<PAGE> 1
[GRAPHIC: PHOTO COLLAGE - COMPUTER Nations Convertible
CHIP/OYSTER SHELL] Securities Fund
Nations Balanced
Assets Fund
Nations Asset
Allocation Fund
Nations Equity
Income Fund
Nations Value Fund
Nations LargeCap
Index Fund
Nations Marsico
Growth & Income Fund
Nations
Blue Chip Fund
Nations Strategic
Growth Fund
Nations Capital
Growth Fund
Nations Disciplined
Equity Fund
Nations Marsico
Focused Equities Fund
Nations MidCap
Growth Fund
Nations Small
Company Fund
DOMESTIC
STOCK FUNDS
ANNUAL REPORT FOR THE YEAR
ENDED MARCH 31, 2000
[NATIONS FUNDS LOGO]
<PAGE> 2
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., which is not affiliated with Bank of
America 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: Banc of America Advisors, Inc.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 3
PRESIDENTS' MESSAGE
Dear Shareholder:
As we report on the past 12 months ending March 31,
2000, we need to remind ourselves of two major
investment tenets -- diversification and investing
for the long term. Keep these points in mind as we
take a look back at the past year and where we are
today.
THE YEAR IN REVIEW
For most of 1999, the threat of Y2K was on everyone's
minds. Many companies in the U.S. and around the
world went to great lengths to make sure that
computer systems were compliant and ready to "squash"
the Y2K bug. Fortunately, we entered the 21st century
relatively unscathed. But in the months that led up
to the year 2000 and in the first quarter of the new
year, the markets have put on quite a show. We've
seen an unusual level of volatility and it doesn't
look like things are going to calm down any time
soon.
While large-company stocks continued to perform well
in 1999 and into 2000, markets began to broaden with
small and mid-size company stocks staging turnarounds
and actually outperforming large-company stocks. The
Standard & Poor's 500 Composite Stock Price Index was
up 17.94% for the 12 months ending March 31, 2000,
while the S&P MidCap 400 Index and Russell 2000 Index
were up 38.20% and 37.29%, respectively.* Value
stocks also regained some ground during the period
after several quarters of underperformance versus
growth stocks.
International markets also showed new life in 1999
and into 2000, especially in Asia where it's been a
long recovery since the Asian "malaise" began in
1997. The Morgan Stanley Capital International (MSCI)
Europe, Australasia and Far East (EAFE) Index gained
25.09% for the 12 months ending March 31, 2000,
thanks in large part to the economic recovery in
Japan.**
MARKET MAYHEM
As of late, we have witnessed wild swings in the U.S.
stock markets, setting new milestones for one-day
gains and losses. It's a tumultuous time in the
markets and now, more than ever, it's important to
remember that one key to a successful investment
strategy is diversification. Investing in a number of
sectors allows you to take advantage of those sectors
that are in favor today, and those that may be in
favor tomorrow. And, as shown by how quickly the
markets have rebounded from these dramatic highs and
lows, you need to remember to stay focused on
long-term goals. Investing takes discipline and a
conviction to hold true to your long-term objectives.
As we've said before, investors that took themselves
out of the market based on short-term volatility and
Y2K fears lost out on potential gains in their
investments during that time and face possible tax
implications and fees as a result of their
withdrawal. It's true that over the long term, the
market has trended upward. While there is no
assurance that this trend will continue, the
advantages of long-term investing are clear.
*The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. The Standard & Poor's MidCap 400 Index
is a market-value weighted index that
measures the market value of 400 domestic stocks
chosen for market size, liquidity, and industry
representation. It is unmanaged and unavailable for
investment. The Russell 2000 Index is an
unmanaged capitalization-weighted index that tracks
the performance of 2000 small company stocks. It
is unavailable for investment.
**The Morgan Stanley Capital International Europe,
Australasia and Far East Index is an unmanaged,
capitalization-weighted index that tracks stocks
traded in twenty countries in Europe, Australia, and
the Far East. It is unavailable for investment.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
<PAGE> 4
PRESIDENTS' MESSAGE CONTINUED...
At Nations Funds, we firmly believe in the value of
advice, especially in times of uncertainty. An
investment professional can keep you abreast of
current market conditions and work with you to
determine the best strategy for surviving short-term
volatility and successfully reaching your long-term
goals.
WHAT'S NEW AT NATIONS FUNDS
In its continuing effort to provide world-class
investment management, Bank of America reorganized a
number of internal investment management units into
Banc of America Capital Management, Inc. (BACAP).
Focusing on both equity and fixed income funds, this
Nations Funds Manager of Distinction(SM) is
responsible for the portfolio management of more than
40 Nations Funds. This entity was developed to
synergize research and investment capabilities into a
premier investment management organization. And the
media has taken notice. You may have seen BACAP
investment professionals regularly featured on
programs on CNBC and CNNfn. When the media looks to
the industry for expert analysis, they are now
turning regularly to the investment professionals of
BACAP.
In addition to the changes at BACAP, we enhanced our
investment management expertise with the addition of
MacKay Shields LLC as our newest Manager of
Distinction to manage Nations High Yield Bond Fund,
which debuted in February. The Fund rounds out our
line of fixed income fund offerings. On the equity
side, we launched a new Fund for a new era -- Nations
Marsico 21st Century Fund. This latest offering
managed by Marsico Capital Management, LLC is
positioned to invest in companies of any size that
are changing the way the world does business.
Not only are new products important to us. Quality
shareholder service continues to be of utmost
importance. We were recognized by DALBAR, Inc. -- an
independent evaluator of customer service in the
mutual fund industry -- with the 1999 Mutual Fund
Service Award. This award was given to us in
recognition of our commitment to provide shareholders
with the highest level of client service in the
mutual fund industry. We will strive to maintain this
level of excellence throughout 2000 and beyond.
We are excited about our growth over the past year
and the opportunities ahead of us. Should you have
any questions or comments on your annual report,
please contact your investment professional or call
us at 1.800.321.7854. You can also visit us online at
www.nations-funds.com.
Thank you for being a part of the Nations Funds
family.
Sincerely,
/s/ A. Max Walker
A. MAX WALKER
PRESIDENT AND CHAIRMAN OF THE BOARD
NATIONS FUNDS
/s/ Robert H. Gordon
ROBERT H. GORDON
PRESIDENT
BANC OF AMERICA ADVISORS, INC.
March 31, 2000
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<S> <C>
NATIONS FUNDS SPECTRUM 2
ECONOMIC OVERVIEWS 3
PORTFOLIO COMMENTARY
Nations Convertible Securities Fund 7
Nations Balanced Assets Fund 11
Nations Asset Allocation Fund 16
Nations Equity Income Fund 21
Nations Value Fund 26
Nations LargeCap Index Fund 31
Nations Marsico Growth & Income Fund 34
Nations Blue Chip Fund 39
Nations Strategic Growth Fund 43
Nations Capital Growth Fund 48
Nations Disciplined Equity Fund 53
Nations Marsico Focused Equities Fund 58
Nations MidCap Growth Fund 63
Nations Small Company Fund 68
FINANCIAL STATEMENTS
Statements of net assets 73
Statements of operations 120
Statements of changes in net assets 124
Schedules of capital stock activity 130
Financial highlights 144
Notes to financial statements 172
Statement of net assets -- Nations Master Investment Trust 185
Nations Marsico Growth & Income Master Portfolio 185
Nations Blue Chip Master Portfolio 187
Nations Marsico Focused Equities Master Portfolio 190
Statement of operations 192
Statement of changes in net assets 193
Supplementary data 193
Notes to financial statements 194
</TABLE>
<TABLE>
<S> <C>
------------------------------------------------------------------------------
NATIONS FUNDS [DALBAR MUTUAL FUND SERVICE AWARD
RECOGNIZED FOR 1999 GRAPHIC]
OUTSTANDING [DALBAR HONORS COMMITMENT TO:
CUSTOMER SERVICE FINANCIAL INTERMEDIARIES 1999 GRAPHIC]
DALBAR, Inc., is a well-respected
research firm that measures
customer service levels and
IN RECOGNITION OF ITS COMMITMENT TO establishes benchmarks in the
PROVIDE SHAREHOLDERS WITH THE financial services industry.
HIGHEST LEVEL OF CUSTOMER SERVICE
IN THE MUTUAL FUND INDUSTRY,
NATIONS FUNDS RECEIVED THE DALBAR
MUTUAL FUND SERVICE AWARD IN 1999.
------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
THE NATIONS FUNDS FAMILY OF FUNDS
As of March 31, 2000
LOWER RISK/REWARD POTENTIAL
MONEY MARKET FUNDS
Nations Prime Fund
Nations Cash Reserves
Nations Money Market Reserves
Nations Government Money Market Fund
Nations Government Reserves
Nations Treasury Fund
Nations Treasury Reserves
Nations Tax Exempt Fund
Nations Municipal Reserves
Nations California Tax-Exempt Reserves
FIXED INCOME FUNDS
INCOME FUNDS
Nations High Yield Bond Fund
Nations Strategic Income Fund
Nations U.S. Government Bond Fund
Nations Government Securities Fund
Nations Investment Grade Bond Fund
Nations Intermediate Bond Fund
Nations Short-Intermediate Government Fund
Nations Short-Term Income Fund
TAX-EXEMPT INCOME FUNDS
Nations Municipal Income Fund
Nations State-Specific Long-Term Municipal
Bond Funds (CA, FL, GA,
MD, NC, SC, TN, TX, VA)
Nations Intermediate Municipal Bond Fund
Nations State-Specific Intermediate Municipal
Bond Funds (FL, GA, MD,
NC, SC, TN, TX, VA)
Nations Short-Term Municipal Income Fund
DOMESTIC EQUITY FUNDS
GROWTH FUNDS
Nations Small Company Fund
Nations MidCap Growth Fund
Nations Marsico Focused Equities Fund
Nations Disciplined Equity Fund
Nations Capital Growth Fund
Nations Strategic Growth Fund
Nations Blue Chip Fund
GROWTH AND INCOME FUNDS
Nations Marsico Growth & Income Fund
Nations Value Fund
Nations Equity Income Fund
Nations Asset Allocation Fund
Nations Balanced Assets Fund
Nations Convertible Securities Fund
INTERNATIONAL FUNDS
Nations Emerging Markets Fund
Nations International Growth Fund
Nations International Equity Fund
Nations International Value Fund
HIGHER RISK/REWARD POTENTIAL
INDEX FUNDS
Nations LargeCap Index Fund
Nations Managed Index Fund
Nations SmallCap Index Fund
Nations Managed SmallCap Value Index Fund
Nations Managed Value Index Fund
ASSET ALLOCATION PORTFOLIOS
Nations LifeGoal Balanced Growth Portfolio
Nations LifeGoal Growth Portfolio
Nations LifeGoal Income and Growth Portfolio
2
<PAGE> 7
ECONOMIC OVERVIEW
BANC OF AMERICA CAPITAL MANAGEMENT*
THE YEAR IN REVIEW
Both the U.S. economy and stock market scored
impressive performances in the year ended March 31,
2000. Our economy launched an unprecedented tenth
year of expansion, marking the longest upswing in
American history. And the stock market's continued
climb reflected favorable short-term fundamentals and
a long-term revolution in technology and
communications.
In the year ended March 31, the Standard & Poor's 500
Composite Stock Price Index advanced by 17.94%. While
investors turned in March to some of those economic
sectors largely overlooked in the rush to technology,
the Nasdaq Composite Index still sparkled with an 86%
advance for the past 12 months. A renewed interest in
smaller-capitalization stocks also drove the Russell
2000 Index 37% higher as of March 31.**
During the past year, U.S. real GDP (gross domestic
product) expanded an estimated 5%, while inflation
remained subdued. Despite a near tripling in oil
costs, consumer prices increased by only 2.4%. Two
primary forces deserve credit for this nearly
flawless performance. First, U.S. economic policies
have spawned an environment conducive to
non-inflationary growth. These policies include
deficit reduction, monetary discipline, deregulation
and free foreign trade. Second, a once-in-a-century
wave of innovation has sparked large gains in
productivity through advances in the internet,
computers and information sharing. These advances in
output per hour have restrained inflation and helped
companies achieve double-digit profit gains.
Economic and stock market advances have continued
despite five interest rate hikes enacted by the
Federal Reserve Board (the Fed) over the past year.
Three of those increases simply reversed the easings
triggered by Russia's crisis in 1998. The last two
advances in the Federal Funds rate have restored the
monetary target to the 6.0% level of 1995. The Fed is
attempting to achieve a tempered and sustainable
economic growth rate consistent with an ongoing low
rate of inflation.
The long-term bond market appears confident that the
Fed will succeed. The yield on 30-year U.S. Treasury
bonds slid below 6.0% by the end of March 2000,
reflecting in part the conviction that economic
growth will ultimately moderate and that inflation
will stay in check. In addition, the Treasury's
decision to buy back $30 billion in government debt
because of the emergence of sizable federal budget
surpluses has been a major force pushing long-term
Treasury bond yields lower.
*Banc of America Capital Management is the investment
management group of Bank of America, N.A.
and includes Banc of America Capital Management,
Inc., investment sub-adviser to many Nations Funds,
and other non-bank affiliates of Bank of America.
**The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment.
The Nasdaq Composite Index tracks the performance of
domestic common stocks traded on the regular
Nasdaq market as National Market System traded
foreign stocks and ADRs. It is unmanaged and
unavailable for investment.
The Russell 2000 Index is an unmanaged,
capitalization-weighted index that tracks the
performance of 2000 small company stocks. It is
unavailable for investment.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
3
<PAGE> 8
ECONOMIC OVERVIEW CONTINUED...
The past 12 months have also witnessed the emergence
of a global recovery. Much of Asia has rebounded
smartly from the scourge of devaluations that began
in 1997. Japan's economy has continued to struggle
but appears to be on a modest upward track. The new
"Eurozone" has moved forward, although growth has
been moderate. Even Russia has begun to emerge from
the turmoil of 1998. Finally, while parts of Latin
America -- such as Venezuela and
Argentina -- continue to struggle, Brazil appears to
have turned the corner and Mexico has prospered.
The major non-event of the year turned out to be the
"Y2K" date change. Although computer failures could
have wreaked havoc on financial markets and the
global economy, extensive investment and preparation
by the technology-dependent countries allowed markets
to celebrate the new year with barely a hiccup.
THE YEAR AHEAD
Look for the U.S. economy to continue its expansion
during the coming year, with no recession looming on
the horizon. We forecast growth to moderate, however,
to 3.5% or less over the course of the next 12
months. This pace will be more consistent with a
long-term sustainable trend.
Inflation should remain constrained. Although low
unemployment may cause additional upward pressure on
wages and benefits, productivity gains should offset
much of that increase. Meanwhile, a step-up in
production by oil producing countries should cause
energy prices to subside from the peaks reached in
early 2000.
We also anticipate one or two more interest rate
hikes from the Fed as monetary authorities attempt to
rein in growth and ensure that the economy does not
overheat. Long-term interest rates have already
largely incorporated expectations of such additional
tightening.
The stock market has displayed extreme volatility
recently, and large swings are likely to continue.
Strong profit growth and moderate interest rates
should support a further rise in overall stock prices
during the coming year. However, general gains of
more than 10% should be more difficult to achieve,
especially as the surge in the technology sector has
tended to overstate some of the general strength in
the market.
While the long-term fundamentals underpinning the
technology sector remain compelling, a reallocation
in portfolios generally has begun. Investors have
started to switch from internet, communications, and
biotechnology stocks with very high valuations to
other market segments with much lower
price-to-earnings ratios***. We think this
rebalancing of the market is healthy, especially as
it involves some broadening in its strength to
encompass the financial, consumer noncyclical and
industrial sectors of the market. Also, look for
investors to continue to discern between internet and
other new firms that are likely to be long-term
survivors and those that have set up shop with only a
concept and a promise.
LYNN REASER, PH.D.
CHIEF ECONOMIST
BANC OF AMERICA CAPITAL MANAGEMENT
March 31, 2000
***The price-to-earnings ratio gives investors an
idea of how much they are paying for a company's
earning power.
Source for all statistical data -- Banc of America
Capital Management.
4
<PAGE> 9
ECONOMIC OVERVIEW
MARSICO CAPITAL MANAGEMENT, LLC
We maintain a positive outlook on the equity market.
There are a variety of "inputs" which enter into our
thinking, and we would like to touch on a few with
you.
First, we have believed for some time that we are
experiencing a productivity boom. After years and
years of growth, we continue to see record levels of
productivity gains. We believe these productivity
gains are sustainable and, in fact, may well
accelerate going forward. Actually, we believe the
productivity gains have been undermeasured due to the
government's somewhat antiquated methodology used in
determining productivity. We don't think the
government's methodology fully accounts for the fact
that our economy has changed dramatically. We're
essentially a service economy now -- our economy is
much, much less capital intensive than it used to be.
We think many of the benefits of high
technology -- biotech being just one
example -- dramatically raise our living standards
without showing up in the productivity numbers.
We also have become an information economy, spurred
in large part through technological enhancements and
the internet. The internet changes everything. One of
the more widely invoked reasons underlying
productivity enhancements is e-commerce. Peter
Drucker, a highly regarded management consultant,
recently wrote, "E-commerce is to the Information
Revolution what the railroad was to the Industrial
Revolution".* We don't think that's hyperbole.
Every day we see new examples of enhanced
productivity related to e-commerce, business-to
business (B2B) enterprises, and enhanced
communications. Late last year, The New York Times
reported that the number of adults using the internet
in the U.S. had surpassed 100 million -- meaning that
roughly half of the country's population is now
on-line. Many businesses are just now starting to
absorb the Internet and using it to relate to one
another. Commerce has moved to the 'Net, and now the
'Net is moving into businesses at an increasingly
rapid rate.
We believe we are in a secular lower inflation/lower
interest rate environment, which is attributable in
large part to improved productivity. With regard to
inflation, we quite frankly see very few -- if
any -- signs pointing to a materially higher CPI
(Consumer Price Index). At least in the universe of
companies we follow, remarkably few have demonstrated
any ability to raise prices. Wal-Mart Stores, as just
one example, had $4 billion worth of price rollbacks
last year. That fits in directly with our thesis of
improved productivity, which we think is essentially
a deflationary force.
Some investors, citing low unemployment rates, have
pointed toward wage pressures as a potential sign of
inflation. In our view, wage increases do not appear
to be a pressing concern. The recent United Auto
Workers agreement called for modest wage increases
over three years. Further, even with companies
showing wage increases, we are finding that these are
offset through lower expenditures in other
areas -- largely due to improved corporate
productivity.
*"Beyond the Information Revolution", Peter F.
Drucker, The Atlantic Monthly, October 1999
Source for all statistical information -- Marsico
Capital Management, LLC
5
<PAGE> 10
ECONOMIC OVERVIEW
MARSICO CAPITAL MANAGEMENT, LLC
But, more importantly, we think there are some
remarkable benefits to having such low unemployment
rates. Tight labor markets have facilitated welfare
reform. They have reduced poverty, crime, and
minority unemployment. These types of benefits aren't
always discussed in the context of classic economic
theory, but we think they're extremely important.
We think interest rates should decline further over a
period of time. We have felt for quite some time that
real rates are too high, particularly given our views
on productivity and inflation. And if we're right,
the declining interest rate environment has enormous,
positive implications for equity
valuations -- especially growth companies.
Another factor that we think is very important is the
very large government surpluses we are seeing. At the
beginning of the last fiscal year, the surplus was
expected to be around $25 billion to $35 billion.
When the last fiscal year ended in October, the
surplus was $125 billion. Since that time, budget
surplus projections have risen even further. The
creation of new jobs clearly has done wonders for the
tax rolls. The strong employment levels are leading
to much larger-than-expected surpluses. We are also
encouraged by the fact that entitlement-related
spending hasn't increased too much -- probably due to
gridlock between the Democrats and Republicans.
