
OFFICE EQUIPMENT -- 2.3%
570,850 Xerox Corporation......................... 48,380
----------
OIL -- INTERNATIONAL -- 6.1%
548,400 British Petroleum Company PLC, ADR........ 47,848
125,783 Chevron Corporation....................... 10,574
344,700 Exxon Corporation......................... 24,194
631,900 Mobil Corporation......................... 47,985
----------
130,601
----------
OIL SERVICES -- 1.0%
1,101,850 Valero Energy Corporation................. 21,899
----------
PRINTING AND PUBLISHING -- 0.8%
604,350 Dun & Bradstreet Corporation.............. 16,317
----------
RETAIL -- DISCOUNT -- 0.6%
677,175 TJX Companies Inc. ....................... 12,062
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 14
NATIONS FUNDS
Nations Value Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
RETAIL -- GENERAL -- 4.2%
647,300 Dillard Department Stores Inc., Class A... $ 18,327
917,500 Federated Department Stores Inc.++........ 33,374
571,940 May Department Stores Company............. 29,455
368,200 Saks Inc. ................................ 8,261
----------
89,417
----------
SEMICONDUCTORS -- 1.7%
422,740 Intel Corporation......................... 36,250
----------
TOBACCO -- 2.9%
1,072,587 Philip Morris Companies Inc. ............. 49,406
449,450 UST Inc. ................................. 13,287
----------
62,693
----------
TOYS -- 1.3%
928,900 Hasbro Inc. .............................. 27,403
----------
TRANSPORTATION -- AIRLINES -- 2.1%
5,400 AMR Corporation++......................... 299
452,350 Delta Air Lines Inc. ..................... 43,991
----------
44,290
----------
UTILITIES -- NATURAL GAS -- 1.5%
1,077,000 Williams Companies Inc. .................. 30,964
----------
UTILITIES -- TELEPHONE -- 8.3%
494,475 AT&T Corporation.......................... 28,896
593,950 BellSouth Corporation..................... 44,695
688,095 GTE Corporation........................... 37,845
323,942 MCI WorldCom Corporation.................. 15,833
1,094,900 SBC Communications Inc. .................. 48,655
----------
175,924
----------
TOTAL COMMON STOCKS (Cost $1,714,431)..... 2,118,672
----------
</TABLE>
<TABLE>
<S> <C>
INVESTMENT COMPANY -- 0.8% (Cost $16,840)
16,840,000 Nations Cash Reserves(a).................. 16,840
----------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS
(Cost $1,731,271*)................ 100.2% 2,135,512
----------
OTHER ASSETS AND
LIABILITIES (NET)................. (0.2)%
Cash....................................... 1
Dividends and interest receivable.......... 3,623
Receivable for Fund shares sold............ 1,499
Other asset................................ 13
Payable for Fund shares redeemed........... (7,406)
Shareholder servicing and distribution fees
payable.................................. (1,054)
Investment advisory fee payable............ (1,321)
Accrued Trustees'/Directors' fees and
expenses................................. (105)
Administration fee payable................. (176)
Accrued expenses and other liabilities..... (258)
----------
TOTAL OTHER ASSETS AND
LIABILITIES (NET)........................ (5,184)
----------
NET ASSETS.......................... 100.0% $2,130,328
==========
</TABLE>
<TABLE>
<CAPTION>
VALUE
(000)
- ------------------------------------------------------------------
<C> <S> <C>
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share
($1,859,196,000/115,951,839 shares
outstanding)............................ $16.03
==========
PRIMARY B SHARES:
Net asset value, offering and redemption
price per share ($0##/1 share
outstanding)............................ $16.06
==========
INVESTOR A SHARES:
Net asset value, offering and redemption
price per share ($124,392,000/7,755,716
shares outstanding)..................... $16.04
==========
INVESTOR B SHARES:
Net asset value and offering price per
share# ($135,912,000/8,537,278 shares
outstanding)............................ $15.92
==========
INVESTOR C SHARES:
Net asset value, offering and redemption
price per share ($10,828,000/681,222
shares outstanding)..................... $15.89
==========
AT SEPTEMBER 30, 1998, NET ASSETS
CONSIST OF:
Paid-in capital.......................... $1,601,083
Undistributed net investment income...... 390
Accumulated net realized gain on
investments sold........................ 124,614
Unrealized appreciation of investments... 404,241
----------
NET ASSETS............................... $2,130,328
==========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $523,958,000 and gross
depreciation of $119,717,000 for federal income tax purposes. At September
30, 1998, the aggregate cost of securities for federal income tax purposes
was $1,731,271,000.
++ Non-income producing security.
# Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
## Amount represents less than $500.
(a) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates, Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 15
NATIONS FUNDS
Nations Marsico Growth and Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 94.0%
AEROSPACE AND DEFENSE EQUIPMENT -- 3.1%
49,312 Gulfstream Aerospace Corporation............ $ 1,985
--------
AIRLINES -- 4.0%
14,673 Delta Air Lines Inc. ....................... 1,427
17,512 UAL Corporation............................. 1,134
--------
2,561
--------
APPAREL MANUFACTURERS -- 0.1%
1,847 Polo Ralph Lauren Corporation++............. 37
--------
APPLICATION SOFTWARE -- 0.7%
13,158 Peoplesoft Inc.++........................... 429
--------
AUTOMOTIVE -- CARS & LIGHT TRUCKS -- 6.5%
12,809 Chrysler Corporation........................ 613
62,921 Ford Motor Company.......................... 2,953
10,968 General Motors Corporation.................. 600
--------
4,166
--------
BEVERAGES -- ALCOHOLIC -- 2.7%
31,848 Anheuser-Busch Companies Inc. .............. 1,720
--------
BEVERAGES -- NON-ALCOHOLIC -- 1.4%
36,268 Coca-Cola Enterprises Inc. ................. 916
--------
BUILDING RESIDENTIAL/COMMERCIAL -- 2.0%
67,191 MDC Holdings Inc. .......................... 1,239
--------
COMMERCIAL BANKS -- 7.3%
21,936 Northern Trust Corporation.................. 1,497
57,324 Norwest Corporation......................... 2,053
31,646 US BanCorporation........................... 1,125
--------
4,675
--------
COMPUTER -- MICRO -- 6.6%
52,524 EMC Corporation............................. 3,004
9,465 International Business Machines
Corporation................................ 1,212
--------
4,216
--------
COMPUTER SOFTWARE -- 3.8%
21,804 Microsoft Corporation++..................... 2,400
--------
CRUISE LINES -- 3.1%
62,072 Carnival Corporation........................ 1,975
--------
DIVERSIFIED MANUFACTURING OPERATIONS -- 2.6%
20,891 General Electric Company.................... 1,662
--------
FINANCE -- OTHER SERVICES -- 6.0%
28,018 Associates First Capital Corporation........ 1,828
17,811 Federal National Mortgage Association....... 1,144
29,855 MBNA Corporation............................ 855
--------
3,827
--------
HOTELS & MOTELS -- 0.6%
17,739 Four Seasons Hotels Inc. ................... 366
--------
INTERNET SOFTWARE -- 1.6%
9,410 America Online Inc. ........................ 1,047
--------
MACHINERY CONSTRUCTION & MINING -- 0.7%
10,715 Caterpillar Inc. ........................... 477
--------
MEDICAL -- DRUGS -- 10.2%
20,208 Pfizer Inc. ................................ 2,141
20,396 Schering-Plough Corporation................. 2,112
29,750 Warner-Lambert Company...................... 2,246
--------
6,499
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
MEDICAL SERVICES -- 2.9%
30,280 IMS Health Inc. ............................ $ 1,875
--------
MULTIMEDIA -- 10.5%
10,440 Clear Channel Communications Inc. .......... 496
60,283 MediaOne Group Inc. ........................ 2,678
39,966 Time Warner Inc. ........................... 3,500
--------
6,674
--------
NETWORK PRODUCTS -- 2.8%
28,839 Cisco Systems Inc.++........................ 1,783
--------
OIL -- INTERNATIONAL -- 3.2%
23,537 British Petroleum Company ADR............... 2,054
--------
RENTAL AUTO & EQUIPMENT -- 2.8%
43,425 Hertz Corporation Class A................... 1,797
--------
RETAIL -- BUILDING PRODUCTS -- 1.7%
27,316 Home Depot Inc. ............................ 1,079
--------
RETAIL -- SPECIALTY -- 2.0%
23,901 Gap Inc. ................................... 1,261
--------
SAVINGS/LOANS/THRIFTS -- EASTERN U.S. -- 0.1%
2,900 Staten Island Bancorp Inc. ................. 52
--------
TELECOMMUNICATION EQUIPMENT -- 2.6%
24,242 Lucent Technologies Inc. ................... 1,674
--------
TRANSPORTATION -- RAILROADS -- 2.4%
44,092 Kansas City Southern Industries Inc. ....... 1,543
--------
TOTAL COMMON STOCKS
(Cost $60,690).............................. 59,989
--------
<CAPTION>
PRINCIPAL
AMOUNT
(000)
---------
<C> <S> <C>
CORPORATE BONDS AND NOTES -- 1.7%
$ 550 Premier Parks Inc., 12.000% 08/15/03........ 543
500 MDC Holdings Inc., 8.375% 02/01/08.......... 531
--------
TOTAL CORPORATE BONDS AND NOTES (Cost
$1,079).................................... 1,074
--------
U.S. GOVERNMENT AGENCY -- 14.7% (Cost $9,400)
9,400 Federal Home Loan Bank, 0.000% 10/01/98..... 9,400
--------
U.S. TREASURY SECURITIES -- 1.5% (Cost $939)
878 U.S. Treasury Bond, 5.500% 08/15/28......... 949
--------
<CAPTION>
SHARES
---------
<C> <S> <C>
INVESTMENT COMPANY -- 0.0% (Cost $2)
2,000 Nations Cash Reserves(a).................... 2
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 16
NATIONS FUNDS
Nations Marsico Growth and Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
(000)
- -----------------------------------------------------------------
<S> <C> <C>
TOTAL INVESTMENTS (Cost $72,110*)... 112.0% $ 71,414
--------
OTHER ASSETS AND LIABILITIES
(NET)............................. (12.0)
Cash....................................... 1
Receivable for investment securities....... 1,931
Receivable for fund shares sold............ 1,314
Dividends and interest receivable.......... 34
Other assets............................... 33
Payable for investment securities.......... (10,789)
Payable for fund shares redeemed........... (27)
Shareholder servicing and distribution fees
payable.................................. (91)
Investment advisory fee payable............ (18)
Administration fee payable................. (5)
Accrued expenses and other liabilities..... (9)
--------
TOTAL OTHER ASSETS AND LIABILITIES (NET)...
(7,626)
--------
NET ASSETS.......................... 100.0% $ 63,788
========
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share ($13,139,000/1,148,076
shares outstanding)...................... $11.45
-------
-------
INVESTOR A SHARES:
Net asset value, offering and redemption
price per share ($8,699,000/758,188
shares outstanding)...................... $11.48
-------
-------
INVESTOR B SHARES:
Net asset value and offering price per
share# ($41,122,000/3,595,411 shares
outstanding)............................. $11.44
-------
-------
INVESTOR C SHARES:
Net asset value, offering and redemption
price per share ($828,000/72,310 shares
outstanding)............................. $11.45
-------
-------
</TABLE>
<TABLE>
<CAPTION>
VALUE
(000)
- -----------------------------------------------------------------
<S> <C> <C>
AT SEPTEMBER 30, 1998, NET ASSETS
CONSIST OF:
Paid-in capital............................ $ 68,433
Distributions in excess of net investment
income................................... (101)
Accumulated net realized loss on
investments sold......................... (3,848)
Unrealized depreciation of investments..... (696)
--------
NET ASSETS................................. $ 63,788
========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized depreciation of investment
securities was comprised of gross appreciation of $2,171,000 and gross
depreciation of $2,867,000 for federal income tax purposes. At September 30,
1998, the aggregate cost of securities for federal income tax purposes was
$72,110,000.
** Rate represents annualized yield at date of purchase.
++++ 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.
# Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
(a) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates, Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 17
NATIONS FUNDS
Nations Equity Index Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 99.0%
AEROSPACE AND DEFENSE -- 1.3%
80,800 Boeing Company.............................. $ 2,772
3,600 EG&G Inc. .................................. 81
10,200 General Dynamics Corporation................ 512
15,600 Lockheed Martin Corporation................. 1,573
5,400 Northrop Grumman Corporation................ 394
27,100 Raytheon Company, Class B................... 1,462
9,800 TRW Inc. ................................... 435
18,400 United Technologies Corporation............. 1,406
--------
8,635
--------
APPAREL AND TEXTILES -- 0.3%
5,800 Fruit of the Loom Inc., Class A++........... 87
5,300 Liz Claiborne Inc. ......................... 139
3,400 National Service Industries Inc. ........... 108
23,000 Nike Inc., Class B.......................... 847
4,500 Reebok International Ltd.++................. 61
2,800 Russell Corporation......................... 74
1,500 Springs Industries Inc. .................... 52
9,700 V.F. Corporation............................ 360
--------
1,728
--------
AUTOMOBILE AND TRUCK MANUFACTURERS -- 1.6%
51,600 Chrysler Corporation........................ 2,470
97,100 Ford Motor Company.......................... 4,558
53,600 General Motors Corporation.................. 2,931
9,500 ITT Industries Inc. ........................ 322
5,500 Navistar International Corporation++........ 124
6,300 PACCAR Inc. ................................ 259
--------
10,664
--------
AUTOMOBILE PARTS MANUFACTURERS -- 0.4%
12,200 AutoZone Inc.++............................. 300
5,800 BF Goodrich Company......................... 190
6,400 Cooper Tire & Rubber Company................ 115
13,100 Dana Corporation............................ 489
5,700 Eaton Corporation........................... 357
14,200 Genuine Parts Company....................... 427
12,600 Goodyear Tire & Rubber Company.............. 647
4,700 Snap-On Inc. ............................... 145
--------
2,670
--------
BANKS -- 7.6%
56,200 Banc One Corporation........................ 2,396
54,700 BankAmerica Corporation..................... 3,289
23,500 BankBoston Corporation...................... 776
60,300 Bank of New York Inc. ...................... 1,651
7,900 Bankers Trust N.Y. Corporation.............. 466
22,600 BB&T Corporation............................ 677
68,400 Chase Manhattan Corporation................. 2,958
36,200 Citicorp.................................... 3,364
12,500 Comerica Inc. .............................. 685
21,000 Fifth Third Bancorp......................... 1,208
23,000 First Chicago Corporation NBD............... 1,576
77,600 First Union Corporation..................... 3,972
22,700 Fleet Financial Group Inc. ................. 1,667
17,000 Huntington Bancshares....................... 427
35,200 KeyCorp (New)............................... 1,016
20,800 Mellon Bank Corporation..................... 1,145
12,100 Mercantile BanCorporation................... 585
14,200 Morgan (J.P.) & Company Inc. ............... 1,202
48,000 Morgan Stanley Dean Witter and Company...... 2,067
26,300 National City Corporation................... 1,734
76,700 NationsBank Corporation..................... 4,103
8,900 Northern Trust Corporation.................. 607
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
BANKS -- (CONTINUED)
60,500 Norwest Corporation......................... $ 2,167
24,200 PNC Bank Corporation........................ 1,089
17,800 Regions Financial Corporation............... 645
8,600 Republic New York Corporation............... 340
12,900 State Street Corporation.................... 704
14,100 Summit Bancorp++............................ 529
16,900 SunTrust Banks Inc. ........................ 1,048
59,400 U.S. Bancorp................................ 2,112
16,500 Wachovia Corporation........................ 1,407
6,900 Wells Fargo & Company....................... 2,450
--------
50,062
--------
BEVERAGES -- 2.8%
38,900 Anheuser-Busch Companies Inc. .............. 2,101
5,500 Brown-Forman Corporation, Class B........... 330
197,700 Coca-Cola Company........................... 11,392
2,800 Coors (Adolph) Company, Class B............. 129
119,200 PepsiCo Inc. ............................... 3,509
27,700 Seagram Company Ltd. ....................... 795
--------
18,256
--------
BIO SPECIALTY PHARMACEUTICALS -- 0.2%
20,300 Amgen Inc.++................................ 1,534
--------
CABLE -- 0.3%
48,700 MediaOne Group Inc.++....................... 2,164
--------
CHEMICALS -- BASIC -- 2.0%
18,800 Air Products & Chemicals Inc................ 559
18,100 Dow Chemical Company........................ 1,546
90,300 du Pont (E.I.) de Nemours & Company......... 5,068
6,400 Eastman Chemical Company.................... 323
10,400 Ecolab Inc. ................................ 296
2,700 FMC Corporation (New)++..................... 139
14,500 Freeport McMoran Copper and Gold, Class B... 172
7,600 Hercules Inc. .............................. 228
6,000 Mallinckrodt Group Inc. .................... 122
47,900 Monsanto Company............................ 2,700
5,300 Nalco Chemical Company...................... 156
14,100 PPG Industries Inc. ........................ 769
12,600 Praxair Inc. ............................... 412
14,600 Rohm & Haas Company......................... 406
10,900 Union Carbide Corporation................... 470
--------
13,366
--------
CHEMICALS -- SPECIALTY -- 0.2%
9,400 Avery Dennison Corporation.................. 411
11,600 Engelhard Corporation....................... 205
6,200 Grace (W.R.) & Company...................... 77
4,700 Great Lakes Chemical Corporation............ 183
10,500 Morton International Inc., Industries....... 230
8,100 Sigma-Aldrich Corporation................... 234
--------
1,340
--------
COAL, GAS AND PIPELINE -- 0.3%
17,000 Coastal Corporation......................... 574
26,300 Enron Corporation........................... 1,389
--------
1,963
--------
COMMUNICATION EQUIPMENT -- 0.0%##
7,100 Andrew Corporation++........................ 94
--------
COMPUTER RELATED -- 6.2%
28,400 3Com Corporation++.......................... 854
10,700 Apple Computer Inc.++....................... 408
5,800 Ceridian Corporation++...................... 333
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 18
NATIONS FUNDS
Nations Equity Index Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
COMPUTER RELATED -- (CONTINUED)
122,950 Cisco Systems Inc.++........................ $ 7,600
132,300 Compaq Computer Corporation++............... 4,184
3,900 Data General Corporation++.................. 42
103,000 Dell Computer Corporation++................. 6,772
39,800 EMC Corporation++........................... 2,276
12,400 Gateway 2000 Inc.++......................... 646
83,000 Hewlett-Packard Company..................... 4,394
10,200 Honeywell Inc. ............................. 653
75,400 International Business Machines
Corporation................................ 9,651
19,500 Seagate Technology++........................ 489
15,100 Silicon Graphics Inc.++..................... 142
30,400 Sun Microsystems Inc.++..................... 1,514
20,100 Unisys Corporation++........................ 457
--------
40,415
--------
COMPUTER SERVICES -- 0.8%
24,200 Automatic Data Processing Inc. ............. 1,809
43,800 Computer Associates International Inc. ..... 1,621
12,500 Computer Sciences Corporation++............. 669
39,100 Electronic Data Systems Corporation......... 1,298
--------
5,397
--------
COMPUTER SOFTWARE -- 4.0%
5,400 Adobe Systems Inc. ......................... 187
3,700 Autodesk Inc. .............................. 97
12,600 Cabletron Systems Inc.++.................... 142
35,700 First Data Corporation...................... 839
197,200 Microsoft Corporation++..................... 21,704
28,100 Novell Inc.++............................... 344
77,900 Oracle Systems Corporation++................ 2,269
21,600 Parametric Technology Company++............. 217
2,000 Shared Medical Systems Corporation.......... 106
--------
25,905
--------
CONSTRUCTION -- 0.3%
3,100 Armstrong World Industries Inc. ............ 166
6,100 Case Corporation............................ 133
4,700 Centex Corporation.......................... 162
5,350 Crane Company............................... 126
6,600 Fluor Corporation........................... 271
3,000 Kaufman & Broad Home Corporation............ 70
27,200 Masco Corporation........................... 670
4,300 Owens-Corning Fiberglass Corporation........ 140
3,400 Pulte Corporation........................... 84
13,800 Sherwin-Williams Company.................... 298
--------
2,120
--------
CONTAINERS -- 0.2%
2,300 Ball Corporation............................ 81
4,200 Bemis Inc................................... 147
10,000 Crown Cork & Seal Inc. ..................... 268
12,300 Owens-Illinois Inc.++....................... 308
6,800 Sealed Air Corporation++.................... 217
5,000 Tupperware Corporation...................... 59
--------
1,080
--------
COSMETICS AND TOILETRY -- 2.2%
4,500 Alberto-Culver Company, Class B............. 105
21,100 Avon Products Inc. ......................... 592
8,300 Clorox Company.............................. 685
23,700 Colgate-Palmolive Company................... 1,623
89,900 Gillette Company............................ 3,439
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
COSMETICS AND TOILETRY -- (CONTINUED)
8,600 International Flavors & Fragrances Inc. .... $ 284
107,200 Procter & Gamble Company.................... 7,605
--------
14,333
--------
DIVERSIFIED -- 1.1%
2,200 Aeroquip-Vickers Inc. ...................... 63
45,300 AlliedSignal Inc. .......................... 1,602
18,600 Corning Inc. ............................... 548
1,600 Eastern Enterprises......................... 67
13,800 Fortune Brands Inc. ........................ 409
13,600 Frontier Corporation........................ 372
9,200 Loews Corporation........................... 776
32,400 Minnesota Mining & Manufacturing Company.... 2,387
13,500 Tenneco Inc. ............................... 444
13,000 Textron Inc. ............................... 788
--------
7,456
--------
DRUGS -- 8.8%
7,000 ALZA Corporation++.......................... 304
105,100 American Home Products Corporation.......... 5,505
79,600 Bristol-Myers Squibb Company................ 8,268
88,700 Lilly (Eli) & Company....................... 6,946
95,700 Merck & Company Inc. ....................... 12,399
104,500 Pfizer Inc. ................................ 11,070
40,600 Pharmacia & Upjohn Inc. .................... 2,038
58,700 Schering-Plough Corporation................. 6,079
65,600 Warner-Lambert Company...................... 4,953
--------
57,562
--------
ELECTRIC POWER -- 2.8%
11,000 Ameren Corporation.......................... 461
15,200 American Electric Power Inc. ............... 742
11,800 Baltimore Gas & Electric Company............ 394
12,100 Carolina Power & Light Company.............. 559
17,000 Central & South West Corporation............ 486
12,600 CINergy Corporation......................... 481
18,900 Consolidated Edison Company New York
Inc. ...................................... 985
15,600 Dominion Resources Inc. .................... 696
11,600 DTE Energy Company.......................... 524
28,800 Duke Power Company.......................... 1,906
28,900 Edison International........................ 742
19,700 Entergy Corporation (New)................... 606
18,500 FirstEnergy................................. 575
14,500 FPL Group Inc. ............................. 1,010
10,300 GPU Inc. ................................... 438
23,700 Houston Industries Inc. .................... 738
15,000 Niagara Mohawk Power Corporation++.......... 231
12,100 Northern States Power Corporation........... 340
23,800 PacifiCorp.................................. 457
17,900 PECO Energy Company......................... 654
30,600 PG&E Corporation............................ 977
13,400 PP&L Resources Inc. ........................ 347
18,600 Public Service Enterprise Group Inc. ....... 731
55,900 Southern Company............................ 1,646
22,300 Texas Utilities Company..................... 1,038
17,400 Unicom Corporation.......................... 650
--------
18,414
--------
ELECTRICAL EQUIPMENT -- 3.6%
35,400 Emerson Electric Company.................... 2,204
260,700 General Electric Company.................... 20,741
7,900 Grainger (W.W.) Inc. ....................... 333
6,800 Raychem Corporation......................... 166
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 19
NATIONS FUNDS
Nations Equity Index Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
ELECTRICAL EQUIPMENT -- (CONTINUED)
6,400 Scientific-Atlanta Inc. .................... $ 135
4,400 Thomas & Betts Corporation.................. 167
--------
23,746
--------
ELECTRONICS -- 0.8%
17,700 AMP Inc. ................................... 633
29,300 Applied Materials Inc.++.................... 740
6,500 Harris Corporation.......................... 208
7,000 KLA-Tencor Corporation++.................... 174
11,300 LSI Logic Corporation++..................... 143
47,800 Motorola Inc. .............................. 2,040
13,100 National Semiconductor Corporation++........ 127
3,900 Perkin-Elmer Corporation.................... 268
15,700 Rockwell International Corporation.......... 567
4,000 Tektronix Inc. ............................. 62
--------
4,962
--------
ENVIRONMENTAL -- 0.6%
14,700 Browning-Ferris Industries Inc. ............ 445
6,800 Johnson Controls Inc. ...................... 316
26,300 Laidlaw Inc., Class B....................... 248
3,500 Millipore Corporation....................... 67
46,700 Tyco International Ltd. .................... 2,580
--------
3,656
--------
EXPLORATION AND DRILLING -- 0.1%
14,100 Burlington Resources Inc. .................. 527
4,000 Helmerich & Payne Inc. ..................... 84
4,900 McDermott International Inc. ............... 132
--------
743
--------
FINANCIAL SERVICES -- 4.0%
36,900 American Express Company.................... 2,864
20,300 American General Corporation................ 1,297
27,700 Associates First Capital Corporation........ 1,807
9,100 Bear Stearns Companies Inc. ................ 282
5,300 Capital One Financial Corporation........... 549
21,300 Charles Schwab Corporation.................. 839
8,700 Countrywide Credit Industries Inc. ......... 362
11,800 Equifax Inc. ............................... 421
54,400 Federal Home Loan Mortgage Corporation...... 2,689
83,000 Federal National Mortgage Association....... 5,332
39,200 Household International Inc. ............... 1,470
9,500 Lehman Brothers Holdings Inc. .............. 268
20,500 Marsh & McLennan Companies Inc. ............ 1,020
40,000 MBNA Corporation............................ 1,145
27,600 Merrill Lynch & Company Inc. ............... 1,308
13,500 SLM Holding Corporation..................... 438
21,000 Synovus Financial Corporation............... 415
5,100 Transamerica Corporation.................... 541
92,101 Travelers Group Inc. ....................... 3,454
--------
26,501
--------
FOOD PRODUCERS -- 2.6%
47,950 Archer-Daniels-Midland Company.............. 803
23,100 Bestfoods................................... 1,119
36,400 Campbell Soup Company....................... 1,827
38,400 ConAgra Inc. ............................... 1,034
12,600 General Mills Inc. ......................... 882
29,200 Heinz (H.J.) Company........................ 1,493
11,500 Hershey Foods Corporation................... 787
32,700 Kellogg Company............................. 1,077
19,600 Pioneer Hi-Bred International............... 515
11,100 Quaker Oats Company......................... 655
25,500 Ralston Purina Group........................ 746
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
FOOD PRODUCERS -- (CONTINUED)
37,400 Sara Lee Corporation........................ $ 2,020
51,200 Unilever NV, ADR............................ 3,136
9,300 Wrigley (Wm.) Jr. Company................... 706
--------
16,800
--------
FOOD RETAILERS -- 0.6%
19,700 Albertson's Inc. ........................... 1,066
21,800 American Stores Company..................... 702
3,000 Great Atlantic & Pacific Tea Company........ 73
20,500 Kroger Company++............................ 1,025
9,300 SuperValu Inc. ............................. 217