We like to invest in strong, multi-national
franchises -- companies that have global scale. We
think this is an extremely important element of our
stock selection process. We're seeing tremendous
improvement in the economic structure not only here
in the U.S., but also in Europe and Japan. We think
that free trade -- which is a major cornerstone of
both political parties here in the U.S. -- will
accelerate going forward.
So, basically, we're painting a pretty bright
outlook. We've essentially held this view for a long
time, and we think it's going to persist. Our view is
that -- if we're right in our inflation and interest
rate forecasts and the economy continues to grow at a
healthy rate -- then overall valuations would be
reasonable and we think there would be room for
multiple expansion. Within the universe of stocks
that we follow closely at Marsico Capital, we think
there are plenty of good companies that have exciting
products or services and that are trading at
reasonable valuations.
THOMAS F. MARSICO
CHIEF EXECUTIVE OFFICER
MARSICO CAPITAL MANAGEMENT, LLC
March 31, 2000
6
<PAGE> 11
NATIONS CONVERTIBLE SECURITIES FUND
CONVERTIBLE SECURITIES MANAGEMENT TEAM COMMENTARY*
<TABLE>
<S> <C>
IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON
NATIONS CONVERTIBLE SECURITIES FUND'S PERFORMANCE FOR THE
12-MONTH PERIOD ENDED MARCH 31, 2000 AND ITS OUTLOOK FOR THE
FUTURE.
PORTFOLIO MANAGEMENT PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE.
The Fund is managed by the Nations Convertible Securities Fund is designed to be a
Convertible Securities Management moderate way to invest in convertible securities. We try to
Team of Banc of America Capital maintain a portfolio of convertibles that have balanced
Management, Inc., investment risk/reward characteristics. This means as individual issues
sub-adviser to the Fund. rise in price, we replace them with other issues selling
closer to par. We believe this tends to keep volatility
INVESTMENT OBJECTIVE dampened and the Fund's yield above the yields of the
The Fund seeks to provide popular indexes.
investors with a total investment
return, comprised of current Our philosophy is to try to run a somewhat conservative
income and capital appreciation, equity vehicle with a current income above the overall yield
consistent with prudent investment of stocks in general, but with some appreciation potential.
risk.
PLEASE COMMENT ON THE FUND'S PERFORMANCE.***
PERFORMANCE REVIEW For the year ended March 31, 2000, the Fund (Investor A
For the 12-month period ended Shares) returned 39.38%. While this was one of the largest
March 31, 2000, Nations gains recorded over the life of the Fund, it still lagged
Convertible Securities Fund the return of the CS First Boston Convertible Index. The
Investor A Shares provided Index was dominated by several large issues that recorded
shareholders with a total return strong gains, and it also included many lower quality issues
of 39.38%.** in which the Fund had not invested. The Fund's policy of
selling securities that had recorded significant gains also
contributed to the relative underperformance.
WHAT PARTICULAR SECTORS OR STOCKS PROVED FAVORABLE FOR THE
FUND AND WHAT SECTORS OR STOCKS PROVED UNFAVORABLE?+
We maintained the Fund's heavy overweighting in the
technology and communications industries and underweighting
in cyclical and basic industries. Both decisions supported
performance. Most of the gains in the Fund came from
technology and communications, especially from
internet-related companies. The semiconductor industry was
apparently helped as much as it was hurt by Y2K, as sales
and orders surged through the fourth calendar quarter, right
up to the end of the Fund's fiscal year end. The Y2K effects
on this industry were also felt in the communications sector
as many of these companies also reported robust business
with no slowdown. Fund holdings such as Xilinx, Inc., U.S.
Cellular Corporation
</TABLE>
*The outlook for this Fund may differ from that
presented for other Nations Funds mutual funds.
**The performance shown does not reflect the maximum
front-end sales charge of 5.75%, which may
apply to purchases of Investor A Shares. For
standardized performance, please refer to the
Performance table.
***The CS First Boston Convertible Index is a widely
used unmanaged index that measures the
performance of convertible securities. It is
unavailable for investment.
+Portfolio characteristics are subject to change and
may not be representative of current characteristics.
The Standard & Poor's 500 Composite Stock Price Index
is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment.
Source for all statistical data -- Banc of America
Capital Management, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
7
<PAGE> 12
NATIONS CONVERTIBLE SECURITIES FUND
CONVERTIBLE SECURITIES MANAGEMENT
TEAM COMMENTARY continued
<TABLE>
<S> <C>
and LSI Logic Corporation were up four to six fold between
October 1999 and February of this year.
The cyclical and basic industry companies continued to be
hurt by a low-inflation environment which gave them little
pricing power. The basic industry and capital goods sectors
again lagged the gains of the overall market, due to their
low unit growth characteristics and an inability to raise
prices. Without price hikes these companies can not generate
the top line revenue to bring faster than average growth to
the bottom line. With inflation still benign, stocks in
these areas of the market will have a hard time attracting
investors. The Fund's holdings in these sectors hurt its
performance.
WHAT ECONOMIC FACTORS MOST INFLUENCED THE FUND'S
PERFORMANCE?
The market corrected from a summer peak to an October 1999
low by an average 10%. The convertible market took off again
in October 1999 and in January 2000. Other markets also
rose, most notably the technology dominated Nasdaq Composite
Index. The more economically cyclical Standard & Poor's 500
Composite Stock Price Index lagged the more growth-oriented
Nasdaq.++
WHAT IS YOUR OUTLOOK FOR THE COMING YEAR, AND HOW ARE YOU
POSITIONING THE FUND?
In our view, the new issue market is quite strong. To the
extent these issues meet our quality standards, we are able
to fine-tune the portfolio's risk exposure. Unfortunately,
many of the issues are not high quality, as the market
appears to be becoming more speculative, especially in the
biotech area. The Federal Reserve Board may continue to
raise short-term interest rates, affecting the relationship
of bond prices to convertible prices. This suggests more
risk in the market. However, inflation remains benign and
the outlook for corporate profits is quite good. On balance,
we believe the convertible market will do well again this
year, but may not have the exceptional gain of last year.
</TABLE>
++The Nasdaq Composite Index tracks the performance
of domestic common stocks traded on the
regular Nasdaq market as National Market System
traded foreign stocks and American Depository
Receipts. It is unmanaged and unavailable for
investment.
8
<PAGE> 13
NATIONS CONVERTIBLE SECURITIES FUND
PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/00)
[PIE CHART]
<TABLE>
<S> <C>
Other 41.2%
Telecommunications 9.7
Semiconductors 8.2
Oil - Domestic 6.6
Computer related 6.4
Media 5.8
Healthcare 5.5
Utilities - Telephone 5.0
Financial services 4.0
Energy 3.9
Professional services 3.7
</TABLE>
<TABLE>
<C> <S> <C>
TOP 10 HOLDINGS
-------------------------------------------------
1 Bell Atlantic Financial Services,
4.250% 09/15/05 1.8%
-------------------------------------------------
2 Citrix Systems, Inc., 5.250% 03/22/19 1.7%
-------------------------------------------------
3 Intel Corporation 1.7%
-------------------------------------------------
4 CommScope, Inc., 4.000% 12/15/06 1.6%
-------------------------------------------------
5 AT&T Corporation - Liberty Media
Group, 4.000% 11/15/29 1.6%
-------------------------------------------------
6 Telefonos de Mexico SA, 4.250%
06/15/04 1.6%
-------------------------------------------------
7 Elan International Finance
Corporation, 3.280% 12/14/18 1.5%
-------------------------------------------------
8 LSI Logic Corporation, 4.250%
03/15/04 1.5%
-------------------------------------------------
9 CNB Capital Trust I 1.4%
-------------------------------------------------
10 Lattice Semiconductor Corporation,
4.750% 11/01/06 1.4%
-------------------------------------------------
THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
PORTFOLIO HOLDINGS WERE CURRENT
AS OF MARCH 31, 2000, ARE
SUBJECT TO CHANGE AND MAY NOT BE
REPRESENTATIVE OF CURRENT HOLDINGS.
9
<PAGE> 14
NATIONS CONVERTIBLE SECURITIES FUND
PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN
Investor A Shares
<TABLE>
<CAPTION>
NAV** MOP*
SINCE INCEPTION
<S> <C> <C>
(9/25/87
through
3/31/00) 17.16% 16.61%
</TABLE>
The charts to the left show the
growth in value of a
hypothetical $10,000 investment
in Investor A Shares of Nations
Convertible Securities Fund from
the inception of the share
class. Figures for the CS First
Boston Convertible Securities
Index, an unmanaged
market-weighted index of
convertible securities that meet
minimum quality and liquidity
criteria, include reinvestment
of dividends. Funds included in
the Lipper Convertible
Securities Funds Universe invest
their portfolios primarily in
convertible securities and
convertible preferred shares. It
is not possible to invest in the
Index or Lipper Universe. Both
are unavailable for investment.
The performance of Primary A,
Investor B and Investor C Shares
may vary based on the
differences in sales loads and
fees paid by the shareholders
investing in each class.
[LINE GRAPH]
INVESTOR A SHARES AT MOP* RETURN CHART
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
NATIONS CSFB CONVERTIBLE SECURITIES INDEX $42,995
CONVERTIBLE SECURITIES LIPPER CONVERTIBLE SECURITIES -----------------------------------------
FUND $47,863 FUND UNIVERSE $39,656
---------------------- -----------------------------
<S> <C> <C> <C>
Mar. 31, 1990 9425.00 10000.00 10000.00
9995.00 10365.00 10240.00
8768.00 9205.00 9147.00
8911.00 9503.00 9428.00
10478.00 10835.00 10695.00
10956.00 11001.00 10813.00
11642.00 11828.00 11621.00
1991 12318.00 12592.00 12173.00
12600.00 12894.00 12752.00
12890.00 12871.00 13071.00
13671.00 13413.00 13578.00
1992 14947.00 14332.00 14315.00
15953.00 15161.00 15363.00
16763.00 15462.00 15777.00
17479.00 16298.00 16562.00
1993 18340.00 16626.00 16973.00
17858.00 16223.00 16481.00
17315.00 15750.00 16032.00
18131.00 16269.00 16512.00
1994 17266.00 15754.00 16172.00
18155.00 16631.00 17121.00
19491.00 17727.00 18682.00
20673.00 18890.00 19839.00
1995 21429.00 19313.00 20009.00
22704.00 20300.00 21178.00
23229.00 20769.00 21629.00
24325.00 21440.00 22122.00
1996 25597.00 22407.00 22777.00
26168.00 22606.00 22896.00
29528.00 24620.00 24901.00
32442.00 26807.00 27394.00
1997 31219.00 26509.00 26630.00
33249.00 28524.00 28816.00
32753.00 28153.00 28384.00
29671.00 24946.00 24733.00
1998 33273.00 27611.00 28377.00
34341.00 28265.00 29478.00
36704.00 30580.00 31700.00
35926.00 30057.00 31456.00
1999 42173.00 36179.00 40371.00
Mar. 31, 2000 47863.00 39656.00 42995.00
</TABLE>
[LINE GRAPH]
INVESTOR A SHARES AT NAV** RETURN CHART
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
NATIONS CSFB CONVERTIBLE SECURITIES INDEX $42,995
CONVERTIBLE SECURITIES LIPPER CONVERTIBLE SECURITIES -----------------------------------------
FUND $50,783 FUND UNIVERSE $39,656
----------------------- -----------------------------
<S> <C> <C> <C>
Mar. 31, 1990 10000.00 10000.00 10000.00
10605.00 10365.00 10240.00
9303.00 9205.00 9147.00
9454.00 9503.00 9428.00
11117.00 10835.00 10695.00
11624.00 11001.00 10813.00
12352.00 11828.00 11621.00
1991 13070.00 12592.00 12173.00
13369.00 12894.00 12752.00
13676.00 12871.00 13071.00
14505.00 13413.00 13578.00
1992 15859.00 14332.00 14315.00
16926.00 15161.00 15363.00
17786.00 15462.00 15777.00
18545.00 16298.00 16562.00
1993 19459.00 16626.00 16973.00
18948.00 16223.00 16481.00
18372.00 15750.00 16032.00
19237.00 16269.00 16512.00
1994 18319.00 15754.00 16172.00
19263.00 16631.00 17121.00
20680.00 17727.00 18682.00
21934.00 18890.00 19839.00
1995 22736.00 19313.00 20009.00
24089.00 20300.00 21178.00
24646.00 20769.00 21629.00
25809.00 21440.00 22122.00
1996 27159.00 22407.00 22777.00
27765.00 22606.00 22896.00
31329.00 24620.00 24901.00
34422.00 26807.00 27394.00
1997 33124.00 26509.00 26630.00
35277.00 28524.00 28816.00
34751.00 28153.00 28384.00
31481.00 24946.00 24733.00
1998 35303.00 27611.00 28377.00
36436.00 28265.00 29478.00
38943.00 30580.00 31700.00
38118.00 30057.00 31456.00
1999 44746.00 36179.00 40371.00
Mar. 31, 2000 50783.00 39656.00 42995.00
</TABLE>
TOTAL RETURN (AS OF 3/31/00)
<TABLE>
<CAPTION>
INVESTOR A INVESTOR B++ INVESTOR C
PRIMARY A+ NAV** MOP* NAV** CDSC*** NAV** CDSC***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Inception date 5/21/99 9/25/87 7/15/98 10/21/96
---------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 41.14% 39.38% 31.38% 38.28% 33.28% 38.39% 37.39%
---------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS 22.81% 22.30% 19.90% 21.84% 21.16% 21.72% 21.72%
5 YEARS 21.70% 21.39% 19.97% 21.12% 20.94%
10 YEARS 17.79% 17.65% 16.95% 17.52% 17.52%
SINCE INCEPTION 17.28% 17.16% 16.61% 17.06% 17.06% 20.31% 20.31%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of distributions.
*Figures at maximum offering price (MOP) reflect the maximum front-end sales
charge of 5.75%.
**Figures at net asset value (NAV) do not reflect any sales charges. Investor A
Shares are available with a reduced or waived sales charge only under certain
circumstances as described in the prospectus.
***Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
+Primary A Shares commenced operations on May 21, 1999 and have no performance
prior to that date. Performance prior to May 21, 1999 is that of Investor A
Shares at NAV, which reflects shareholder servicing and/or 12b-1 fees of 0.25%.
These fees are not applicable to Primary A Shares.
++Investor B Shares commenced operations on July 15, 1998 and have no
performance prior to that date. Performance prior to July 15, 1998 is that of
Investor A Shares at NAV, which reflects shareholder servicing and/or 12b-1 fees
of 0.25%. If Investor B Shares had been reflected, total returns would have been
lower.
10
<PAGE> 15
NATIONS BALANCED ASSETS FUND
INVESTMENT STRATEGIES TEAM COMMENTARY*
<TABLE>
<S> <C>
IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON
NATIONS BALANCED ASSETS FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 2000 AND ITS OUTLOOK FOR THE FUTURE.
PORTFOLIO MANAGEMENT PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE.
The Fund is managed by the The Fund seeks to provide shareholders with the potential
Investment Strategies Team of Banc for solid returns with reduced overall portfolio risk. It
of America Capital Management, allocates its assets among a diversified portfolio of
Inc., investment sub-adviser to stocks, fixed-income securities and money market
the Fund. instruments -- all of which have different return/risk
characteristics. The Fund invests primarily in stocks of
INVESTMENT OBJECTIVE high-quality companies with long-term fundamentals believed
The Fund seeks total return by favorable and trading at we think are attractive valuations.
investing in equity and fixed Its fixed income holdings consist of investment-grade
income securities. securities.
PERFORMANCE REVIEW
For the 12-month period ended Management of the equity portion of the Fund is based on the
March 31, 2000, Nations Balanced premise that companies' stock prices are more volatile than
Assets Fund Investor A Shares their underlying business fundamentals and that active
provided shareholders with a total security selection improves performance over time. We also
return of 0.47%.** believe that proprietary research is a critical component of
investment success and, that opportunities are best
uncovered by a constant search for new information. In
addition, we believe that the reward for assuming risk
varies over time. As a result, in our view, dynamic risk
management should increase performance consistency.
Within this framework, the Fund's equity style is a value
approach where the management team seeks superior returns by
investing in sound, proven businesses that are thought to be
inexpensive relative to their intrinsic value. This approach
also reflects a long-term view of value investing with its
potential long-term rewards.
The management of the fixed income portion is based on our
belief that returns and consistency of returns are enhanced
through a disciplined risk management process that seeks to
control interest rate risk and emphasizes a quantitative
approach to sector allocation, sector rotation and relative
value security selection.
PLEASE COMMENT ON FUND PERFORMANCE FOR THE PERIOD.
Nations Balanced Assets Fund offers investors the
opportunity to invest in the stocks of high-quality
companies with long-term fundamentals believed favorable,
selling at what we think are attractive valuation levels.
The fixed income portion consists of high-quality
securities. Over the reporting period, the stock market did
little to reward investors with a valuation focus, while the
bond market suffered through one of its worst declines in
the last 10 years. The Fund's return reflects these
occurrences. However, we believe that investors with a
long-term horizon
</TABLE>
*The outlook for this Fund may differ from that
presented for other Nations Funds mutual funds.
**The performance shown does not reflect the maximum
front-end sales charge of 5.75%, which may
apply to purchases of Investor A Shares. For
standardized performance, please refer to the
Performance table. The performance shown includes
the effect of fee waivers by the investment adviser
and the co-administrator, which have the effect of
increasing total return.
Source for all statistical data -- Banc of America
Capital Management, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
11
<PAGE> 16
NATIONS BALANCED ASSETS FUND
INVESTMENT STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
should benefit with solid returns from the strategies
represented by both the equity and fixed income portions of
the portfolio while incurring reduced overall portfolio
risk.
WHAT WAS THE INVESTMENT ENVIRONMENT FOR THE FUND DURING THE
FISCAL YEAR?
The stock market was, once again, dominated by growth
stocks, particularly technology and communications services
companies. In fact, the market propelled a very narrow group
of large capitalization, high price-to-earnings stocks
forward, leaving more undervalued companies we consider to
have more attractive valuation measures in their wake.
Momentum investing carried the day, as investors continued
to flock to very highly valued technology and communication
stocks. Many of these companies did not fit the valuation
criteria used in the equity portion of Nations Balanced
Assets Fund, which maintains a focus on value measures.
The bond market experienced one of its most volatile periods
in history because of a confluence of factors. These factors
included: the combination of a strong U.S. economy, fears of
a Y2K disaster, the announcement of a U.S. Treasury debt
reduction program, the dramatic increase in oil prices, and
the recent proposal to eliminate the implied government
guarantee on some government agency securities. In general,
interest rates rose and bond prices declined.
WHAT FACTORS AFFECTED THE PERFORMANCE IN THE STOCK PORTION
OF THE PORTFOLIO?***
As might be expected, the technology stocks in the portfolio
performed the best, rising 93.4% compared to 78.4% for the
technology sector of the Standard & Poor's 500 Composite
Stock Price Index (S&P 500 Index).+ However, we believed it
was prudent to continue to take profits in these companies
as they reached the price objectives we had set.
Consequently, we reduced the weighting in the sector
throughout the year. At year-end March 31, 2000, the Fund's
technology weighting was 16.7%, compared to a 34.0% weight
for the technology sector of the S&P 500 Index. This
decision hurt performance, but was in keeping with the
Fund's investment strategy. The Fund's holdings during the
year included Apple Computer Inc., which gained 278%, and
Sun Microsystems which gained nearly 200%. Currently, our
holdings include International Business Machines
Corporation, Xerox Corporation and Pitney Bowes,
Inc. -- more traditional, undervalued companies selling
substantially below their fair value, in our opinion, with
catalysts for improvement over the next 12 to 18 months.
The financial sector's weighting was 16.2% at the end of the
period and represented the second largest portion of the
Fund's equity assets. This sector within the S&P 500 Index
declined about 1% for the period, as interest rates
continued to move upward. We believe valuations are
compelling, particularly in the large, money center banks,
Citigroup Inc. and Chase Manhattan Corporation; Mellon
Financial Corporation, the well diversified, regional bank
holding company; and Paine Webber Group, Inc., a brokerage
firm we think undervalued.
</TABLE>
***Portfolio holdings and characteristics are subject
to change and may not be representative of current
holdings and characteristics.
+The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment.
12
<PAGE> 17
NATIONS BALANCED ASSETS FUND
INVESTMENT STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
WHAT FACTORS AFFECTED THE PERFORMANCE OF THE BOND PORTION OF
THE PORTFOLIO?
Despite the volatility, we remained faithful to our strategy
of seeking to maximize the yield of the portfolio while
minimizing its risk relative to the benchmark. While this
may cause some interim performance volatility, we believe
the strategy will produce superior returns over time. Our
strategic overweighting of the corporate bond and
mortgage-backed securities sectors helped performance in a
difficult environment.
WHAT INVESTMENT OPPORTUNITIES DO YOU ANTICIPATE IN THE
EQUITY MARKET DURING THE NEXT YEAR, AND HOW HAVE YOU
POSITIONED THE PORTFOLIO TO TAKE ADVANTAGE OF THESE
OPPORTUNITIES?
First, we believe the tremendous increase in the value of
technology stocks will dissipate over the coming year as
stocks in this sector are now selling, on average, at
incredibly high levels relative to what we think are their
sustainable growth rates. Therefore, we have underweighted
the technology sector relative to the market (S&P 500
Index), and have major representation in just those stocks
that we believe should continue to perform well with strong
dominance in their respective markets -- IBM, Xerox and
Pitney Bowes.
Second, we have overweighted the financial sector. When
viewed from a demographic as well as from a bottom-up,
valuation approach, we think these companies represent
substantial opportunity for the long-term investor.
Third, we anticipate improvement in the economies of our
global trading partners, Europe, Asia (ex-Japan) and Latin
America in 2000 and beyond. We have invested in
commodity-like companies, such as Alcoa Inc., Nucor
Corporation and Weyerhaeuser Company and multi-national
conglomerates such as United Technologies Corporation,
Honeywell International Inc., Rockwell International
Corporation and Emerson Electric Company. These stocks
appear to be selling substantially below their potential
earnings power and dividend-paying capabilities.
WHAT INVESTMENT OPPORTUNITIES DO YOU ANTICIPATE IN THE FIXED
INCOME MARKET, AND HOW ARE YOU POSITIONING THE PORTFOLIO?
On the fixed income side, our expectations are for the
Federal Reserve Board to raise the Federal Funds rate to
slow the U.S. economy at least one more time -- to 6.25%.
While there is a risk of additional rate increases, the
recent volatility in the stock market should help to dampen
consumer confidence and U.S. GDP (gross domestic product)
growth.
The yield advantages -- or "spreads" -- of corporate,
mortgage-backed and asset-backed securities over the yields
of U.S. Treasuries are higher than at any point since the
recession of 1991. We expect to continue to add incremental
exposure to corporate bonds, mortgage-backed and
asset-backed securities as these yield advantages grow
larger. We believe that once the markets stabilize, these
sectors will enhance the return potential of the portfolio.
</TABLE>
13
<PAGE> 18
NATIONS BALANCED ASSETS FUND
PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/00)
[PIE CHART]
<TABLE>
<S> <C>
Other 51
Federal National Mortgage Association (FNMA) certificates 9.5
Commercial mortgage-backed securities 8.7
Banking 4.5
Utilities - Telephone 5.4
Banking and finance 3.8
Financial services 6.5
Federal Home Loan Mortgage Corporation (FHLM) certificates 3.3
Computer related 2.6
Oil - International 2.5
Telecommunications 2.2
</TABLE>
<TABLE>
<C> <S> <C>
TOP 10 HOLDINGS
-------------------------------------------------
1 Exxon Mobil Corporation 1.6%
-------------------------------------------------
2 Chase Manhattan Corporation 1.6%
-------------------------------------------------
3 Citigroup Inc. 1.4%
-------------------------------------------------
4 United Technologies Corporation 1.3%
-------------------------------------------------
5 Honeywell International Inc. 1.2%
-------------------------------------------------
6 Bristol-Myers Squibb Company 1.2%
-------------------------------------------------
7 Lincoln National Corporation Ltd. 1.2%
-------------------------------------------------
8 Mellon Financial Corporation 1.2%
-------------------------------------------------
9 Ford Motor Company 1.2%
-------------------------------------------------
10 Target Corporation 1.1%
-------------------------------------------------
THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
PORTFOLIO HOLDINGS WERE CURRENT
AS OF MARCH 31, 2000, ARE
SUBJECT TO CHANGE AND MAY NOT BE
REPRESENTATIVE OF CURRENT HOLDINGS.
14
<PAGE> 19
NATIONS BALANCED ASSETS FUND
PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN
Investor A Shares
<TABLE>
<CAPTION>
SINCE INCEPTION NAV** MOP*
<S> <C> <C>
(10/2/92
through
3/31/00) 10.22% 9.35%
</TABLE>
The charts to the left show the growth in value of a hypothetical $10,000
investment in Investor A Shares of Nations Balanced Assets Fund from the
inception of the share class. Figures for the Standard & Poor's 500 Composite
Stock Price Index (Standard & Poor's 500 Index), an unmanaged index of 500
widely held common stocks, include reinvestment of dividends. Figures for the
Lehman Aggregate Bond Index, which is an unmanaged index comprised of the
Government Corporate Bond Index, the Asset-Backed Securities Index and the
Mortgage-Backed Securities Index and includes U.S. Treasury issues, agency
issues, corporate bond issues and mortgage-backed issues include reinvestment of
dividends. Funds included in the Lipper Balanced Funds Universe have a primary
objective of conserving principal by maintaining at all times a balanced
portfolio of both stocks and bonds. Typically, the stock/bond ratio ranges
around 60%/40%. It is not possible to invest in the Indexes or Lipper Universe.
The performance of Primary A, Investor B and Investor C Shares may vary based on
the differences in sales loads and fees paid by the shareholders investing in
each class.
[CHART LEGEND]
[INVESTOR A SHARES AT MOP* RETURN CHART]
<TABLE>
<CAPTION>
NATIONS|BALANCED|ASSETS STANDARD &|POOR'S
FUND|$19,533 LIPPER|BALANCED|FUNDS|UNIVERSE|$24,310 500|INDEX|$42,080
----------------------- -------------------------------------- -----------------
<S> <C> <C> <C>
Oct. 2|1992 9425 10000 10000
1992 9776 10396 10504
10179 10830 10963
10431 11003 11017
10659 11387 11301
1993 10726 11548 11563
10381 11178 11125
10050 11058 11172
10441 11387 11718
1994 10369 11269 11716
10955 11984 12857
11862 12862 14085
12491 13575 15204
1995 13070 14146 16120
13504 14523 16985
13864 14875 17748
14178 15279 18296
1996 14946 16114 19820
15148 16118 20351
16679 17786 23907
17997 18992 25695
1997 18137 19233 26432
19713 20706 30120
19408 20932 31114
17657 19590 28018
1998 19637 21817 33986
19444 22044 35682
20348 23005 38197
19182 22021 35810
1999 19614 23699 41138
Mar. 31|2000 19533 24310 42080
<CAPTION>
LEHMAN|AGGREGATE|BOND
INDEX|$15,846
---------------------
<S> <C>
Oct. 2|1992 10000
1992 10027
10441
10718
10998
1993 11004
10688
10578
10643
1994 10683
11222
11905
12138
1995 12655
12431
12502
12734
1996 13116
13042
13521
13970
1997 14380
14605
14947
15579
1998 15632
15554
15417
15522
1999 15503
Mar. 31|2000 15846
</TABLE>
[INVESTOR A SHARES AT NAV** RETURN CHART]
<TABLE>
<CAPTION>
NATIONS|BALANCED|ASSETS STANDARD &|POOR'S
FUND|$20,725 LIPPER|BALANCED|FUNDS|UNIVERSE|$24,310 500|INDEX|$42,080
----------------------- -------------------------------------- -----------------
<S> <C> <C> <C>
Oct. 2|1992 10000.00 10000.00 10000.00
1992 10372.00 10396.00 10504.00
10800.00 10830.00 10963.00
11067.00 11003.00 11017.00
11310.00 11387.00 11301.00
1993 11361.00 11548.00 11563.00
11014.00 11178.00 11125.00
10668.00 11058.00 11172.00
11078.00 11387.00 11718.00
1994 11001.00 11269.00 11716.00
11623.00 11984.00 12857.00
12585.00 12862.00 14085.00
13254.00 13575.00 15204.00
1995 13867.00 14146.00 16120.00
14328.00 14523.00 16985.00
14710.00 14875.00 17748.00
15043.00 15279.00 18296.00
1996 15858.00 16114.00 19820.00
15072.00 16118.00 20351.00
17697.00 17786.00 23907.00
19095.00 18992.00 25695.00
1997 19244.00 19233.00 26432.00
20916.00 20706.00 30120.00
20592.00 20932.00 31114.00
15734.00 19590.00 28018.00
1998 20835.00 21817.00 33986.00
20630.00 22044.00 35682.00
21589.00 23005.00 38197.00
20352.00 22021.00 35810.00
1999 20810.00 23699.00 41138.00
Mar. 31|2000 20725.00 24310.00 42080.00
<CAPTION>
LEHMAN|AGGREGATE|BOND
INDEX|$15,846
---------------------
<S> <C>
Oct. 2|1992 10000.00
1992 10027.00
10441.00
10718.00
10998.00
1993 11004.00
10688.00
10578.00
10643.00
1994 10683.00
11222.00
11905.00
12138.00
1995 12655.00
12431.00
12502.00
12734.00
1996 13116.00
13042.00
13521.00
13970.00
1997 14380.00
14605.00
14947.00
15579.00
1998 15632.00
15554.00
15417.00
15522.00
1999 15503.00
Mar. 31|2000 15846.00
</TABLE>
TOTAL RETURN (AS OF 3/31/00)
<TABLE>
<CAPTION>
INVESTOR A INVESTOR B INVESTOR C
PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Inception date 9/30/92 10/2/92 6/7/93 10/2/92
----------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 0.73% 0.47% -5.28% -0.30% -5.20% -0.27% -1.25%
----------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS 9.07% 8.85% 6.72% 8.07% 7.28% 8.09% 8.09%
5 YEARS 12.49% 12.27% 10.94% 11.55% 11.31% 11.59% 11.59%
SINCE INCEPTION 10.46% 10.22% 9.35% 9.44% 9.44% 9.49% 9.49%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of distributions.
*Figures at maximum offering price (MOP) reflect the maximum front-end sales
charge of 5.75%.
**Figures at net asset value (NAV) do not reflect any sales charges. Investor A
Shares are available with a reduced or waived sales charge only under certain
circumstances as described in the prospectus.
***Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
The performance shown includes the effect of fee waivers by the investment
adviser and the co-administrator, which have the effect of increasing total
return.
15
<PAGE> 20
NATIONS ASSET ALLOCATION FUND
EQUITY MANAGEMENT TEAM AND FIXED INCOME MANAGEMENT TEAM COMMENTARY*
<TABLE>
<S> <C>
IN THE FOLLOWING INTERVIEW, THE TEAMS SHARE THEIR VIEWS ON
NATIONS ASSET ALLOCATION FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 2000 AND THEIR OUTLOOK FOR THE
FUTURE.
PORTFOLIO MANAGEMENT PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE.
The Fund is managed by the Equity Within the stock component of the Fund, our intent is to
Management Team of Chicago Equity stay neutral to the market in terms of sector weightings and
Partners Corporation and the Fixed market capitalization. The Fund primarily invests in
Income Management Team of Banc of large-capitalization common stocks represented in the
America Capital Management, Inc., Standard & Poor's 500 Composite Stock Price Index (S&P 500
investment sub-advisers to the Index) as well as common stocks represented in the Standard
Fund. & Poor's MidCap 400 Index and the Standard & Poor's SmallCap
600 Index.*** We believe investment across the large-, mid-
INVESTMENT OBJECTIVE and small-cap market segments allows for greater
The Fund seeks to obtain long-term diversification and potentially lower volatility and higher
growth from capital appreciation, returns.
and dividend and interest income.
PERFORMANCE REVIEW We focus on individual stock selections. Our risk-controlled
For the 12-month period ended strategy is intended to ensure that the Fund is able to
March 31, 2000, Nations Asset fully benefit from the market's advances, despite the major
Allocation Fund Investor A Shares disparities in performance between sectors and the recent
provided shareholders with a total narrowness of the market. Within the framework of our
return of 10.65%.** disciplined process, we select securities that display what
we think are attractive valuations, while exhibiting
positive momentum and solid earnings quality.
The fixed income portion of the Fund is composed of
investment grade securities. The management of the fixed
income portion is based on the belief that returns and
consistency of returns are enhanced through a disciplined
risk management process that seeks to control interest rate
risk and emphasizes a quantitative approach to sector
allocation, sector rotation and relative value security
selection.
</TABLE>
*The outlook for this Fund may differ from that
presented for other Nations Funds mutual funds.
**The performance shown does not reflect the maximum
front-end sales charge of 5.75%, which may
apply to purchases of Investor A Shares. For
standardized performance, please refer to the
Performance
table.
***The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment.
The Standard & Poor's MidCap 400 Index is a
market-value weighted index that measures the market
value of 400 domestic stocks chosen for market size,
liquidity and industry representation. It is
unmanaged and unavailable for investment.
The Standard & Poor's SmallCap 600 Index is a
market-capitalization-weighted index consisting of
600 common stocks that capture the economic and
industry characteristics of small-company stock
performance. It is unmanaged and unavailable for
investment.
Source for all statistical data -- Banc of America
Capital Management, Inc. and Chicago Equity
Partners Corporation.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
16
<PAGE> 21
NATIONS ASSET ALLOCATION FUND
EQUITY MANAGEMENT TEAM AND FIXED INCOME
MANAGEMENT TEAM COMMENTARY continued
<TABLE>
<S> <C>
PLEASE COMMENT ON THE FUND'S PERFORMANCE
For the 12 months ended March 31, 2000, the Fund (Investor A
Shares) had a total return of 10.65%. The Fund measures its
performance against two benchmarks, the S&P 500 Index and
the Lehman Aggregate Bond Index+, which returned 17.94% and
1.88%, respectively. The Fund's asset allocation as of March
31, 2000, was 59% to equity, 23% to fixed income and 18% to
cash and cash equivalents.++
WHAT PARTICULAR EQUITY SECTORS OR STOCKS PROVED FAVORABLE
FOR THE FUND, AND WHAT SECTORS PROVED UNFAVORABLE?
The Fund benefited primarily from its holdings in the
technology sector. In the large-cap segment, QUALCOMM Inc.,
Oracle Corporation and Cisco Systems, Inc. produced
triple-digit returns as investors flocked towards the "new
economy" companies. The same story was true for mid- and
small-company stocks, with companies such as PMC-Sierra,
Inc., Three-five Systems, Inc. and Qlogic Corporation each
returning above 700%. Sectors that lagged were health care
and transportation. Price-cutting hurt the profits of major
drug companies while higher energy costs adversely affected
transportation companies.
WHAT FACTORS AFFECTED THE PERFORMANCE OF THE BOND PORTION OF
THE PORTFOLIO?
Despite the bond market's volatility, we remained faithful
to our strategy of maximizing the yield of the portfolio
while minimizing its risk relative to the benchmark. While
this may cause some interim performance volatility, we
believe the strategy will produce superior returns over
time. The portfolio's strategic overweighting of the
corporate bond and mortgage-backed securities sectors helped
performance in a difficult environment.
WHAT ECONOMIC FACTORS MOST INFLUENCED THE FUND'S
PERFORMANCE?
Rising interest rates most influenced performance. The U.S.
economy remained healthy throughout the year, but fears of
rising inflation helped increase interest rates as the year
wore on. Investors remained cautious on the outlook for
continued economic growth, specifically for the "old
economy" stocks, as they appeared more affected by the
volatility of interest rates than their "new economy"
brethren.
WHAT IS YOUR OUTLOOK FOR THE YEAR AHEAD IN THE EQUITY
MARKET?
As we enter the tenth year of economic prosperity, the U.S.
economy remains remarkably healthy in spite of higher
interest rates and tight labor conditions. We anticipate
that the U.S. economy will continue to grow, though we
believe the growth to be more moderate than in recent
months.
</TABLE>
+The Lehman Aggregate Bond Index is an unmanaged
index composed of the Government Corporate Bond
Index, the Asset-Backed Securities Index and the
Mortgage-Backed Securities Index and includes
U.S. Treasury issues, agency issues, corporate bond
issues and mortgage-backed issues. It includes
reinvestment of dividends and is unavailable for
investment.
++Portfolio holdings and characteristics are subject
to change and may not be representative of current
holdings and characteristics.
17
<PAGE> 22
NATIONS ASSET ALLOCATION FUND
EQUITY MANAGEMENT TEAM AND FIXED INCOME
MANAGEMENT TEAM COMMENTARY continued
<TABLE>
<S> <C>
In the stock market, the S&P 500 Index has recorded a record
20% annual return for the last five years and most
prognosticators believe that pace will not continue. The
continued discrepancies in valuations between the largest 50
stocks and the rest of the stock market defy historical
averages. We believe these discrepancies favoring the
largest stocks are unlikely to be sustained.
Of course, neither we nor anyone else can predict exact
changes in the markets. We plan to continue our
diversification strategy of investing in large-, mid- and
small-cap stocks. Our goal is to add value through security
selection, while attempting to neutralize risk factors such
as market timing and sector rotation, for which there is not
adequate compensation by the market.
WHAT INVESTMENT OPPORTUNITIES DO YOU ANTICIPATE IN THE FIXED
INCOME MARKET, AND HOW ARE YOU POSITIONING THE PORTFOLIO?
On the fixed income side, our expectations are for the
Federal Reserve Board to continue to raise interest rates to
slow the U.S. economy at least one more time -- to 6.25%.
While there is a risk of additional rate increases, the
recent volatility in the stock market should help to dampen
consumer confidence and U.S. GDP (gross domestic product)
growth.
The yield advantages -- or "spreads" -- of corporate,
mortgage-backed and asset-backed securities over the yields
of U.S. Treasuries are higher than at any point since the
recession of 1991. We expect to continue to add incremental
exposure to corporate bonds, mortgage-backed and
asset-backed securities as these yield advantages grow
larger. We believe that once the markets stabilize, these
sectors could enhance the returns of the portfolio.
</TABLE>
18
<PAGE> 23
NATIONS ASSET ALLOCATION FUND
PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/00)
[PIE CHART]
<TABLE>
<S> <C>
Other 50.4%
U.S. Treasury strips 3.2
Drugs 3.7
Banking and finance 4.0
Banking 4.3
Computer related 4.3
Utilities - Telephone 4.5
Semiconductors 4.7
Computer software 5.3
Commercial mortgage-backed securities 7.5
Federal National Mortgage Association (FNMA) certificates 8.1
</TABLE>
<TABLE>
<C> <S> <C>
TOP 10 HOLDINGS
-------------------------------------------------
1 Cisco Systems, Inc. 2.6%
-------------------------------------------------
2 Microsoft Corporation 2.3%
-------------------------------------------------
3 General Electric Company 1.9%
8.000% 11/01/29 1.8%
-------------------------------------------------
4 Intel Corporation 1.4%
-------------------------------------------------
5 Citigroup Inc. 1.4%
-------------------------------------------------
6 Wal-Mart Stores, Inc. 1.3%
6.500% 04/01/29 1.2%
-------------------------------------------------
7 MCI Worldcom, Inc. 1.2%
-------------------------------------------------
8 Oracle Corporation 1.1%
-------------------------------------------------
9 Texas Instruments Inc. 1.1%
-------------------------------------------------
10 Chase Manhattan Corporation 1.1%
-------------------------------------------------
THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
PORTFOLIO HOLDINGS WERE CURRENT
AS OF MARCH 31, 2000, ARE
SUBJECT TO CHANGE AND MAY NOT BE
REPRESENTATIVE OF CURRENT HOLDINGS.