27,000 Sysco Corporation........................... 636
11,900 Winn-Dixie Stores Inc. ..................... 443
--------
4,162
--------
FURNITURE AND APPLIANCES -- 0.3%
7,600 Black & Decker Corporation.................. 316
7,600 Maytag Corporation.......................... 363
12,700 Newell Company.............................. 585
12,000 Rubbermaid Inc. ............................ 287
7,200 Stanley Works............................... 214
6,100 Whirlpool Corporation....................... 287
--------
2,052
--------
INSURANCE -- 3.6%
11,600 Aetna Life & Casualty Company............... 806
67,200 Allstate Corporation........................ 2,801
84,100 American International Group Inc. .......... 6,476
13,400 Aon Corporation............................. 864
13,400 Chubb Corporation........................... 844
17,200 CIGNA Corporation........................... 1,137
13,300 Cincinnati Financial Corporation............ 409
24,800 Conseco Inc. ............................... 758
6,200 General Re Corporation...................... 1,259
18,900 Hartford Financial Services Group Inc. ..... 897
8,500 Jefferson-Pilot Corporation................. 514
8,100 Lincoln National Corporation Ltd. .......... 666
7,800 MBIA Inc. .................................. 419
9,100 MGIC Investment Corporation................. 336
5,800 Progressive Corporation..................... 654
200 Provident Companies Inc. ................... 7
7,600 Providian Corporation....................... 645
11,300 SAFECO Corporation.......................... 471
18,800 St. Paul Companies Inc. .................... 611
15,600 SunAmerica Inc. ............................ 952
11,200 Torchmark Corporation....................... 403
11,100 UNUM Corporation............................ 552
31,000 Washington Mutual Inc. ..................... 1,046
--------
23,527
--------
MACHINERY AND EQUIPMENT -- 0.9%
1,900 Briggs & Stratton Corporation............... 78
29,200 Caterpillar Inc. ........................... 1,301
3,100 Cincinnati Milacron Inc. ................... 48
9,600 Cooper Industries Inc. ..................... 391
3,000 Cummings Engine Inc. ....................... 89
19,900 Deere & Company............................. 602
17,900 Dover Corporation........................... 553
3,200 Foster Wheeler Corporation.................. 44
3,500 General Signal Corporation.................. 119
3,800 Harnischfeger Industries Inc. .............. 43
20,000 Illinois Tool Works Inc. ................... 1,090
13,200 Ingersoll-Rand Company...................... 501
600 NACCO Industries Inc., Class A.............. 60
10,000 Pall Corporation............................ 222
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 20
NATIONS FUNDS
Nations Equity Index Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
MACHINERY AND EQUIPMENT -- (CONTINUED)
8,800 Parker-Hannifin Corporation................. $ 261
12,700 Thermo Electron Corporation++............... 191
5,000 Timken Company.............................. 76
--------
5,669
--------
MEDIA -- 1.5%
57,500 CBS Corporation............................. 1,394
19,800 Clear Channel Communications Inc.++......... 941
29,600 Comcast Corporation Class A................. 1,389
13,600 Omnicom Group............................... 612
40,500 Tele-Communications Inc., Class A........... 1,585
47,300 Time Warner Inc. ........................... 4,142
--------
10,063
--------
MEDICAL PRODUCTS AND SUPPLIES -- 3.4%
123,600 Abbott Laboratories......................... 5,369
5,300 Allergan Inc. .............................. 309
4,500 Bard (C.R.) Inc. ........................... 166
4,400 Bausch & Lomb Inc. ......................... 173
22,500 Baxter International Inc. .................. 1,339
19,700 Becton, Dickinson & Company................. 810
9,000 Biomet Inc. ................................ 312
15,500 Boston Scientific Corporation++............. 796
8,900 Cardinal Health Inc. ....................... 919
12,100 Guidant Corporation......................... 898
107,600 Johnson & Johnson........................... 8,420
37,600 Medtronic Inc. ............................. 2,176
6,800 St. Jude Medical Inc.++..................... 157
6,200 United States Surgical Corporation.......... 258
--------
22,102
--------
MEDICAL SERVICES -- 0.7%
51,400 Columbia/HCA Healthcare Corporation......... 1,031
34,400 HBO & Company............................... 993
32,100 HEALTHSOUTH Corporation++................... 339
13,300 Humana Inc.++............................... 218
13,000 IMS Health Inc. ............................ 805
5,100 Manor Care Inc. ............................ 149
24,700 Tenet Healthcare Corporation++.............. 710
15,400 United Healthcare Corporation............... 539
--------
4,784
--------
METALS AND MINING -- 0.6%
18,300 Alcan Aluminum Ltd. ........................ 429
13,400 Aluminum Company of America................. 951
3,100 ASARCO Inc. ................................ 59
29,900 Barrick Gold Corporation ADR................ 598
18,500 Battle Mountain Gold Company................ 112
7,500 Cyprus Amax Minerals Company................ 99
16,900 Homestake Mining Company.................... 205
13,200 Inco Ltd. .................................. 135
12,500 Newmont Mining Corporation.................. 303
4,600 Phelps Dodge Corporation.................... 240
20,000 Placer Dome Inc., ADR....................... 276
5,800 Reynolds Metals Company..................... 295
--------
3,702
--------
NETWORKING EQUIPMENT AND PRODUCTS -- 0.1%
15,400 Ascend Communications Inc.++ 701
--------
OFFICE EQUIPMENT -- 0.6%
10,900 Ikon Office Solutions Inc. ................. 78
7,100 Moore Corporation Ltd. ..................... 75
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
OFFICE EQUIPMENT -- (CONTINUED)
21,800 Pitney Bowes Inc. .......................... $ 1,189
26,300 Xerox Corporation........................... 2,229
--------
3,571
--------
OIL -- DOMESTIC -- 1.6%
7,400 Amerada Hess Corporation.................... 427
76,900 Amoco Corporation........................... 4,143
6,200 Ashland Oil Inc. ........................... 287
25,700 Atlantic Richfield Company.................. 1,823
3,800 Kerr-McGee Corporation...................... 173
29,400 Occidental Petroleum Corporation............ 632
8,500 Oryx Energy Company++....................... 110
3,800 Pennzoil Company............................ 133
20,900 Phillips Petroleum Company.................. 950
7,600 Sun Company Inc. ........................... 243
19,400 Unocal Corporation.......................... 703
23,200 USX-Marathon Group (New).................... 822
--------
10,446
--------
OIL -- INTERNATIONAL -- 5.3%
9,600 Anadarko Petroleum Corporation.............. 377
7,900 Apache Corporation.......................... 212
52,300 Chevron Corporation......................... 4,396
195,800 Exxon Corporation........................... 13,743
62,500 Mobil Corporation........................... 4,746
171,600 Royal Dutch Petroleum Company, ADR.......... 8,172
43,400 Texaco Inc. ................................ 2,721
20,100 Union Pacific Resources Group Inc. ......... 247
--------
34,614
--------
OIL SERVICES -- 0.7%
25,240 Baker Hughes Inc. .......................... 528
6,700 Columbia Energy Group....................... 393
35,000 Halliburton Company......................... 1,000
7,000 Rowan Companies Inc.++...................... 78
40,000 Schlumberger Ltd. .......................... 2,013
19,200 Sempra Energy............................... 500
--------
4,512
--------
PAPER AND FOREST PRODUCTS -- 1.0%
4,500 Boise Cascade Corporation................... 114
7,700 Champion International Corporation.......... 241
17,700 Fort James Corporation...................... 581
7,400 Georgia-Pacific Corporation................. 338
24,701 International Paper Company................. 1,152
44,700 Kimberly-Clark Corporation.................. 1,810
8,800 Louisiana-Pacific Corporation............... 179
8,300 Mead Corporation............................ 244
2,200 Potlatch Corporation........................ 75
8,000 Stone Container Corporation++............... 69
4,400 Temple-Inland Inc. ......................... 211
5,600 Union Camp Corporation...................... 221
8,100 Westvaco Corporation........................ 194
15,900 Weyerhaeuser Company........................ 671
8,900 Willamette Industries Inc. ................. 255
--------
6,355
--------
PHOTO AND OPTICAL -- 0.3%
25,800 Eastman Kodak Company....................... 1,995
3,500 Polaroid Corporation........................ 86
--------
2,081
--------
PRINTING AND PUBLISHING -- 0.8%
5,800 American Greetings Corporation, Class A..... 229
6,500 Deluxe Corporation.......................... 185
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 21
NATIONS FUNDS
Nations Equity Index Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
PRINTING AND PUBLISHING -- (CONTINUED)
11,400 Donnelley (R.R.) & Sons Company............. $ 401
7,500 Dow Jones & Company Inc. ................... 349
13,700 Dun & Bradstreet Corporation................ 370
22,800 Gannett Company Inc. ....................... 1,221
5,700 Harcourt General Inc. ...................... 276
2,900 Jostens Inc. ............................... 60
6,400 Knight-Ridder Inc. ......................... 285
8,000 McGraw-Hill Companies Inc. ................. 634
4,200 Meredith Corporation........................ 134
15,300 New York Times Company, Class A............. 421
7,200 Times Mirror Company, Class A............... 383
9,700 Tribune Company............................. 488
--------
5,436
--------
PROFESSIONAL SERVICES -- 0.3%
8,400 Block (H&R) Inc. ........................... 348
20,300 Franklin Resources Inc. .................... 609
10,900 Interpublic Group Companies Inc. ........... 588
20,500 Service Corporation International........... 653
--------
2,198
--------
RECREATION -- 1.1%
8,000 Brunswick Corporation....................... 104
163,700 Disney (Walt) Company....................... 4,144
2,800 Fleetwood Enterprises Inc. ................. 85
8,100 Harrah's Entertainment Inc.++............... 108
10,700 Hasbro Inc. ................................ 316
6,000 King World Productions Inc.++............... 157
23,500 Mattel Inc. ................................ 658
14,300 Mirage Resorts Inc.++....................... 240
28,500 Viacom Inc., Class B++...................... 1,653
--------
7,465
--------
RESTAURANTS AND LODGING -- 0.9%
68,200 Cendant Corporation++....................... 793
11,400 Darden Restaurants Inc. .................... 182
19,800 Hilton Hotels Corporation................... 338
20,400 Marriott International Inc., Class A........ 487
55,000 McDonald's Corporation...................... 3,283
12,200 Tricon Global Restaurants................... 476
10,500 Wendy's International Inc. ................. 233
--------
5,792
--------
RETAIL -- DISCOUNT -- 1.9%
8,600 Consolidated Stores Corporation++........... 169
14,375 Dollar General Corporation.................. 383
39,000 Kmart Stores Corporation++.................. 466
20,600 Rite Aid Corporation........................ 731
25,600 TJX Companies Inc. ......................... 456
22,300 Toys R Us Inc.++............................ 361
179,700 Wal-Mart Stores Inc. ....................... 9,816
--------
12,382
--------
RETAIL -- GENERAL -- 0.9%
17,300 Costco Companies Inc.++..................... 820
35,000 Dayton Hudson Corporation................... 1,251
8,600 Dillard Department Stores Inc., Class A..... 243
16,900 Federated Department Stores Inc.++.......... 615
18,500 May Department Stores Company............... 953
20,100 Penny (J.C.) Company Inc. .................. 903
31,300 Sears, Roebuck & Company.................... 1,383
--------
6,168
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
RETAIL -- SPECIALTY -- 2.0%
7,900 Circuit City Stores Inc. ................... $ 263
30,800 CVS Corporation............................. 1,349
12,200 Fred Meyer Inc.++........................... 474
31,500 Gap Inc. ................................... 1,662
117,600 Home Depot Inc. ............................ 4,644
12,800 Kohl's Corporation+......................... 499
18,200 Limited Inc. ............................... 399
3,000 Longs Drug Stores Corporation............... 121
27,900 Lowe's Companies Inc. ...................... 888
12,200 Nordstrom Inc. ............................. 302
5,100 Pep Boys -- Manny, Moe & Jack............... 68
8,100 Tandy Corporation........................... 433
10,800 Venator Group Inc.++........................ 94
39,700 Walgreen Company............................ 1,749
--------
12,945
--------
SAVINGS AND LOANS -- 0.1%
8,900 Ahmanson (H.F.) & Company................... 494
4,500 Golden West Financial Corporation........... 368
--------
862
--------
SEMICONDUCTORS -- 2.1%
11,500 Advanced Micro Devices Inc.++............... 213
135,800 Intel Corporation........................... 11,645
17,000 Micron Technology Inc.++.................... 517
31,300 Texas Instruments Inc. ..................... 1,651
--------
14,026
--------
STEEL -- 0.2%
15,700 Allegheny Teledyne Inc. .................... 280
8,600 Armco Inc.++................................ 43
10,300 Bethlehem Steel Corporation++............... 85
7,100 Nucor Corporation........................... 288
7,000 USX-U.S. Steel Group........................ 167
7,800 Worthington Industries Inc. ................ 98
--------
961
--------
TELECOMMUNICATIONS -- 1.6%
12,000 General Instruments Corporation++........... 260
105,000 Lucent Technologies Inc. ................... 7,252
21,900 Nextel Communications Inc., Class A++....... 442
52,360 Northern Telecommunications Ltd. ........... 1,676
14,600 Tellabs Inc.+............................... 581
--------
10,211
--------
TOBACCO -- 1.4%
194,500 Philip Morris Companies Inc. ............... 8,959
400 RJR Nabisco Holdings Corporation............ 10
14,800 UST Inc. ................................... 438
--------
9,407
--------
TRANSPORTATION -- AIRLINES -- 0.4%
14,600 AMR Corporation++........................... 809
6,200 Delta Air Lines Inc. ....................... 603
11,800 FDX Corporation++........................... 532
26,800 Southwest Airlines Company.................. 536
8,100 US Airways Group Inc.++..................... 410
--------
2,890
--------
TRANSPORTATION -- RAILROADS -- 0.6%
37,800 Burlington Northern Santa Fe Inc. .......... 1,210
17,500 CSX Corporation............................. 736
30,400 Norfolk Southern Corporation................ 884
19,800 Union Pacific Corporation................... 844
--------
3,674
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 22
NATIONS FUNDS
Nations Equity Index Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
TRUCKING AND SHIPPING -- 0.0%##
6,000 Ryder Systems Inc. ......................... $ 149
--------
UTILITIES -- NATURAL GAS -- 0.3%
7,700 Consolidated Natural Gas Company............ 420
3,800 NICOR Inc. ................................. 157
2,400 ONEOK Inc. ................................. 82
2,700 Peoples Energy Corporation.................. 97
8,800 Sonat Inc. ................................. 263
34,000 Williams Companies Inc. .................... 978
--------
1,997
--------
UTILITIES -- TELEPHONE -- 7.8%
45,800 AirTouch Communications Inc.++.............. 2,611
21,900 ALLTEL Corporation.......................... 1,038
88,100 Ameritech Corporation....................... 4,174
143,900 AT&T Corporation............................ 8,409
124,300 Bell Atlantic Corporation................... 6,021
79,200 BellSouth Corporation....................... 5,960
77,100 GTE Corporation............................. 4,241
154,626 MCI WorldCom Inc.++......................... 7,557
147,200 SBC Communications Inc. .................... 6,541
34,500 Sprint Corporation.......................... 2,484
40,100 U.S. West Inc. ............................. 2,103
--------
51,139
--------
WASTE DISPOSAL -- 0.3%
45,300 Waste Management Inc. ...................... 2,177
--------
TOTAL COMMON STOCKS
(Cost $403,237)............................ 649,786
--------
<CAPTION>
PRINCIPAL
AMOUNT
(000)
---------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS -- 0.1% (Cost
$794)
U.S. Treasury Bills,
$ 800 4.860%** 11/27/98@.......................... 794
--------
</TABLE>
<TABLE>
<C> <S> <C> <C>
INVESTMENT COMPANY -- 0.7% (Cost
$4,695)
4,695,000 Nations Cash Reserves(a)........... 4,695
--------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $408,726*)................... 99.8% 655,275
--------
OTHER ASSETS AND
LIABILITIES (NET).................. 0.2
Cash........................................ 113
Dividends receivable........................ 862
Receivable for fund shares sold............. 1,697
Unamortized organization costs.............. 1
Variation Margin/due to broker.............. (165)
Payable for fund shares redeemed............ (669)
Shareholder servicing and distribution fees
payable................................... (4)
Investment advisory fee payable............. (78)
Accrued Trustees'/Directors' fees and
expenses.................................. (34)
Administration fee payable.................. (54)
Accrued expenses and other liabilities...... (132)
--------
TOTAL OTHER ASSETS AND
LIABILITIES (NET)......................... 1,537
--------
NET ASSETS........................... 100.0% $656,812
========
</TABLE>
<TABLE>
<CAPTION>
VALUE
(000)
- -----------------------------------------------------------------
<S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share ($648,722,000/32,668,640
shares outstanding)....................... $19.86
========
PRIMARY B SHARES:
Net asset value, offering and redemption
price per share ($185,000/9,320 shares
outstanding).............................. $19.90
========
INVESTOR A SHARES:
Net asset value, offering and redemption
price per share ($7,905,000/399,942 shares
outstanding).............................. $19.76
========
AT SEPTEMBER 30, 1998, NET ASSETS
CONSIST OF:
Paid-in capital............................. $413,984
Undistributed net investment income......... 258
Accumulated net realized loss on investments
sold...................................... (4,101)
Unrealized appreciation of investments and
futures contracts......................... 246,671
--------
NET ASSETS.................................. $656,812
========
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Federal Income Tax Information: Net unrealized appreciation
of investment securities was comprised of gross appreciation
of $260,104,000 and gross depreciation of $13,555,000 for
federal income tax purposes. At September 30, 1998, the
aggregate cost of securities for federal income tax purposes
was $408,726,000.
** Rate represents annualized yield at date of purchase.
++ Non-income producing security.
@ Security segregated as collateral for futures contracts.
## Amount represents less than 0.01%.
(a) Money market mutual fund registered under the Investment
Company Act of 1940, as amended, and sub-advised by
TradeStreet Investment Associates, Inc.
</TABLE>
<TABLE>
<CAPTION>
NET
UNREALIZED
NUMBER OF APPRECIATION
CONTRACTS (000)
- ----------------------------------------------------------------
<C> <S> <C>
FUTURES CONTRACTS -- LONG POSITION
21 S&P 500 Index Futures,
December 1998........................ $122
--------
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 23
NATIONS FUNDS
Nations Capital Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000'S)
- -------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 97.5%
APPAREL AND TEXTILES -- 0.7%
129,390 Tommy Hilfiger Corporation++................ $ 5,305
--------
BANKS -- 4.1%
222,775 Banc One Corporation........................ 9,496
225,650 Chase Manhattan Corporation................. 9,759
50,400 Citicorp.................................... 4,684
108,520 Mellon Bank Corporation..................... 5,976
--------
29,915
--------
BEVERAGES -- 1.3%
332,950 PepsiCo Inc. ............................... 9,801
--------
CHEMICALS -- SPECIALTY -- 2.4%
137,625 Morton International Inc., Industries....... 3,011
285,825 Raychem Corporation......................... 6,967
236,815 Praxair, Inc. .............................. 7,741
--------
17,719
--------
COMPUTER RELATED -- 12.1%
286,350 Cisco Systems, Inc.++....................... 17,700
293,700 Compaq Computer Corporation++............... 9,288
168,375 EMC Corporation++........................... 9,629
141,550 Hewlett-Packard Company..................... 7,493
202,625 Intel Corporation........................... 17,375
102,550 International Business Machines
Corporation................................ 13,127
225,450 SCI Systems Inc.++.......................... 6,073
167,075 Sun Microsystems, Inc.++.................... 8,323
--------
89,008
--------
COMPUTER SERVICES -- 2.0%
192,600 Computer Associates International Inc. ..... 7,126
216,450 Sterling Commerce, Inc.++................... 7,495
--------
14,621
--------
COMPUTER SOFTWARE -- 5.7%
134,700 BMC Software, Inc.++........................ 8,090
175,525 Compuware Corporation++..................... 10,334
195,472 Network Associates, Inc.++.................. 6,939
150,775 Microsoft Corporation++..................... 16,595
--------
41,958
--------
DIVERSIFIED -- 2.8%
208,300 Tyco International Ltd. .................... 11,509
120,400 United Technologies Corporation............. 9,203
--------
20,712
--------
DRUGS -- 9.6%
165,410 American Home Products Corporation.......... 8,663
128,475 Bristol-Myers Squibb Company................ 13,345
98,525 Merck & Company Inc. ....................... 12,765
79,575 Pfizer Inc. ................................ 8,430
150,225 Schering-Plough Corporation................. 15,558
158,800 Warner Lambert Company...................... 11,989
--------
70,750
--------
ELECTRICAL EQUIPMENT -- 7.7%
222,875 Emerson Electric Company.................... 13,874
243,600 General Electric Company.................... 19,381
181,850 Honeywell, Inc. ............................ 11,650
254,625 Sundstrand Corporation...................... 11,808
--------
56,713
--------
FINANCIAL SERVICES -- 5.8%
166,425 Equifax Inc. ............................... 5,939
188,550 Federal National Mortgage Association....... 12,114
291,855 Household International, Inc. .............. 10,945
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000'S)
- -------------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES -- (CONTINUED)
98,270 Morgan Stanley, Dean Witter,
Discover & Company......................... $ 4,232
285,212 Washington Mutual, Inc. .................... 9,626
--------
42,856
--------
FOOD PRODUCERS -- 2.3%
169,575 Cambell Soup Company........................ 8,511
126,250 Hershey Foods Corporation................... 8,640
--------
17,151
--------
FOOD RETAILERS -- 2.0%
199,650 Safeway, Inc.++............................. 9,259
243,575 SYSCO Corporation........................... 5,739
--------
14,998
--------
HOUSEHOLD PRODUCTS -- 0.6%
55,640 Clorox Company.............................. 4,590
--------
INSURANCE -- 5.8%
136,012 American International Group, Inc. ......... 10,473
50,450 General Re Corporation...................... 10,241
255,670 MGIC Investment Corporation................. 9,428
255,500 UNUM Corporation............................ 12,695
--------
42,837
--------
MACHINERY AND EQUIPMENT -- 0.3%
43,355 Illinois Tool Works, Inc. .................. 2,363
--------
MEDIA -- 2.6%
429,975 CBS Corporation............................. 10,427
101,375 Time Warner Inc. ........................... 8,877
--------
19,304
--------
MEDICAL PRODUCTS AND SUPPLIES -- 4.5%
141,225 Abbott Laboratories......................... 6,135
146,375 Baxter International Inc. .................. 8,709
107,300 Guidant Corporation......................... 7,967
175,130 Medtronic, Inc. ............................ 10,136
--------
32,947
--------
MEDICAL SERVICES -- 1.6%
433,670 HEALTHSOUTH Corporation++................... 4,581
258,675 Tenet Healthcare Corporation++.............. 7,437
--------
12,018
--------
OIL -- INTERNATIONAL -- 0.7%
67,150 Mobil Corporation........................... 5,099
--------
OIL SERVICES -- 2.2%
296,100 Halliburton Company......................... 8,457
149,000 Schlumberger Ltd. .......................... 7,497
--------
15,954
--------
PRINTING AND PUBLISHING -- 1.0%
129,325 Gannett Company, Inc. ...................... 6,927
--------
PROFESSIONAL SERVICES -- 2.4%
189,575 Ascend Communications Inc.++................ 8,625
272,025 Service Corporation International........... 8,671
--------
17,296
--------
RECREATION -- 1.0%
221,800 Carnival Corporation........................ 7,056
--------
RESTAURANTS AND LODGING -- 0.7%
463,554 Cendant Corporation++....................... 5,389
--------
RETAIL -- 10.3%
158,125 Best Buy Company Inc. ...................... 6,562
187,770 CVS Corporation............................. 8,227
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE> 24
NATIONS FUNDS
Nations Capital Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000'S)
- -------------------------------------------------------------------
<C> <S> <C>
RETAIL -- (CONTINUED)
266,050 Dayton Hudson Corporation................... $ 9,511
202,450 Federated Department Stores Inc.++.......... 7,364
143,150 Home Depot Inc. ............................ 5,654
329,800 Lowe's Companies Inc. ...................... 10,492
174,360 Office Depot, Inc.++........................ 3,912
443,650 OfficeMax, Inc.++........................... 4,353
275,990 Rite Aid Corporation........................ 9,798
543,760 TJX Companies, Inc. ........................ 9,686
--------
75,559
--------
TELECOMMUNICATIONS -- 1.9%
98,675 AirTouch Communications, Inc.++............. 5,624
173,850 MCI WorldCom Inc.++......................... 8,497
--------
14,121
--------
TELECOMMUNICATIONS EQUIPMENT -- 3.3%
62,450 Lucent Technologies Inc. ................... 4,313
79,000 Nokia Corporation, Class A, ADR............. 6,196
225,885 Northern Telecom Ltd. ...................... 7,228
162,325 Tellabs, Inc.++............................. 6,463
--------
24,200
--------
TOTAL COMMON STOCKS (Cost $595,547)......... 717,167
--------
</TABLE>
INVESTMENT COMPANY -- 2.6% (Cost $19,190)
19,190,000 Nations Cash Reserves(a).................... 19,190
--------
TOTAL INVESTMENTS (Cost $614,737*)... 100.1% 736,357
--------
OTHER ASSETS AND LIABILITIES (NET).......... (0.1)
Cash........................................ 13
Receivable for investment securities........ 1,769
Dividends receivable........................ 516
Payable for investment securities........... (2,089)
Shareholder servicing and distribution fees
payable................................... (313)
Investment advisory fee payable............. (466)
Accrued Trustees'/Directors' fees and
expenses.................................. (52)
Administration fee payable.................. (62)
--------
TOTAL OTHER ASSETS AND
LIABILITIES (NET)......................... (684)
--------
NET ASSETS........................... 100.0% $735,673
========
<TABLE>
<CAPTION>
VALUE
(000'S)
- -----------------------------------------------------------------
<S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share ($640,461,000/65,037,666
shares outstanding)....................... $9.85
========
PRIMARY B SHARES:
Net asset value, offering and redemption
price per share ($236,000/24,237 shares
outstanding).............................. $9.74
========
INVESTOR A SHARES:
Net asset value, offering and redemption
price per share ($39,73,000/4,055,860
shares outstanding)....................... $9.80
========
INVESTOR B SHARES:
Net asset value and offering price per
share# ($52,218,000/5,559,706 shares
outstanding).............................. $9.39
========
INVESTOR C SHARES:
Net asset value, offering and redemption
price per share ($3,025,000/318,546 shares
outstanding).............................. $9.49
========
AT SEPTEMBER 30, 1998, NET ASSETS
CONSIST OF:
Paid-in capital............................. $521,409
Distributions in excess of net investment
income.................................... (136)
Accumulated net realized gain
on investments sold....................... 92,780
Unrealized appreciation of investments...... 121,620
--------
NET ASSETS.................................. $735,673
========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $173,098,000 and gross
depreciation of $51,478,000 for federal income tax purposes. At September 30,
1998, the aggregate cost of securities for federal income tax purposes was
$614,737,000.