19
<PAGE> 24
NATIONS ASSET ALLOCATION FUND
PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN
Investor A Shares
<TABLE>
<CAPTION>
SINCE INCEPTION NAV** MOP*
<S> <C> <C>
(1/8/94 through
3/31/00) 15.32% 14.22%
</TABLE>
The charts to the left show the
growth in value of a
hypothetical $10,000 investment
in Investor A Shares of Nations
Asset Allocation Fund from the
inception of the share class.
Figures for the Standard &
Poor's 500 Composite Stock Price
Index (Standard & Poor's 500
Index), an unmanaged index of
500 widely held common stocks,
include reinvestment of
dividends. Figures for the
Lehman Aggregate Bond Index,
which is an unmanaged index
comprised of the
Government/Corporate Bond Index,
the Asset-Backed Securities
Index and the Mortgage-Backed
Securities Index and includes
U.S. Treasury issues, agency
issues, corporate bond issues
and mortgage-backed issues,
include reinvestment of
dividends. Funds included in the
Lipper Balanced Funds Universe
have a primary objective of
conserving principal by
maintaining at all times a
balanced portfolio of both
stocks and bonds. Typically, the
stock/bond ratio ranges around
60%/40%. It is not possible to
invest in the Indexes or Lipper
Universe. The performance of
Primary A, Investor B, Investor
C and Seafirst Shares may vary
based on the differences in
sales loads and fees paid by the
shareholders investing in each
class.
[LINE GRAPH]
INVESTOR A SHARES AT MOP* RETURN CHART
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
NATIONS ASSET
ALLOCATION FUND LIPPER BALANCED FUNDS STANDARD & POOR'S LEHMAN AGGREGATE
$22,795 UNIVERSE $21,051 500 INDEX $36,392 BOND INDEX $14,400
--------------- --------------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Jan. 8 1994 9425 10000 10000 10000
9095 9679 9621 9713
8978 9575 9661 9613
9284 9860 10134 9672
9295 9758 10132 9708
9999 10377 11119 10198
10795 11138 12180 10819
11297 11755 13149 11031
1995 11796 12249 13940 11501
12099 12575 14689 11297
12377 12881 15349 11361
12747 13230 15823 11572
13644 13954 17141 11919
13772 13956 17600 11852
15371 15401 20675 12287
16158 16445 22221 12695
1997 16558 16654 22859 13068
17976 17930 26048 13272
18587 18125 26908 13583
17780 16963 24230 14157
20051 18892 29391 14205
20602 19088 30858 14134
21214 19921 33034 14010
20385 19068 30969 14105
1999 22278 20521 35577 14088
Mar. 31 2000 22795 21051 36392 14400
</TABLE>
[LINE GRAPH]
INVESTOR A SHARES AT NAV** RETURN CHART
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
NATIONS ASSET
ALLOCATION FUND LIPPER BALANCED FUNDS STANDARD & POOR'S LEHMAN AGGREGATE
$24,186 UNIVERSE $21,051 500 INDEX $36,392 BOND INDEX $14,400
--------------- --------------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Jan. 8 1994 10000 10000 10000 10000
9650 9679 9621 9713
9526 9575 9661 9613
9850 9860 10134 9672
9862 9758 10132 9708
10609 10377 11119 10198
11453 11138 12180 10819
11986 11755 13149 11031
1995 12516 12249 13940 11501
12837 12575 14689 11297
13132 12881 15349 11361
13525 13230 15823 11572
14476 13954 17141 11919
14612 13956 17600 11852
16308 15401 20675 12287
17143 16445 22221 12695
1997 17569 16654 22859 13068
19072 17930 26048 13272
19721 18125 26908 13583
18865 16963 24230 14157
21274 18892 29391 14205
21859 19088 30858 14134
22508 19921 33034 14010
21628 19068 30969 14105
1999 23638 20521 35577 14088
Mar. 31 2000 24186 21051 36392 14400
</TABLE>
TOTAL RETURN (AS OF 3/31/00)
<TABLE>
<CAPTION>
INVESTOR A INVESTOR B++
PRIMARY A+ SEAFIRST NAV** MOP* NAV** CDSC***
<S> <C> <C> <C> <C> <C> <C>
Inception date 5/21/99 3/7/88 1/8/94 7/15/98
---------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 12.18% 10.92% 10.65% 4.27% 9.77% 4.77%
---------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS 18.84% 18.44% 18.30% 15.99% 17.82% 17.10%
5 YEARS 18.24% 18.03% 17.92% 16.53% 17.64% 17.43%
10 YEARS 13.44%
SINCE INCEPTION 15.57% 13.37% 15.32% 14.22% 15.09% 15.09%
<CAPTION>
INVESTOR C
NAV** CDSC***
<S> <C> <C> <C>
Inception date 11/11/96
-----------------------------------------------------
1 YEAR PERFORMANCE 9.75% 8.75%
-----------------------------------------------------------
AVERAGE ANNUAL RETURN
3 YEARS 17.48% 17.48%
5 YEARS
10 YEARS
SINCE INCEPTION 16.05% 16.05%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of distributions.
*Figures at maximum offering price (MOP) reflect the maximum front-end sales
charge of 5.75%.
**Figures at net asset value (NAV) do not reflect any sales charges. Investor A
Shares are available with a reduced or waived sales charge only under certain
circumstances as described in the prospectus.
***Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
+Primary A Shares commenced operations on May 21, 1999 and have no performance
prior to that date. Performance prior to May 21, 1999 is that of Investor A
Shares at NAV, which reflects shareholder servicing and/or 12b-1 fees of 0.25%.
These fees are not applicable to Primary A Shares.
++Investor B Shares commenced operations on July 15, 1998 and have no
performance prior to that date. Performance prior to July 15, 1998 is that of
Investor A Shares at NAV, which reflects shareholder servicing and/or 12b-1 fees
of 0.25%. If Investor B Shares had been reflected, total returns would have been
lower.
The performance shown includes the effect of fee waivers by the investment
adviser and the co-administrator, which have the effect of increasing total
return.
20
<PAGE> 25
NATIONS EQUITY INCOME FUND
GROWTH STRATEGIES TEAM COMMENTARY*
<TABLE>
<S> <C>
IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON
NATIONS EQUITY INCOME FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 2000 AND ITS OUTLOOK FOR THE FUTURE.
PORTFOLIO MANAGEMENT PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE.
The Fund is managed by the Growth Nations Equity Income Fund's approach is based on the
Strategies Team of Banc America premise that companies' stock prices are more volatile than
Capital Management, Inc., their underlying business fundamentals and that active
investment sub-adviser to the security selection improves performance over time. We also
Fund. believe that proprietary research is a critical component of
investment success and that opportunities are best uncovered
INVESTMENT OBJECTIVE by a constant search for new information. In addition, we
The Fund seeks current income and believe that the reward for assuming risk varies over time.
growth of capital by investing in As a result, in our view, dynamic risk management should
companies with above-average increase performance consistency.
dividend yields.
PERFORMANCE REVIEW The Fund employs a strategy of investing in companies with
For the 12-month period ended above-average current income yields or the potential for
March 31, 2000, Nations Equity significantly higher yields in the future. Typically, the
Income Fund Investor A Shares investments chosen for the Fund are mature, successful
provided shareholders with a total businesses. We also invest in a number of different
return of 4.26%** industries to achieve diversification. Overall, we look to
construct a portfolio with a yield well above that of the
Standard & Poor's 500 Composite Stock Price Index (S&P 500
Index)*** and with below-average volatility in performance.
In seeking to achieve satisfactory levels of return, we
analyze firms to identify growth at a reasonable price.
PLEASE COMMENT ON THE FUND'S PERFORMANCE.
The Fund (Investor A Shares) returned 4.26% for the fiscal
year during a period when yield-oriented equity strategies
were not in favor as investors sought out growth stocks,
particularly in technology, that displayed strong upward
price momentum. Many technology stocks pay low, or even no,
dividends to shareholders. The Fund outperformed its peer
group, the Lipper Equity Income Funds Universe, which
returned 3.04%.+
</TABLE>
*The outlook for this Fund may differ from that
presented for other Nations Funds mutual funds.
**The performance shown does not reflect the maximum
front-end sales charge of 5.75%, which may apply to
purchases of Investor A Shares. For standardized
performance, please refer to the Performance table.
The performance shown includes the effect of fee
waivers by the investment adviser and the co-
administrator, which have the effect of increasing
total return.
***The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment.
+Lipper Inc., is an independent mutual fund
performance monitor. Funds included in the Lipper
Equity Income Funds Universe seek relatively high
current income and growth of income through investing
65% or more of their portfolios in dividend paying
equity securities.
Source for all statistical data: Banc of America
Capital Management, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
21
<PAGE> 26
NATIONS EQUITY INCOME FUND
GROWTH STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
WHAT ECONOMIC FACTORS OR MARKET OCCURRENCES MOST INFLUENCED
THE FUND'S PERFORMANCE?
The economy continued to grow at a strong pace, while
inflation remained at a modest level. The Federal Reserve
Board continued its inflation vigil, and raised interest
rates several times in what were deemed to be pre-emptive
moves. The stock market continued to be dominated by growth
stocks, particularly technology and communications services
companies. In fact, a very narrow group of large-
capitalization, highly priced stocks propelled the market
forward, leaving more undervalued companies we consider to
have more attractive valuation measures in their wake. Many
of these large-cap, high priced companies did not fit the
valuation criteria used in Nations Equity Income Fund. As we
noted earlier, the Fund's focus is on generating
above-average current income and many of the best performing
stocks paid little or no dividend yield.
WHAT PARTICULAR SECTORS OR STOCKS PROVED FAVORABLE FOR THE
FUND?
As expected, the stocks in the technology sector performed
the best, rising 49%. Because of our focus on current
income, however, we maintained a below-market exposure to
low-yielding technology issues. This hurt overall relative
performance.
Outside of the technology sector, many of the Fund's stocks
performed well relative to their industry colleagues but
poorly versus the technology-dominated S&P 500 Index.
WHAT PARTICULAR SECTORS OR STOCKS WERE UNFAVORABLE FOR THE
FUND?
Due to the narrowness of the market, virtually every sector
other than technology underperformed the market.
Particularly out of favor were many higher yielding "old
economy" cyclical companies such as those found in the basic
materials, capital goods and consumer cyclicals sectors.
This reflected a market of tremendous momentum, not a market
where factors like corporate fundamentals, valuation or cash
flow were recognized. We believe a large number of stocks
today offer a compelling blend of income and growth. We
think that significant opportunity awaits investors who
follow a patient and disciplined strategy in the coming
year.
WHAT INVESTMENT OPPORTUNITIES DO YOU ANTICIPATE IN THE
COMING YEAR, AND HOW ARE YOU POSITIONING THE FUND TO TAKE
ADVANTAGE OF THESE OPPORTUNITIES?
First, we believe the tremendous rally in technology stocks
will dissipate over the coming year. Stocks in this sector
are now selling, on average, at incredibly high levels
relative to what we feel are their sustainable growth rates.
Therefore, we will continue to underweight the sector
relative to the market (S&P 500 Index).
Second, we expect improvement in the economies of our global
trading partners -- Europe, Asia (ex-Japan) and Latin
America -- this year and beyond. This should enhance the
profits of commodity-based companies, such as Alcoa Inc.,
E.I. duPont de Nemours and Company and Weyerhaeuser Company.
Multinational conglomerates such as General Electric
Company, Honeywell International Inc. and Emerson Electric
Company should generate strong earnings gains. They should
be able to benefit from positive economic globalization
trends, yet their stocks are selling substantially below
their potential earnings power and dividend-paying
capabilities.
</TABLE>
22
<PAGE> 27
NATIONS EQUITY INCOME FUND
GROWTH STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
Finally, the Fund has broad representation in many other
"blue chip" industrial companies that are using today's
technological revolution as a means to improve profitability
or growth. We believe that this diversified exposure should
serve our investors well by providing above-average income,
capital growth, and below-market performance volatility.
</TABLE>
23
<PAGE> 28
NATIONS EQUITY INCOME FUND
PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/00)
[PIE CHART]
<TABLE>
<S> <C>
Networking equipment and products 5.6%
Semiconductors 6.2%
Drugs 6.5%
Computer related 6.6%
Oil - International 7.5%
Utilities - Telephone 9.2%
Other 40.7%
Retail - General 4.0%
Manufacturing 4.4%
Banking 4.6%
Computer software 4.7%
</TABLE>
<TABLE>
<C> <S> <C>
TOP 10 HOLDINGS
-------------------------------------------------
1 Intel Corporation 4.9%
-------------------------------------------------
2 Microsoft Corporation 4.7%
-------------------------------------------------
3 General Electric Company 4.4%
-------------------------------------------------
4 Cisco Systems, Inc. 4.0%
-------------------------------------------------
5 Exxon Mobil Corporation 3.0%
-------------------------------------------------
6 International Business Machines
Corporation 2.9%
-------------------------------------------------
7 GTE Corporation 2.3%
-------------------------------------------------
8 American International Group, Inc. 2.2%
-------------------------------------------------
9 Citigroup Inc. 2.2%
-------------------------------------------------
10 Wal-Mart Stores, Inc. 2.2%
-------------------------------------------------
THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
PORTFOLIO HOLDINGS WERE CURRENT
AS OF MARCH 31, 2000, ARE
SUBJECT TO CHANGE AND MAY NOT BE
REPRESENTATIVE OF CURRENT HOLDINGS.
24
<PAGE> 29
NATIONS EQUITY INCOME FUND
PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN
Investor A Shares
<TABLE>
<CAPTION>
SINCE INCEPTION NAV** MOP*
<S> <C> <C>
(4/16/91
through
3/31/00) 12.08% 11.35%
</TABLE>
The charts to the left show the
growth in value of a
hypothetical $10,000 investment
in Investor A Shares of Nations
Equity Income Fund from the
inception of the share class.
Figures for the Standard &
Poor's 500 Composite Stock Price
Index (Standard & Poor's 500
Index), an unmanaged index of
500 widely held common stocks,
include reinvestment of
dividends. Funds included in the
Lipper Equity Income Funds
Universe seek relatively high
current income and growth of
income through investing 65% or
more of their portfolios in
equities. It is not possible to
invest in the Index or Lipper
Universe. The performance of
Primary A, Investor B and
Investor C Shares may vary based
on the differences in sales
loads and fees paid by the
shareholders investing in each
class.
[LINE GRAPH]
INVESTOR A SHARES AT MOP* (AS OF 3/31/00)
Assumes the reinvestment of all distributions.
<TABLE>
<S> <C>
Nations Equity Income Funds
Apr. 16 1991 9425
9321
10007
1991 10740
10650
10927
11376
1992 11790
12398
12486
12946
1993 13259
12729
12960
13451
1994 13087
14197
15051
15962
1995 16667
17614
18250
18746
1996 19939
20311
22735
24985
1997 25068
27810
26584
22716
1998 25944
25124
27815
25487
1999 26623
Mar. 31 2000 26192
<S> <C>
Standard & Poor's 500 Index
Apr. 16 1991 10000
9625
10140
1991 10990
10712
10915
11259
1992 11826
12343
12404
12724
1993 13019
12526
12578
13193
1994 13191
14475
15858
17118
1995 18149
19124
19982
20600
1996 22316
22914
26917
28930
1997 29760
33912
35031
31545
1998 38265
40174
43006
40318
1999 46318
Mar. 31|2000 47378
</TABLE>
INVESTOR A SHARES AT NAV** (AS OF 3/31/00)
Assumes the reinvestment of all distributions.
<TABLE>
<S> <C>
Nations Equity Income Funds
Apr. 16 1991 10000
9890
10618
1991 11395
11299
11593
12070
1992 12509
13154
13248
13735
1993 14068
13505
13751
14272
1994 13885
15063
15970
16936
1995 17684
18689
19363
19890
1996 21155
21551
24122
26510
1997 26597
29507
28206
24102
1998 27527
26657
29512
27042
1999 28248
Mar. 31 2000 27790
<S> <C>
Standard & Poor's 500 Index
Apr. 16 1991 10000
9625
10140
1991 10990
10712
10915
11259
1992 11826
12343
12404
12724
1993 13019
12526
12578
13193
1994 13191
14475
15858
17118
1995 18149
19124
19982
20600
1996 22316
22914
26917
28930
1997 29760
33912
35031
31545
1998 38265
40174
43006
40318
1999 46318
Mar. 31 2000 47378
</TABLE>
TOTAL RETURN (AS OF 3/31/00)
<TABLE>
<CAPTION>
INVESTOR A INVESTOR B INVESTOR C
PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Inception date 4/11/91 4/16/91 6/7/93 6/17/92
---------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 4.51% 4.26% -1.73% 3.43% -1.57% 3.46% 2.46%
---------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS 9.12% 8.85% 6.72% 8.05% 7.24% 8.21% 8.21%
5 YEARS 13.30% 13.03% 11.70% 12.30% 12.05% 12.43% 12.43%
SINCE INCEPTION 12.42% 12.08% 11.35% 10.94% 10.94% 11.44% 11.44%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of distributions.
*Figures at maximum offering price (MOP) reflect the maximum front-end sales
charge of 5.75%.
**Figures at net asset value (NAV) do not reflect any sales charges. Investor A
Shares are available with a reduced or waived sales charge only under certain
circumstances as described in the prospectus.
***Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
The performance shown includes the effect of fee waivers by the investment
adviser and the co-administrator, which have the effect of increasing total
return.
25
<PAGE> 30
NATIONS VALUE FUND
VALUE STRATEGIES TEAM COMMENTARY*
<TABLE>
<S> <C>
IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON
NATIONS VALUE FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD
ENDED MARCH 31, 2000 AND ITS OUTLOOK FOR THE FUTURE.
PORTFOLIO MANAGEMENT PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE.
The Fund is managed by the Value The investment philosophy of Nations Value Fund is based on
Strategies Team of Banc of America the premise that companies' stock prices are more volatile
Capital Management, Inc., than their underlying business fundamentals and that active
investment sub-adviser to the security selection improves performance over time. We also
Fund. believe that proprietary research is a critical component of
INVESTMENT OBJECTIVE investment success and that opportunities are uncovered by a
The Fund seeks growth of capital constant search for new information. The reward for assuming
by investing in companies that are risk varies over time, therefore dynamic risk management
believed to be undervalued. increases performance consistency.
PERFORMANCE REVIEW Within this framework, the Fund follows a value approach in
For the 12-month period ended which the management team seeks superior returns by
March 31, 2000, Nations Value Fund investing in sound, proven businesses that are considered
Investor A Shares provided inexpensive relative to their intrinsic value. This approach
shareholders with a total return also reflects a long-term view of value investing with its
of -0.47%.** potential long-term rewards.
PLEASE COMMENT ON THE FUND'S PERFORMANCE.
The Fund's return was essentially flat for the 12 month
period, compared to the 17.94% return of the Standard &
Poor's 500 Composite Stock Price Index (S&P 500 Index).***
The S&P 500 Index's return tended to be driven by the
superior performance of a few, highly priced growth
companies, predominately in the technology industry. Value
stocks, which the Fund emphasizes, tended to be out of favor
during the period.