++ Non-income producing security.
# Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
(a) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates, Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE> 25
NATIONS FUNDS
Nations Disciplined Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 99.6%
AEROSPACE AND DEFENSE -- 3.8%
211,100 General Dynamics Corporation................. $ 10,595
84,000 United Technologies Corporation.............. 6,421
--------
17,016
--------
APPAREL AND TEXTILES -- 1.6%
192,000 VF Corporation............................... 7,128
--------
APPLIANCES -- 1.9%
177,500 Maytag Corporation........................... 8,476
--------
AUTOMOTIVE AND TRUCK
MANUFACTURERS -- 2.0%
187,400 Ford Motor Company........................... 8,796
--------
BANKS -- 0.8%
63,000 Ahmanson (H.F.)&Company...................... 3,497
--------
BUILDING AND CONSTRUCTION -- 1.5%
160,000 USG Corporation++............................ 6,920
--------
CHEMICALS -- BASIC -- 1.5%
235,800 Rohm & Haas Company.......................... 6,558
--------
COAL, GAS AND PIPELINE -- 2.5%
340,900 Coastal Corporation.......................... 11,505
--------
COMPUTER RELATED -- 5.5%
45,000 Cisco Systems Inc.++......................... 2,782
239,400 Dell Computer Corporation++.................. 15,741
243,700 Storage Technology Corporation++............. 6,199
--------
24,722
--------
COMPUTER SOFTWARE -- 5.9%
194,300 Compuware Corporation++...................... 11,439
99,700 Microsoft Corporation++...................... 10,973
326,800 Symantec Corporation++....................... 4,310
--------
26,722
--------
DRUGS -- 3.8%
20,000 Bristol-Myers Squibb Company................. 2,078
35,000 Merck & Company Inc. ........................ 4,535
356,200 Mylan Laboratories Inc. ..................... 10,507
--------
17,120
--------
ELECTRIC POWER -- 2.0%
204,050 DTE Energy Company........................... 9,221
--------
ELECTRICAL EQUIPMENT -- 1.9%
107,000 General Electric Company..................... 8,513
--------
ELECTRONICS -- 1.4%
133,550 Sundstrand Corporation....................... 6,193
--------
FINANCIAL SERVICES -- 4.0%
191,800 GreenPoint Financial Corporation............. 6,114
128,400 Morgan Stanley Dean Witter Discover
Company++................................... 5,528
217,825 Paine Webber Group Inc. ..................... 6,535
--------
18,177
--------
FOOD -- 2.8%
271,338 Safeway Inc.++............................... 12,583
--------
HOUSEWARES -- 1.5%
242,300 Premark International Inc. .................. 6,800
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
INSURANCE -- 8.4%
184,200 Allstate Corporation......................... $ 7,679
139,500 Equitable Companies Inc. .................... 5,772
107,100 Lincoln National Corporation Ltd. ........... 8,808
152,800 MGIC Investment Corporation.................. 5,635
164,700 SunAmerica Inc. ............................. 10,047
--------
37,941
--------
MACHINERY AND EQUIPMENT -- 3.0%
141,000 Caterpillar Inc. ............................ 6,283
187,800 Ingersoll-Rand Company....................... 7,125
--------
13,408
--------
MEDICAL PRODUCTS AND SUPPLIES -- 8.6%
170,600 Allergan Inc. ............................... 9,958
135,900 Biogen Inc.++................................ 8,944
122,000 Guidant Corporation.......................... 9,059
100,550 Pfizer Inc.++................................ 10,652
--------
38,613
--------
OFFICE EQUIPMENT -- 1.2%
81,100 Lexmark International Group Inc., Class A.... 5,621
--------
OIL REFINING AND MARKETING -- 4.7%
147,300 Ashland Inc. ................................ 6,813
132,450 Columbia Energy Group........................ 7,764
215,250 Sun Company.................................. 6,888
--------
21,465
--------
PHOTO AND OPTICAL -- 1.8%
105,100 Eastman Kodak Company........................ 8,126
--------
PRINTING AND PUBLISHING -- 1.8%
185,000 Knight-Ridder Inc. .......................... 8,233
--------
RETAIL -- DISCOUNT -- 1.5%
394,800 TJX Companies Inc. .......................... 7,032
--------
RETAIL -- GENERAL -- 4.9%
152,900 Costco Companies Inc.++...................... 7,244
223,800 Dayton Hudson Corporation.................... 8,001
194,700 Federated Department Stores Inc.++........... 7,082
--------
22,327
--------
RETAIL -- SPECIALTY -- 5.0%
260,600 Best Buy Company Inc.++...................... 10,815
292,700 Lowe's Companies Inc. ....................... 9,312
90,000 Staples Inc. ................................ 2,644
--------
22,771
--------
SEMICONDUCTORS -- 0.5%
28,000 Intel Corporation............................ 2,401
--------
TELECOMMUNICATIONS -- 4.3%
179,100 AT&T Corporation............................. 10,466
128,400 Lucent Technologies Inc. .................... 8,868
--------
19,334
--------
TRANSPORTATION -- AIRLINES -- 2.1%
60,400 AMR Corporation++............................ 3,348
92,634 UAL Corporation++............................ 6,004
--------
9,352
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE> 26
NATIONS FUNDS
Nations Disciplined Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
UTILITIES -- TELEPHONE -- 7.4%
136,000 BellSouth Corporation........................ $ 10,233
225,000 Century Telephone Enterprises Inc. .......... 10,631
196,300 U.S. West Inc. .............................. 10,293
50,000 MCI WorldCom Inc.++.......................... 2,444
--------
33,601
--------
TOTAL COMMON STOCKS
(Cost $405,870)............................. 450,172
--------
INVESTMENT COMPANY -- 0.5% (Cost $2,227)
2,227,000 Nations Cash Reserves(a)..................... 2,227
--------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $408,097*)..................... 100.1% 452,399
--------
OTHER ASSETS AND
LIABILITIES (NET).................... (0.1)%
Cash.......................................... 1
Dividends and interest receivable............. 346
Receivable for fund shares sold............... 618
Payable for fund shares redeemed.............. (651)
Shareholder servicing and distribution fees
payable..................................... (232)
Investment advisory fee payable............... (285)
Accrued Trustees'/Directors' fees and
expenses.................................... (11)
Administration fee payable.................... (38)
Accrued expenses and other liabilities........ (116)
--------
TOTAL OTHER ASSETS AND
LIABILITIES (NET)........................... (368)
--------
NET ASSETS............................. 100.0% $452,031
========
PRIMARY A SHARES:
Net asset value, offering and redemption price
per share ($349,435,000/19,223,870 shares
outstanding)................................ $18.18
========
PRIMARY B SHARES:
Net asset value, offering and redemption price
per share ($0##/1 share outstanding)........ $18.20
========
INVESTOR A SHARES:
Net asset value, offering and redemption price
per share ($62,013,000/3,428,226 shares
outstanding)................................ $18.09
========
INVESTOR B SHARES:
Net asset value and offering price per share#
($39,413,000/2,242,837 shares outstanding)... $17.57
========
INVESTOR C SHARES:
Net asset value, offering and redemption price
per share ($1,170,000/65,434 shares
outstanding)................................ $17.87
========
</TABLE>
<TABLE>
<CAPTION>
VALUE
(000)
- ------------------------------------------------------------------
<S> <C> <C>
AT SEPTEMBER 30, 1998,
NET ASSETS CONSIST OF:
Paid-in capital............................... $397,412
Undistributed net investment income........... 80
Accumulated net realized gain on investments
sold........................................ 10,237
Unrealized appreciation of investments........ 44,302
--------
NET ASSETS.................................... $452,031
========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized appreciation of investment
securities was comprised of gross appreciation of $76,619,000 and gross
depreciation of $32,317,000 for federal income tax purposes. At September 30,
1998, the aggregate cost of securities for federal income tax purposes was
$408,097,000.
++ Non-income producing security.
# Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
## Amount represents less than $500.
(a) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates, Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE> 27
NATIONS FUNDS
Nations Marsico Focused Equities Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 85.8%
AEROSPACE AND DEFENSE -- 4.4%
199,850 Gulfstream Aerospace Corporation............ $ 8,044
--------
AIRLINES -- 4.8%
16,966 Delta Air Lines Inc. ....................... 1,650
111,410 UAL Corporation............................. 7,221
--------
8,871
--------
AUTOMOTIVE -- CARS & LIGHT TRUCKS -- 5.4%
211,330 Ford Motor Company.......................... 9,919
--------
BANKS -- 4.0%
151,802 Norwest Corporation......................... 5,436
53,921 U.S. BanCorporation......................... 1,918
--------
7,354
--------
BEVERAGES -- ALCOHOLIC -- 2.7%
91,810 Anheuser-Busch Companies Inc................ 4,958
--------
BEVERAGES -- NON-ALCOHOLIC -- 2.6%
191,555 Coca-Cola Enterprises Inc................... 4,837
--------
COMPUTER -- MICRO -- 12.4%
291,985 EMC Corporation++........................... 16,698
48,172 International Business Machines
Corporation................................ 6,166
--------
22,864
--------
COMPUTER SOFTWARE -- 5.3%
89,677 Microsoft Corporation++..................... 9,871
--------
CRUISE LINES -- 4.0%
234,161 Carnival Corporation........................ 7,449
--------
DIVERSIFIED MANUFACTURING OPERATIONS -- 2.9%
66,544 General Electric Company.................... 5,294
--------
FINANCE -- INVESTMENT BANKERS/BROKERS -- 0.2%
8,565 Morgan Stanley, Dean Witter and Company..... 369
--------
FINANCE -- OTHER SERVICES -- 4.6%
131,404 Associates First Capital Corporation........ 8,574
--------
MEDICAL -- DRUGS -- 7.9%
49,751 Pfizer Inc. ................................ 5,270
7,388 Schering-Plough Corporation................. 765
113,259 Warner-Lambert Company...................... 8,551
--------
14,586
--------
MEDICAL SERVICES -- 2.3%
69,634 IMS Health Inc. ............................ 4,313
--------
MULTIMEDIA -- 14.0%
270,858 MediaOne Group Inc. ........................ 12,036
158,895 Time Warner Inc. ........................... 13,913
--------
25,949
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
NETWORKING PRODUCTS -- 4.6%
137,807 Cisco Systems Inc.++........................ $ 8,518
--------
RETAIL -- BUILDING PRODUCTS -- 1.8%
84,291 Home Depot Inc. ............................ 3,329
--------
RETAIL -- SPECIALTY -- 1.3%
44,616 Gap Inc.++.................................. 2,354
--------
TELECOMMUNICATION EQUIPMENT -- 0.6%
16,051 Lucent Technologies......................... 1,109
--------
TOTAL COMMON STOCKS
(Cost $159,019,686)........................ 158,562
--------
FOREIGN COMMON STOCKS -- 2.4%
FRANCE -- 1.2%
4,872 L'Oreal..................................... 2,266
--------
GERMANY -- 1.2%
1,208 Porsche AG.................................. 2,098
--------
TOTAL FOREIGN COMMON STOCKS
(Cost $4,675).............................. 4,364
--------
<CAPTION>
PRINCIPAL
AMOUNT
(000)
- ----------
<C> <S> <C>
U.S. GOVERNMENT AGENCY -- 8.5% (Cost
$15,700)
$ 15,700 Federal Home Loan Bank, 0000%** 10/01/98.... 15,700
--------
</TABLE>
<TABLE>
<CAPTION>
SHARES
- ----------
<C> <S> <C> <C>
INVESTMENT COMPANY -- 0.0% (Cost $33)
33,000 Nations Cash Reserves(a)................. 33
--------
TOTAL INVESTMENTS
(Cost $179,428*)................. 96.7% 178,659
--------
OTHER ASSETS AND
LIABILITIES (NET)................ 3.3
Receivable for investment securities..... 4,402
Receivable for fund shares sold.......... 2,386
Dividends and interest receivable........ 41
Other assets............................. 31
Payable for fund shares redeemed......... (217)
Investment advisory fee payable.......... (141)
Accrued Trustees'/Directors' fees and (1)
expenses................................
Administration fee payable............... (14)
Shareholder servicing and distributor (310)
fees....................................
Accrued expenses and other liabilities... (44)
--------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)................................... 6,133
--------
NET ASSETS......................... 100.0% $184,792
========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE> 28
NATIONS FUNDS
Nations Marsico Focused Equities Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
(000)
- -------------------------------------------------------------------
<C> <S> <C>
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share ($35,523,000/2,907,030
shares outstanding)........................ $12.22
========
INVESTOR A SHARES:
Net asset value, offering and redemption
price per share ($40,857,000/3,335,505
shares outstanding)........................ $12.25
========
INVESTOR B SHARES:
Net asset value and offering price per
share# ($106,771,000/8,747,786 shares
outstanding)............................... $12.21
========
INVESTOR C SHARES:
Net asset value, offering and redemption
price per share ($1,641,000/134,592 shares
outstanding)............................... $12.19
========
</TABLE>
<TABLE>
<CAPTION>
VALUE
(000)
- -------------------------------------------------------------------
<C> <S> <C>
AT SEPTEMBER 30, 1998,
NET ASSETS CONSIST OF:
Paid-in capital............................. $189,535
Distributions in excess of net investment
income..................................... (326)
Accumulated net realized loss on investments
sold....................................... (3,648)
Unrealized depreciation of investments...... (769)
--------
NET ASSETS.................................. $184,792
========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized depreciation of investment
securities was comprised of gross appreciation of $5,346,000 and gross
depreciation of $6,115,000 for federal income tax purposes. At September 30,
1998, the aggregate cost of securities for federal income tax purposes was
$179,428,000.
** Rate represents annualized yield at date of purchase.
# Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
(a) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates, Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE> 29
NATIONS FUNDS
Nations Emerging Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 96.9%
APPAREL AND TEXTILES -- 5.7%
125,000 Columbia Sportswear Company.................. $ 2,047
126,400 Land's End Inc.++............................ 2,338
160,000 Stage Stores Inc.++.......................... 1,950
90,000 The Men's Wearhouse Inc.++................... 1,553
115,000 Tommy Hilfiger Corporation................... 4,715
--------
12,603
--------
AUTOMOBILE PARTS MANUFACTURERS -- 1.6%
150,000 Superior Industries International Inc. ...... 3,431
--------
BANKS -- 1.2%
40,000 Northern Trust Company....................... 2,730
--------
BEVERAGES -- 1.5%
130,000 Coca-Cola Enterprises Inc. .................. 3,282
--------
BIO SPECIALTY PHARMACEUTICALS -- 2.4%
79,000 Biogen Inc.++................................ 5,199
--------
CIRCUITS -- 1.1%
50,000 Linear Technology Corporation................ 2,500
--------
COMMERCIAL BANKS -- WESTERN U.S. -- 0.6%
40,000 City National Corporation.................... 1,253
--------
COMPUTER RELATED -- 3.5%
95,000 Comverse Technology Inc.++................... 3,883
57,200 Diebold Inc. ................................ 1,258
188,700 Symantec Corporation......................... 2,489
--------
7,630
--------
COMPUTER SERVICES -- 1.9%
81,000 Sterling Commerce Inc. ...................... 2,804
41,850 Networks Associates Inc. .................... 1,486
--------
4,290
--------
COMPUTER SOFTWARE -- 7.0%
75,000 BMC Software Inc.++.......................... 4,505
132,100 Check Point Software Technology Ltd.++....... 2,625
73,100 Compuware Corporation++...................... 4,304
229,600 Remedy Corporation........................... 2,066
60,000 SunGard Data Systems Inc.++.................. 1,890
--------
15,390
--------
ELECTRIC COMPONENTS -- 6.0%
114,000 Maxim Integrated Products Inc. .............. 3,178
115,000 Solectron Corporation........................ 5,520
127,200 Xilinx Inc. ................................. 4,452
--------
13,150
--------
ELECTRIC POWER -- 3.7%
115,000 AES Corporation++............................ 4,262
90,000 CMS Energy Corporation....................... 3,921
--------
8,183
--------
ELECTRONICS -- 3.4%
147,000 ADC Telecommunications Inc.++................ 3,105
65,000 Sundstrand Corporation....................... 3,014
138,000 Parametric Technology Corporation++.......... 1,389
--------
7,508
--------
EXPLORATION AND DRILLING -- 1.6%
130,000 BJ Services Inc.++........................... 2,112
50,000 Smith International Inc.++................... 1,372
--------
3,484
--------
FINANCIAL SERVICES -- 6.6%
80,000 FINOVA Group (The), Inc. .................... 3,995
80,000 FIRSTPLUS Financial Group Inc.++............. 915
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES -- (CONTINUED)
75,000 Franklin Resources Inc. ..................... $ 2,250
119,998 Legg Mason Inc. ............................. 3,157
221,500 Waddell & Reed Financial Inc. ............... 4,209
--------
14,526
--------
FOOD PRODUCTION -- 0.8%
128,500 International Home Foods Inc. ............... 1,735
--------
INSURANCE -- 3.6%
96,000 Aflac Inc. .................................. 2,742
100,000 Reinsurance Group of America Inc. ........... 5,175
--------
7,917
--------
MEDIA -- 1.0%
163,600 Metro-Goldwyn-Mayer Inc. .................... 2,270
--------
MEDICAL PRODUCTS AND SUPPLIES -- 7.3%
151,000 Acuson Corporation++......................... 2,577
63,000 Centocor Inc. ............................... 2,496
73,000 DePuy Inc.++................................. 2,555
110,000 ESC Medical Systems Ltd.++................... 773
99,600 Stryker Corporation.......................... 3,386
87,600 Watson Pharmaceuticals Inc. ................. 4,446
--------
16,233
--------
MEDICAL SERVICES -- 5.2%
65,000 HCR Manor Care Inc.++........................ 1,905
262,500 Health Management Associates Inc, Class A++.. 4,791
124,038 HEALTHSOUTH Corporation++.................... 1,310
23,300 Pediatrix Medical Group Inc.++............... 1,046
145,500 Quorum Health Group Inc.++................... 2,364
--------
11,416
--------
OIL AND GAS DRILLING -- 2.2%
186,000 Nabors Industries Inc. ...................... 2,825
138,000 Noble Drilling Corporation................... 2,035
--------
4,860
--------
OIL -- DOMESTIC -- 0.6%
115,800 Global Marine Inc.++......................... 1,281
--------
OIL SERVICES -- 1.7%
50,800 Schlumberger Ltd. ........................... 2,556
150,000 Varco International Inc. .................... 1,256
--------
3,812
--------
PAPER AND FOREST PRODUCTS -- 1.3%
130,000 Caraustar Industries Inc. ................... 2,958
--------
PRINTING AND PUBLISHING -- 0.9%
100,000 Belo (A.H.) Corporation, Class A............. 2,000
--------
PROFESSIONAL SERVICES -- 4.1%
200,000 Accustaff Inc. .............................. 2,912
155,000 Gartner Group Inc, Class A++................. 3,236
230,000 Personnel Group of America Inc.++............ 2,832
--------
8,980
--------
RECREATION -- 1.6%
120,000 International Speedway Corporation++......... 3,593
--------
RESTAURANTS AND LODGING -- 1.3%
107,855 Promus Hotel Corporation++................... 2,973
--------
RETAIL -- SPECIALTY -- 4.8%
148,000 Bed Bath & Beyond Inc.++..................... 3,459
305,650 OfficeMax Inc.++............................. 2,999
140,000 Staples Inc. ................................ 4,113
--------
10,571
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE> 30
NATIONS FUNDS
Nations Emerging Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
SEMICONDUCTORS -- 3.2%
121,000 Altera Corporation++......................... $ 4,250
120,000 Vitesse Semiconductor Corporation++.......... 2,835
--------
7,085
--------
TELECOMMUNICATION EQUIPMENT -- 2.2%
104,000 Advanced Fibre Communications Inc.++......... 715
170,000 ECI Telecom Ltd., ADR........................ 4,165
--------
4,880
--------
TELECOMMUNICATIONS -- 0.9%
140,000 Reltec Corporation++......................... 2,065
--------
TECHNOLOGY -- 1.6%
87,500 Uniphase Corporation......................... 3,588
--------
TRANSPORTATION -- AIRLINES -- 2.6%
200,000 Comair Holdings Inc. ........................ 5,750
--------
WASTER DISPOSAL -- 1.6%
75,000 Waste Management Inc. ....................... 3,605
--------
WATER TREATMENT SYSTEMS -- 0.6%
81,000 US Filter Corporation........................ 1,296
--------
TOTAL COMMON STOCKS (Cost $221,700).......... 214,027
--------
WARRANTS -- 0.0%++++
4,069 Coram Healthcare Corporation,
Expires 7/11/99##........................... 0
--------
INVESTMENT COMPANY -- 3.9% (Cost $8,707)
8,707,000 Nations Cash Reserves(a)..................... 8,707
--------
</TABLE>
<TABLE>
<C> <S> <C>
TOTAL INVESTMENTS
(Cost $230,407*)..................... 100.8% 222,734
--------
</TABLE>
<TABLE>
<C> <S> <C>
OTHER ASSETS AND
LIABILITIES (NET).................... (0.8)%
Cash.......................................... 12
Dividends and interest receivable............. 77
Receivable for fund shares sold............... 190
Receivable for investment securities sold..... 1,009
Payable for investment securities purchased... (805)
Payable for fund shares redeemed.............. (1,660)
Shareholder servicing and distribution fees
payable..................................... (199)
Investment advisory fee payable............... (145)
Accrued Trustees'/Directors' fees and
expenses.................................... (22)
Administration fee payable.................... (19)
Accrued expenses and other liabilities........ 115
--------
TOTAL OTHER ASSETS AND
LIABILITIES (NET)........................... (1,677)
--------
NET ASSETS............................. 100.0% $221,057
========
</TABLE>
<TABLE>
<CAPTION>
VALUE
(000)
- -----------------------------------------------------------------
<S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share ($177,136,000/17,523,950
shares outstanding)........................ $10.11
========
PRIMARY B SHARES:
Net asset value, offering and redemption
price per share ($0##/1 share
outstanding)............................... $9.83
========
INVESTOR A SHARES:
Net asset value, offering and redemption
price per share ($13,158,000/1,327,144
shares outstanding)........................ $9.91
========
INVESTOR B SHARES:
Net asset value and offering price per share#
($29,584,000/3,156,489 shares
outstanding)............................... $9.37
========
INVESTOR C SHARES:
Net asset value, offering and redemption
price per share ($1,179,000/125,293 shares
outstanding)............................... $9.41
========
AT SEPTEMBER 30, 1998, NET ASSETS
CONSIST OF:
Paid-in capital.............................. $218,540
Distributions in excess of net investment
income..................................... (631)
Accumulated net realized gain on investments
sold....................................... 10,821
Unrealized depreciation of investments....... (7,673)
--------
NET ASSETS................................... $221,057
========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized depreciation of investment
securities was comprised of gross appreciation of $39,321,000 and gross
depreciation of $46,994,000 for federal income tax purposes. At September 30,
1998, the aggregate cost of securities for federal income tax purposes was
$230,407,000.