</TABLE>
*The outlook for this Fund may differ from that
presented for other Nations Funds mutual funds.
**The performance shown does not reflect the maximum
front-end sales charge of 5.75%, which may
apply to purchases of Investor A Shares. For
standardized performance, please refer to the
"Performance table." The performance shown includes
the effect of fee waivers by the investment
adviser and the co-administrator, which have the
effect of increasing total return.
***The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment.
Source for all statistical data -- Banc of America
Capital Management, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
26
<PAGE> 31
NATIONS VALUE FUND
VALUE STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
WHAT ECONOMIC FACTORS OR MARKET OCCURRENCES INFLUENCED THE
FUND'S PERFORMANCE?
The economy continued to grow at a strong pace, while
inflation remained at a modest level. The Federal Reserve
Board continued its inflation vigil and raised interest
rates several times as pre-emptive moves. During the fiscal
year ended March 31, 2000, the stock market was again
dominated by growth stocks, particularly technology and
communications services companies. In fact, the market
propelled a very narrow group of large-capitalization,
high-priced stocks forward, leaving in their wake more
undervalued companies we consider to have more attractive
valuation measures. Momentum investing carried the day, as
investors continued to flock to very highly valued
technology and communication stocks. Many of these companies
did not fit into the valuation criteria used by Nations
Value Fund. As we noted earlier, the Fund's focus is on
intrinsic value measures.
WHAT PARTICULAR SECTORS OR STOCKS PROVED FAVORABLE FOR THE
FUND?+
As expected, the portfolio's technology holdings performed
the best, rising 93.4% compared to 78.4% for the technology
sector of the S&P 500 Index. However, we believed it prudent
to continue to take profits in these companies as they
reached their price objectives. Consequently, we reduced the
Fund's weighting in the sector throughout the year. As of
March 31, 2000, the Fund's technology weighting was 15.2%,
compared to a 34.0% sector weighting for the S&P 500 Index.
The Fund's holdings during the year included Apple Computer,
Inc. which gained 278%, and Sun Microsystems, which gained
nearly 200%. Currently, holdings include International
Business Machines Corporation, Xerox Corporation and Pitney
Bowes, Inc. We believe these are more traditional,
undervalued companies selling substantially below their fair
value, with catalysts for improvement over the next 12 to 18
months.
The financial sector's weighting at the end of the period
was 16.8%, representing the largest portion of the Fund's
assets. This sector within the S&P 500 Index declined about
1% for the year, as interest rates continued to move upward.
We believe valuations are compelling, particularly in the
large, money center banks such as Citigroup Inc. and Chase
Manhattan Corporation. We also were attracted to Mellon
Financial Corporation, a well-diversified, regional bank
holding company and Paine Webber Group, Inc., a brokerage
firm we think undervalued. We believe these companies will
perform well, assuming the Federal Reserve Board completes
its moves tightening the money supply over the next several
quarters.
</TABLE>
+Portfolio holdings and characteristics are subject
to change and may not be representative of current
holdings and characteristics.
27
<PAGE> 32
NATIONS VALUE FUND
VALUE STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
WHAT PARTICULAR SECTORS OR STOCKS WERE UNFAVORABLE FOR THE
FUND?
Due to the narrowness of the market, virtually every sector
except technology underperformed the market. The sectors
particularly out of favor included cyclical companies,
including those found in basic materials, capital goods and
consumer cyclicals. This lack of investor interest in these
industries reflected a market favoring momentum over
valuation. We believe, however, that these cyclical sectors
should benefit as the global economies improve. This should
offer significant opportunities for investors, as we believe
value investing will move back into favor over the coming
year.
WHAT INVESTMENT OPPORTUNITIES DO YOU ANTICIPATE IN THE
COMING YEAR AND HOW ARE YOU POSITIONING THE FUND TO TAKE
ADVANTAGE OF THESE OPPORTUNITIES?
First, we believe the tremendous increase in technology
stocks will dissipate over the coming year because stocks in
this sector are now selling, on average, at incredibly high
levels relative to their sustainable growth rates.
Therefore, we have underweighted the sector relative to the
market (S&P 500 Index), and have major representation in
just stocks such as IBM, Xerox and Pitney Bowes that should
continue to perform well with strong dominance in their
respective markets.
Second, we have overweighted the financial sector. When
viewed from a demographic as well as from a bottom-up,
valuation approach, we believe these companies represent
substantial opportunity for the long-term investor. Third,
we expect improvement in the economies of our global trading
partners, Europe, Asia (ex-Japan) and Latin America in 2000
and beyond. This should enhance the profits of
commodity-based companies such as Alcoa, Nucor and
Weyerhaeuser. Multi-national conglomerates such as United
Technologies, Honeywell, Rockwell International and Emerson
Electric should generate strong earnings gains as they are
able to benefit from positive economic globalization trends.
These stocks are now selling substantially below their
potential earnings power and dividend-paying capabilities.
</TABLE>
28
<PAGE> 33
NATIONS VALUE FUND
PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/00)
[PIE CHART]
<TABLE>
<S> <C>
Other 51.3%
Banking 8.1%
Utilities - Telephone 8.0%
Financial services 5.3%
Oil - International 4.6%
Drugs 4.1%
Conglomerate 4.0%
Automobiles and trucks 3.9%
Energy 3.6%
Computer related 3.6%
Insurance 3.5%
</TABLE>
<TABLE>
<C> <S> <C>
TOP 10 HOLDINGS
-------------------------------------------------
1 Exxon Mobil Corporation 3.0%
-------------------------------------------------
2 Chase Manhattan Corporation 2.9%
-------------------------------------------------
3 Citigroup Inc. 2.6%
-------------------------------------------------
4 United Technologies Corporation 2.3%
-------------------------------------------------
5 Honeywell International Inc. 2.3%
-------------------------------------------------
6 Bristol-Myers Squibb Company 2.2%
-------------------------------------------------
7 Lincoln National Corporation Ltd. 2.2%
-------------------------------------------------
8 Mellon Financial Corporation 2.2%
-------------------------------------------------
9 Ford Motor Company 2.1%
-------------------------------------------------
10 Target Corporation 2.1%
-------------------------------------------------
THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
PORTFOLIO HOLDINGS WERE CURRENT
AS OF MARCH 31, 2000, ARE
SUBJECT TO CHANGE AND MAY NOT BE
REPRESENTATIVE OF CURRENT HOLDINGS.
29
<PAGE> 34
NATIONS VALUE FUND
PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN
Investor A Shares
<TABLE>
<CAPTION>
NAV** MOP*
SINCE INCEPTION
<S> <C> <C>
(12/6/89
through
3/31/00) 13.77% 13.12%
</TABLE>
The charts to the left show the
growth in value of a
hypothetical $10,000 investment
in Investor A Shares of Nations
Value Fund from the inception of
the share class. Figures for the
Standard & Poor's 500 Composite
Stock Price Index (Standard &
Poor's 500 Index), an unmanaged
index of 500 widely held common
stocks, include reinvestment of
dividends. Funds included in the
Lipper Multi-Cap Value Funds
Universe invest in a variety of
market capitalization ranges and
invest in companies considered
to be undervalued. It is not
possible to invest in the Index
or Lipper Universe. The
performance of Primary A,
Investor B and Investor C Shares
may vary based on the
differences in sales loads and
fees paid by the shareholders
investing in each class.
[LINE GRAPH]
INVESTOR A SHARES AT MOP* (AS OF 3/31/00)
Assumes the reinvestment of all distributions.
<TABLE>
<S> <C>
Nations Value Fund
Mar. 31 1990 9425
9916
8716
1990 9685
10985
10983
11466
1991 12191
12262
12327
12461
1992 13059
13682
13997
14613
1993 15156
14762
14643
14891
1994 14687
16052
17657
19068
1995 19943
20934
21751
22281
1996 24102
24661
27773
30953
1997 30439
34083
34063
29866
1998 35657
35433
38115
34776
1999 36010
Mar. 31 2000 35269
<S> <C>
Standard & Poor's 500 Index
Mar. 31 1990 10000
10629
9169
1990 9990
11442
11415
12026
1991 13034
12704
12945
13353
1992 14026
14639
14711
15090
1993 15441
14855
14918
15647
1994 15644
17168
18807
20303
1995 21525
22681
23699
24431
1996 26466
27176
31923
34311
1997 35296
40220
41547
37413
1998 45382
47647
51006
47818
1999 54933
Mar. 31 2000 56191
</TABLE>
[LINE GRAPH]
INVESTOR A SHARES AT NAV** (AS OF 3/31/00)
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
STANDARD & POOR'S 500 LIPPER MULTI-CAP VALUE
NATIONS VALUE FUND INDEX FUNDS UNIVERSE
-------------------------- --------------------- ----------------------
<S> <C> <C> <C>
Mar. 31 1990 10000 10000 10000
10521 10629 10399
9248 9169 8956
1990 10276 9990 9630
11655 11442 11049
11653 11415 11042
12166 12026 11622
1991 12935 13034 12367
13010 12704 12520
13079 12945 12587
13221 13353 12911
1992 13856 14026 13738
14517 14639 14480
14851 14711 14652
15504 15090 15234
1993 16081 15441 15606
15663 14855 15195
15536 14918 15194
15800 15647 15829
1994 15584 15644 15528
17031 17168 16819
18734 18807 18181
20231 20303 19528
1995 21160 21525 20380
22211 22681 21526
23078 23699 22106
23641 24431 22699
1996 25572 26466 24564
26166 27176 24886
29468 31923 28196
32842 34311 31007
1997 32297 35296 30920
36162 40220 34315
36141 41547 33790
31688 37413 29087
1998 37833 45382 33706
37594 47647 33568
40440 51006 37218
36898 47818 33500
1999 38207 54933 35711
Mar. 31 2000 37420 56191 36211
</TABLE>
TOTAL RETURN (AS OF 3/31/00)
<TABLE>
<CAPTION>
INVESTOR A INVESTOR B INVESTOR C
PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Inception date 9/19/89 12/6/89 6/7/93 6/17/92
-----------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE -0.16% -0.47% -6.20% -1.24% -5.68% -1.18% -2.07%
-----------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS 12.94% 12.67% 10.46% 11.82% 11.09% 12.01% 12.01%
5 YEARS 17.34% 17.05% 15.67% 16.30% 16.08% 16.45% 16.45%
10 YEARS 14.31% 14.11% 13.43%
SINCE INCEPTION 13.70% 13.77% 13.12% 14.09% 14.09% 14.13% 14.13%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of distributions.
*Figures at maximum offering price (MOP) reflect the maximum front-end sales
charge of 5.75%.
**Figures at net asset value (NAV) do not reflect any sales charges. Investor A
Shares are available with a reduced or waived sales charge only under certain
circumstances as described in the prospectus.
***Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
The performance shown includes the effect of fee waivers by the investment
adviser and the co-administrator, which have the effect of increasing total
return.
30
<PAGE> 35
NATIONS LARGECAP INDEX FUND
QUANTITATIVE STRATEGIES TEAM COMMENTARY*
<TABLE>
<S> <C>
IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON
NATIONS LARGECAP INDEX FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 2000 AND ITS OUTLOOK FOR THE FUTURE.
PORTFOLIO MANAGEMENT PLEASE DESCRIBE THE FUND'S INVESTMENT STYLE AND PHILOSOPHY.
The Fund is managed by the The Fund invests in the stocks that comprise the S&P 500
Quantitative Strategies Team of Index, an unmanaged market-capitalization-weighted index
Banc of America Capital consisting of 500 common stocks chosen for market size,
Management, Inc., investment liquidity and industry group representation.
sub-adviser to the Fund. HOW DID THE FUND PERFORM UNDER THE MARKET CONDITIONS THAT
INVESTMENT OBJECTIVE PREVAILED OVER THE PAST 12 MONTHS?
The Fund seeks investment results Nations LargeCap Index Fund (Investor A Shares) tracked the
that (before fees and expenses) S&P 500 Index for the 12 months ended March 31, 2000,
correspond to the total return of returning 17.32%, while the Index returned 17.94%. The stock
the Standard & Poor's 500 market performed well during the 12-month period, driven by
Composite Stock Price Index (S&P low inflation, a favorable interest rate environment for a
500 Index).** better part of the year and stable economic growth.
PERFORMANCE REVIEW Large-capitalization stocks with high earnings growth,
For the 12-month period ended particularly in technology and communications services, were
March 31, 2000, Nations LargeCap performance leaders. However, the spreading impact of a
Index Fund Investor A Shares global economic recovery led to rising interest rates and
provided shareholders with a total pressured all but the most costly and best-performing
return of 17.32%.*** stocks.
WHICH SECTORS PROVED FAVORABLE FOR THE FUND AND WHICH PROVED
UNFAVORABLE?+
Technology almost single-handedly provided the market's
strength during the year advancing in excess of 80%, while
the capital goods, energy and communication services sectors
were up by double-digit percentages. Consumer cyclicals and
basic materials posted positive, single-digit percentage
returns. Financials, utilities, health care, transports and
consumer staples declined over the year. Portfolio results
mirrored the benchmark, as one would expect.
WHAT DO YOU ANTICIPATE FOR THE COMING YEAR?
We believe we are in a less favorable market environment
than a year ago. The Federal Reserve Board is sensitive to
the economy's robust growth and has notched up interest
rates, even though prices in the economy continue to reflect
low inflation and high company productivity. However, after
five years of 20% annual market gains, we would not be
surprised to see lower returns in the coming 12-month
period.
</TABLE>
*The outlook for this Fund may differ from that
presented for other Nations Funds mutual funds.
**The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment.
***The performance shown includes the effect of fee
waivers by the investment adviser and the co-
administrator, which has the effect of increasing
total return.
+Portfolio characteristics are subject to change and
may not be representative of current characteristics.
Source for all statistical data -- Banc of America
Capital Management, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
31
<PAGE> 36
NATIONS LARGECAP INDEX FUND
PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/00)
[PIE CHART]
<TABLE>
<S> <C>
Manufacturing 4.4
Oil - International 3.8
Financial services 3.4
Other 39.6
Computer software 8.3
Computer related 7.4
Manufacturing 4.4
Utilities - Telephone 7.2
Semiconductors 6.8
Banking 6.7
Drugs 6.4
Networking equipment
and products 6.0
</TABLE>
<TABLE>
<C> <S> <C>
TOP 10 HOLDINGS
-------------------------------------------------
1 Microsoft Corporation 4.3%
-------------------------------------------------
2 Cisco Systems, Inc. 4.1%
-------------------------------------------------
3 General Electric Company 4.0%
-------------------------------------------------
4 Intel Corporation 3.5%
-------------------------------------------------
5 Exxon Mobil Corporation 2.1%
-------------------------------------------------
6 Wal-Mart Stores, Inc. 1.9%
-------------------------------------------------
7 Oracle Corporation 1.7%
-------------------------------------------------
8 International Business Machines
Corporation 1.7%
-------------------------------------------------
9 Citigroup Inc. 1.6%
-------------------------------------------------
10 Nortel Networks Corporation 1.4%
-------------------------------------------------
THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
PORTFOLIO HOLDINGS WERE CURRENT
AS OF MARCH 31, 2000, ARE
SUBJECT TO CHANGE AND MAY NOT BE
REPRESENTATIVE OF CURRENT HOLDINGS.
32
<PAGE> 37
NATIONS LARGECAP INDEX FUND
PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN
Investor A Shares
<TABLE>
<CAPTION>
SINCE INCEPTION
<S> <C>
(10/10/95
through
3/31/00) 25.08%
</TABLE>
The charts to the left show the
growth in value of a
hypothetical $10,000 investment
in Investor A Shares and Primary
A Shares of Nations LargeCap
Index Fund from the inception of
each share class. Figures for
the Standard & Poor's 500
Composite Stock Price Index
(Standard & Poor's 500 Index),
an unmanaged index of 500 widely
held common stocks, include
reinvestment of dividends. Funds
included in the Lipper S&P 500
Funds Universe are passively
managed, limited-expense
(adviser fee no higher than
0.50%) funds designed to
replicate the performance of the
Standard & Poor's 500 on a
reinvested basis. It is not
possible to invest in the Index
or Lipper Universe.
AVERAGE ANNUAL TOTAL RETURN
Primary A Shares
<TABLE>
<CAPTION>
SINCE INCEPTION
<S> <C>
(12/15/93
through
3/31/99) 22.54%
</TABLE>
[LINE GRAPH]
INVESTOR A SHARES (AS OF 3/31/00)
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
NATIONS LARGE CAP INDEX STANDARD & POOR'S 500 LIPPER S&P
FUND INDEX 500 FUNDS UNIVERSE
----------------------- --------------------- --------------------------
<S> <C> <C> <C>
Oct. 10 1995 10000.00 10000.00 10000.00
1995 10710.00 10617.00 10603.00
11267.00 11187.00 11160.00
11755.00 11689.00 11646.00
12092.00 12051.00 11991.00
1996 13091.00 13054.00 12974.00
13414.00 13404.00 13301.00
15735.00 15746.00 15597.00
16893.00 16924.00 16740.00
1997 17285.00 17410.00 17196.00
19662.00 19838.00 19563.00
20291.00 20493.00 20185.00
18276.00 18454.00 18169.00
1998 22136.00 22384.00 22023.00
23201.00 23501.00 23077.00
24794.00 25158.00 24658.00
23215.00 23586.00 23090.00
1999 26639.00 27096.00 26477.00
Mar. 31 2000 27220.00 27716.00 27041.00
</TABLE>
[LINE GRAPH]
PRIMARY A SHARES (AS OF 3/31/00)
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
NATIONS LARGE CAP INDEX LIPPER S&P
FUND STANDARD & POOR'S 500 INDEX 500 FUNDS UNIVERSE
----------------------- --------------------------- ------------------
<S> <C> <C> <C>
Dec. 15|1993 10000.00 10000.00 10000.00
1993 10072.00 10076.00 10072.00
9681.00 9694.00 9678.00
9710.00 9735.00 9710.00
10182.00 10211.00 10169.00
1994 10172.00 10209.00 10157.00
11152.00 11203.00 11130.00
12209.00 12273.00 12174.00
13167.00 13249.00 13123.00
1995 13939.00 14046.00 13897.00
14677.00 14801.00 14626.00
15329.00 15465.00 15264.00
15787.00 15943.00 15716.00
1996 17093.00 17271.00 17005.00
17526.00 17734.00 17433.00
20577.00 20832.00 20442.00
22114.00 22390.00 21941.00
1997 22684.00 23033.00 22537.00
25831.00 26246.00 25641.00
26668.00 27112.00 26456.00
24043.00 24415.00 23813.00
1998 29124.00 29615.00 28864.00
30548.00 31093.00 30247.00
32665.00 33285.00 32319.00
30601.00 31204.00 30263.00
1999 35142.00 35848.00 34703.00
Mar. 31 2000 35922.00 36668.00 35442.00
</TABLE>
TOTAL RETURN (AS OF 3/31/00)
<TABLE>
<CAPTION>
PRIMARY A INVESTOR A
<S> <C> <C> <C>
Inception date 12/15/93 10/10/95
--------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 17.58% 17.32%
--------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS 27.02% 26.60%
5 YEARS 26.36%
SINCE INCEPTION 22.54% 25.08%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of distributions.
The performance shown includes the effect of fee waivers by the investment
adviser and the co-administrator, which have the effect of increasing total
return.
33
<PAGE> 38
NATIONS MARSICO
GROWTH & INCOME FUND
PORTFOLIO MANAGER COMMENTARY*
<TABLE>
<S> <C>
IN THE FOLLOWING INTERVIEW, MR. MARSICO SHARES HIS VIEWS ON
NATIONS MARSICO GROWTH & INCOME FUND'S PERFORMANCE FOR THE
12-MONTH PERIOD ENDED MARCH 31, 2000 AND HIS OUTLOOK FOR THE
FUTURE.
PORTFOLIO MANAGER PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE.
Thomas F. Marsico is Portfolio The Fund seeks long-term growth of capital with a limited
Manager of Nations Marsico Growth emphasis on income. The Fund invests primarily in
& Income Fund and Chief Executive large-capitalization equity securities that are selected for
Officer of Marsico Capital their growth potential. Generally, the Fund holds 35 to 50
Management, LLC, investment securities allocated across a variety of economic sectors
sub-adviser to the Fund. and industries. We seek investments in companies with strong
INVESTMENT OBJECTIVE brand franchises, improving financial returns and global
The Fund seeks long-term growth of presences.
capital with a limited emphasis on PLEASE COMMENT ON THE FUND'S PERFORMANCE DURING THE FISCAL
income. YEAR.***
PERFORMANCE REVIEW For the 12-month period ending March 31, 2000, the Fund
For the 12-month period ended (Investor A Shares) gained 45.01%. This return compares very
March 31, 2000, Nations Marsico favorably to the Standard & Poor's 500 Composite Stock Price
Growth & Income Fund Investor A Index (S&P 500 Index), the Fund's primary benchmark, which
Shares provided a total return of was up 17.94%.+
45.01%.** Over the past twelve months, identifying growth industries
and picking the right stocks in those industries were
critical to success. Technology stocks, as would be
expected, had exceptionally strong performance. However, the
portfolio also benefited from investments in retail,
consumer services, biomedical, cellular communications and
financials. Many of the Fund's most successful investments
during the year were in the technology sector. Within the
sector, the Fund was broadly diversified with investments in
telecom equipment, computer software, internet software,
memory devices, and semiconductors. A common characteristic
of these companies is that they are all infrastructure plays
on the internet. These businesses have all experienced
significant earnings growth from the expansion of the
internet.
</TABLE>
*The outlook for this Fund may differ from that
presented for other Nations Funds mutual funds.
**The performance shown does not reflect the maximum
front-end sales charge of 5.75%, which may
apply to purchases of Investor A Shares. For
standardized performance, please refer to the
Performance table.
***Portfolio holdings and characteristics are subject
to change and may not be representative of current
holdings and characteristics.
+The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment.
Source for all statistical data -- Marsico Capital
Management, LLC.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
34
<PAGE> 39
NATIONS MARSICO
GROWTH & INCOME FUND
PORTFOLIO MANAGER COMMENTARY continued
<TABLE>
<S> <C>
WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE DURING THE
REPORTING PERIOD?
The equity markets over the last 12 months were
characterized by a great deal of volatility, which I believe
was caused primarily by interest rate unease. Federal
Reserve Board Chairman Alan Greenspan has expressed concern
that the level of growth in the U.S. economy needs to be
slowed from the 7% rate we've have seen recently down to
about 4%.
This concern has led the Federal Reserve Board (the Fed) to
adopt a tightening bias in 1999 and into 2000. However,
complicating this outlook is the low level of inflation we
have experienced. As a result, we have seen the market adopt
an almost manic-depressive response to tightening moves by
the Fed on the one hand and benign inflation reports on the
other. This was most apparent in the second half of 1999
when the S&P 500 Index swung from a 6.3% decline in the
third quarter to a 14.9% gain in the fourth quarter.
Our outlook has been, and continues to be, that inflation
will remain modest because of high productivity, large
government surpluses, subdued wage increases, and continued
growth of free trade. All of these factors lead us to remain
optimistic regarding the equity markets.
WHAT IS YOUR INVESTMENT PROCESS?
We believe strongly that there is no substitute for direct,
comprehensive and disciplined research. Our investment team
does not rely on computer-based screening techniques,
ratio-driven analysis or Wall Street in order to generate
investment ideas. Rather, we foster creative, innovative
thinking, which in turn may lead to promising areas that
frequently are not well followed or well understood by other
investors.
In research, our investment team looks for information from
a variety of sources. One source of information is
direct -- we speak regularly with company management to get
its perspective. But we also go outside the company,
surveying customers, competitors, suppliers and distributors
for independent sources of information. In this process, our
central purpose is to uncover information and relationships
that are not obvious under conventional analytical
techniques. Our goal is to be able to act early by using
this independent information when it can provide the maximum
benefit to the Fund's investors.
TELL US ABOUT STOCKS YOU FIND TO BE PARTICULARLY PROMISING.
Genentech, Inc. is a stock we have held in the portfolio
since it went public last July. It has two drugs that we
think have great potential. One is Retuxin, which is used
for the treatment of non-Hodgkins' lymphoma. The other is
called Herceptin, which is used in the treatment of metastic
breast cancer. Genentech also, we think, has a tremendous
research and development pipeline. It has a number of drugs
in Phase III clinical trials which we believe have
impressive potential. One is a treatment for asthma. The
other is designed to cut off the blood flow to certain types
of cancerous cells.
</TABLE>
35
<PAGE> 40
NATIONS MARSICO
GROWTH & INCOME FUND
PORTFOLIO MANAGER COMMENTARY continued
<TABLE>
<S> <C>
We also continue to be big believers in the internet.
However, we have generally avoided the pure internet
plays -- particularly companies with no earnings. Instead,
we've chosen to invest in what I call the "arms suppliers"
to the internet, companies like Cisco Systems, Inc., EMC
Corporation, Oracle Corporation and Sun Microsystems.
WHAT ECONOMIC DEVELOPMENTS DO YOU ANTICIPATE DURING THE REST
OF 2000?
We believe that the economy continues to be in a secular low
inflation/low interest rate environment, which is
attributable in large part to improved productivity. As a
result of the Fed's moves tightening the money supply, the
economy should begin to slow by the second half of 2000.
This would allow interest rates to come down. That should be
positive for the equity markets.
</TABLE>
36
<PAGE> 41
NATIONS MARSICO
GROWTH & INCOME FUND
PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/00)
[PIE CHART]
<TABLE>
<S> <C>
Other 31.3
Computer related 13
Networking equipment
and products 11.4
Telecommunications 7.4
Media 6.3
Computer software 6.2
Medical products
and supplies 6.2
Semiconductors 5.6
Electrical equipment 4.9
Banking 4.8
Financial services 2.9
</TABLE>
<TABLE>
<C> <S> <C>
TOP 10 HOLDINGS
-------------------------------------------------
1 Cisco Systems, Inc. 5.5%
-------------------------------------------------
2 Sony Corporation, ADR 4.9%
-------------------------------------------------
3 Genentech, Inc. 4.8%
-------------------------------------------------
4 EMC Corporation 4.7%
-------------------------------------------------
5 Oracle Corporation 4.5%
-------------------------------------------------
6 3Com Corporation 3.6%
-------------------------------------------------
7 Time Warner Inc. 3.6%
-------------------------------------------------
8 QUALCOMM Inc. 3.4%
-------------------------------------------------
9 Flextronics International Ltd. 3.4%
-------------------------------------------------
10 Sprint Corporation (PCS Group) 3.3%
-------------------------------------------------
THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
PORTFOLIO HOLDINGS WERE CURRENT
AS OF MARCH 31, 2000, ARE
SUBJECT TO CHANGE AND MAY NOT BE
REPRESENTATIVE OF CURRENT HOLDINGS.
37
<PAGE> 42
NATIONS MARSICO
GROWTH & INCOME FUND
PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN
Investor A Shares
<TABLE>
<CAPTION>
NAV** MOP*
SINCE INCEPTION
<S> <C> <C>
(12/31/97
through
3/31/00) 41.17% 37.50%
</TABLE>
The charts to the left show the
growth in value of a
hypothetical $10,000 investment
in Investor A Shares of Nations
Marsico Growth & Income Fund
from the inception of the share
class. Figures for the Standard
& Poor's 500 Composite Stock
Price Index (Standard & Poor's
500 Index), an unmanaged index
of 500 widely held common
stocks, include reinvestment of
dividends. Funds included in the
Lipper Large-Cap Growth Funds
Universe normally invest in
large capitalization companies
with long-term earnings expected
to grow significantly. It is not
possible to invest in the Index
or Lipper Universe. The
performance of Primary A,
Investor B and Investor C Shares
may vary based on the
differences in sales loads and
fees paid by the shareholders
investing in each class.
[LINE GRAPH] INVESTOR A SHARES AT MOP* (AS OF 3/31/00) [CHART LEGEND]
<TABLE>
<CAPTION>
NATIONS GROWTH & INCOME LIPPER LARGE-CAP GROWTH STANDARD & POOR'S 500
FUND $20,450 FUNDS UNIVERSE $20,229 INDEX $15,920
----------------------- ----------------------- ---------------------
<S> <C> <C> <C>
Dec. 31|1997 9425.00 10000.00 10000.00
11338.00 11467.00 11395.00
12329.00 12051.00 11771.00
10820.00 10702.00 10600.00
1998 13065.00 13500.00 12858.00
14103.00 14645.00 13499.00
14898.00 15230.00 14451.00
14700.00 14691.00 13548.00
1999 19873.00 18646.00 15564.00
Mar. 31|2000 20450.00 20229.00 15920.00
</TABLE>
[LINE GRAPH] INVESTOR A SHARES AT NAV** (AS OF 3/31/00)
<TABLE>
<CAPTION>
NATIONS GROWTH & INCOME LIPPER LARGE-CAP GROWTH STANDARD & POOR'S 500
FUND $21,697 FUNDS UNIVERSE $20,229 INDEX $15,920
----------------------- ----------------------- ---------------------
<S> <C> <C> <C>
Dec. 31|1997 10000.00 10000.00 10000.00
12030.00 11467.00 11395.00
13081.00 12051.00 11771.00
11480.00 10702.00 10600.00
1998 13862.00 13500.00 12858.00
14963.00 14645.00 13499.00
15807.00 15230.00 14451.00
15597.00 14691.00 13548.00
1999 21085.00 18646.00 15564.00
Mar. 31|2000 21697.00 20229.00 15920.00
</TABLE>
TOTAL RETURN (AS OF 3/31/00)
<TABLE>
<CAPTION>
INVESTOR A INVESTOR B INVESTOR C
PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Inception date 12/31/97 12/31/97 12/31/97 12/31/97
---------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 45.33% 45.01% 36.69% 43.90% 38.90% 43.93% 42.93%
---------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
SINCE INCEPTION 41.14% 41.17% 37.50% 40.27% 39.39% 40.33% 40.33%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of distributions.
*Figures at maximum offering price (MOP) reflect the maximum front-end sales
charge of 5.75%.
**Figures at net asset value (NAV) do not reflect any sales charges. Investor A
Shares are available with a reduced or waived sales charge only under certain
circumstances as described in the prospectus.
***Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
38
<PAGE> 43
NATIONS BLUE CHIP FUND
EQUITY MANAGEMENT TEAM COMMENTARY*
<TABLE>
<S> <C>
IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON
NATIONS BLUE CHIP FUND'S PERFORMANCE FOR THE 12-MONTH PERIOD
ENDED MARCH 31, 2000 AND ITS OUTLOOK FOR THE FUTURE.
PORTFOLIO MANAGEMENT PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE.
The Fund is managed by the Equity As a general policy, our intent is to remain neutral to the
Management Team of Chicago Equity overall stock market in sector weightings and market
Partners Corporation, the capitalization and focus on individual stock selection. Our
investment sub-adviser to the risk-controlled strategy is designed to provide the
Fund. potential for the Fund to fully benefit from the market's
INVESTMENT OBJECTIVE advances, despite major disparities in performance between
The Fund seeks to achieve sectors and the narrowness of the market. Within our
long-term capital appreciation discipline, we select securities that display attractive
through investments in blue chip valuations, while exhibiting positive momentum and solid
stocks. earnings quality. By factoring for these three themes, we
PERFORMANCE REVIEW seek to provide superior stock selection across the industry
For the 12-month period ended sectors. We focus on companies that exhibit rising earnings
March 31, 2000, Nations Blue Chip expectations and perceived high earnings certainty while
Fund Investor A Shares provided trading at attractive valuations. Companies with high
shareholders with a total return earnings certainty are those that have similar estimates by
of 17.70%** different analysts. Firms with rising earnings expectations
are typically those that have experienced the biggest
increase in analyst earnings estimates.
PLEASE COMMENT ON THE FUND'S PERFORMANCE.
Performance was consistent with that of the overall market,
as reflected by the Standard & Poor's 500 Composite Stock
Price Index (S&P 500 Index).*** For the 12 months ended
March 31, 2000, the Fund (Investor A Shares) had a total
return of 17.70%, while the benchmark S&P 500 Index returned
17.94%.
WHAT PARTICULAR SECTORS OR STOCKS PROVED FAVORABLE FOR THE
FUND?+
The Fund benefited primarily from its holdings in the
technology sector which, as of March 31, 2000, comprised 32%
of the Fund. Technology holdings returned over 77% during
this period. Of the top ten stocks in the portfolio, four
produced triple-digit returns and all were in technology
sector: Cisco Systems Inc., Intel Corporation, Oracle
Corporation and Texas Instruments Inc. Other technology
names that were leading contributors included QUALCOMM Inc.,
EMC Corporation and Sun Microsystems, while Enron
Corporation, an energy company, was the only non-technology
company producing a triple-digit return.
</TABLE>
*The outlook for this Fund may differ from that
presented for other Nations Funds mutual funds.
**The performance shown does not reflect the maximum
front-end sales charge of 5.75%, which may
apply to purchases of Investor A Shares. For
standardized performance, please refer to the
Performance
table.
***The Standard & Poor's 500 Composite Stock Price
Index is an managed index of 500 widely held
common stocks. It is unavailable for investment.
+Portfolio holdings and characteristics are subject
to change and may not be representative of current
holdings and characteristics.
Source for all statistical data -- Chicago Equity
Partners Corporation
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
39
<PAGE> 44
NATIONS BLUE CHIP FUND
EQUITY MANAGEMENT TEAM COMMENTARY continued
<TABLE>
<S> <C>
WHAT PARTICULAR SECTORS OR STOCKS WERE UNFAVORABLE FOR THE
FUND?
The lagging sectors were health care and transportation.
Price-cutting compressed earnings for most of the major drug
companies. In the health care sector, drug companies such as
Schering-Plough Corporation, Johnson & Johnson, Merck &
Company, Inc. and Pfizer Inc. fell after a very strong 1998
because of weak drug prices. However, not all was bad in
health care, as United Healthcare, a managed health care
company, posted a respectable 13% return. A spike-up in
energy prices hurt transportation companies. Union Pacific
Corporation and Delta AirLines, Inc. were the laggards,
although the impact on performance was hardly felt as
transportation comprises less than .75% of Fund assets.
WHAT ECONOMIC FACTORS MOST INFLUENCED THE FUND'S
PERFORMANCE?
Interest rates had the most influence on performance. The
U.S. economy remained healthy throughout the year, but fears
of rising inflation helped increase interest rates as the
year wore on. Investors remained cautious on the outlook for
continued economic growth, specifically for the "old
economy" stocks, as they appeared more affected by the
volatility of interest rates than their "new economy"
technology brethren.
WHAT IS YOUR OUTLOOK FOR THE YEAR AHEAD?
As we enter the tenth year of economic prosperity, the U.S.
economy remains remarkably healthy in spite of higher
interest rates and tight labor conditions. We anticipate
that the U.S. economy will continue to grow, though we
believe the growth to be more moderate than in recent
months. In the stock market, the S&P 500 Index has recorded
a record 20% annual return for the last five years and most
prognosticators believe that pace will not continue.
However, neither we nor anyone else can predict the future.
Our philosophy will not change based on short-term trends or
conditions in the market. Our goal is to add value through
security selection, while attempting to neutralize other
risk factors, such as market timing and sector rotation, for
which there is not adequate compensation by the market.
</TABLE>
40
<PAGE> 45
NATIONS BLUE CHIP FUND
PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/00)
[PIE CHART]
<TABLE>
<CAPTION>
<S> <C>
COMPUTER SOFTWARE 8.3
COMPUTER RELATED 7.40
UTILITIES - TELEPHONE 7.30
SEMICONDUCTORS 7.30
BANKING 6.90
DRUGS 6.00
NETWORKING EQUIPMENT AND PRODUCTS 5.20
OIL - INTERNATIONAL 3.80
COMPUTER SOFTWARE 8.3
MANUFACTURING 3.40
RETAIL - GENERAL 3.40
OTHER 41.00
</TABLE>
<TABLE>
<C> <S> <C>
TOP 10 HOLDINGS
-------------------------------------------------
1 Cisco Systems, Inc. 4.7%
-------------------------------------------------
2 Microsoft Corporation 4.1%
-------------------------------------------------
3 General Electric Company 3.4%
-------------------------------------------------
4 Intel Corporation 2.5%
-------------------------------------------------
5 Citigroup Inc. 2.5%
-------------------------------------------------
6 Wal-Mart Stores, Inc. 2.3%
-------------------------------------------------
7 Oracle Corporation 2.0%
-------------------------------------------------
8 Texas Instruments Inc. 2.0%
-------------------------------------------------
9 EMC Corporation 1.9%
-------------------------------------------------
10 Chase Manhattan Corporation 1.9%
-------------------------------------------------
THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
PORTFOLIO HOLDINGS WERE CURRENT
AS OF MARCH 31, 2000, ARE
SUBJECT TO CHANGE AND MAY NOT BE
REPRESENTATIVE OF CURRENT HOLDINGS.
41
<PAGE> 46
NATIONS BLUE CHIP FUND
PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN
Investor A Shares
<TABLE>
<CAPTION>
SINCE INCEPTION NAV** MOP*
<S> <C> <C>
(1/13/94
through
3/31/00) 22.59% 21.42%
</TABLE>
The charts to the left show the
growth in value of a
hypothetical $10,000 investment
in Investor A Shares of Nations
Blue Chip Fund from the
inception of the share class.
Figures for the Standard &
Poor's 500 Composite Stock Index
(Standard & Poor's 500 Index) an
unmanaged index of 500 widely
held common stocks include
reinvestment of dividends. Funds
included in the Lipper Large-Cap
Core Funds Universe invests at
least 75% of its equity assets
in companies with market
capitalizations of greater than
$10 billion. It is not possible
to invest in the Index or Lipper
Universe. The performance of
Primary A, Investor B, Investor
C and Seafirst Shares may vary
based on the differences in
sales loads and fees paid by the
shareholders investing in each
class.