++ Non-income producing security.
++++ Amount represents less than 0.01%.
# Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
## Amount represents less than $500.
(a) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates, Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE> 31
NATIONS FUNDS
Nations Small Company Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 97.1%
ADVERTISING SALES -- 1.9%
216,449 HA-LO Industries Inc.++..................... $ 6,331
--------
AEROSPACE AND DEFENSE -- 2.9%
95,900 BE Aerospace Inc.++......................... 2,110
153,100 Coltec Industries Inc.++.................... 2,316
479,550 REMEC Inc. ................................. 3,820
169,800 Tristar Aerospace Company++................. 1,634
--------
9,880
--------
AGRICULTURAL OPERATIONS -- 0.9%
316,300 Northland Cranberries Inc. ................. 3,183
--------
APPAREL AND TEXTILES -- 4.7%
77,200 Culp Inc. .................................. 613
222,700 Galey & Lord Inc.++......................... 2,658
221,500 Interface Inc. ............................. 2,658
266,300 Phillips-Van Heusen Corporation............. 2,530
374,200 Tefron Ltd.++............................... 2,947
246,700 Quicksilver Inc.++.......................... 4,487
--------
15,893
--------
BANKS -- 1.5%
162,800 City National Corporation................... 5,098
--------
BUILDING MATERIALS -- 3.8%
328,267 Advanced Lighting Technologies++............ 2,790
402,800 Group Maintenance America Corporation++..... 5,815
162,900 Service Experts Inc.++...................... 4,531
--------
13,136
--------
COAL, GAS AND PIPELINE -- 1.6%
161,300 Kinder Morgan Energy Partners LP............ 5,343
--------
COMMERCIAL SERVICES -- 3.3%
97,600 Lason Holdings Inc.++....................... 5,002
201,416 Nova Corporation++.......................... 6,181
--------
11,183
--------
COMMUNICATIONS SOFTWARE -- 0.8%
110,200 Avid Technology Inc.++...................... 2,624
--------
COMPUTER SERVICES -- 2.8%
100,750 Analyst International Corporation........... 3,023
207,550 Cybex Computer Products Corporation++....... 5,215
110,500 Systems & Computer Technology
Corporation++.............................. 1,423
--------
9,661
--------
COMPUTER SOFTWARE -- 5.7%
293,900 3Dlabs Inc., Ltd.++......................... 1,231
203,700 BARRA Inc.++................................ 4,176
157,165 Hyperion Solutions Corporation.............. 3,409
406,650 Rogue Wave Software++....................... 2,948
212,000 Seque Software Inc.++....................... 3,498
311,475 Symantec Corporation........................ 4,108
--------
19,370
--------
CONSTRUCTION -- 2.6%
45,100 Champion Enterprises Inc.++................. 1,049
154,400 Kaufman & Broad Home Corporation............ 3,619
69,000 Lennar Corporation.......................... 1,540
112,200 Pulte Corporation........................... 2,756
--------
8,964
--------
COSMETICS AND TOILETRY -- 1.1%
163,525 Alberto-Culver Company...................... 3,822
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
ELECTRONICS -- 8.5%
374,300 Aeroflex Inc.++............................. $ 3,696
292,200 Aneren Microwave Inc.++..................... 3,397
294,500 C-COR Electronics Inc.++.................... 3,792
179,400 Esterline Technologies Corporation++........ 3,521
416,400 Ortel Corporation++......................... 6,662
161,000 SIPEX Corporation++......................... 4,085
257,000 Sawtek Inc.++............................... 3,630
--------
28,783
--------
ELECTRONICS -- SEMICONDUCTOR -- 1.9%
190,600 AstroPower Inc. ............................ 1,287
62,700 Plexus Corporation++........................ 1,215
325,200 SDL Inc. ................................... 4,065
--------
6,567
--------
FINANCIAL SERVICES -- 0.2%
404,800 IMC Mortgage Company++...................... 797
--------
FURNITURE AND APPLIANCES -- 0.7%
66,675 Ethan Allen Interiors Inc. ................. 2,417
--------
INSTRUMENTS -- SCIENTIFIC -- 0.8%
120,700 Dionex Corporation++........................ 2,806
--------
INSURANCE -- 1.7%
95,017 Delphi Financial Group Inc., Class A........ 3,741
80,300 Triad Guaranty Inc.++....................... 2,048
--------
5,789
--------
MACHINERY AND EQUIPMENT -- 1.7%
147,400 Applied Power Inc., Class A................. 4,026
130,525 Gardner Denver Machinery Inc.++............. 1,844
--------
5,870
--------
MANUFACTURING INDUSTRIES -- 0.8%
80,800 Kaydon Corporation.......................... 2,126
119,200 Wimdmere-Durable Holdings Inc.++............ 671
--------
2,797
--------
MARINE SERVICES -- 1.0%
317,700 Horizon Offshore Inc.++..................... 2,105
208,000 Newpark Resources Inc.++.................... 1,430
--------
3,535
--------
MEDICAL BIOTECHNOLOGY -- 2.2%
23764.00 Alfacell Corporation++...................... 17
105,500 Human Genome Sciences Inc.++................ 3,165
249,147 Martek Biosciences Corporation++............ 2,055
206,479 Vical Inc.++................................ 2,271
--------
7,508
--------
MEDICAL PRODUCTS AND SUPPLIES -- 4.8%
170,900 Coherent Inc.++............................. 1,597
208,825 Dura Pharmaceutical Inc..................... 2,284
109,416 Henry Schein Inc.++......................... 3,802
189,150 Invacare Corporation........................ 4,445
275,685 Respironic Inc.++........................... 3,101
332,600 Somnus Medical Technologies++............... 1,039
--------
16,268
--------
MEDICAL SERVICES -- 8.0%
116,000 Acuson Corporation++........................ 1,979
111,700 Centennial Health Corporation............... 890
197,000 NovaCare Inc.++............................. 603
311,000 OrthAlliance Inc., Class A++................ 2,527
341,600 Orthodontic Centers of America++............ 5,700
362,200 Physician Reliance Network++................ 4,256
332,400 Physicians Specialty Corporation++.......... 2,368
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE> 32
NATIONS FUNDS
Nations Small Company Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
MEDICAL SERVICES -- (CONTINUED)
155,500 Province Healthcare Company++............... $ 5,297
166,400 Shire Pharmaceuticals Group PLC, ADR++...... 3,640
--------
27,260
--------
METALS AND MINING -- 0.6%
189,800 AMCOL International Corporation............. 2,159
--------
OIL SERVICES -- 1.0%
201,600 Core Laboratories NV++...................... 3,478
--------
PRINTING AND PUBLISHING -- 0.5%
51,825 McClatchy Newspapers Inc., Class A.......... 1,555
--------
PROFESSIONAL SERVICES -- 7.3%
89,100 AHL Services++.............................. 2,918
220,000 Career Education Corporation++.............. 4,813
143,800 Inacom Corporation++........................ 2,714
311,050 Perceptron Inc.++........................... 1,866
287,500 Personnel Group of America Inc.++........... 3,540
450,100 SCB Computer Technology Inc.++.............. 3,487
222,506 Romac International Inc.++.................. 4,005
69,400 Trammell Crow Company++..................... 1,770
--------
25,113
--------
RESTAURANTS AND LODGING -- 0.8%
188,775 Garden Fresh Restaurant Corporation++....... 2,784
--------
RETAIL -- DISCOUNT -- 0.8%
87,000 ShopKo Stores Inc.++........................ 2,828
--------
RETAIL -- SPECIALTY -- 2.3%
192,000 Blue Rhino Corporation...................... 1,944
135,100 Bon-Ton Stores Inc.++....................... 1,013
190,350 Fossil Inc.++............................... 2,594
103,075 JO-ANN Stores Inc., Class A++............... 2,293
672 Score Board (The), Inc.++................... 0##
--------
7,844
--------
SAVINGS AND LOANS -- 3.0%
120,200 FirstFed Financial Corporation++............ 2,051
179,600 First Republic Bank++....................... 5,478
140,700 Golden State Bancorp Inc.+++................ 2,805
--------
10,334
--------
STEEL -- 0.2%
116,450 Steel Technologies Inc. .................... 844
--------
TELECOMMUNICATIONS -- 5.6%
408,400 Allen Telecom Inc.++........................ 2,731
292,400 CellStar Corporation++...................... 1,261
313,500 Gilat Communications Ltd.++................. 2,056
335,500 Harmonic Lightwaves Inc.++.................. 4,110
344,500 SmarTalk TeleServices Inc.++................ 2,562
175,100 Spectrian Corporation++..................... 2,123
455,500 Stanford Telecommunications Inc.++.......... 4,213
--------
19,056
--------
TELECOMMUNICATIONS EQUIPMENT -- 7.1%
415,200 ANTEC Corporation++......................... 6,384
201,500 Gilat Satellite Networks Ltd.++............. 9,068
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- -------------------------------------------------------------------
<C> <S> <C>
377,500 Proxim Inc.++............................... $ 4,908
216,500 RF Micro Devices Inc.++..................... 3,924
--------
24,284
--------
TRANSPORTATION -- AIRLINES -- 1.4%
151,950 Air Express International Corporation....... 2,431
236,000 Midway Airlines Corporation++............... 2,331
--------
4,762
--------
WASTE DISPOSAL -- 0.6%
55,900 American Disposal Services Inc.++........... 2,177
--------
TOTAL COMMON STOCKS
(Cost $419,167)............................. 332,103
--------
INVESTMENT COMPANY -- 5.0%
(Cost $17,164)
17,164,000 Nations Cash Reserves(a).................... 17,164
--------
TOTAL INVESTMENTS (Cost $436,331*).....102.1% 349,267
--------
OTHER ASSETS AND LIABILITIES (NET).......... (2.1)
Receivable for investment securities........ 693
Receivable for fund shares sold............. 150
Dividends and interest receivable........... 115
Payable for investment securities purchased. (6,970)
Payable for fund shares redeemed............ (919)
Shareholder servicing and distribution fees
payable................................... (35)
Investment advisory fee payable............. (214)
Accrued Trustees'/Directors' fees and
expenses.................................. (4)
Administration fee payable.................. (29)
Accrued expenses and other liabilities...... (85)
--------
TOTAL OTHER ASSETS AND LIABILITIES (NET).... (7,298)
--------
NET ASSETS............................ 100.0% $341,969
========
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share ($321,210,000/30,602,094
shares outstanding)....................... $10.50
-------
-------
INVESTOR A SHARES:
Net asset value, offering and redemption
price per share ($14,507,000/1,389,496
shares outstanding)....................... $10.44
-------
-------
INVESTOR B SHARES:
Net asset value and offering price per
share# ($4,343,000/421,682 shares
outstanding).............................. $10.30
-------
-------
INVESTOR C SHARES:
Net asset value, offering and redemption
price per share ($1,909,000/183,252
shares outstanding)....................... $10.42
-------
-------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE> 33
NATIONS FUNDS
Nations Small Company Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
(000)
- -----------------------------------------------------------------
<S> <C> <C>
AT SEPTEMBER 30, 1998, NET ASSETS
CONSIST OF:
Paid-in capital............................ $420,983
Distributions in excess of net investment
income................................... (808)
Accumulated net realized gain on
investments so........................... 8,858
Unrealized depreciation of investments..... (87,064)
--------
NET ASSETS.......................... $341,969
========
</TABLE>
- ---------------
* Federal Income Tax Information: Net unrealized depreciation of investment
securities was comprised of gross appreciation of $16,854,000 and gross
depreciation of $103,918,000 for federal income tax purposes. At September
30, 1998, the aggregate cost of securities for federal income tax purposes
was $436,331,000.
+ Non-income producing security.
# Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
## Amount represents less than $500.
(a) Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by TradeStreet Investment Associates, Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE> 34
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
BALANCED EQUITY GROWTH &
ASSETS INCOME VALUE INCOME
----------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
INVESTMENT INCOME:
Dividends (Net of foreign withholding taxes of $0, $6, $0,
$0, $0, $0, $0, $0, $0, and $0, respectively)............. $ 1,245 $ 13,324 $ 20,295 $ 125
Interest.................................................... 1,673 1,435 989 167
Securities lending.......................................... 26 16 282 --
-------- --------- --------- -------
Total investment income................................. 2,944 14,775 21,566 292
-------- --------- --------- -------
EXPENSES:
Investment advisory fee..................................... 606 3,251 9,157 176
Administration fee.......................................... 81 517 1,221 21
Transfer agent fees......................................... 79 271 568 10
Custodian fees.............................................. 18 45 93 8
Legal and audit fees........................................ 14 51 81 8
Registration and filing fees................................ 45 59 81 59
Trustees'/Directors' fees and expenses...................... 2 9 21 --
Amortization of organization costs.......................... -- -- -- --
Interest expense............................................ 5 7 2 --
Other....................................................... 8 25 54 1
-------- --------- --------- -------
Subtotal................................................ 858 4,235 11,278 283
Shareholder servicing and distribution fees :
Primary B Shares.......................................... 4 0 -- --
Investor A Shares......................................... 30 78 184 6
Investor B Shares......................................... 390 669 750 134
Investor C Shares......................................... 9 42 66 3
Fees waived and expenses reimbursed by investment adviser,
administrator, and/or distributor......................... -- -- (31) (24)
-------- --------- --------- -------
Total expenses.......................................... 1,291 5,024 12,247 402
Fees reduced by credits allowed by the custodian............ (1) (2) (2) --
-------- --------- --------- -------
Net expenses............................................ 1,290 5,022 12,245 402
-------- --------- --------- -------
NET INVESTMENT INCOME/(LOSS)................................ 1,654 9,753 9,321 (110)
-------- --------- --------- -------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain/(loss) from:
Security transactions..................................... (1,161) 33,902 124,929 (3,842)
Forward foreign currency contracts and foreign currency
transactions............................................ -- -- -- --
Futures contracts......................................... -- -- -- --
-------- --------- --------- -------
Net realized gain on investments............................ (1,161) 33,902 124,929 (3,842)
-------- --------- --------- -------
Change in unrealized appreciation/(depreciation) of:
Securities (Note 8)....................................... (20,255) (245,799) (441,249) (1,824)
Futures contracts......................................... -- -- -- --
-------- --------- --------- -------
Net change in unrealized appreciation/(depreciation) of
investments............................................... (20,255) (245,799) (441,249) (1,824)
-------- --------- --------- -------
Net realized and unrealized gain on investments............. (21,416) (211,897) (316,320) (5,666)
-------- --------- --------- -------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $(19,762) $(202,144) $(306,999) $(5,776)
======== ========= ========= =======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE> 35
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
SMALL
EQUITY CAPITAL DISCIPLINED FOCUSED EMERGING COMPANY
INDEX GROWTH EQUITY EQUITIES GROWTH GROWTH
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 5,419 $ 4,260 $ 2,162 $ 405 $ 708 $ 600
28 -- 246 312 367 414
3 10 7 -- 73 112
-------- --------- -------- -------- --------- ---------
5,450 4,270 2,415 717 1,148 1,126
-------- --------- -------- -------- --------- ---------
1,708 3,214 1,670 492 1,188 1,933
342 428 223 58 158 143
183 220 81 22 90 86
64 38 23 10 22 19
23 40 17 9 20 17
58 37 68 69 38 66
8 11 5 1 4 3
1 -- -- -- -- --
-- 25 1 -- 17 5
16 21 8 12 13 25
-------- --------- -------- -------- --------- ---------
2,403 4,034 2,096 673 1,550 2,347
-- 1 -- -- -- --
8 54 71 29 25 19
-- 295 210 336 202 23
-- 22 6 5 10 10
(1,208) -- -- -- (3) (502)
-------- --------- -------- -------- --------- ---------
1,203 4,406 2,383 1,043 1,784 1,897
-- -- (1) -- (5) --
-------- --------- -------- -------- --------- ---------
1,203 4,406 2,382 1,043 1,779 1,897
-------- --------- -------- -------- --------- ---------
4,247 (136) 33 (326) (631) (771)
-------- --------- -------- -------- --------- ---------
1,169 93,654 10,305 (3,644) 11,195 8,120
-- -- -- -- -- --
(1,463) -- -- -- -- --
-------- --------- -------- -------- --------- ---------
(294) 93,654 10,305 (3,644) 11,195 8,120
-------- --------- -------- -------- --------- ---------
(53,853) (203,548) (76,817) (4,067) (109,859) (156,945)
122 -- -- -- -- --
-------- --------- -------- -------- --------- ---------
(53,731) (203,548) (76,817) (4,067) (109,859) (156,945)
-------- --------- -------- -------- --------- ---------
(54,025) (109,894) (66,512) (7,711) (98,664) (148,825)
-------- --------- -------- -------- --------- ---------
$(49,778) $(110,030) $(66,479) $(8,037) $(99,295) $(149,596)
======== ========= ======== ======== ========= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<PAGE> 36
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
BALANCED ASSETS EQUITY INCOME
------------------------------- -------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
9/30/98 YEAR ENDED 9/30/98 YEAR ENDED
(UNAUDITED) 3/31/98 (UNAUDITED) 3/31/98
------------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
Net investment income/(loss).................... $ 1,654 $ 4,644 $ 9,753 $ 15,036
Net realized gain/(loss) on investments......... (1,161) 36,271 33,902 122,323
Net change in unrealized
appreciation/(depreciation) of investments.... (20,255) 9,456 (245,799) 109,181
-------- -------- ---------- ----------
Net increase/(decrease) in net assets resulting
from operations............................... (19,762) 50,371 (202,144) 246,540
Distributions to shareholders from net
investment income:
Primary A Shares.............................. (779) (2,911) (8,355) (11,909)
Primary B Shares.............................. (16) (139) -- (84)
Investor A Shares............................. (263) (304) (559) (1,138)
Investor B Shares............................. (503) (1,224) (741) (1,603)
Investor C Shares............................. (10) (41) (48) (114)
Distributions to shareholders from net realized
gain on investments:
Primary A Shares.............................. (1,197) (26,569) (55,402) (45,271)
Primary B Shares.............................. (119) (1,423) -- (847)
Investor A Shares............................. (1,019) (2,364) (4,177) (9,122)
Investor B Shares............................. (5,059) (13,747) (8,875) (19,538)
Investor C Shares............................. (122) (445) (616) (1,368)
Net increase/(decrease) in net assets from Fund
share transactions............................ 68,003 (98,063) 399 615,156
-------- -------- ---------- ----------
Net increase/(decrease) in net assets........... 39,154 (96,859) (280,518) 770,702
NET ASSETS:
Beginning of period............................. 118,938 215,797 1,138,912 368,210
-------- -------- ---------- ----------
End of period................................... $158,092 $118,938 $ 858,394 $1,138,912
======== ======== ========== ==========
Undistributed net investment
income/(distributions in excess of net
investment income) at end of period........... $ 125 $ 41 $ 384 $ 335
======== ======== ========== ==========
</TABLE>
- ---------------
(a) Growth and Income commenced operations on December 31, 1997
SEE NOTES TO FINANCIAL STATEMENTS.
32
<PAGE> 37
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
VALUE GROWTH & INCOME EQUITY INDEX
----------------------------- ------------------------------- -----------------------------
SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED
9/30/98 YEAR ENDED 9/30/98 PERIOD ENDED 9/30/98 YEAR ENDED
(UNAUDITED) 3/31/98 (UNAUDITED) 03/31/98(a) (UNAUDITED) 3/31/98
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 9,321 $ 20,138 $ (110) $ (2) $ 4,247 $ 9,369
124,929 514,208 (3,842) 8 (294) 48,053
(441,249) 170,187 (1,824) 1,128 (53,731) 194,840
---------- ---------- ------- ------- -------- ---------
(306,999) 704,533 (5,776) 1,134 (49,778) 252,262
(8,703) (18,994) -- -- (3,972) (9,283)
-- (97) -- -- (1) (32)
(436) (849) -- -- (32) (35)
-- (231) -- -- -- --
(7) (23) -- -- -- --
(177,313) (287,309) (3) -- (28,087) (19,201)
-- (3,678) -- -- (5) (118)
(11,962) (19,885) (1) -- (197) (89)
(12,071) (22,962) (10) -- -- --
(1,115) (2,516) -- -- -- --
87,703 807,980 57,495 10,949 77,643 (137,381)
---------- ---------- ------- ------- -------- ---------
(430,903) 1,155,969 51,705 12,083 (4,429) 86,123
2,561,231 1,405,262 12,083 -- 661,241 575,118
---------- ---------- ------- ------- -------- ---------
$2,130,328 $2,561,231 $63,788 $12,083 $656,812 $ 661,241
========== ========== ======= ======= ======== =========
$ 390 $ 215 $ (101) $ 9 $ 258 $ 16
========== ========== ======= ======= ======== =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
33
<PAGE> 38
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
CAPITAL GROWTH DISCIPLINED EQUITY
------------------------------ ------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
9/30/98 YEAR ENDED 9/30/98 YEAR ENDED
(UNAUDITED) 3/31/98 (UNAUDITED) 3/31/98
----------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
Net investment income/(loss).................. $ (136) $ 348 $ 33 $ 299
Net realized gain/(loss) on investments....... 93,654 273,745 10,305 35,307
Net change in unrealized
appreciation/(depreciation) of
investments................................. (203,548) 78,878 (76,817) 29,982
--------- --------- -------- --------
Net increase/(decrease) in net assets
resulting from operations................... (110,030) 352,971 (66,479) 65,588
Distributions to shareholders from net
investment income:
Primary A Shares............................ -- (639) -- (246)
Primary B Shares............................ -- -- -- --
Investor A Shares........................... -- -- -- (6)
Investor B Shares........................... -- -- -- --
Investor C Shares........................... -- -- -- --
Distributions to shareholders from net
realized gain on investments:
Primary A Shares............................ (129,080) (143,058) (9,947) (22,847)
Primary B Shares............................ (41) (2,386) -- (159)
Investor A Shares........................... (6,517) (7,645) (1,615) (1,985)
Investor B Shares........................... (9,249) (13,929) (2,900) (5,098)
Investor C Shares........................... (938) (1,825) (90) (160)
Net increase/(decrease) in net assets from
Fund share transactions..................... 10,055 184,298 339,554 29,500
--------- --------- -------- --------
Net increase/(decrease) in net assets......... (245,800) 367,787 258,523 64,587
NET ASSETS:
Beginning of period........................... 981,473 613,686 193,508 128,921
--------- --------- -------- --------
End of period................................. $ 735,673 $ 981,473 $452,031 $193,508
========= ========= ======== ========
Undistributed net investment
income/(distributions in excess of net
investment income) at end of period......... $ (136) $ -- $ 80 $ 47
========= ========= ======== ========
</TABLE>
- ---------------
(a) Focused Equities commenced operations on December 31, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
34
<PAGE> 39
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
FOCUSED EQUITIES EMERGING GROWTH SMALL COMPANY GROWTH
------------------------------- ----------------------------- -----------------------------
SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED
9/30/98 PERIOD ENDED 9/30/98 YEAR ENDED 9/30/98 YEAR ENDED
(UNAUDITED) 3/31/98(a) (UNAUDITED) 03/31/98 (UNAUDITED) 3/31/98
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ (326) $ (28) $ (631) $ (2,067) $ (771) $ 23
(3,644) 39 11,195 89,899 8,120 20,876
(4,067) 3,298 (109,859) 47,047 (156,945) 34,467
-------- ------- --------- -------- -------- --------
(8,037) 3,309 (99,295) 134,879 (149,596) 55,366
-- -- -- -- 0 (58)
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
(10) -- (43,365) (34,129) (10,723) (6,839)
-- -- (3) (445) -- --
(8) -- (3,190) (1,863) (321) (271)
(26) -- (6,531) (4,817) (153) (52)
-- -- (320) (260) (147) (153)
157,095 32,469 (14,155) (22,569) 254,204 84,929
-------- ------- --------- -------- -------- --------
149,014 35,778 (166,859) 70,796 93,264 132,922
35,778 -- 387,916 317,120 248,705 115,783
-------- ------- --------- -------- -------- --------
$184,792 $35,778 $ 221,057 $387,916 $341,969 $248,705
======== ======= ========= ======== ======== ========
$ (326) $ -- $ (631) $ -- $ (808) $ (37)
======== ======= ========= ======== ======== ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
35
<PAGE> 40
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY
<TABLE>
<CAPTION>
BALANCED ASSETS
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...................................................... 422 $ 4,321 2,574 $ 29,244
Issued in exchange for assets of Emerald Balanced Assets
Fund (Note 8)........................................... 6,310 68,185
Issued as reinvestment of dividends....................... 164 1,712 2,583 27,578
Redeemed.................................................. (2,632) (27,585) (15,564) (169,900)
------ -------- ------- ---------
Net increase/(decrease)................................... 4,264 $ 46,633 (10,407) $(113,078)
====== ======== ======= =========
PRIMARY B SHARES:
Sold...................................................... -- $ -- 268 $ 3,019
Issued as reinvestment of dividends....................... 11 119 133 1,404
Redeemed.................................................. -- -- (736) (7,995)
------ -------- ------- ---------
Net increase/(decrease)................................... 11 $ 119 (335) $ (3,572)
====== ======== ======= =========
INVESTOR A SHARES:
Sold...................................................... 612 $ 6,384 681 $ 7,699
Issued in exchange for assets of Emerald Balanced Assets
Fund (Note 8)........................................... 806 8,702
Issued as reinvestment of dividends....................... 120 1,267 247 2,624
Redeemed.................................................. (279) (2,832) (348) (3,890)
------ -------- ------- ---------
Net increase.............................................. 1,259 $ 13,521 580 $ 6,433
====== ======== ======= =========
INVESTOR B SHARES:
Sold...................................................... 961 $ 10,095 692 $ 7,671
Issued as reinvestment of dividends....................... 510 5,432 1,379 14,629
Redeemed.................................................. (751) (7,695) (954) (10,609)
------ -------- ------- ---------
Net increase.............................................. 720 $ 7,832 1,117 $ 11,691
====== ======== ======= =========
INVESTOR C SHARES:
Sold...................................................... 35 $ 367 124 $ 1,367
Issued as reinvestment of dividends....................... 12 132 46 486
Redeemed.................................................. (57) (601) (125) (1,390)
------ -------- ------- ---------
Net increase/(decrease)................................... (10) $ (102) 45 $ 463
====== ======== ======= =========
Total net increase/(decrease)............................... 6,244 $ 68,003 (9,000) $ (98,063)
====== ======== ======= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
36
<PAGE> 41
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
EQUITY INCOME
SIX MONTHS ENDED
SEPTEMBER 30, 1998 YEAR ENDED
(UNAUDITED) MARCH 31, 1998
---------------------- ----------------------
SHARES DOLLARS SHARES DOLLARS
(IN THOUSANDS) ------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 4,477 $ 52,421 6,312 $ 81,040
Issued in exchange for:
Pilot Shares of Pilot Equity Income Fund (Note 8)....... -- -- 10,972 132,321
Assets of NationsBank Common Trust Equity Income Fund
(Note 8).............................................. -- -- 46,645 563,468
Assets of NationsBank Common Trust ASB Equity Income
Fund (Note 8)......................................... 4,737 62,189 -- --
Issued as reinvestment of dividends....................... 508 6,592 1,566 19,191
Redeemed.................................................. (10,635) (125,640) (16,153) (209,588)
------- --------- ------- ---------
Net increase/(decrease)................................... (913) $ (4,438) 49,342 $ 586,432
======= ========= ======= =========
PRIMARY B SHARES:
Sold...................................................... -- $ -- 70 $ 893
Issued as reinvestment of dividends....................... -- -- 63 762
Redeemed.................................................. -- -- (660) (8,640)
------- --------- ------- ---------
Net increase/(decrease)................................... -- $ -- (527) $ (6,985)
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 633 $ 7,755 1,077 $ 13,599
Issued in exchange for Class A Shares of Pilot Equity
Income Fund (Note 8).................................... -- -- 355 4,273
Issued as reinvestment of dividends....................... 339 4,364 788 9,543
Redeemed.................................................. (869) (10,370) (1,231) (15,540)
------- --------- ------- ---------
Net increase.............................................. 103 $ 1,749 989 $ 11,875
======= ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 779 $ 9,691 1,293 $ 16,797
Issued in exchange for Class B Shares of Pilot Equity
Income Fund (Note 8).................................... -- -- 409 4,902
Issued as reinvestment of dividends....................... 722 9,289 1,674 20,416
Redeemed.................................................. (1,237) (14,439) (1,751) (22,947)
------- --------- ------- ---------
Net increase.............................................. 264 $ 4,541 1,625 $ 19,168
======= ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 21 $ 274 492 $ 6,685
Issued as reinvestment of dividends....................... 51 661 118 1,451
Redeemed.................................................. (191) (2,388) (277) (3,470)
------- --------- ------- ---------
Net increase/(decrease)................................... (119) $ (1,453) 333 $ 4,666
======= ========= ======= =========
Total net increase/(decrease)............................... (665) $ 399 51,762 $ 615,156
======= ========= ======= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
37
<PAGE> 42
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SIX MONTHS ENDED
SEPTEMBER 30, 1998 YEAR ENDED
(UNAUDITED) MARCH 31, 1998
------------------------ ------------------------
SHARES DOLLARS SHARES DOLLARS
(IN THOUSANDS) ------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 19,331 $ 353,552 16,610 $ 311,812
Issued in exchange for:
PilotShares of Pilot Growth and Income Fund (Note 8).... -- -- 17,843 327,257
Assets of NationsBank Common Trust Value Equity Fund
(Note 8).............................................. -- -- 54,449 916,929
Assets of NationsBank Common Trust ASB LT Equity Fund
(Note 8).............................................. 6,395 120,426 -- --
Assets of Emerald Equity Value Fund (Note 8)............ 1,059 19,791 -- --
Issued as reinvestment of dividends....................... 3,431 64,745 9,342 165,845
Redeemed.................................................. (27,120) (495,431) (52,590) (998,852)
------- --------- ------- ---------
Net increase/(decrease)................................... 3,096 $ 63,083 45,654 $ 722,991
======= ========= ======= =========
PRIMARY B SHARES:
Sold...................................................... -- $ -- 207 $ 3,909
Issued as reinvestment of dividends....................... -- -- 157 2,798
Redeemed.................................................. -- -- (1,908) (36,315)
------- --------- ------- ---------
Net increase/(decrease)................................... -- $ -- (1,544) $ (29,608)
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 1,281 $ 23,196 3,310 $ 65,462
Issued in exchange for:
Class A Shares of Pilot Growth and Income Fund
(Note 8).............................................. -- -- 436 7,995
Assets of Emerald Equity Value Fund (Note 8)............ 354 6,603 -- --
Issued as reinvestment of dividends....................... 620 11,573 1,126 19,824
Redeemed.................................................. (1,989) (34,960) (1,317) (24,923)
------- --------- ------- ---------
Net increase.............................................. 266 $ 6,412 3,555 $ 68,358
======= ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 1,027 $ 18,618 1,419 $ 32,294
Issued in exchange for Class B Shares of Pilot Growth and
Income Fund............................................. -- -- 310 5,668
Issued as reinvestment of dividends....................... 633 11,750 1,288 22,711
Redeemed.................................................. (675) (11,825) (1,080) (21,865)
------- --------- ------- ---------
Net increase.............................................. 985 $ 18,543 1,937 $ 38,808
======= ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 148 $ 2,708 503 $ 10,534
Issued as reinvestment of dividends....................... 61 1,122 144 2,530
Redeemed.................................................. (235) (4,165) (307) (5,633)
------- --------- ------- ---------
Net increase/(decrease)................................... (26) $ (335) 340 $ 7,431
======= ========= ======= =========
Total net increase/(decrease)............................... 4,321 $ 87,703 49,942 $ 807,980
======= ========= ======= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
38
<PAGE> 43
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
GROWTH & INCOME
SIX MONTHS ENDED
SEPTEMBER 30, 1998 PERIOD ENDED
(UNAUDITED) MARCH 31, 1998(a)
------------------------ ------------------------
(IN THOUSANDS) SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 1,317 $ 16,400 210 $ 2,117
Issued as reinvestment of dividends....................... --* 3 -- --
Redeemed.................................................. (379) (4,456) (1) (11)
------- --------- ------- ---------
Net increase/(decrease)................................... 938 $ 11,947 209 $ 2,106
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 756 $ 9,621 100 $ 1,117
Issued as reinvestment of dividends....................... --* 1 -- --
Redeemed.................................................. (92) (1,079) (5) (55)
------- --------- ------- ---------
Net increase.............................................. 664 $ 8,543 95 $ 1,062
======= ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 3,060 $ 38,135 664 $ 7,350
Issued as reinvestment of dividends....................... 1 9 -- --
Redeemed.................................................. (123) (1,497) (6) (71)
------- --------- ------- ---------
Net increase.............................................. 2,938 $ 36,647 658 $ 7,279
======= ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 43 $ 528 43 $ 502
Issued as reinvestment of dividends....................... -- -- -- --
Redeemed.................................................. (14) (170) -- --
------- --------- ------- ---------
Net increase/(decrease)................................... 29 $ 358 43 $ 502
======= ========= ======= =========
Total net increase/(decrease)............................... 4,569 $ 57,495 1,005 $ 10,949
======= ========= ======= =========
</TABLE>
- ---------------
(a) Growth and Income Fund commenced operations on December 31, 1997.
* Amount represents less than 500 shares.
SEE NOTES TO FINANCIAL STATEMENTS.
39
<PAGE> 44
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
EQUITY INDEX
SIX MONTHS ENDED
SEPTEMBER 30, 1998 YEAR ENDED
(UNAUDITED) MARCH 31, 1998
------------------------ ------------------------
SHARES DOLLARS SHARES DOLLARS
(IN THOUSANDS) ------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 20,692 $ 453,605 14,925 $ 286,047
Issued as reinvestment of dividends....................... 1,220 26,273 1,114 21,515
Redeemed.................................................. (18,542) (406,386) (22,419) (439,321)
------- --------- ------- ---------
Net increase/(decrease)................................... 3,370 $ 73,492 (6,380) $(131,759)
======= ========= ======= =========
PRIMARY B SHARES:
Sold...................................................... 7 $ 151 119 $ 2,219
Issued as reinvestment of dividends....................... 0(a) 6 8 142
Redeemed.................................................. (3) (74) (468) (9,016)
------- --------- ------- ---------
Net increase/(decrease)................................... 4 $ 83 (341) $ (6,655)
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 224 $ 4,679 201 $ 3,881
Issued as reinvestment of dividends....................... 10 218 6 114
Redeemed.................................................. (40) (829) (163) (2,962)
------- --------- ------- ---------
Net increase.............................................. 194 $ 4,068 44 $ 1,033
======= ========= ======= =========
Total net increase/(decrease)............................... 3,568 $ 77,643 (6,677) $(137,381)
======= ========= ======= =========
</TABLE>
- ---------------
(a) Amount represents less than 500 shares.
SEE NOTES TO FINANCIAL STATEMENTS.
40
<PAGE> 45
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
CAPITAL GROWTH
SIX MONTHS ENDED
SEPTEMBER 30, 1998 YEAR ENDED
(UNAUDITED) MARCH 31, 1998
-------------------- --------------------
SHARES DOLLARS SHARES DOLLARS
(IN THOUSANDS) --------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 5,879 $ 65,439 6,334 $ 78,066
Issued in exchange for:
Assets of NationsBank Common Trust Capital Growth Fund
(Note 8).............................................. -- -- 44,251 469,944
Assets of NationsBank Common Trust Equity Fund for
Personal Trust (Note 8)............................... -- -- 5,062 53,754
Issued as reinvestment of dividends....................... 4,026 45,171 9,411 105,982
Redeemed.................................................. (10,429) (117,780) (45,061) (537,766)
------- --------- ------- ---------
Net increase/(decrease)................................... (524) $ (7,170) 19,997 $ 169,980
======= ========= ======= =========
PRIMARY B SHARES:
Sold...................................................... -- $ -- 96 $ 1,136
Issued as reinvestment of dividends....................... 4 41 177 1,992
Redeemed.................................................. -- -- (1,311) (16,042)
------- --------- ------- ---------
Net increase/(decrease)................................... 4 $ 41 (1,038) $ (12,914)
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 1,162 $ 12,994 2,778 $ 33,436
Issued as reinvestment of dividends....................... 528 5,900 620 6,941
Redeemed.................................................. (906) (10,060) (1,879) (23,315)
------- --------- ------- ---------
Net increase.............................................. 784 $ 8,834 1,519 $ 17,062
======= ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 537 $ 5,797 352 $ 4,213
Issued as reinvestment of dividends....................... 846 9,098 1,252 13,690
Redeemed.................................................. (459) (4,829) (623) (7,430)
------- --------- ------- ---------
Net increase.............................................. 924 $ 10,066 981 $ 10,473
======= ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 86 $ 938 149 $ 1,808
Issued as reinvestment of dividends....................... 86 936 165 1,809
Redeemed.................................................. (332) (3,590) (336) (3,920)
------- --------- ------- ---------
Net increase.............................................. (160) $ (1,716) (22) $ (303)
======= ========= ======= =========
Total net increase/(decrease)............................... 1,028 $ 10,055 21,437 $ 184,298
======= ========= ======= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
41
<PAGE> 46
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
DISCIPLINED EQUITY
------------------------------------------
SIX MONTHS ENDED
SEPTEMBER 30, 1998 YEAR ENDED
(UNAUDITED) MARCH 31, 1998
-------------------- ------------------
SHARES DOLLARS SHARES DOLLARS
(IN THOUSANDS) ------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 4,488 $ 95,316 3,960 $ 81,039
Issued in exchange for:
Pilot Shares of Pilot Growth Fund (Note 8).............. -- -- 2,069 37,389
Assets of NationsBank Common Trust Kansas Growth Fund
(Note 8)............................................... 2,294 47,340 -- --
Assets of NationsBank Common Trust Oklahoma Growth Fund
(Note 8)............................................... 205 4,245 -- --
Assets of Emerald Equity Fund (Note 8).................. 11,872 249,848 -- --
Issued as reinvestment of dividends....................... 314 6,654 736 13,934
Redeemed.................................................. (5,925) (125,187) (6,216) (126,868)
-------- --------- ------ ---------
Net increase/(decrease)................................... 13,248 $ 278,216 549 $ 5,494
======== ========= ====== =========
PRIMARY B SHARES:
Sold...................................................... -- $ -- 8 $ 157
Issued as reinvestment of dividends....................... -- -- 1 28
Redeemed.................................................. -- -- (70) (1,439)
-------- --------- ------ ---------
Net increase/(decrease)................................... -- $ -- (61) (1,254)
======== ========= ====== =========
INVESTOR A SHARES:
Sold...................................................... 2,058 $ 42,582 733 $ 14,589
Issued in exchange for:
Class A Shares of Pilot Growth Fund (Note 8)............ -- -- 12 223
Assets of Emerald Equity Fund (Note 8).................. 2,242 47,004 -- --
Issued as reinvestment of dividends....................... 74 1,568 103 1,934
Redeemed.................................................. (1,929) (39,952) (235) (4,755)
-------- --------- ------ ---------
Net increase.............................................. 2,445 $ 51,202 613 $ 11,991
======== ========= ====== =========
INVESTOR B SHARES:
Sold...................................................... 507 $ 10,395 592 $ 11,777
Issued in exchange for Class B
Shares of Pilot Growth Fund (Note 8).................... -- -- 8 139
Issued as reinvestment of dividends....................... 138 2,842 270 5,025
Redeemed.................................................. (167) (3,296) (218) (4,252)
-------- --------- ------ ---------
Net increase.............................................. 478 $ 9,941 652 $ 12,689
======== ========= ====== =========
INVESTOR C SHARES:
Sold...................................................... 24 $ 486 53 $ 1,059
Issued as reinvestment of dividends....................... 4 90 8 154
Redeemed.................................................. (17) (381) (30) (633)
-------- --------- ------ ---------
Net increase.............................................. 11 $ 195 31 $ 580
======== ========= ====== =========
Total net increase/(decrease)............................... 16,182 $ 339,554 1,784 $ 29,500
======== ========= ====== =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
42
<PAGE> 47
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
FOCUSED EQUITIES
SIX MONTHS ENDED
SEPTEMBER 30, PERIOD ENDED
1998 MARCH 31,
(UNAUDITED) 1998(a)
------------------ -----------------
(IN THOUSANDS) SHARES DOLLARS SHARES DOLLARS
--------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 2,711 $ 35,270 726 $ 7,832
Issued as reinvestment of dividends....................... 1 9 -- --
Redeemed.................................................. (531) (7,026) 0(b) (3)
------ -------- ----- -------
Net increase/(decrease)................................... 2,181 $ 28,253 726 $ 7,829
====== ======== ===== =======
INVESTOR A SHARES:
Sold...................................................... 3,083 $ 39,743 514 $ 5,758
Issued as reinvestment of dividends....................... 1 7 -- --
Redeemed.................................................. (247) (3,203) (15) (168)
------ -------- ----- -------
Net increase.............................................. 2,837 $ 36,547 499 $ 5,590
====== ======== ===== =======
INVESTOR B SHARES:
Sold...................................................... 7,271 $ 93,704 1,701 $18,783
Issued as reinvestment of dividends....................... 2 25 -- --
Redeemed.................................................. (212) (2,679) (15) (164)
------ -------- ----- -------
Net increase.............................................. 7,062 $ 91,050 1,686 $18,619
====== ======== ===== =======
INVESTOR C SHARES:
Sold...................................................... 96 $ 1,245 39 $ 431
Issued as reinvestment of dividends....................... -- -- -- --
Redeemed.................................................. -- -- -- --
------ -------- ----- -------
Net increase.............................................. 96 $ 1,245 39 $ 431
====== ======== ===== =======
Total net increase/(decrease)............................... 12,175 $157,095 2,950 $32,469
====== ======== ===== =======
</TABLE>
- ---------------
(a) Focused Equities commenced operations on December 31, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
43
<PAGE> 48
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
EMERGING GROWTH
SIX MONTHS ENDED
SEPTEMBER 30, 1998 YEAR ENDED
(UNAUDITED) MARCH 31, 1998
------------------------ ------------------------
SHARES DOLLARS SHARES DOLLARS
(IN THOUSANDS) ---------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 2,022 $ 28,974 3,096 $ 44,791
Issued in exchange for:
Assets of NationsBank Common Trust Emerging
Growth Fund (Note 8).................................. -- -- 7,086 103,027
Issued as reinvestment of dividends....................... 1,415 20,768 1,624 23,698
Redeemed.................................................. (5,151) (68,352) (13,362) (199,704)
------- --------- ------- ---------
Net increase/(decrease)................................... (1,714) $ (18,610) (1,556) $ (28,188)
======= ========= ======= =========
PRIMARY B SHARES:
Sold...................................................... -- $ -- 98 $ 1,358
Issued as reinvestment of dividends....................... 0(a) 3 29 425
Redeemed.................................................. (1) (23) (352) (5,177)
------- --------- ------- ---------
Net increase/(decrease)................................... (1) $ (20) (225) $ (3,394)
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 11,642 $ 142,316 1,655 $ 24,208
Issued in exchange for:
Issued as reinvestment of dividends..................... 192 2,766 116 1,645
Redeemed.................................................. (11,832) (144,314) (1,401) (20,185)
------- --------- ------- ---------
Net increase/(decrease)................................... 2 $ 768 370 $ 5,668
======= ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 211 $ 2,740 368 $ 5,386
Issued as reinvestment of dividends....................... 469 6,405 340 4,707
Redeemed.................................................. (442) (5,283) (502) (7,132)
------- --------- ------- ---------
Net increase/(decrease)................................... 238 $ 3,862 206 $ 2,961
======= ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 36 $ 441 97 $ 1,349
Issued as reinvestment of dividends....................... 23 319 18 260
Redeemed.................................................. (79) (915) (87) (1,225)
------- --------- ------- ---------
Net increase/(decrease)................................... (20) $ (155) 28 $ 384
======= ========= ======= =========
Total net increase/(decrease)............................... (1,495) $ (14,155) (1,177) $ (22,569)
======= ========= ======= =========
</TABLE>
- ---------------
(a) Amount represents less than 500 shares.
SEE NOTES TO FINANCIAL STATEMENTS.
44
<PAGE> 49
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH
SIX MONTHS ENDED
SEPTEMBER 30, 1998 PERIOD ENDED
(UNAUDITED) MARCH 31, 1998
-------------------- -------------------
SHARES DOLLARS SHARES DOLLARS
(IN THOUSANDS) ------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold...................................................... 11,147 $158,609 9,153 $125,787
Issued in exchange for:
Assets of NationsBank Common Trust ASB Special Equity
Fund (Note 8)......................................... 464 7,075 -- --
Assets of Emerald Small Capitalization Fund (Note 8).... 9,319 139,205 -- --
Issued as reinvestment of dividends....................... 390 5,902 110 1,586
Redeemed.................................................. (5,629) (73,256) (3,417) (47,093)
------ -------- ------ --------
Net increase/(decrease)................................... 15,691 $237,535 5,846 $ 80,280
====== ======== ====== ========
INVESTOR A SHARES:
Sold...................................................... 3,470 $ 43,541 234 $ 3,339
Issued in exchange for:
Assets of Emerald Small Capitalization Fund (Note 8).... 933 13,883 -- --
Issued as reinvestment of dividends..................... 20 295 18 260
Redeemed.................................................. (3,464) (43,872) (128) (1,747)
------ -------- ------ --------
Net increase/(decrease)................................... 959 $ 13,897 124 $ 1,852
====== ======== ====== ========
INVESTOR B SHARES:
Sold...................................................... 268 $ 3,718 224 $ 3,173
Issued as reinvestment of dividends....................... 10 150 4 51
Redeemed.................................................. (74) (973) (230) (3,443)
------ -------- ------ --------
Net increase/(decrease)................................... 204 $ 2,895 (2) $ (219)
====== ======== ====== ========
INVESTOR C SHARES:
Sold...................................................... 9 $ 126 225 $ 3,399
Issued as reinvestment of dividends....................... 10 146 10 149
Redeemed.................................................. (34) (395) (37) (532)
------ -------- ------ --------
Net increase/(decrease)................................... (15) $ (123) 198 $ 3,016
====== ======== ====== ========
Total net increase/(decrease)............................... 16,893 $254,204 6,166 $ 84,929
====== ======== ====== ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
45
<PAGE> 50
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) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCED ASSETS:
PRIMARY A
Six months ended
09/30/1998 (unaudited)##............. $11.49 $0.14 $(1.25) $(1.11) $(0.12) $(0.73)
Year ended 03/31/1998.................. 11.15 0.29 2.68 2.97 (0.29) (2.34)
Year ended 03/31/1997.................. 11.65 0.39 1.03 1.42 (0.38) (1.54)
Period ended 03/31/1996(a)............. 12.68 0.11 0.45 0.56 (0.18) (1.41)
Year ended 11/30/1995.................. 10.44 0.38 2.21 2.59 (0.33) (0.02)
Year ended 11/30/1994.................. 10.87 0.25 (0.43) (0.18) (0.25) --
Year ended 11/30/1993.................. 10.24 0.29 0.64 0.93 (0.30) --
PRIMARY B
Six months ended
09/30/1998 (unaudited)##............. $11.50 $0.11 $(1.25) $(1.14) $(0.09) $(0.73)
Year ended 03/31/1998.................. 11.14 0.23 2.70 2.93 (0.23) (2.34)
Period ended 03/31/1997*............... 11.87 0.21 0.85 1.06 (0.25) (1.54)
INVESTOR A
Six months ended
09/30/1998 (unaudited)##............. $11.47 $0.12 $(1.24) $(1.12) $(0.10) $(0.73)
Year ended 03/31/1998.................. 11.13 0.27 2.68 2.95 (0.27) (2.34)
Year ended 03/31/1997.................. 11.64 0.34 1.05 1.39 (0.36) (1.54)
Period ended 03/31/1996(a)............. 12.66 0.11 0.45 0.56 (0.17) (1.41)
Year ended 11/30/1995.................. 10.42 0.34 2.23 2.57 (0.31) (0.02)
Year ended 11/30/1994.................. 10.86 0.22 (0.44) (0.22) (0.22) --
Year ended 11/30/1993.................. 10.24 0.29 0.62 0.91 (0.29) --
INVESTOR B
Six months ended
09/30/1998 (unaudited)##............. $11.45 $0.08 $(1.24) $(1.16) $(0.07) $(0.73)
Year ended 03/31/1998.................. 11.11 0.19 2.68 2.87 $(0.19) (2.34)
Year ended 03/31/1997.................. 11.62 0.29 1.04 1.33 (0.30) (1.54)
Period ended 03/31/1996(a)............. 12.63 0.09 0.45 0.54 (0.14) (1.41)
Year ended 11/30/1995.................. 10.40 0.28 2.22 2.50 (0.25) (0.02)
Year ended 11/30/1994.................. 10.85 0.17 (0.44) (0.27) (0.18) --
Period ended 11/30/1993*............... 10.61 0.14 0.23 0.37 (0.13) --
INVESTOR C
Six months ended
09/30/1998 (unaudited)##............. $11.41 $0.08 $(1.24) $(1.16) $(0.06) $(0.73)
Year ended 03/31/1998.................. 11.08 0.20 2.67 2.87 $(0.20) (2.34)
Year ended 03/31/1997.................. 11.60 0.33 1.02 1.35 (0.33) (1.54)
Period ended 03/31/1996(a)............. 12.61 0.09 0.45 0.54 (0.14) (1.41)
Year ended 11/30/1995.................. 10.38 0.26 2.21 2.47 (0.22) (0.02)
Year ended 11/30/1994.................. 10.82 0.14 (0.43) (0.29) (0.15) --
Year ended 11/30/1993.................. 10.23 0.23 0.59 0.82 (0.23) --
</TABLE>
- ---------------
* Balanced Assets Primary A, Primary B, Investor A, Investor B and Investor C
Shares commenced operations on September 30, 1992, June 28, 1996, October 2,
1992, June 7, 1993 and October 2, 1992, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# The amount shown at this caption for each share outstanding throughout the
period may not accord with the change in the aggregate gains and losses in
the portfolio securities for the period because of the timing of purchases
and withdrawals of shares in relation to the fluctuating market value of the
portfolio.