[LINE GRAPH]
INVESTOR A SHARES AT MOP* (AS OF 3/31/00)
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
NATIONS BLUE CHIP FUND LIPPER LARGE-CAP CORE STANDARD & POOR'S 500
FUNDS UNIVERSE INDEX
---------------------- ---------------------- ---------------------
<S> <C> <C> <C>
Jan. 13 1993 9425.00 10000.00 10000.00
9020.00 9660.00 9621.00
9002.00 9561.00 9661.00
9480.00 9988.00 10134.00
1994 9486.00 9876.00 10132.00
10397.00 10678.00 11119.00
11345.00 11596.00 12180.00
12252.00 12453.00 13149.00
1995 12880.00 13045.00 13940.00
13565.00 13760.00 14689.00
14237.00 14278.00 15349.00
14643.00 14741.00 15823.00
1996 15940.00 15758.00 17141.00
16340.00 15889.00 17600.00
19273.00 18471.00 20675.00
20765.00 19939.00 22221.00
1997 21151.00 20177.00 22859.00
24133.00 22810.00 26048.00
24891.00 23380.00 26908.00
21859.00 20740.00 24230.00
1998 27042.00 25249.00 29391.00
28370.00 26383.00 30858.00
30081.00 28077.00 33034.00
28126.00 26395.00 30969.00
1999 32766.00 30858.00 35577.00
Mar. 31 2000 33395.00 32127.00 36392.00
</TABLE>
[LINE GRAPH]
INVESTOR A SHARES AT NAV** (AS OF 3/31/00)
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
NATIONS BLUE CHIP FUND LIPPER LARGE-CAP CORE STANDARD & POOR'S 500
FUNDS UNIVERSE INDEX
---------------------- ---------------------- ---------------------
<S> <C> <C> <C>
Jan. 13 1993 10000.00 10000.00 10000.00
9570.00 9660.00 9621.00
9551.00 9561.00 9661.00
10058.00 9988.00 10134.00
1994 10065.00 9876.00 10132.00
11031.00 10678.00 11119.00
12037.00 11596.00 12180.00
12999.00 12453.00 13149.00
1995 13666.00 13045.00 13940.00
14393.00 13760.00 14689.00
15105.00 14278.00 15349.00
15536.00 14741.00 15823.00
1996 16912.00 15758.00 17141.00
17337.00 15889.00 17600.00
20449.00 18471.00 20675.00
22032.00 19939.00 22221.00
1997 22441.00 20177.00 22859.00
25606.00 22810.00 26048.00
26410.00 23380.00 26908.00
23193.00 20740.00 24230.00
1998 28692.00 25249.00 29391.00
30101.00 26383.00 30858.00
31916.00 28077.00 33034.00
29841.00 26395.00 30969.00
1999 34765.00 30858.00 35577.00
Mar. 31 2000 35433.00 32127.00 36392.00
</TABLE>
TOTAL RETURN (AS OF 3/31/00)
<TABLE>
<CAPTION>
INVESTOR A INVESTOR B++ INVESTOR C
PRIMARY A+ SEAFIRST NAV** MOP* NAV** CDSC*** NAV** CDSC***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Inception date 5/21/99 3/7/88 1/13/94 7/15/98 11/11/96
-----------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 20.31% 17.98% 17.70% 10.95% 16.83% 11.83% 16.85% 15.85%
-----------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS 27.83% 27.21% 26.90% 24.43% 26.40% 25.77% 26.11% 26.11%
5 YEARS 26.84% 26.56% 26.29% 24.80% 25.99% 25.83%
10 YEARS 18.08%
SINCE INCEPTION 23.03% 18.19% 22.59% 21.42% 22.36% 22.36% 23.95% 23.95%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of distributions.
*Figures at maximum offering price (MOP) reflect the maximum front-end sales
charge of 5.75%.
**Figures at net asset value (NAV) do not reflect any sales charges. Investor A
Shares are available with a reduced or waived sales charge only under certain
circumstances as described in the prospectus.
***Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
+Primary A Shares commenced operations on May 21, 1999 and have no performance
prior to that date. Performance prior to May 21, 1999 is that of Investor A
Shares at NAV, which reflects shareholder servicing and/or 12b-1 fees of 0.25%.
These fees are not applicable to Primary A Shares.
++Investor B Shares commenced operations on July 15, 1998 and have no
performance prior to that date. Performance prior to July 15, 1998 is that of
Investor A Shares at NAV, which reflects shareholder servicing and/or 12b-1 fees
of 0.25%. If Investor B Shares had been reflected, total returns would have been
lower.
The performance shown includes the effect of fee waivers by the investment
adviser and the co-administrator, which have the effect of increasing total
return.
42
<PAGE> 47
NATIONS STRATEGIC GROWTH FUND
GROWTH STRATEGIES TEAM COMMENTARY*
<TABLE>
<S> <C>
IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON
NATIONS STRATEGIC GROWTH FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 2000 AND ITS OUTLOOK FOR THE FUTURE.
PORTFOLIO MANAGEMENT PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE.
The Fund is managed by the Growth Nations Strategic Growth Fund employs a long-term,
Strategies Team of Banc of America large-capitalization growth strategy with a focus on
Capital Management, Inc., minimizing taxes. We combine fundamental and quantitative
investment sub-adviser to the analysis to select high-growth companies that we believe
Fund. will capitalize on our long-term strategic themes of an
INVESTMENT OBJECTIVE aging U.S. population, globalization and innovation.
The Fund seeks long-term, Consistent with an emphasis on tax-sensitive investing, the
after-tax returns by investing in portfolio is managed for low turnover.
a diversified portfolio of common PLEASE COMMENT ON THE FUND'S PERFORMANCE.
stocks. The Fund performed well last year in spite of higher
PERFORMANCE REVIEW interest rates and energy prices. Over the 12 months ended
For the 12-month period ended March 31, 2000, the Federal Reserve Board increased interest
March 31, 2000, Nations Strategic rates four times and oil prices tripled to $33 per barrel.
Growth Fund Investor A Shares Market volatility also increased over the last year. There
provided shareholders with a total were two periods in which the Nasdaq Composite Index***
return of 24.27%.** suffered drops of 10% or more, only to set new record highs
in between those periods. Because of our long-term growth
strategy, diversification and risk management, the Fund
posted solid performance, as it was able to capitalize on
opportunities created by the changing market conditions.
For the period, Nations Strategic Growth Fund (Investor A
Shares) returned 24.27%, significantly outperforming its
benchmark, the Standard & Poor's 500 Composite Stock Price
Index, which returned 17.94%.+
</TABLE>
*The outlook for this Fund may differ from that
presented for other Nations Funds mutual funds.
**The performance shown does not reflect the maximum
front-end sales charge of 5.75%, which may be
charged on purchases of Investor A Shares. For
standardized performance, please refer to the
Performance table.
***The Nasdaq Composite Index tracks the performance
of domestic common stocks traded on the
regular Nasdaq market as National Market System
traded foreign stocks and American Depository
Receipts. It is unmanaged and unavailable for
investment.
+The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment.
Source for all statistical data -- Banc of America
Capital Management, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
43
<PAGE> 48
NATIONS STRATEGIC GROWTH FUND
GROWTH STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
WHAT PARTICULAR SECTORS OR STOCKS PROVED FAVORABLE FOR THE
FUND?++
For the second consecutive year, the technology sector was
the clear winner. A slight overweight in technology and
superior stock selection contributed to the Fund's strong
performance. Several large-capitalization stocks such as
Cisco Systems, Inc., Sun Microsystems, Inc., Intel
Corporation and Texas Instruments Inc. were standouts, but a
few lesser know companies, such as CIENA Corporation, Xilinx
Inc., QUALCOMM Inc. and Linear Technology Corporation added
tremendously to returns. Communications services also
produced positive results, with Nokia Corporation, Western
Wireless Corporation, Time Warner Inc. and Sprint
Corporation all outperforming. Despite higher interest
rates, several retail stocks ended the year considerable
higher, including Home Depot Inc. and Wal-Mart Stores, Inc.
WHAT PARTICULAR SECTORS OR STOCKS WERE UNFAVORABLE FOR THE
FUND?
Health care and consumer staples stocks were the poorest
performing groups in the portfolio. The Fund's
pharmaceutical stocks were particularly hard hit, with
Schering-Plough Corporation, Eli Lilly and Company and
Johnson & Johnson all posting significant losses for the
year. As long-term growth investors, we continue to believe
these companies fit within our theme of the aging U.S.
populations' need for greater health care services,
particularly pharmaceutical products. These stocks are
currently trading very inexpensively relative to what we
view as their potential growth rates. We expect to continue
to maintain these positions. The consumer staples stocks
were hurt by higher commodity prices, namely oil, and were
unable to pass along higher costs to customers because of
the lack of pricing power. As a result, stocks like Procter
& Gamble Company and Coca-Cola Company had negative returns
over the last year.
WHAT ECONOMIC FACTORS MOST INFLUENCED THE FUND'S
PERFORMANCE?
The largest economic factor influencing the Fund's
performance was corporate capital spending on technology.
Fueled by strong profit growth and intense competition,
corporations are spending more money on technology than at
any time before. This capital spending is creating enormous
growth for technology companies, particularly those offering
ways to increase efficiency or reduce costs. The growth in
spending on technology far outweighed the effects of
materially higher interest rates and rising oil prices on
the Fund's performance.
</TABLE>
++Portfolio holdings and characteristics are subject
to change and may not be representative of current
holdings and characteristics.
44
<PAGE> 49
NATIONS STRATEGIC GROWTH FUND
GROWTH STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
WHAT IS YOUR OUTLOOK IN THE NEW FISCAL YEAR?
Our overall economic outlook is positive. We believe
interest rates have peaked and should be flat-to-down over
the next year. Economic growth should slow but remain
positive, allaying concerns about inflation. The conditions
for continuing strength in the stock market should persist
well into the next year. These include the technology
revolution, global economic recovery and strong corporate
profits. We believe, however, that valuations in some
sectors of the market are reaching speculative levels. While
we do not believe a bear market is in store for the overall
market, we expect increasing volatility and a severely
punitive reaction by the market for any company with
disappointing earnings or announcements.
Volatility, one of the most important factors over the next
year, may also be the biggest opportunity. We believe
volatility will increase, given the tremendous
outperformance of technology stocks, the high stock
valuations in some areas of technology and the increasing
leverage of the overall market to technology.
We are prepared for increasing volatility and, in fact,
welcome it. Our growth strategy combined with our
investments in the long-term strategic themes of the aging
of the U.S. population, globalization and innovation should
allow us to take advantage of volatility. Market volatility
may afford us the opportunity to initiate or increase
positions in strong growth companies at less expensive
valuations. Currently, the Fund holds more positions than
normal. The goal of more holdings is to increase the
diversification of the Fund, thereby attempting to limit the
effect of disappointments. Greater diversification also
allows the Fund to participate in sector rotations out of
technology and into other sectors. Should events unfold in
favor of sectors outside technology, we will be proactive in
using the volatility to add to, reduce or initiate positions
that fit the Fund's objectives.
</TABLE>
45
<PAGE> 50
NATIONS STRATEGIC GROWTH FUND
PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/00)
[PIE CHART]
<TABLE>
<S> <C>
Computer related 7.3
Utilities - Telephone 7.5
Drugs 7.7
Semiconductors 8.8
Networking equipment and products 9.1
Other 35.1
Manufacturing 3.8
Telecommunications 4.6
Financial services 5.1
Retail - Specialty 5.4
Computer software 5.6
</TABLE>
<TABLE>
<C> <S> <C>
TOP 10 HOLDINGS
-------------------------------------------------
1 Cisco Systems, Inc. 4.9%
-------------------------------------------------
2 Microsoft Corporation 4.5%
-------------------------------------------------
3 Intel Corporation 4.4%
-------------------------------------------------
4 General Electric Company 3.8%
-------------------------------------------------
5 Wal-Mart Stores, Inc. 2.4%
-------------------------------------------------
6 Citigroup Inc. 2.3%
-------------------------------------------------
7 Nextel Communications Inc. 2.2%
-------------------------------------------------
8 International Business Machines
Corporation 2.1%
-------------------------------------------------
9 Time Warner Inc. 2.1%
-------------------------------------------------
10 QUALCOMM Inc. 2.0%
-------------------------------------------------
THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
PORTFOLIO HOLDINGS WERE CURRENT
AS OF MARCH 31, 2000, ARE
SUBJECT TO CHANGE AND MAY NOT BE
REPRESENTATIVE OF CURRENT HOLDINGS.
46
<PAGE> 51
NATIONS STRATEGIC GROWTH FUND
PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
CUMULATIVE TOTAL RETURN
Investor A Shares
<TABLE>
<CAPTION>
SINCE INCEPTION NAV** MOP*
<S> <C> <C>
(10/2/98
through
3/31/00) 43.96% 38.36%
</TABLE>
The chart to the left shows the
growth in value of a
hypothetical $10,000 investment
in Primary A Shares of Nations
Strategic Growth Fund from the
inception of the share class.
Figures for the Standard &
Poor's 500 Composite Stock Price
Index (Standard & Poor's 500
Index), an unmanaged index of
500 widely held common stocks,
include reinvestment of
dividends. Funds included in the
Lipper Large-Cap Growth Funds
Universe normally invest in
large-capitalization companies
whose long-term earnings are
expected to grow significantly.
It is not possible to invest in
the Index or Lipper Universe.
The performance of Investor A,
Investor B and Investor C Shares
may vary based on the
differences in sales loads and
fees paid by the shareholders
investing in each class.
[LINE GRAPH]
INVESTOR A SHARES AT MOP* (AS OF 3/31/00)
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
NATIONS LIPPER LARGE-
STRATEGIC GROWTH FUND CAP GROWTH FUNDS STANDARD & POOR'S 500
UNIVERSE INDEX
--------------------- ---------------- ----------------------
<S> <C> <C> <C>
Oct. 2 1998 9425 10000 10000
1998 12141 12614 12130
13068 13684 12735
13721 14231 13633
12883 13727 12781
1999 15520 17423 14683
Mar. 31 2000 16237 18902 15019
</TABLE>
[LINE GRAPH]
INVESTOR A SHARES AT NAV** (AS OF 3/31/00)
Assumes the reinvestment of all distributions.
<TABLE>
<CAPTION>
NATIONS LIPPER LARGE-
STRATEGIC GROWTH FUND CAP GROWTH FUNDS STANDARD & POOR'S 500
UNIVERSE INDEX
--------------------- ---------------- ----------------------
<S> <C> <C> <C>
Oct. 2 1998 10000 10000 10000
1998 12882 12614 12130
13865 13684 12735
14558 14231 13633
13669 13727 12781
1999 16467 17423 14683
Mar. 31 2000 17227 18902 15019
</TABLE>
TOTAL RETURN (AS OF 3/31/00)
<TABLE>
<CAPTION>
INVESTOR A+ INVESTOR B+ INVESTOR C+
PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Inception date 10/2/98 8/2/99 8/2/99 8/2/99
---------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 24.63% 24.27% 17.08% 23.68% 18.68% 23.75% 22.75%
---------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
SINCE INCEPTION 44.24% 43.96% 38.36% 43.51% 41.25% 43.56% 43.56%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Cumulative total returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of distributions.
*Figures at maximum offering price (MOP) reflect the maximum front-end sales
charge of 5.75%.
**Figures at net asset value (NAV) do not reflect any sales charges. Investor A
Shares are available with a reduced or waived sales charge only under certain
circumstances as described in the prospectus.
***Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
+Investor A, Investor B and Investor C Shares commenced operations on August 2,
1999 and have no performance prior to that date. Performance prior to August 2,
1999 is that of Primary A Shares, which do not have any shareholder servicing or
12b-1 fees. If Investor A, Investor B and Investor C Shares had been reflected,
total returns would have been lower.
47
<PAGE> 52
NATIONS CAPITAL GROWTH FUND
GROWTH STRATEGIES TEAM COMMENTARY*
<TABLE>
<S> <C>
IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON
NATIONS CAPITAL GROWTH FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 2000 AND ITS OUTLOOK FOR THE FUTURE.
PORTFOLIO MANAGEMENT PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE.
The Fund is managed by the Growth Nations Capital Growth Fund employs a long-term,
Strategies Team of Banc of America large-capitalization growth strategy. We combine fundamental
Capital Management Inc., and quantitative research analysis to select high-growth
investment sub-adviser to the companies that we believe will capitalize on our long-term
Fund. strategic themes of an aging U.S. population, globalization
INVESTMENT OBJECTIVE and innovation.
The Fund seeks growth of capital The Fund typically invests in companies that are recognized
by investing in companies that are as industry leaders, have strong track records and possess
believed to have superior earnings what we think are key competitive advantages. We believe
growth potential. these characteristics can help them sustain superior growth
PERFORMANCE REVIEW rates and exceed consensus earnings expectations of market
For the 12-month period ended analysts.
March 31, 2000, Nations Capital PLEASE COMMENT ON THE FUND'S PERFORMANCE.
Growth Fund Investor A Shares The Fund performed well last year in spite of a reversal of
provided shareholders with a total interest rates and energy prices. Over the past twelve
return of 29.41%.** months, the Federal Reserve Board increased interest rates
four times and oil prices tripled to $33 per barrel. Market
volatility also increased over the last year. There were two
periods when the Nasdaq Composite Index (Nasdaq)*** suffered
drops of 10% or more. In between these periods, the Nasdaq
set new record highs. Because of our long-term growth
strategy, diversification and risk management, the Fund was
able to capitalize on opportunities created by the changing
market conditions, posting solid performance.
For the period, Nations Capital Growth Fund (Investor A
Shares) returned 29.41%, significantly outperforming its
benchmark, the Standard & Poor's 500 Composite Stock Price
Index (S&P 500 Index), which returned 17.94%.+
WHAT PARTICULAR SECTORS OR STOCKS PROVED FAVORABLE FOR THE
FUND?++
Our overweighting of technology stocks significantly
contributed to the Fund's performance. Nine of the top ten
performing stocks in the Fund were technology or technology
related issues. The most notable were Oracle Corporation,
Xilinx, Inc. and Nortel Networks Corporation. Strength in
consumer spending buoyed retail stocks over the last twelve
months. The Fund's overweight position in these stocks
</TABLE>
*The outlook for this Fund may differ from that
presented for other Nations Funds mutual funds.
**The performance shown does not reflect the maximum
front-end sales charge of 5.75%, which may
apply to purchases of Investor A Shares. For
standardized performance, please refer to the
Performance
table.
***The Nasdaq Composite Index tracks the performance
of domestic common stocks traded on the
regular Nasdaq market as National Market System
traded foreign stocks and ADRs. It is unmanaged and
unavailable for investment.
+The Standard & Poor's 500 Composite Stock Price
Index is index of 500 widely held common stocks. It
is unavailable for investment.
++Portfolio holdings are subject to change and may
not be representative of current holding.
Source for all statistical data -- Banc of America
Capital Management, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
48
<PAGE> 53
NATIONS CAPITAL GROWTH FUND
GROWTH STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
benefited performance. Best Buy Company, Inc., Circuit City
Group and Home Depot Inc. were the most significant
contributors.
WHAT PARTICULAR SECTORS OR STOCKS WERE UNFAVORABLE FOR THE
FUND?
Our continuing belief that the aging of the U.S. population
will require increasing levels of health care was
temporarily derailed over the last year. Concerns about
health care industry reform increased, driving down
valuations in the sector. All of the pharmaceutical stocks
in the Fund underperformed the S&P 500 Index. In our view,
these stocks are currently trading very inexpensively
relative to their potential growth rates and we expect to
continue to maintain positions. Further, should technology
valuations correct, we believe health care stocks could
benefit as investors seek high-quality, growth alternatives.
The consumer staples stocks were negatively affected by
higher commodity prices, namely oil, and by their lack of
power to raise prices in their end markets to pass along
higher costs. The profit margins of these companies declined
as did their stock prices.
WHAT ECONOMIC FACTORS MOST INFLUENCED THE FUND'S
PERFORMANCE?
The largest economic factor influencing the Fund's
performance was corporate capital spending on technology.
Fueled by strong profit growth and intense competition,
corporations are spending more money on technology than at
any time before. This capital spending is creating enormous
growth for technology companies, particularly those offering
ways to increase efficiency or reduce costs. The growth in
spending on technology far outweighed the effects of
materially higher interest rates and rising oil prices on
the Fund's performance.
WHAT IS YOUR OUTLOOK IN THE NEW FISCAL YEAR?
Our overall economic outlook is positive. We believe
interest rates have peaked and will be flat-to-down over the
next year. Economic growth should slow but remain positive,
allaying concerns about inflation. The conditions for
continuing strength in the stock market should persist well
into the next year. These include the technology revolution,
global economic recovery and strong corporate profits. We
believe, however, that valuations in some sectors of the
market are reaching speculative levels. While we do not
believe a bear market is in store for the overall market, we
expect increasing volatility and a severely punitive
reaction by the market for any company with disappointing
earnings or announcements.
Volatility, one of the most important factors over the next
year, will also be the biggest opportunity. We believe
volatility will increase, given the tremendous
outperformance of technology stocks, the high stock
valuations in some areas of technology and the increasing
leverage of the overall market to technology.