SEE NOTES TO FINANCIAL STATEMENTS.
46
<PAGE> 51
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF NET RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT OPERATING
DIVIDENDS VALUE END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
AND END OF TOTAL PERIOD AVERAGE AVERAGE TURNOVER AVERAGE
DISTRIBUTIONS PERIOD RETURN++ (000'S) NET ASSETS NET ASSETS RATE NET ASSETS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(0.85) $ 9.53 (10.41)% $ 57,480 1.06%(b)(c) 2.58% 80% 1.06%(b)
(2.63) 11.49 30.35 20,299 1.08(b)(c) 2.70 276 1.08(b)
(1.92) 11.15 12.50 135,731 1.00(b) 3.31 264 1.00(b)
(1.59) 11.65 4.90 164,215 1.00+ 2.91+ 83 1.00+
(0.35) 12.68 25.27 163,198 0.99 3.25 174 0.99
(0.25) 10.44 (1.73) 162,215 0.98 2.31 156 0.99
(0.30) 10.87 9.22 178,270 0.90 2.82 50 0.97
$(0.82) $ 9.54 (10.60)% $ 1,655 1.56%(b)(c) 2.08% 80% 1.66%(b)
(2.57) 11.50 29.90 1,868 1.58(b)(c) 2.20 276 1.58(b)
(1.79) 11.14 9.06 5,537 1.50+(b) 2.81+ 264 1.50+(b)
$(0.83) $ 9.52 (10.43)% $ 25,256 1.31%(b)(c) 2.33% 80% 1.31%(b)
(2.61) 11.47 30.13 16,009 1.33(b)(c) 2.45 276 1.33(b)
(1.90) 11.13 12.18 9,075 1.25(b) 3.06 264 1.25(b)
(1.58) 11.64 4.86 6,261 1.25+ 2.66+ 83 1.25+
(0.33) 12.66 25.01 5,276 1.24 3.00 174 1.24
(0.22) 10.42 (2.02) 4,881 1.23 2.06 156 1.24
(0.29) 10.86 8.93 5,191 1.15 2.57 50 1.22
$(0.80) $ 9.49 (10.87)% $ 72,181 2.06%(b)(c) 1.58% 80% 2.06%(b)
(2.53) 11.45 29.35 78,813 2.00(b)(c) 1.78 276 2.00(b)
(1.84) 11.11 11.62 64,058 1.75(b) 2.56 264 1.75(b)
(1.55) 11.62 4.69 65,764 1.75+ 2.16+ 83 1.75+
(0.27) 12.63 24.35 65,275 1.74 2.50 174 1.74
(0.18) 10.40 (2.51) 52,905 1.73 1.56 156 1.74
(0.13) 10.85 3.45 27,982 1.65+ 2.07+ 50 1.72+
$(0.79) $ 9.46 (10.84)% $ 1,521 2.06%(b)(c) 1.58% 80% 2.06%(b)
(2.54) 11.41 29.43 1,947 1.91(b)(c) 1.87 276 1.91(b)
(1.87) 11.08 11.85 1,396 1.50(b) 2.81 264 1.50(b)
(1.55) 11.60 4.71 1,187 1.62+ 2.29+ 83 1.62+
(0.24) 12.61 24.03 992 1.99 2.25 174 1.99
(0.15) 10.38 (2.72) 951 1.98 1.31 156 1.99
(0.23) 10.82 8.06 1,196 1.90 1.82 50 1.97
</TABLE>
- ---------------
## Per share net investment income has been calculated using the monthly average
share method.
(a) Fiscal year changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements, was less than 0.01%.
(c) The effect of interest expense on the operating expense ratio was less than
0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
47
<PAGE> 52
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQUITY INCOME:
PRIMARY A
Six months ended
09/30/1998(unaudited)#............. $13.94 $0.12 $(2.49) $(2.37) $(0.12) $(0.85)
Year ended 03/31/1998................ 12.30 0.29 3.79 4.08 (0.28) (2.16)
Year ended 03/31/1997................ 13.14 0.43 1.55 1.98 (0.41) (2.41)
Period ended 03/31/1996(a)........... 11.81 0.30 1.77 2.07 (0.37) (0.37)
Year ended 05/31/1995................ 11.43 0.42 1.11 1.53 (0.42) (0.73)
Year ended 05/31/1994................ 12.06 0.38 0.22 0.60 (0.42) (0.81)
Year ended 05/31/1993................ 11.41 0.37 1.08 1.45 (0.35) (0.45)
PRIMARY B
Six months ended
09/30/1998(unaudited)#............. $13.94 $0.12 $(2.59) $(2.47) $(0.12) $(0.85)
Year ended 03/31/1998................ 12.30 0.24 3.75 3.99 (0.19) (2.16)
Period ended 03/31/1997*............. 13.50 0.25 1.21 1.46 (0.25) (2.41)
INVESTOR A
Six months ended
09/30/1998(unaudited)#............. $13.89 $0.11 $(2.49) $(2.38) $(0.11) $(0.85)
Year ended 03/31/1998................ 12.26 0.26 3.77 4.03 (0.24) (2.16)
Year ended 03/31/1997................ 13.11 0.36 1.58 1.94 (0.38) (2.41)
Period ended 03/31/1996(a)........... 11.78 0.27 1.77 2.04 (0.34) (0.37)
Year ended 05/31/1995................ 11.41 0.40 1.10 1.50 (0.40) (0.73)
Year ended 05/31/1994................ 12.02 0.37 0.21 0.58 (0.38) (0.81)
Year ended 05/31/1993................ 11.40 0.34 1.05 1.39 (0.32) (0.45)
INVESTOR B
Six months ended
09/30/1998(unaudited)#............. $13.87 $0.06 $(2.47) $(2.41) $(0.07) $(0.85)
Year ended 03/31/1998................ 12.25 0.17 3.77 3.94 (0.16) (2.16)
Year ended 03/31/1997................ 13.10 0.31 1.57 1.88 (0.32) (2.41)
Period ended 03/31/1996(a)........... 11.77 0.22 1.76 1.98 (0.28) (0.37)
Year ended 05/31/1995................ 11.40 0.34 1.11 1.45 (0.35) (0.73)
Period ended 05/31/1994*............. 11.98 0.37 0.22 0.59 (0.36) (0.81)
INVESTOR C
Six months ended
09/30/1998(unaudited)#............. $14.01 $0.06 $(2.50) $(2.44) $(0.07) $(0.85)
Year ended 03/31/1998................ 12.35 0.18 3.83 4.01 (0.19) (2.16)
Year ended 03/31/1997................ 13.19 0.33 1.59 1.92 (0.35) (2.43)
Period ended 03/31/1996(a)........... 11.83 0.21 1.78 1.99 (0.26) (0.37)
Year ended 05/31/1995................ 11.47 0.32 1.08 1.40 (0.31) (0.73)
Year ended 05/31/1994................ 12.04 0.28 0.21 0.49 (0.25) (0.81)
Period ended 05/31/1993*............. 11.13 0.32 1.32 1.64 (0.28) (0.45)
</TABLE>
- ---------------
* Equity Income Primary A, Primary B, Investor A, Investor B and Investor C
Shares commenced operations on April 11, 1991, June 28, 1996, April 16, 1991,
June 7, 1993 and June 17, 1992, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# Per share numbers have been calculated using the monthly average share
method, which more appropriately represents the per share data for the period
since use of the undistributed income method did not accord with the results
of operations.
SEE NOTES TO FINANCIAL STATEMENTS.
48
<PAGE> 53
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
----------------------
RATIO OF RATIO OF NET RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT OPERATING
DIVIDENDS VALUE END OF EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
AND END OF TOTAL PERIOD AVERAGE AVERAGE TURNOVER AVERAGE
DISTRIBUTIONS PERIOD RETURN++ (000'S) NET ASSETS NET ASSETS RATE NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(0.97) $10.60 (18.16)% $686,202 0.82%(b) 2.04% 31% 0.82%(b)
(2.44) 13.94 37.21 915,630 0.86(b) 2.22 74 0.86(b)
(2.82) 12.30 15.62 200,772 0.91(b) 3.09 102 0.91(b)
(0.74) 13.14 17.98 283,142 0.90+ 2.84+ 59 0.90+
(1.15) 11.81 14.79 283,082 0.92 3.75 158 0.93
(1.23) 11.43 5.00 225,740 0.94 3.41 116 0.95
(0.80) 12.06 13.30 175,949 0.92 3.37 55 1.04
$(0.97) $10.50 (18.92)% $ --(c) 1.32%(b) 1.54% 31% 1.42%(b)
(2.35) 13.94 36.36 0(c) 1.36(b) 1.72 74 1.36(b)
(2.66) 12.30 11.17 6,484 1.41+(b) 2.59+ 102 1.41+(b)
$(0.96) $10.55 (18.32)% $ 52,743 1.07%(b) 1.79% 31% 1.07%(b)
(2.40) 13.89 36.92 68,006 1.11(b) 1.97 74 1.11(b)
(2.79) 12.26 15.30 47,891 1.16(b) 2.84 102 1.16(b)
(0.71) 13.11 17.75 42,606 1.15+ 2.59+ 59 1.15+
(1.13) 11.78 14.53 35,538 1.17 3.50 158 1.18
(1.19) 11.41 4.74 33,691 1.19 3.16 116 1.20
(0.77) 12.02 12.78 32,760 1.17 3.12 55 1.29
$(0.92) $10.54 (18.56)% $112,844 1.82%(b) 1.04% 31% 1.82%(b)
(2.32) 13.87 36.02 144,929 1.78(b) 1.30 74 1.78(b)
(2.73) 12.25 14.76 108,055 1.66(b) 2.34 102 1.66(b)
(0.65) 13.10 17.21 104,026 1.65+ 2.09+ 59 1.65+
(1.08) 11.77 14.03 75,371 1.67 3.00 158 1.68
(1.17) 11.40 4.84 46,043 1.69+ 2.66+ 116 1.70+
$(0.92) $10.65 (18.56)% $ 6,605 1.82%(b) 1.04% 31% 1.82%(b)
(2.35) 14.01 36.28 10,348 1.69(b) 1.39 74 1.69(b)
(2.76) 12.35 15.01 5,007 1.41(b) 2.59 102 1.41(b)
(0.63) 13.19 17.20 4,612 1.75+ 1.99+ 59 1.75+
(1.04) 11.83 13.49 4,278 1.92 2.75 158 1.93
(1.06) 11.47 3.96 4,221 1.94 2.41 116 1.95
(0.73) 12.04 15.31 4,377 1.92+ 2.37+ 55 2.04+
</TABLE>
- ---------------
(a) Fiscal year changed to March 31. Prior to this, the fiscal year end was May
31.
(b) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements, was less than 001%.
(c) Amount represents less than $500.
SEE NOTES TO FINANCIAL STATEMENTS.
49
<PAGE> 54
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
NET INCREASE/
NET ASSET NET REALIZED (DECREASE) IN DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED NET ASSET VALUE FROM NET FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) ON FROM INVESTMENT REALIZED
OF PERIOD INCOME/(LOSS) INVESTMENTS OPERATIONS INCOME CAPITAL GAINS
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
VALUE:
PRIMARY A
Six months ended
09/30/1998 (unaudited)#........... $19.92 $ 0.08 $(2.31) $(2.23) $(0.07) $(1.59)
Year ended 03/31/1998............... 17.87 0.20 5.98 6.18 (0.19) (3.94)
Year ended 03/31/1997............... 16.60 0.26 2.69 2.95 (0.26) (1.42)
Period ended 03/31/1996(a).......... 16.21 0.07 1.06 1.13 (0.12) (0.62)
Year ended 11/30/1995............... 12.98 0.27 3.91 4.18 (0.28) (0.67)
Year ended 11/30/1994............... 13.74 0.24 (0.23) 0.01 (0.23) (0.54)
Year ended 11/30/1993............... 12.45 0.24 1.38 1.62 (0.24) (0.09)
PRIMARY B
Six months ended
09/30/1998 (unaudited)#........... $19.98 $ 0.08 $(2.34) $(2.26) $(0.07) $(1.59)
Year ended 03/31/1998............... 17.87 0.11 6.01 6.12 (0.07) (3.94)
Period ended 03/31/1997*............ 17.19 0.14 2.10 2.24 (0.14) (1.42)
INVESTOR A
Six months ended
09/30/1998 (unaudited)#........... $19.92 $ 0.05 $(2.29) $(2.24) $(0.05) $(1.59)
Year ended 03/31/1998............... 17.87 0.15 5.98 6.13 (0.14) (3.94)
Year ended 03/31/1997............... 16.60 0.21 2.70 2.91 (0.22) (1.42)
Period ended 03/31/1996(a).......... 16.21 0.05 1.06 1.11 (0.10) (0.62)
Year ended 11/30/1995............... 12.98 0.23 3.92 4.15 (0.25) (0.67)
Year ended 11/30/1994............... 13.72 0.20 (0.20) 0.00 (0.20) (0.54)
Year ended 11/30/1993............... 12.45 0.22 1.35 1.57 (0.21) (0.09)
INVESTOR B
Six months ended
09/30/1998 (unaudited)#........... $19.81 $(0.01) $(2.29) $(2.30) -- $(1.59)
Year ended 03/31/1998............... 17.81 0.02 5.96 5.98 (0.04) (3.94)
Year ended 03/31/1997............... 16.55 0.14 2.68 2.82 (0.14) (1.42)
Period ended 03/31/1996(a).......... 16.15 0.03 1.05 1.08 (0.06) (0.62)
Year ended 11/30/1995............... 12.94 0.17 3.89 4.06 (0.18) (0.67)
Year ended 11/30/1994............... 13.71 0.15 (0.22) (0.07) (0.16) (0.54)
Period ended 11/30/1993*............ 13.08 0.11 0.63 0.74 (0.11) --
INVESTOR C
Six months ended
09/30/1998 (unaudited)#........... $19.75 $(0.01) $(2.25) $(2.26) $(0.01) $(1.59)
Year ended 03/31/1998............... 17.75 0.04 5.95 5.99 (0.05) (3.94)
Year ended 03/31/1997............... 16.50 0.17 2.68 2.85 (0.18) (1.42)
Period ended 03/31/1996(a).......... 16.09 0.04 1.05 1.09 (0.06) (0.62)
Year ended 11/30/1995............... 12.90 0.13 3.88 4.01 (0.15) (0.67)
Year ended 11/30/1994............... 13.64 0.12 (0.22) (0.10) (0.10) (0.54)
Year ended 11/30/1993............... 12.41 0.13 1.32 1.45 (0.13) (0.09)
</TABLE>
- ---------------
* Value Primary A, Primary B, Investor A, Investor B and Investor C Shares
commenced operations on September 19, 1989, June 28, 1996, December 6, 1989,
June 7, 1993 and June 17, 1992, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
SEE NOTES TO FINANCIAL STATEMENTS.
50
<PAGE> 55
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO
AND END OF TOTAL PERIOD AVERAGE AVERAGE TURNOVER AVERAGE
DISTRIBUTIONS PERIOD RETURN++ (000'S) NET ASSETS NET ASSETS RATE NET ASSETS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(1.66) $16.03 (12.34)% $1,859,196 0.92%+(b) 0.85%+ 19% 0.92%+(b)
(4.13) 19.92 38.53 2,248,460 0.95(b) 1.04 79 0.95(b)
(1.68) 17.87 18.07 1,200,853 0.97(b) 1.51 47 0.97(b)
(0.74) 16.60 7.20 998,957 0.96+ 1.30+ 12 0.96+
(0.95) 16.21 34.53 956,669 0.94 1.90 63 0.94
(0.77) 12.98 (0.08) 799,743 0.93 1.85 75 0.93
(0.33) 13.74 13.19 707,185 0.96 1.98 64 0.97
$(1.66) $16.06 (12.45)% $ --(c) 1.42%+(b) 0.35+ 19% 1.52%+(b)
(4.01) 19.98 38.09 --(c) 1.45(b) 0.54 79 1.45(b)
(1.56) 17.87 13.20 27,586 1.47+(b) 1.01+ 47 1.47+(b)
$(1.64) $16.04 (12.38)% $ 124,392 1.17%+(b) 0.60%+ 19% 1.17%+(b)
(4.08) 19.92 38.22 149,167 1.20(b) 0.79 79 1.20(b)
(1.64) 17.87 17.80 70,305 1.22(b) 1.26 47 1.22(b)
(0.72) 16.60 7.07 54,341 1.21+ 1.05+ 12 1.21+
(0.92) 16.21 34.22 48,440 1.19 1.65 63 1.19
(0.74) 12.98 (0.17) 35,445 1.18 1.60 75 1.18
(0.30) 13.72 12.80 32,607 1.21 1.73 64 1.22
$(1.59) $15.92 (12.77)% $ 135,912 1.92%+(b) (0.15)%+ 19% 1.92%+(b)
(3.98) 19.81 37.29 149,635 1.87(b) 0.12 79 1.87(b)
(1.56) 17.81 17.21 99,999 1.72(b) 0.76 47 1.72(b)
(0.68) 16.55 6.90 88,861 1.71+ 0.55+ 12 1.71+
(0.85) 16.15 33.55 83,699 1.69 1.15 63 1.69
(0.70) 12.94 (0.69) 42,530 1.68 1.10 75 1.68
(0.11) 13.71 5.65 10,449 1.71+ 1.23+ 64 1.72+
$(1.60) $15.89 (12.60)% $ 10,828 1.92%+(b) (0.15)%+ 19% 1.92%+(b)
(3.99) 19.75 37.55 13,969 1.78(b) 0.21 79 1.78(b)
(1.60) 17.75 17.51 6,519 1.47(b) 1.01 47 1.47(b)
(0.68) 16.50 6.99 4,633 1.58+ 0.68+ 12 1.58+
(0.82) 16.09 33.15 4,185 1.94 0.90 63 1.94
(0.64) 12.90 (0.92) 2,983 1.93 0.85 75 1.93
(0.22) 13.64 11.85 2,997 1.96 0.98 64 1.97
</TABLE>
- ---------------
# Per share numbers have been calculated using the monthly average share
method.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements, was less than 0.01%.
(c) Amount represents less than $500.
SEE NOTES TO FINANCIAL STATEMENTS.
51
<PAGE> 56
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING OF INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED CAPITAL
PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME GAINS
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GROWTH & INCOME:
PRIMARY A
Six months ended
09/30/1998 unaudited)#........... $12.03 $(0.02) $(0.55) $(0.57) $0.00 $(0.01)
Period ended 03/31/1998*#.......... 10.00 0.01 2.02 2.03 0.00 0.00
INVESTOR A
Six months ended
09/30/1998 (unaudited)#.......... $12.02 $(0.01) $(0.52) $(0.53) $0.00 $(0.01)
Period ended 03/31/1998*#.......... 10.00 0.00(b) 2.02 2.02 0.00 0.00
INVESTOR B
Six months ended
09/30/1998 unaudited)#........... $12.02 $(0.03) $(0.54) $(0.57) $0.00 $(0.01)
Period ended 03/31/1998*#.......... 10.00 (0.02) 2.04 2.02 0.00 0.00
INVESTOR C
Six months ended
09/30/1998 unaudited)#........... $12.02 $(0.04) $(0.52) $(0.56) $0.00 $(0.01)
Period ended 03/31/1998*#.......... 10.00 (0.02) 2.04 2.02 0.00 0.00
</TABLE>
- ---------------
* Growth & Income Primary A, Primary B, Investor A, Investor B and Investor C
Shares commenced operations on December 31, 1997.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average share method.
(a) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements, was less than 0.01%.
(b) Amount represents less than $0.01 per share.
SEE NOTES TO FINANCIAL STATEMENTS.
52
<PAGE> 57
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT
WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
--------------
NET ASSETS RATIO OF RATIO OF RATIO OF
TOTAL NET ASSET END OF OPERATING NET INVESTMENT OPERATING
DIVIDENDS VALUE PERIOD EXPENSES TO INCOME TO PORTFOLIO EXPENSES TO
AND END OF TOTAL (IN AVERAGE AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS PERIOD RETURN++ 000'S) NET ASSETS ASSETS RATE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(0.01) $11.45 (4.82)% $13,139 1.25%+(a) 0.16%+ 95% 1.36%+(a)
0.00 $12.03 20.30 2,517 1.09+(a) 0.38+ 22 1.97+(a)
$(0.01) $11.48 (4.87)% $ 8,699 1.50%+(a) (0.09)%+ 95% 1.61%+(a)
0.00 $12.02 20.20 1,141 1.34+(a) 0.13+ 22 2.22+(a)
$(0.01) $11.44 (4.90)% $41,122 2.25%+(a) (0.84)%+ 95% 2.36%+(a)
0.00 $12.02 20.20 7,907 2.09+(a) (0.62)+ 22 2.97+(a)
$(0.01) $11.45 (4.82)% $ 828 2.25%+(a) (0.84)%+ 95% 2.36%+(a)
0.00 $12.02 20.20 518 2.09+(a) (0.62)+ 22 2.97+(a)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
53
<PAGE> 58
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQUITY INDEX:
PRIMARY A
Six months ended 09/30/1998
(unaudited)#........................ $22.41 $0.13 $(1.61) $(1.48) $(0.12) $(0.95)
Year ended 03/31/1998#................ 15.89 0.27 7.11 7.38 (0.27) (0.59)
Year ended 03/31/1997................. 13.58 0.26 2.36 2.62 (0.26) (0.05)
Period ended 03/31/1996(a)............ 12.91 0.08 0.86 0.94 (0.13) (0.14)
Year ended 11/30/1995................. 9.84 0.28 3.20 3.48 (0.28) (0.13)
Period ended 11/30/1994*.............. 10.00 0.24 (0.21) 0.03 (0.19) --
PRIMARY B
Six months ended 09/30/1998
(unaudited)#........................ $22.46 $0.08 $(1.61) $(1.53) $(0.08) $(0.95)
Year ended 03/31/1998#................ 15.89 0.18 7.12 7.30 (0.14) (0.59)
Period ended 03/31/1997*.............. 14.13 0.16 1.80 1.96 (0.15) (0.05)
INVESTOR A
Six months ended 09/30/1998
(unaudited)#........................ $22.31 $0.10 $(1.60) $(1.50) $(0.10) $(0.95)
Year ended 03/31/1998#................ 15.87 0.21 7.05 7.26 (0.23) (0.59)
Year ended 03/31/1997................. 13.58 0.25 2.32 2.57 (0.23) (0.05)
Period ended 03/31/1996(a)............ 12.91 0.06 0.87 0.93 (0.12) (0.14)
Period ended 11/30/1995*.............. 12.29 0.03 0.59 0.62 -- --
</TABLE>
- ---------------
* Equity Index Primary A, Primary B and Investor A Shares commenced operations
on December 15, 1993, June 28, 1996 and October 10, 1995, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average share method.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements, was less than 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
54
<PAGE> 59
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
RATIO OF REIMBURSEMENTS
OPERATING ---------------
RATIO OF EXPENSES TO RATIO OF NET RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING AVERAGE INVESTMENT OPERATING
DIVIDENDS VALUE END OF EXPENSES TO NET ASSETS INCOME TO PORTFOLIO EXPENSES TO
AND END OF TOTAL PERIOD AVERAGE INCLUDING AVERAGE TURNOVER AVERAGE
DISTRIBUTIONS PERIOD RETURN++ (000'S) NET ASSETS INTEREST EXPENSE NET ASSETS RATE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$(1.07) $19.86 (6.92)% $648,722 0.35%+(b) 0.35%+ 1.25%+ 2% 0.70%+(b)
(0.86) 22.41 47.38 656,523 0.35(b) 0.36 1.39 26 0.66(b)
(0.31) 15.89 19.41 567,039 0.35(b) N/A 1.91 5 0.70(b)
(0.27) 13.58 7.33 192,388 0.35+ 0.35+ 1.99+ 2 0.73+
(0.41) 12.91 36.35 145,021 0.37 0.38 2.44 18 0.78
(0.19) 9.84 0.29 123,147 0.35+ -- 2.64+ 14 0.79+
$(1.03) $19.90 (7.13)% $ 185 0.85%+(b) 0.85%+ 0.75%+ 2% 1.30%+(b)
(0.73) 22.46 46.75 123 0.85(b) 0.86 0.89 26 1.16(b)
(0.20) 15.89 13.93 5,505 0.85+(b) N/A 1.41+ 5 1.20+(b)
$(1.05) $19.76 (7.05)% $ 7,905 0.60%+(b) 0.60%+ 1.00%+ 2% 0.95%+(b)
(0.82) 22.31 46.58 4,595 0.60(b) 0.61 1.14 26 0.91(b)
(0.28) 15.87 19.06 2,574 0.60(b) N/A 1.66 5 0.95(b)
(0.26) 13.58 7.26 95 0.35+ 0.35+ 1.99+ 2 0.73+
-- 12.91 5.04 11 0.62+ 0.63+ 2.19+ 18 1.03+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
55
<PAGE> 60
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED NET INCREASE IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL GROWTH:
PRIMARY A
Six months ended 09/30/1998
(unaudited)##...................... $13.30 $ 0.00(b) $(1.46) $(1.46) -- $(1.99)
Year ended 03/31/1998##.............. 11.70 0.02 5.27 5.29 $(0.01) (3.68)
Year ended 03/31/1997##.............. 13.43 0.05 1.66 1.71 (0.05) (3.39)
Period ended 03/31/1996(a)........... 14.24 0.02 0.38 0.40 (0.02) (1.19)
Year ended 11/30/1995................ 11.23 0.09 3.28 3.37 (0.10) (0.26)
Year ended 11/30/1994................ 11.08 0.09 0.14 0.23 (0.08) (0.00)(b)
Year ended 11/30/1993................ 10.68 0.09 0.42 0.51 (0.10) (0.01)
PRIMARY B
Six months ended 09/30/1998
(unaudited)##...................... $13.20 $ 0.00(b) $(1.47) $(1.47) -- $(1.99)
Year ended 03/31/1998##.............. 11.68 (0.05) 5.25 5.20 -- (3.68)
Period ended 03/31/1997#*............ 13.96 (0.01) 1.12 1.11 -- (3.39)
INVESTOR A
Six months ended 09/30/1998
(unaudited)##...................... $13.26 $(0.01) $(1.46) $(1.47) -- $(1.99)
Year ended 03/31/1998##.............. 11.67 (0.01) 5.28 5.27 -- (3.68)
Year ended 03/31/1997##.............. 13.41 0.02 1.65 1.67 $(0.02) (3.39)
Period ended 03/31/1996(a)........... 14.22 0.01 0.38 0.39 (0.01) (1.19)
Year ended 11/30/1995................ 11.21 0.06 3.28 3.34 (0.07) (0.26)
Year ended 11/30/1994................ 11.06 0.07 0.14 0.21 (0.06) (0.00)(b)
Year ended 11/30/1993................ 10.67 0.07 0.41 0.48 (0.08) (0.01)
INVESTOR B
Six months ended 09/30/1998
(unaudited)##...................... $12.83 $(0.05) $(1.40) $(1.45) -- $(1.99)
Year ended 03/31/1998##.............. 11.47 (0.10) 5.14 5.04 -- (3.68)
Year ended 03/31/1997##.............. 13.31 (0.08) 1.63 1.55 -- (3.39)
Period ended 03/31/1996(a)........... 14.15 (0.02) 0.37 0.35 -- (1.19)
Year ended 11/30/1995................ 11.17 (0.03) 3.27 3.24 -- (0.26)
Year ended 11/30/1994................ 11.05 (0.01) 0.13 0.12 -- (0.00)(b)
INVESTOR C
Six months ended 09/30/1998
(unaudited)##...................... $12.92 $(0.05) $(1.39) $(1.44) -- $(1.99)
Year ended 03/31/1998##.............. 11.50 (0.08) 5.18 5.10 -- (3.68)
Year ended 03/31/1997##.............. 13.26 (0.01) 1.64 1.63 -- (3.39)
Period ended 03/31/1996(a)........... 14.09 0.00(b) 0.36 0.36 -- (1.19)
Year ended 11/30/1995................ 11.14 (0.03) 3.24 3.21 -- (0.26)
Year ended 11/30/1994................ 11.01 (0.02) 0.15 0.13 -- (0.00)(b)
Year ended 11/30/1993................ 10.67 (0.00)(b) 0.38 0.38 $(0.03) (0.01)
</TABLE>
- ---------------
* Capital Growth Primary A, Primary B, Investor A, Investor B and Investor C
Shares commenced operations on September 30, 1992, June 28, 1996, October 2,
1992, June 7, 1993 and October 2, 1992, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
+++ Unaudited.
# The amount shown at this caption for each share outstanding throughout the
period may not accord with the change in the aggregate gains and losses in
the portfolio securities for the period because of the timing of purchases
and withdrawals of shares in relation to the fluctuating mar portfolio.
## Per share net investment income has been calculated using the monthly
average share method.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Amount represents less than $0.01 per share.
(c) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements, was less than 0.01%.
(d) The effect of interest expense on the operating expense ratio was less than
0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
56
<PAGE> 61
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF NET RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT OPERATING
DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO
AND END OF TOTAL PERIOD AVERAGE TO AVERAGE TURNOVER AVERAGE
DISTRIBUTIONS PERIOD RETURN++ (000'S) NET ASSETS NET ASSETS RATE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(1.99) $ 9.85 (12.81)% $640,461 0.94%+(c)(d) 0.05%+ 22% 0.94%+(c)
(3.69) 13.30 53.89 872,150 0.95(c)(d) 0.13 113 0.95(c)
(3.44) 11.70 11.88 533,168 0.96(d) 0.39 75 0.96
(1.21) 13.43 3.14 839,300 0.96+ 0.38+ 25 0.96+
(0.36) 14.24 30.96 867,361 0.98 0.71 80 0.98
(0.08) 11.23 2.14 717,914 0.90 0.85 56 0.91
(0.11) 11.08 4.84 646,661 0.80 0.84 81 0.89
$(1.99) $ 9.47 (13.01)% $ 236 1.44%+(c)(d) (0.45)%+ 22% 1.54%+(c)
(3.68) 13.20 52.99 271 1.45(c)(d) (0.37) 113 1.45(c)
(3.39) 11.68 7.07 12,367 1.46+(d) (0.11)+ 75 1.46+
$(1.59) $ 9.80 (12.93)% $ 39,734 1.19%+(c)(d) (0.20)%+ 22% 1.19%+(c)
(3.68) 13.26 53.83 43,380 1.20(c)(d) (0.12) 113 1.20(c)
(3.41) 11.67 11.58 20,465 1.21(d) 0.14 75 1.21
(1.20) 13.41 3.02 18,311 1.21+ 0.13+ 25 1.21+
(0.33) 14.22 30.70 16,770 1.23 0.46 80 1.23
(0.06) 11.21 1.93 11,038 1.15 0.60 56 1.16
(0.09) 11.06 4.56 11,182 1.05 0.59 81 1.14
$(1.59) $ 9.39 (13.27)% $ 52,218 1.94%+(c)(d) (0.95)%+ 22% 1.94%+(c)
(3.68) 12.83 52.52 59,496 1.95(c)(d) (0.87) 113 1.95(c)
(3.39) 11.47 10.68 41,933 1.96(d) (0.61) 75 1.96
(1.19) 13.31 2.77 41,045 1.96+ (0.62)+ 25 1.96+
(0.26) 14.15 29.80 40,868 1.98 (0.29) 80 1.98
(0.00)(b) 11.17 1.12 23,591 1.90 (0.15) 56 1.91
$(1.99) $ 9.49 (13.33)% $ 3,025 1.94%+(c)(d) (0.95)%+ 22% 1.94%+(c)
(3.68) 12.92 53.02 6,176 1.78(c)(d) (0.70) 113 1.78(c)
(3.39) 11.50 11.39 5,752 1.46(d) (0.11) 75 1.46
(1.19) 13.26 2.86 3,655 1.58+ (0.24)+ 25 1.58+
(0.26) 14.09 29.61 3,322 1.98 (0.29) 80 1.98
(0.00)(b) 11.14 1.22 2,394 1.90 (0.15) 56 1.91
(0.04) 11.01 3.61 2,919 1.80 (0.16) 81 1.89
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
57
<PAGE> 62
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED DECREASE IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DISCIPLINED EQUITY:
PRIMARY A
Six months ended
09/30/1998(unaudited)##.......... $22.17 $ 0.01 $(2.38) $(2.37) -- $(1.62)
Year ended 03/31/1998##............ 18.47 0.08 7.88 7.96 $(0.03) (4.23)
Year ended 03/31/1997.............. 17.19 0.14 2.79 2.93 (0.14) (1.51)
Period ended 03/31/1996(a)......... 17.06 0.05 0.35 0.40 (0.04) (0.23)
Year ended 11/30/1995.............. 13.08 0.10 3.96 4.06 (0.08) --
Period ended 11/30/1994*........... 13.31 0.01 (0.23)# (0.22) (0.01) --
Period ended 04/29/1994*........... 13.65 (0.05) 2.66 2.61 -- (2.95)
Period ended 04/30/1993*........... 10.00 (0.03) 3.74 3.71 -- (0.06)
PRIMARY B
Six months ended
09/30/1998(unaudited)##.......... $22.17 $ 0.01 $(2.36) $(2.35) -- $(1.62)
Year ended 03/31/1998##............ 18.47 (0.03) 7.96 7.93 -- (4.23)
Period ended 03/31/1997***......... 17.84 0.03 2.15 2.18 $(0.04) (1.51)
INVESTOR A
Six months ended
09/30/1998(unaudited)##.......... $22.09 $(0.01) $(2.37) $(2.38) -- $(1.62)
Year ended 03/31/1998##............ 18.44 0.02 7.87 7.89 $(0.01) (4.23)
Year ended 03/31/1997.............. 17.16 0.08 2.80 2.88 (0.09) (1.51)
Period ended 03/31/1996(a)......... 17.04 0.04 0.35 0.39 (0.04) (0.23)
Year ended 11/30/1995.............. 13.06 0.09 3.96 4.05 (0.07) --
Period ended 11/30/1994**.......... 13.30 0.00(b) (0.23)# (0.23) (0.01) --
Period ended 04/30/1994**.......... 14.94 (0.04) 1.35 1.31 -- (2.95)
INVESTOR B
Six months ended
09/30/1998(unaudited)##.......... $21.57 $(0.09) $(2.29) $(2.38) -- $(1.62)
Year ended 03/31/1998##............ 18.20 (0.12) 7.72 7.60 -- (4.23)
Year ended 03/31/1997.............. 17.00 (0.05) 2.76 2.71 -- (1.51)
Period ended 03/31/1996(a)......... 16.89 (0.01) 0.35 0.34 -- (0.23)
Year ended 11/30/1995.............. 13.02 0.03 3.87 3.90 $(0.03) --
Period ended 11/30/1994***......... 12.77 (0.02) 0.28 0.26 (0.01) --
INVESTOR C
Six months ended
09/30/1998(unaudited)##.......... $21.92 $(0.09) $(2.14) $(2.43) -- $(1.62)
Year ended 03/31/1998##............ 18.41 (0.09) 7.83 7.74 -- (4.23)
Year ended 03/31/1997.............. 17.10 0.04 2.79 2.83 $(0.01) (1.51)
Period ended 03/31/1996(a)......... 16.97 0.01 0.35 0.36 -- (0.23)
Period ended 11/30/1995***......... 14.08 (0.00)(b) 2.92 2.92 (0.03) --
</TABLE>
- ---------------
* The period for the Disciplined Equity Primary A Shares reflects operations
from April 30, 1994 through November 30, 1994. The financial information for
the fiscal periods through April 29, 1994 is based on the financial
information for The Capitol Mutual Funds Special Equity Portfolio Class A
Shares, which were reorganized into Primary A Shares of Nations Disciplined
Equity Fund (then named Nations Special Equity Fund) as of the close of
business on April 29, 1994. The Capitol Mutual Funds' Special Equity
Portfolio Class A Shares commenced operations on October 1, 1992.
** The period for the Disciplined Equity's Investor A Shares reflects
operations from April 30, 1994 through November 30, 1994. The financial
information for the fiscal periods through April 29, 1994 is based on the
financial information for The Capitol Mutual Funds Special Equity Portfolio
Class B Shares, which were reorganized into Investor A Shares of Nations
Disciplined Equity Fund (then named Nations Special Equity Fund) as of the
close of business on April 29, 1994. The Capitol Mutual Funds Special Equity
Portfolio Class B Shares commenced operations on July 26, 1993.
*** Disciplined Equity's Primary B, Investor B and Investor C Shares commenced
operations on June 28, 1996, May 20, 1994 and May 10, 1995, respectively.
+ Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
58
<PAGE> 63
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF NET RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT OPERATING
DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO
RETURN OF AND END OF TOTAL PERIOD AVERAGE NET TO AVERAGE TURNOVER AVERAGE NET
CAPITAL DISTRIBUTIONS PERIOD RETURN++ (IN 000'S) ASSETS NET ASSETS RATE ASSETS
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-- $(1.62) $18.18 (11.73)% $349,435 0.94%+(c)(d) 0.14%+ 39% 0.94%+(c)(d)
-- (4.23) 22.17 48.65 132,504 0.98(c)(d) 0.37 79 0.98(c)(d)
-- (1.65) 18.47 17.00 100,260 1.04(c) 0.70 120 1.04
-- (0.27) 17.19 2.44 116,469 1.02+ 0.82+ 47 1.02+
-- (0.08) 17.06 31.13 109,939 1.30 0.85 124 1.30
$(0.00)(b) (0.01) 13.08 (1.62) 9,947 1.13+ 0.12+ 177 1.56+
-- (2.95) 13.31 18.79 8,079 1.20+ (0.60)+ 475 1.53+
-- (0.06) 13.65 37.13 4,638 1.20+ (0.58)+ 203 1.31+
-- $(1.62) $18.20 (11.64)% $ --(e) 1.44%+(c)(d) (0.36)%+ 39% 1.54%+(c)(d)
-- (4.23) 22.17 48.44 --(e) 1.48(c)(d) (0.13) 79 1.48(c)(d)
-- (1.55) 18.47 12.13 1,121 1.54+(c) 0.20+ 120 1.54+
-- $(1.62) $18.09 (11.82)% $ 62,013 1.19%+(c)(d) (0.11)%+ 39% 1.19%+(c)(d)
-- (4.23) 22.09 48.28 21,725 1.23(c)(d) 0.12 79 1.23(c)(d)
-- (1.60) 18.44 16.76 6,837 1.29(c) 0.45 120 1.29
-- (0.27) 17.16 2.35 4,722 1.12+ 0.72+ 47 1.12+
-- (0.07) 17.04 31.05 3,234 1.40 0.75 124 1.40
$(0.00)(b) (0.01) 13.06 (1.71) 252 1.23+ 0.02+ 177 1.66+
-- (2.95) 13.30 8.31 165 1.30+ (0.62)+ 475 1.74+
-- $(1.62) $17.57 (12.13)% $ 39,413 1.94%+(c)(d) (0.86)%+ 39% 1.94%+(c)(d)
-- (4.23) 21.57 47.14 38,079 1.98(c)(d) (0.63) 79 1.98(c)(d)
-- (1.51) 18.20 15.86 20,257 2.04(c) (0.30) 120 2.04
-- (0.23) 17.00 2.08 18,412 2.02+ (0.18)+ 47 2.02+
-- (0.03) 16.89 29.94 16,874 2.30 (0.15) 124 2.30
$(0.00)(b) (0.01) 13.02 2.02 177 2.09+ (0.84)+ 177 2.52+
-- $(1.62) $17.87 (12.16)% $ 1,170 1.94%+(c)(d) (0.86)%+ 39% 1.94%+(c)(d)
-- (4.23) 21.92 47.38 1,199 1.81(c)(d) (0.46) 79 1.81(c)(d)
-- (1.52) 18.41 16.45 446 1.54(c) 0.20 120 1.54
-- (0.23) 17.10 2.19 283 1.65+ 0.19+ 47 1.65+
-- (0.03) 16.97 20.78 322 2.30+ (0.15)+ 124 2.30+
</TABLE>
- ---------------
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# The amount shown at this caption for each share outstanding throughout the
period may not accord with the change in the aggregate gains and losses in
the portfolio securities for the period because of the timing of purchases
and withdrawals of shares in relation to the fluctuating market value of the
portfolio.
## Per share net investment income has been calculated using the monthly average
share method.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Amount represents less than $0.01 per share.
(c) The effect of interest expense on the operating expense ratio was less than
0.01%.
(d) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and / or expense
reimbursements, was less than 0.01%.
(e) Amount represents less than $500.
SEE NOTES TO FINANCIAL STATEMENTS.
59
<PAGE> 64
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED
OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOCUSED EQUITIES:
PRIMARY A SHARES
Six months ended
09/30/1998(unaudited)#........... $12.13 $ 0.00 $0.10 $0.10 $0.00 $(0.01)
Period ended 03/31/1998*#.......... 10.00 (0.01) 2.14 2.13 0.00 0.00
INVESTOR A SHARES
Six months ended
09/30/1998(unaudited)#........... $12.14 $(0.01) $0.13 $0.12 $0.00 $(0.01)
Period ended 03/31/1998*#.......... 10.00 (0.01) 2.15 2.14 0.00 0.00
INVESTOR B SHARES
Six months ended
09/30/1998(unaudited)#........... $12.13 $(0.03) $0.12 $0.09 $0.00 $(0.01)
Period ended 03/31/1998*#.......... 10.00 (0.04) 2.17 2.13 0.00 0.00
INVESTOR C SHARES
Six months ended
09/30/1998(unaudited)#........... $12.13 $(0.03) $0.11 $0.07 $0.00 $(0.01)
Period ended 03/31/1998*#.......... 10.00 (0.04) 2.17 2.13 0.00 0.00
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Focused Equities Primary A, Investor A, Investor B and
Investor C Shares commenced operations on December 31, 1997.
+ Annualized.
++ Total return represents aggregate total return for the
period indicated and does not reflect the deduction of any
applicable sales charges.
# Per share net investment income has been calculated using
the monthly average share method.
(a) The effect of the fees reduced by credits allowed by the
custodian on the operating expense ratio, with and without
waivers and/or expense reimbursements, was 0.01%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
60
<PAGE> 65
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF NET RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING INVESTMENT OPERATING
DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO EXPENSES TO
AND END OF TOTAL PERIOD AVERAGE TO AVERAGE TURNOVER AVERAGE
DISTRIBUTIONS PERIOD RETURN++ (000'S) NET ASSETS NET ASSETS RATE NET ASSETS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(0.01) $12.22 0.83% $ 35,523 1.16%+(a) 0.08%+ 103% 1.16%+(a)
0.00 12.13 21.30 8,808 1.52+(a) (0.30)+ 25 1.52+(a)
$(0.01) $12.25 1.00% $ 40,867 1.41%+(a) (0.17)%+ 103% 1.41%+(a)
0.00 12.14 21.40 6,056 1.77+(a) (0.55)+ 25 1.77+(a)
$(0.01) $12.21 0.75% $106,753 2.16%+(a) (0.92)%+ 103% 2.16%+(a)
0.00 12.13 21.30 20,446 2.52+(a) (1.30)+ 25 2.52+(a)
$(0.01) $12.19 0.67% $ 1,641 2.16%+(a) (0.92)%+ 103% 2.16%+(a)
0.00 12.13 21.30 469 2.52+(a) (1.30)+ 25 2.52+(a)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
61
<PAGE> 66
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DISTRIBUTIONS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE REALIZED
OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS CAPITAL GAINS
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EMERGING GROWTH:
PRIMARY A SHARES
Six months ended 09/30/1998(unaudited)#........... $16.56 $(0.02) $(4.16) $(4.18) $(2.27)
Year ended 03/31/1998#............................ 12.86 (0.06) 5.55 5.49 (1.79)
Year ended 03/31/1997#............................ 14.04 (0.04) 0.20 0.16 (1.34)
Period ended 03/31/1996#(a)....................... 14.28 (0.00)(b) 1.26 1.26 (1.50)
Year ended 11/30/1995............................. 11.41 0.01 3.26 3.27 (0.40)
Year ended 11/30/1994#............................ 10.87 (0.03) 0.71 0.68 (0.14)
Period ended 11/30/1993*.......................... 10.00 (0.01) 0.89 0.88 (0.01)
PRIMARY B SHARES
Six months ended 09/30/1998(unaudited)#........... $16.41 $(0.05) $(4.26) $(4.31) $(2.27)
Year ended 03/31/1998#............................ 12.81 (0.15) 5.54 5.39 (1.79)
Year ended 03/31/1997#*........................... 15.08 (0.08) (0.85) (0.93) (1.34)
INVESTOR A SHARES
Six months ended 09/30/1998(unaudited)#........... $16.30 $(0.04) $(4.08) $(4.12) $(2.27)
Year ended 03/31/1998#............................ 12.69 (0.10) 5.50 5.40 (1.79)
Year ended 03/31/1997#............................ 13.91 (0.07) 0.19 0.12 (1.34)
Period ended 03/31/1996#(a)....................... 14.17 (0.01) 1.25 1.24 (1.50)
Year ended 11/30/1995............................. 11.35 (0.01) 3.23 3.22 (0.40)
Year ended 11/30/1994#............................ 10.85 (0.06) 0.70 0.64 (0.14)
Period ended 11/30/1993*.......................... 9.87 (0.03) 1.02 0.99 (0.01)
INVESTOR B SHARES
Six months ended 09/30/1998(unaudited)#........... $15.58 $(0.08) $(3.86) $(3.94) $(2.27)
Year ended 03/31/1998#............................ 12.29 (0.20) 5.28 5.08 (1.79)
Year ended 03/31/1997#............................ 13.61 (0.18) 0.20 0.02 (1.34)
Period ended 03/31/1996#(a)....................... 13.93 (0.05) 1.23 1.18 (1.50)
Year ended 11/30/1995............................. 11.24 (0.07) 3.16 3.09 (0.40)
Year ended 11/30/1994#............................ 10.82 (0.14) 0.70 0.56 (0.14)
Period ended 11/30/1993*.......................... 9.88 (0.02) 0.96 0.94 --
INVESTOR C SHARES
Six months ended 09/30/1998(unaudited)#........... $15.63 $(0.08) $(3.87) $(3.95) $(2.27)
Year ended 03/31/1998#............................ 12.31 (0.18) 5.29 5.11 (1.79)
Year ended 03/31/1997#............................ 13.56 (0.10) 0.19 0.09 (1.34)
Period ended 03/31/1996#(a)....................... 13.87 (0.03) 1.22 1.19 (1.50)
Year ended 11/30/1995............................. 11.20 (0.08) 3.15 3.07 (0.40)
Year ended 11/30/1994#............................ 10.78 (0.14) 0.70 0.56 (0.14)
Period ended 11/30/1993*.......................... 9.89 (0.09) 0.98 0.89 --
</TABLE>
- ---------------
* Emerging Growth Primary A, Primary B, Investor A, Investor B and Investor C
Shares commenced operations on December 4, 1992, June 28, 1996, December 10,
1992, June 7, 1993 and December 18, 1992, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly average
share method.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) Amount represents less than $0.01 per share.
(c) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements, was less than 0.01%.
(d) Amount represents less than $500.
SEE NOTES TO FINANCIAL STATEMENTS.
62
<PAGE> 67
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
RATIO OF ---------------
RATIO OF OPERATING RATIO OF RATIO OF
TOTAL NET ASSET NET ASSETS OPERATING EXPENSES TO NET INVESTMENT OPERATING
DIVIDENDS VALUE END OF EXPENSES TO AVERAGE NET INCOME/(LOSS) PORTFOLIO EXPENSES TO
AND END OF TOTAL PERIOD AVERAGE ASSETS INCLUDING TO AVERAGE TURNOVER AVERAGE
DISTRIBUTIONS PERIOD RETURN++ (000'S) NET ASSETS INTEREST EXPENSE NET ASSETS RATE NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(2.27) $10.11 (29.52)% $177,136 0.96%+(c) 0.98%+ (0.25)%+ 23% 0.98%+(c)
(1.79) 16.56 45.09 318,584 0.98(c) 0.99 (0.42) 76 0.98(c)
(1.34) 12.86 0.48 267,319 0.98(c) N/A (0.26) 93 0.98(c)
(1.50) 14.04 9.87 295,764 0.99+ N/A (0.06)+ 39 0.99%+
(0.40) 14.28 29.95 269,484 0.98 N/A 0.08 139 0.98
(0.14) 11.41 6.26 182,459 1.01 N/A (0.29) 129 1.01
(0.01) 10.87 8.81 121,281 0.80+ N/A (0.15)+ 159 1.01+
$(2.27) $ 9.83 (30.74)% $ --(d) 1.46%+(c) 1.48%+ (0.75)%+ 23% 1.58%+(c)
(1.79) 16.41 44.33 23 1.48(c) 1.49 (0.92) 76 1.48(c)
(1.34) 12.81 (6.80) 2,897 1.48+(c) N/A (0.76)+ 93 1.48+(c)
$(2.27) $ 9.91 (29.64)% $ 13,158 1.21%+(c) 1.23%+ (0.50)%+ 23% 1.23%+(c)
(1.79) 16.30 44.86 21,591 1.23(c) N/A (0.67) 76 1.23(c)
(1.34) 12.69 0.18 12,126 1.23(c) N/A (0.51) 93 1.23(c)
(1.50) 13.91 9.80 7,802 1.24+ N/A (0.31)+ 39 1.24+
(0.40) 14.17 29.65 5,765 1.23 N/A (0.17) 139 1.23
(0.14) 11.35 5.90 3,234 1.26 N/A (0.54) 129 1.26
(0.01) 10.85 9.99 2,095 1.05+ N/A (0.40)+ 159 1.26+
$(2.27) $ 9.37 (29.88)% $ 29,584 1.96%+(c) 1.98%+ (1.25)%+ 23% 1.98%+(c)
(1.79) 15.58 43.64 45,451 1.98(c) 1.99 (1.42) 76 1.98(c)
(1.34) 12.29 (0.57) 33,342 1.98(c) N/A (1.26) 93 1.98(c)
(1.50) 13.61 9.52 34,989 1.99+ N/A (1.06)+ 39 1.99+
(0.40) 13.93 28.75 32,349 1.98 N/A (0.92) 139 1.98
(0.14) 11.24 5.17 15,909 2.01 N/A (1.29) 129 2.01
-- 10.82 9.51 3,594 1.80+ N/A (1.15)+ 159 2.01+
$(2.27) $ 9.41 (29.85)% $ 1,179 1.96%+(c) 1.98%+ (1.25)%+ 23% 1.98%+(c)
(1.79) 15.63 43.80 2,266 1.81(c) 1.82 (1.25) 76 1.81(c)
(1.34) 12.31 (0.04) 1,437 1.48(c) N/A (0.76) 93 1.48(c)
(1.50) 13.56 9.64 936 1.61+ N/A (0.68)+ 39 1.61+
(0.40) 13.87 28.67 805 1.98 N/A (0.92) 139 1.98
(0.14) 11.20 5.19 542 2.01 N/A (1.29) 129 2.01
-- 10.78 9.00 469 1.80+ N/A (1.15)+ 159 2.01+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
63
<PAGE> 68
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET DECREASE DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED IN NET ASSET FROM NET FROM NET
BEGINNING INVESTMENT LOSS ON VALUE FROM INVESTMENT REALIZED
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME CAPITAL GAINS
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SMALL COMPANY GROWTH:
PRIMARY A SHARES
Six months ended
09/30/1998 (unaudited)#.................. $15.79 $(0.02) $(4.53) $(4.55) $ 0.00 $(0.74)
Period ended 03/31/1998*................... 12.07 0.01 4.43 4.44 (0.01) (0.71)
Period ended 05/16/97*..................... 10.65 0.04 1.47 1.51 (0.04) (0.05)
Period ended 08/31/96*(a).................. 10.00 0.09 0.64 0.73 (0.08) --
INVESTOR A SHARES
Six months ended
09/30/1998 (unaudited)#.................. $15.74 $(0.24) $(4.52) $(4.56) $ 0.00 $(0.74)
Period ended 03/31/1998*................... 12.05 (0.02) 4.42 4.40 -- (0.71)
Period ended 05/16/97*..................... 10.64 0.03 1.46 1.49 (0.03) (0.05)
Period ended 08/31/96*(a).................. 10.00 0.05 0.64 0.69 (0.05) --
INVESTOR B SHARES
Six months ended
09/30/1998 (unaudited)#.................. $15.59 $(0.09) $(4.46) $(4.55) $ 0.00 $(0.74)
Period ended 03/31/1998*................... 12.03 (0.08) 4.35 4.27 -- (0.71)
Period ended 05/16/97*..................... 10.65 (0.03) 1.46 1.43 -- (0.05)
Period ended 08/31/96*(a).................. 10.00 0.01 0.65 0.66 (0.01) --
INVESTOR C SHARES
Six months ended
09/30/1998 (unaudited)#.................. $15.74 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $(0.74)
Period ended 03/31/1998**.................. 15.18 (0.08) 1.35 1.27 -- (0.71)
</TABLE>
- ---------------
* The financial information for the fiscal periods prior to May 23, 1997
reflects the financial information for the Pilot Small Capitalization 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 the close of business on May 23, 1997. Prior to
May 23, 1997, the investment manager to Small Company Growth was Boatmen's
Trust Company. Effective May 23, 1997, the investment manager to Small
Company Growth was TradeStreet Investment Associates, Inc.
** Investor C Shares commenced operations on September 22, 1997.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and
does not reflect the deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average share method.
(a) Represents the period from December 12, 1995 (commencement of operations) to
August 31, 1996.
(b) The effect of the fees reduced by credits allowed by the custodian on the
operating expense ratio, with and without waivers and/or expense
reimbursements, was less than 0.01% for Primary A, Investor A and Investor C
Shares and 0.01% for Investor B Shares.
SEE NOTES TO FINANCIAL STATEMENTS.
64
<PAGE> 69
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
RATIO OF ---------------
NET ASSETS RATIO OF OPERATING RATIO OF RATIO OF
TOTAL NET ASSET END OF OPERATING EXPENSES TO NET INVESTMENT OPERATING
DIVIDENDS VALUE PERIOD EXPENSES TO AVERAGE NET INCOME PORTFOLIO EXPENSES TO
AND END OF TOTAL (IN AVERAGE ASSETS INCLUDING TO AVERAGE TURNOVER AVERAGE
DISTRIBUTIONS PERIOD RETURN++ 000'S) NET ASSETS INTEREST EXPENSES NET ASSETS RATE NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(0.74) $10.50 (30.27)% $321,210 0.95%+(b) 0.95%+ (0.37)%+ 46% 1.21%+(b)
(0.72) 15.79 37.27 235,427 0.95+(b) 0.95+ 0.05+ 59 1.26+(b)
(0.09) 12.07 14.21 109,450 0.98+ -- 0.54+ 48 1.41+
(0.08) 10.65 7.37 70,483 1.00+ -- 1.06+ 31 1.54+
$(0.74) $10.44 (30.27)% $ 14,507 1.20%+(b) 1.20%+ (0.62)%+ 46% 1.46%+(b)
(0.71) 15.74 37.02 6,772 1.20+(b) 1.20+ (0.20)+ 59 1.51+(b)
(0.08) 12.05 13.98 3,697 1.23+ -- 0.30+ 48 1.66+
(0.05) 10.64 6.88 2,611 1.25+ -- 0.66+ 31 1.65+
$(0.74) $10.30 (30.65)% $ 4,343 1.95%+(b) 1.95%+ (1.12)%+ 46% 2.21%+(b)
(0.71) 15.59 36.06 3,384 1.87+(b) 1.88+ (0.87)+ 59 2.18+(b)
(0.05) 12.03 13.43 2,635 1.97+ -- (0.45)+ 48 2.41+
(0.01) 10.65 6.65 1,878 2.01+ -- (0.07)+ 31 2.44+
$(0.74) $10.42 (30.50)% $ 1,909 1.95%+(b) 1.95%+ (1.12)%+ 46% 2.21%+(b)
(0.71) 15.74 8.75 3,122 1.95+(b) 1.95+ (0.95)+ 59 2.26+(b)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
65
<PAGE> 70
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Nations Fund Trust (the "Trust") and Nations Fund, Inc. (the "Company") are
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as open-end investment companies. At September 30, 1998, the Trust
offered thirty-seven separate portfolios and the Company offered nine separate
portfolios. These financial statements pertain only to certain domestic stock
portfolios of the Trust and the Company (each a "Fund" and collectively, the
"Funds"). Financial statements for the other portfolios of the Trust and the
Company are presented under separate cover. The Funds (except Equity Index Fund,
Focused Equities Fund and Growth & Income Fund) currently offer five classes of
shares: Primary A Shares, Primary B Shares, Investor A Shares, Investor B Shares
and Investor C Shares. Index Fund currently offers Primary A Shares, Primary B
Shares and Investor A Shares and Focused Equities Fund and Growth & Income Fund
currently offer Primary A 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 of a
Fund has exclusive voting rights on matters that relate solely to its class and
separate voting rights on matters in which in which the interests of one class
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
significant accounting policies followed by the Funds in the preparation of
their financial statements.
Securities Valuation: Securities which are 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 only 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 principal market makers. Restricted securities, securities for which
market quotations are not readily available, and certain other assets are valued
by the investment advisor under the supervision of the Board of
Trustees/Directors. Short-term investments that mature in 60 days or less are
valued at amortized cost.
Futures Contracts: The Equity Index Fund may invest in futures contracts. Upon
entering into a futures contract, the Fund is required to deposit with the
broker an amount of cash or cash equivalents equal to a certain percentage of
the contract amount. This is known as the "initial margin." Subsequent payments
("variation margin") are made or received by the Fund each day, depending on the
daily fluctuation of the value of the contract.
During the period the futures contract is open, changes in the value of the
contract are recognized as unrealized gains or losses by "marking-to-market" on
a daily basis to reflect the market value of the contract. The Fund recognizes a
realized gain or loss when the contract is closed, equal to the difference
between the proceeds from (or cost of) the closing transaction and the Fund's
basis in the contract.
Risks arise in the possible movement of the securities or indices underlying
those investments. Risks also include the possibility that there may not be a
liquid secondary market for these contracts, that a change in the value of the
contract may not correlate with changes in the value of the underlying
securities or that the counterparty to a contract may default on its obligation
to perform.
Securities Transactions and Investment Income: Securities transactions are
accounted for on a trade date basis. Realized gains and losses are computed
based on the specific identification of securities sold. Interest income,
adjusted for accretion of discounts and amortization of premiums, is earned from
settlement date and recorded on an accrual basis. Dividend income is recorded on
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.
66
<PAGE> 71
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Dividends and Distributions to Shareholders: Distributions from net investment
income are declared and paid each calendar quarter by the Balanced Assets,
Emerging Growth, Equity Index, Focused Equities and Growth & Income Funds; all
other Funds declare and pay distributions monthly. 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.
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 its shareholders. Therefore, no provision is made for Federal income
or excise tax.
Expenses: General expenses of the Trust or the Company are allocated to the
Funds based upon relative net assets. Expenses directly attributable to a Fund
or class of shares are charged to such Fund or class. Expenses not directly
attributable to the operations of any class 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 Trust and the Company 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"). Under
the 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>
Small Company Growth.................................... 1.00%
Focused Equities, Growth & Income....................... 0.85%
Balanced Assets, Value, Capital Growth, Disciplined
Equity, Emerging Growth................................ 0.75%
Equity Index............................................ 0.50%
</TABLE>
<TABLE>
<CAPTION>
FEES ON FEES ON FEES ON
NET ASSETS NET ASSETS NET ASSETS
UP TO BETWEEN $100 EXCEEDING
$100 MILLION AND $250 MILLION $250 MILLION
----------------------------------------------
<S> <C> <C> <C>
Equity Income........ 0.75% 0.70% 0.60%
</TABLE>
Each of the Trust and the Company has entered into a sub-advisory agreement with
NBAI and TradeStreet Investment Associates, Inc. ("TradeStreet"), a wholly-
owned subsidiary of NationsBank, pursuant to which TradeStreet is entitled to
receive a fee from NBAI at the following annual rates of each of the following
Fund's average daily net assets:
<TABLE>
<CAPTION>
ANNUAL
RATE
------
<S> <C>
Growth and Income, Focused Equities..................... 0.45%
Balanced Assets, Value, Capital Growth, Disciplined
Equity, Emerging Growth, Small Company Growth.......... 0.25%
Equity Income........................................... 0.20%
Equity Index............................................ 0.10%
</TABLE>
The Trust has, on behalf of the Focused Equities and Growth & Income Funds,
entered into a sub-advisory agreement with NBAI and Marsico Capital Management,
LLC ("Marsico"), pursuant to which Marsico is entitled to receive a fee from
NBAI at the annual rate of 0.45% of each Fund's average daily net assets.
Stephens, Inc. ("Stephens") serves as administrator of the Trust and the
Company. 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 each Fund's average net assets. NBAI is
the sub-administrator of the Trust and the Company pursuant to an agreement with
Stephens. For the six months ended September 30, 1998, Stephens earned
$2,282,000 from the Funds for its administration services, of which $761,000 was
paid to NBAI for its services as sub-administrator.
67
<PAGE> 72
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
The investment advisor, sub-advisor and administrator may, from time to time,
voluntarily reduce their fees payable by each Fund. For the six months ended
September 30, 1998, the fee waivers were as follows:
<TABLE>
<CAPTION>
FEES WAIVED
BY ADVISOR
-----------
<S> <C>
Value.............................................. $ 31,000
Equity Index....................................... 1,208,000
Emerging Growth.................................... 3,000
Small Company Growth............................... 502,000
Growth & Income.................................... 24,000
</TABLE>
NationsBank of Texas, N.A. ("NationsBank of Texas") served as the custodian of
the Trust's and the Company's assets until it merged with NationsBank on May 6,
1998. NationsBank began serving as custodian for the Trust's and the Company's
assets 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 $6,000 and $24,000, respectively,
for providing such services. The Bank of New York ("BNY") has entered into
agreements with each of the Funds, NationsBank of Texas and NationsBank, whereby
BNY serves as sub-custodian for the Funds. For the six months ended September
30, 1998, expenses of the Funds were reduced by $16,000 under expense offset
arrangements with BNY. The Funds could have invested a portion of the assets
utilized in connection with the expense offset arrangements in an income
producing asset if they had not entered into such arrangements.
First Data also serves as the transfer agent for the Funds' shares. NationsBank
of Texas also served as the sub-transfer agent for the Primary Shares of the
Funds until it merged with NationsBank on May 6, 1998. NationsBank began serving
as the 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 $5,000 and $19,000, respectively, for providing
such services.
Stephens serves as distributor of the Funds' shares. For the six months ended
September 30, 1998, the Funds were informed that the distributor received
$468,182 in contingent deferred sales charges from shares which were subject to
such charges. A substantial portion of these fees are paid to affiliates of
NationsBank and NBAI.
The Trust and the Company pay each unaffiliated Trustee or Director an annual
fee of $1,000 ($3,000 for the Chairman of the Board), plus $500 per Fund and an
additional $1,000 for each in-person board meeting, and $500 for each telephonic
board meeting attended. The Trust and the Company also reimburse expenses
incurred by each unaffiliated Trustee or Director in attending such meetings.
The Trust's and the Company's eligible Trustees or Directors, respectively, 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, a
portfolio of the Company. The expense for the deferred compensation and
retirement plans is included in "Trustees'/Directors' fees and expenses" in the
Statements of Operations.
The Company 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
six months ended September 30, 1998, the Funds earned $3,585,000 in aggregate
from such investments.
A significant portion of each Fund's Primary A Shares represent investments by
fiduciary accounts over which Nations Bank 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 Trust and the Company each have adopted a shareholder administration plan
for Primary B shares of each Fund (except Growth & Income and Focused Equities)
and shareholder servicing plans and distri-
68
<PAGE> 73
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
bution plans for the Investor A, Investor B and Investor C Shares of each Fund
(except Equity Index). 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 forth from time to time by the Board of
Trustees/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 are paid to affiliates of NationsBank and NBAI.
At September 30, 1998, the current rates in effect and the plan limits, as a
percentage of average daily 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 C Distribution Plan:...... 0.75% 0.75%
Investor B and C Shareholder Servicing
Plans................................... 0.25% 0.25%
</TABLE>
4. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, excluding
long-term U.S. government securities and short-term investments, for the six
months ended September 30, 1998 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------------------------
<S> <C> <C>
Balanced Assets.................... $147,908,000 $106,879,000
Equity Income...................... 312,792,000 385,200,000
Value.............................. 459,684,000 615,756,000
Growth & Income.................... 88,531,000 33,116,000
</TABLE>
<TABLE>
<CAPTION>
PURCHASES SALES
----------------------------
<S> <C> <C>
Equity Index....................... $ 55,422,000 $ 10,347,000
Capital Growth..................... 180,006,000 327,157,000
Disciplined Equity................. 420,520,000 163,378,000
Focused Equities................... 236,262,000 99,100,000
Emerging Growth.................... 67,773,000 129,679,000
Small Company Growth............... 383,006,000 158,121,000
</TABLE>
The aggregate cost of purchases and proceeds from sales of long-term U.S.
government securities for the six months ended September 30, 1998 were as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
--------------------------
<S> <C> <C>
Balanced Assets...................... $26,162,000 $14,788,000
Growth & Income...................... 939,000 --
</TABLE>
5. SHARES OF BENEFICIAL INTEREST/CAPITAL STOCK
As of September 30, 1998, an unlimited number of shares of beneficial interest
without par value were authorized for the Trust and 420,000,000,000 shares of
$.001 par value capital stock were authorized for the Company. The Trust's
Declaration of Trust and the Company's Articles of Incorporation authorize the
Board of Trustees/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.
6. LINE OF CREDIT
The Trust and the Company 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
the meeting of 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.
69
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NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
For the six months ended September 30, 1998, borrowing by the Funds under the
Agreement were as follows:
<TABLE>
<CAPTION>
AVERAGE
AVERAGE DEBT AVERAGE
AMOUNT AVERAGE PER INTEREST
FUND OUTSTANDING SHARES SHARE RATE
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balanced Assets...... $ 94,000 15,296,000 $0.01 6.01%
Equity Income........ 240,000 84,505,000 0.00(a) 5.87%
Value................ 73,000 135,374,000 0.00(a) 5.87%
Capital Growth....... 829,000 75,759,000 0.01 5.87%
Disciplined Equity... 71,000 21,123,000 0.00(a) 6.02%
Emerging Growth...... 426,000 23,893,000 0.02 6.11%
Small Company
Growth.............. 91,000 28,208,000 0.00(a) 5.95%
</TABLE>
- ---------------
(a) Amount represents less than $0.01 per share.
The average amount outstanding was calculated based on daily balances in the
period.
7. LENDING OF PORTFOLIO SECURITIES
Under an agreement with BNY, the Funds can lend their 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 loaned.
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 the collateral, net of any rebates 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 a 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 MARKET VALUE
FUND LOANED SECURITIES OF COLLATERAL
- ------------------------------------------------------------------
<S> <C> <C>
Balanced Assets................ $ 7,465,000 $ 7,635,000
Equity Income.................. 14,725,000 15,611,000
Value.......................... 76,446,000 83,740,000
Growth & Income................ 1,466,000 1,599,000
Equity Index................... 23,956,000 25,631,000
Capital Growth................. 51,402,000 55,444,000
Disciplined Equity............. 44,459,000 47,176,000
Focused Equities............... 388,000 424,000
Emerging Growth................ 25,076,000 27,175,000
Small Company Growth........... 24,656,000 25,597,000
</TABLE>
8. REORGANIZATIONS
ACQUISITION OF THE PILOT FUNDS
On May 23, 1997, the Small Company Growth Fund, a newly established portfolio,
acquired the assets and certain liabilities of the Pilot Small Capitalization
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 Small
Company Growth Fund in an amount equal to the outstanding shares of the Pilot
Small Capitalization Equity Fund. The financial statements of the Small Company
Growth Fund reflect the historical financial results of the Pilot Small
Capitalization Equity Fund prior to the reorganization. Additionally, the fiscal
year end of the Pilot Small Capitalization Equity Fund for financial reporting
purposes was changed to coincide with that of the Company.
On May 16, 1997, certain Funds, as listed below (each an "Acquiring Fund"),
acquired the assets and certain liabilities of the Pilot Funds, also listed
below (each an "Acquired Fund"), in a tax-free reorganization in exchange for
shares of the Acquiring Fund, pursuant to a plan of reorganization approved by
the Acquired Fund's shareholders. The number and value of shares issued by the
Acquiring Fund are presented in the Schedule of Capital Stock Activity. Net
assets
70
<PAGE> 75
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
and unrealized appreciation as of the reorganization date were as follows:
<TABLE>
<CAPTION>
ACQUIRED
TOTAL NET ASSETS OF FUND
TOTAL NET ASSETS OF TOTAL NET ASSETS OF ACQUIRING FUND UNREALIZED
ACQUIRING ACQUIRED ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION APPRECIATION
FUND FUND (000) (000) (000) (000)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Equity Income Pilot Equity Income Fund $141,496 $ 380,383 $ 521,879 $21,628
Value Pilot Growth and Income 340,919 1,483,907 1,824,827 70,611
Fund
Disciplined Equity Pilot Growth Fund 37,751 134,469 172,220 6,637
</TABLE>
ACQUISITION OF EMERALD FUNDS
On May 15, 1998, certain Funds (each an "Acquiring Fund"), acquired the assets
and certain liabilities of the Emerald Funds (each an "Acquired Fund"), in a
tax-free reorganization in exchange for shares of the Acquiring Fund, pursuant
to a plan of reorganization approved by the Acquired Fund's shareholders. The
number and volume of shares issued by the Acquiring Fund are presented in the
Schedule of Capital Stock Activity. Net assets as of the reorganization date
were as follows:
<TABLE>
<CAPTION>
ACQUIRED
TOTAL NET ASSETS OF FUND
TOTAL NET ASSETS OF TOTAL NET ASSETS OF ACQUIRING FUND UNREALIZED
ACQUIRING ACQUIRED ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION APPRECIATION
FUND FUND (000) (000) (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balanced Assets Emerald
Balanced Assets $ 76,887 $ 121,047 $ 197,934 $ 8,903
Disciplined Equity Emerald Equity 296,852 258,201 555,053 67,060
Small Company Emerald Small
Growth Capitalization 153,088 313,094 466,181 20,046
Value Emerald
Equity Value 26,394 2,570,167 2,596,561 4,855
</TABLE>
CONVERSION OF COMMON TRUST FUNDS
On November 12, 1997, certain Funds, as listed below (each an "Acquiring Fund"),
acquired the assets of certain common trust funds, managed by Nations Bank, as
listed below (each an "Acquired Fund"), in a tax-free reorganization in exchange
for shares of the Acquiring Fund. The number and value of shares issued by the
Acquiring Fund are presented in the Schedule of Capital Stock Activity. Net
assets and unrealized appreciation as of the conversion date were as follows:
<TABLE>
<CAPTION>
ACQUIRED
TOTAL NET ASSETS OF FUND
TOTAL NET ASSETS OF TOTAL NET ASSETS OF ACQUIRING FUND UNREALIZED
ACQUIRING ACQUIRED ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION APPRECIATION
FUND FUND (000) (000) (000) (000)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Capital Growth Common Trust
Equity Funds
for Personal
Trusts $ 53,754 $ 994,840 $1,048,594 $ 23,336
Capital Growth Common Trust
Capital Growth 469,943 524,896 994,840 131,129
Value Common Trust
Value Equity 916,928 1,630,080 2,547,009 256,045
Equity Income Common Trust
Equity Income 563,468 508,666 1,072,134 75,094
Emerging Growth Common Trust
Emerging Growth 103,027 347,819 450,846 26,813
</TABLE>
71
<PAGE> 76
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
CONVERSION OF COMMON TRUST FUNDS
On April 17, 1998 and April 29, 1998 certain Funds, as listed below (each an
"Acquiring Fund"), acquired the assets of certain common trust funds, managed by
Nations Bank, as listed below (each an "Acquired Fund"), in a tax-free
reorganization in exchange for shares of the Acquiring Fund. The number and
value of shares issued by the Acquiring Fund are presented in the Schedule of
Capital Stock Activity. Net assets and unrealized appreciation as of the
conversion date were as follows:
<TABLE>
<CAPTION>
ACQUIRED
TOTAL NET ASSETS OF FUND
TOTAL NET ASSETS OF TOTAL NET ASSETS OF ACQUIRING FUND UNREALIZED
ACQUIRING ACQUIRED ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION APPRECIATION
FUND FUND (000) (000) (000) (000)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
April 17, 1998
Equity Income Common Trust
ASB Equity
Income $ 62,189 $1,085,070 $1,147,258 $13,366
Small Company Common Trust
Growth ASB Special
Equity 7,075 238,952 246,027 1,125
Value Common Trust
ASB LT Equity 120,426 2,484,751 2,605,177 62,186
April 29, 1998
Disciplined Equity Common Trust
Kansas Growth 47,340 201,122 248,463 3,636
Disciplined Equity Common Trust
Oklahoma Growth 4,245 248,463 252,707 281
</TABLE>
9. SUBSEQUENT EVENTS
Effective October 19, 1998, BNY began serving as the custodian for the Trust's
and the Company's assets and is providing the same services as were previously
provided by NationsBank. There is no longer a sub-custodian for the Trust or the
Company.
On November 5, 1998, the Board of Directors/Trustees of each of the Company and
the Trust approved changes in the Fund's administration arrangements whereby
NBAI and Stephens will each serve as co-administrators for the Funds, and BNY
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.
72
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[BACKGROUND GRAPHIC DEPICTING BASKETS]
<PAGE> 80
--------------
[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
--------------
SARI 97495 9/98