</TABLE>
49
<PAGE> 54
NATIONS CAPITAL GROWTH FUND
GROWTH STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
We are prepared for increasing volatility and, in fact,
welcome it. Our growth strategy combined with our
investments in the long-term strategic themes of the aging
of the U.S. population, globalization and innovation should
allow us to take advantage of volatility. We have the
ability to initiate or increase positions in strong growth
companies at what we believe are less expensive valuations.
Currently, the Fund holds more positions than it normally
does. By holding more positions we increase the
diversification of the Fund, thereby attempting to limit the
effect of disappointments. Greater diversification also
allows the Fund to participate in sector rotations out of
technology and into other sectors. Should events unfold in
favor of sectors outside technology, we will be proactive in
using the volatility to add to, reduce or initiate positions
that fit our objectives.
</TABLE>
50
<PAGE> 55
NATIONS CAPITAL GROWTH FUND
PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/00)
[PIE CHART]
<TABLE>
<S> <C>
Computer related 11.3
Networking equipment and products 10.3
Drugs 9.9
Computer software 8.7
Retail - Specialty 7
Semiconductors 6.7
Conglomerate 4.8
Telecommunications 4.4
Financial services 4.3
Medical products and supplies 4.3
Other 28.3
</TABLE>
<TABLE>
<C> <S> <C>
TOP 10 HOLDINGS
-------------------------------------------------
1 Cisco Systems, Inc. 4.9%
-------------------------------------------------
2 Sun Microsystems, Inc. 4.4%
-------------------------------------------------
3 Intel Corporation 4.2%
-------------------------------------------------
4 General Electric Company 4.2%
-------------------------------------------------
5 Microsoft Corporation 3.9%
-------------------------------------------------
6 EMC Corporation 3.5%
-------------------------------------------------
7 Oracle Corporation 3.4%
-------------------------------------------------
8 Tyco International Ltd. 3.2%
-------------------------------------------------
9 Elan Corporation, ADR 3.0%
-------------------------------------------------
10 Nokia Corporation, Class A, ADR 2.8%
-------------------------------------------------
THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
PORTFOLIO HOLDINGS WERE CURRENT
AS OF MARCH 31, 2000, ARE
SUBJECT TO CHANGE AND MAY NOT BE
REPRESENTATIVE OF CURRENT HOLDINGS.
51
<PAGE> 56
NATIONS CAPITAL GROWTH FUND
PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN
Investor A Shares
<TABLE>
<CAPTION>
NAV** MOP*
SINCE INCEPTION
<S> <C> <C>
(10/2/92
through
3/31/00) 19.92% 18.98%
</TABLE>
The charts to the left show the
growth in value of a
hypothetical $10,000 investment
in Investor A Shares of Nations
Capital Growth Fund from the
inception of the share class.
Figures for the Standard &
Poor's 500 Composite Stock Price
Index (Standard & Poor's 500
Index), an unmanaged index of
500 widely held common stocks,
include reinvestment of
dividends. Funds included in the
Lipper Large-Cap Growth Funds
Universe normally invest in
large capitalization companies
whose long-term earnings are
expected to grow significantly.
It is not possible to invest in
the Index or Lipper Universe.
The performance of Primary A,
Investor B and Investor C Shares
may vary based on the
differences in sales loads and
fees paid by the shareholders
investing in each class.
[INVESTOR A SHARES AT MOP* RETURN CHART] [CHART LEGEND]
<TABLE>
<CAPTION>
NATIONS CAPITAL GROWTH LIPPER LARGE-CAP GROWTH STANDARD & POOR'S 500
FUND FUNDS UNIVERSE INDEX
---------------------- ----------------------- ---------------------
<S> <C> <C> <C>
Oct. 2|1992 9425 10000 10000
1992 10157 10908 10504
10333 11052 10963
10229 11142 11017
10571 11695 11301
1993 10921 11901 11563
10590 11456 11125
10269 11077 11172
10899 11754 11718
1994 10752 11656 11716
11430 12540 12857
12660 13911 14085
13772 15213 15204
1995 13823 15474 16120
14431 16295 16985
15012 17154 17748
15556 17758 18296
1996 16351 18539 19820
16102 18326 20351
18893 21484 23907
20612 23610 25695
1997 21315 23478 26432
24770 26922 30120
25352 28293 31114
21567 25127 28018
1998 27651 31695 33986
28412 34383 35682
30588 35758 38197
28603 34492 35810
1999 34172 43778 41138
Mar. 31|2000 36773 47494 42080
</TABLE>
[INVESTOR A SHARES AT NAV** RETURN CHART]
<TABLE>
<CAPTION>
NATIONS CAPITAL GROWTH LIPPER LARGE-CAP GROWTH STANDARD & POOR'S 500
FUND $39,016 FUNDS UNIVERSE $47,494 INDEX $42,080
---------------------- ----------------------- ---------------------
<S> <C> <C> <C>
Oct. 2|1992 10000 10000 10000
1992 10777 10908 10504
10963 11052 10963
10853 11142 11017
11216 11695 11301
1993 11588 11901 11563
11238 11456 11125
10896 11077 11172
11564 11754 11718
1994 11408 11656 11716
12128 12540 12857
13433 13911 14085
14612 15213 15204
1995 14666 15474 16120
15311 16295 16985
15928 17154 17748
16505 17758 18296
1996 17348 18539 19820
17085 18326 20351
20045 21484 23907
21870 23610 25695
1997 22615 23478 26432
26281 26922 30120
26899 28293 31114
22883 25127 28018
1998 29338 31695 33986
30145 34383 35682
32454 35758 38197
30348 34492 35810
1999 36257 43778 41138
Mar. 31|2000 39016 47494 42080
</TABLE>
TOTAL RETURN (AS OF 3/31/00)
<TABLE>
<CAPTION>
INVESTOR A INVESTOR B INVESTOR C
PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Inception date 9/30/92 10/2/92 6/7/93 10/2/92
---------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 29.90% 29.41% 21.98% 28.42% 23.42% 28.46% 27.46%
---------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS 31.98% 31.68% 29.12% 30.65% 30.06% 30.77% 30.77%
5 YEARS 26.61% 26.32% 24.83% 25.35% 25.18% 25.58% 25.58%
SINCE INCEPTION 20.20% 19.92% 18.98% 20.16% 20.16% 19.14% 19.14%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of distributions.
*Figures at maximum offering price (MOP) reflect the maximum front-end sales
charge of 5.75%.
**Figures at net asset value (NAV) do not reflect any sales charges. Investor A
Shares are available with a reduced or waived sales charge only under certain
circumstances as described in the prospectus.
***Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
52
<PAGE> 57
NATIONS DISCIPLINED EQUITY FUND
GROWTH STRATEGIES TEAM COMMENTARY*
<TABLE>
<S> <C>
PORTFOLIO MANAGEMENT ------------------------------------------------------------
The Fund is managed by the Growth
Strategies Team of Banc of America EFFECTIVE APRIL 17, 2000, NATIONS DISCIPLINED EQUITY FUND
Capital Management, Inc., WILL CHANGE ITS NAME, INVESTMENT OBJECTIVE AND PRINCIPAL
investment sub-adviser to the INVESTMENT STRATEGIES.
Fund.
The Fund will be renamed Nations Aggressive Growth Fund and
INVESTMENT OBJECTIVE its investment objective will be "to seek capital
The Fund seeks growth of capital appreciation." The Fund's principal investment strategies
by investing in companies that are are currently based on quantitative analysis and the use of
expected to produce significant computer modeling. Management believes that current and
increases in earnings per share. future shareholders will be better served by principal
investment strategies that are based on both quantitative
PERFORMANCE REVIEW and fundamental analysis, blending top-down macroeconomic
For the 12-month period ended and bottom-up stock selection criteria.
March 31, 2000, Nations ------------------------------------------------------------
Disciplined Equity Fund Investor A
Shares provided shareholders with IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON
a total return of -0.41%.** NATIONS DISCIPLINED EQUITY FUND'S PERFORMANCE FOR THE
12-MONTH PERIOD ENDED MARCH 31, 2000.
PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE
DURING THE REPORTING PERIOD.
The core premise underlying the investment philosophy and
style of Nations Disciplined Equity Fund is that earnings
drive stock prices. We used quantitative techniques to
construct a portfolio of attractively valued companies that
we believed were most likely to report earnings that
exceeded expectations.
PLEASE EXPLAIN THE PROCESS YOU FOLLOWED TO CHOOSE THE STOCKS
COMPRISING NATIONS DISCIPLINED EQUITY FUND DURING THE
REPORTING PERIOD.
The investment process for the Fund was quantitative and
focused primarily on earnings characteristics and valuation.
We started by using computer tools and models to rank
various securities based on these criteria. We then actively
narrowed possible investments to a select group of
securities that meet the earnings expectations and valuation
criteria established for the Fund. Companies identified by
the process were also reviewed to ensure financial stability
and quality of earnings.
PLEASE COMMENT ON THE FUND'S PERFORMANCE.
Nations Disciplined Equity Fund's emphasis on its value
discipline penalized performance during a period in which
investors were willing to pay extraordinarily high prices
for stocks of a narrow group of companies that either were
growing or had the prospect of growing. The Fund (Investor A
Shares) underperformed its benchmark, the Standard & Poor's
500 Composite Stock Price Index (S&P 500 Index).*** For the
one-year period ended March 31, 2000, the S&P 500 Index had
a return of 17.94%, with more than 75% of the Index's return
coming from just 10 stocks with extraordinarily high
valuations.
</TABLE>
*The outlook for this Fund may differ from that
presented for other Nations Funds mutual funds.
**The performance shown does not reflect the maximum
front-end sales charge of 5.75%, which may
apply to purchases of Investor A Shares. For
standardized performance, please refer to the
Performance
table.
***The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment.
Source for all statistical data -- Banc of America
Capital Management, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
53
<PAGE> 58
NATIONS DISCIPLINED EQUITY FUND
GROWTH STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
WHAT PARTICULAR SECTORS OR STOCKS PROVED FAVORABLE FOR THE
FUND?+
The portfolio's investments in the financial and consumer
staple sectors were the greatest contributors to
performance. The Fund benefited both from the weightings in
those sectors and from stock selection within the sectors.
Among financial service companies, Morgan Stanley Dean
Witter & Company was a standout performer, advancing about
80% during the 12 months. Within the consumer staples
sector, the portfolio's lack of exposure to beverage, food
and tobacco companies proved particularly beneficial.
Consumer staples companies have operated under difficult
fundamental business circumstances for several years.
WHAT PARTICULAR SECTORS OR STOCKS WERE UNFAVORABLE FOR THE
FUND?
In an environment where real or prospective high growth
rates and price momentum were the most important decision
factors to investors, the Fund's stock selection model
produced results that lagged across a broad range of
economic sectors. The portfolio's technology, capital goods,
consumer cyclicals and communications services sector
returns proved most problematic. Although some technology
holdings performed very well -- for example, Altera
Corporation advanced almost 200% and Lexmark International
Group, Inc. had a return in excess of 125% -- the
portfolio's other technology holdings couldn't keep pace
with the returns of the sector index, which rose by more
than 80%. In the consumer cyclicals sector, attractively
valued companies like TJX Companies exhibited solid earnings
gains, yet holdings declined sharply on perceptions of
slowing fundamentals due to rising rates. Directly and
indirectly, the Fund's valuation discipline imposed a
distinctly negative penalty on returns.
WHAT ECONOMIC FACTORS MOST INFLUENCED THE FUND'S
PERFORMANCE?
The Federal Reserve Board's concern about an overly robust
economy and the potential of inflation has resulted in an
upward shift in interest rates, even though slow inflation
and high company productivity have acted as restraints on
price increases. Higher interest rates hurt a broad range of
companies. As a result, the median return of stocks in most
common benchmarks experienced a flat to down year. However,
as noted, stocks of a relatively few companies with either
high growth rates or prospects for high growth rates have
soared. In our view, the markets have acted as if investors
think that these companies are impervious to macro-economic
factors and remain unaffected by higher interest rates.
</TABLE>
+Portfolio holdings are subject to change and may not
be representative of current holdings.
54
<PAGE> 59
NATIONS DISCIPLINED EQUITY FUND
GROWTH STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
DO YOU EXPECT THAT MARKET ENVIRONMENT TO CHANGE?
We believe that a higher interest rate environment
eventually will cause investors to become more
discriminating. While investors will continue to be
attracted to industries such as technology,
telecommunications and health care, where revenue growth is
anticipated to be highest, investors should increasingly be
affected by higher interest rates and the effects they may
have on various companies. Moreover, we think that stocks of
some companies labeled as "old economy" have been
excessively punished and now appear more attractive in
value. Over time, we also believe more companies will
embrace technological innovations and the Internet to
enhance their products, services and cost structures.
Investors should recognize the investment opportunities
created by these innovations over time.
HOW ARE YOU POSITIONING THE FUND TO TAKE ADVANTAGE OF THE
MARKET ENVIRONMENT YOU JUST DESCRIBED?
We expect to emphasize technology,
communications -- especially wireless communications -- and
the health care industries relative to the indexes. We
believe that these companies still exhibit favorable growth
characteristics. We also expect to focus selectively on the
retail sector, particularly those firms having material
exposure to the sale of digital consumer products. We feel
we are in the early stages of a digital product revolution
evidenced by the introduction of digital mobile phones, DVD
players and other devices. Retailers that emphasize these
products could benefit in a meaningful way. In other
sectors, we also will seek companies that are growing their
earnings and revenues faster than their peers. We also will
seek companies led by smart management teams, companies
having unique business models and firms having strong
unit-volume growth. Despite the beliefs of many investors,
we think some companies in the consumer staples and capital
goods sectors possess these traits. We are adding
selectively to these stocks.
</TABLE>
55
<PAGE> 60
NATIONS DISCIPLINED EQUITY FUND
PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/00)
[PIE CHART]
<TABLE>
<S> <C>
Computer software 10.2
Semiconductors 9.4
Utilities - Telephone 8.7
Networking equipment and products 8.2
Computer related 8.2
Medical products and supplies 6.2
Financial services 6.1
Retail - Specialty 5.7
Retail - General 4.2
Energy 4.1
Other 29
</TABLE>
<TABLE>
<C> <S> <C>
TOP 10 HOLDINGS
-------------------------------------------------
1 Altera Corporation 5.2%
-------------------------------------------------
2 Microsoft Corporation 4.9%
-------------------------------------------------
3 Cisco Systems, Inc. 4.3%
-------------------------------------------------
4 Intel Corporation 3.8%
-------------------------------------------------
5 General Electric Company 3.7%
-------------------------------------------------
6 Allergan, Inc. 3.6%
-------------------------------------------------
7 Best Buy Company, Inc. 3.5%
-------------------------------------------------
8 Lexmark International Group, Inc.,
Class A 3.3%
-------------------------------------------------
9 Coastal Corporation 3.1%
-------------------------------------------------
10 Morgan Stanley Dean Witter & Company 3.0%
-------------------------------------------------
THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
PORTFOLIO HOLDINGS WERE CURRENT
AS OF MARCH 31, 2000, ARE
SUBJECT TO CHANGE AND MAY NOT BE
REPRESENTATIVE OF CURRENT HOLDINGS.
56
<PAGE> 61
NATIONS DISCIPLINED EQUITY FUND
PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN
Investor A Shares
<TABLE>
<CAPTION>
NAV** MOP*
SINCE INCEPTION
<S> <C> <C>
(7/26/93
through
3/31/00) 16.96% 15.93%
</TABLE>
The charts to the left show the
growth in value of a
hypothetical $10,000 investment
in Investor A Shares and Primary
A Shares of Nations Disciplined
Equity Fund from the inception
of each share class. Figures for
the Standard & Poor's 500
Composite Stock Price Index
(Standard & Poor's 500 Index),
an unmanaged index of 500 widely
held common stocks, include
reinvestment of dividends. Funds
included in the Lipper Multi-Cap
Core Universe invest in a
variety of market capitalization
ranges, without concentrating
75% of their equity assets in
any one range over an extended
period of time. It is not
possible to invest in the Index
or Lipper Universe. The
performance of Primary A,
Investor B and Investor C Shares
may vary based on the
differences in sales loads and
fees paid by the shareholders
investing in each class.
[INVESTOR A SHARES AT MOP* RETURN CHART] [CHART LEGEND]
<TABLE>
<CAPTION>
NATIONS DISCIPLINED|EQUITY STANDARD|& POOR'S|500 LIPPER MULTI-CAP|CORE|FUNDS
FUND|$26,838 INDEX|$38,175 UNIVERSE|$31,943
-------------------------- --------------------- ---------------------------
<S> <C> <C> <C>
Jul. 26|1993 9425.00 10000.00 10000.00
11310.00 10252.00 10501.00
1993 10844.00 10490.00 10796.00
10287.00 10092.00 10494.00
9602.00 10135.00 10289.00
10379.00 10630.00 10817.00
1994 10148.00 10628.00 10626.00
10309.00 11663.00 11462.00
11605.00 12777.00 12452.00
12751.00 13793.00 13497.00
1995 12918.00 14623.00 13972.00
13478.00 15409.00 14735.00
14007.00 16100.00 15298.00
14489.00 16598.00 15778.00
1996 15767.00 17980.00 16826.00
15734.00 18462.00 16800.00
18356.00 21688.00 19379.00
20918.00 23310.00 21435.00
1997 20406.00 23979.00 21335.00
23334.00 27324.00 23967.00
24296.00 28226.00 24030.00
20576.00 25417.00 20692.00
1998 25537.00 30831.00 24936.00
26949.00 32370.00 25472.00
28531.00 34652.00 27642.00
26146.00 32486.00 25903.00
1999 27890.00 37320.00 30310.00
Mar. 31|2000 26838.00 38175.00 31943.00
</TABLE>
[INVESTOR A SHARES AT NAV** RETURN CHART]
<TABLE>
<CAPTION>
NATIONS DISCIPLINED|EQUITY STANDARD|& POOR'S|500 LIPPER MULTI-CAP|CORE|FUNDS
FUND|$28,476 INDEX|$38,175 UNIVERSE|$31,943
-------------------------- --------------------- ---------------------------
<S> <C> <C> <C>
Jul. 26|1993 10000 10000 10000
11894 10252 10501
1993 11505 10490 10796
10925 10092 10494
10188 10135 10289
11012 10630 10817
1994 10767 10628 10626
10938 11663 11462
12312 12777 12452
13561 13793 13497
1995 13706 14623 13972
14298 15409 14735
14862 16100 15298
15352 16598 15778
1996 16708 17980 16826
16694 18462 16800
19475 21688 19379
22194 23310 21435
1997 21653 23979 21335
24758 27324 23967
25778 28226 24030
21831 25417 20692
1998 27191 30831 24936
28594 32370 25472
30272 34652 27642
27741 32486 25903
1999 29592 37320 30310
Mar. 31|2000 28476 38175 31943
</TABLE>
TOTAL RETURN (AS OF 3/31/00)
<TABLE>
<CAPTION>
INVESTOR A INVESTOR B INVESTOR C
PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Inception date 10/1/92 7/26/93 5/20/94 5/10/95
---------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE -0.16% -0.41% -6.15% -1.19% -5.53% -1.16% -2.03%
---------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS 19.76% 19.48% 17.15% 18.58% 17.87% 18.64% 18.64%
5 YEARS 21.35% 21.09% 19.66% 20.16% 19.97%
SINCE INCEPTION 21.58% 16.96% 15.93% 17.81% 17.73% 19.59% 19.59%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of distributions.
*Figures at maximum offering price (MOP) reflect the maximum front-end sales
charge of 5.75%.
**Figures at net asset value (NAV) do not reflect any sales charges. Investor A
Shares are available with a reduced or waived sales charge only under certain
circumstances as described in the prospectus.
***Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
57
<PAGE> 62
NATIONS MARSICO
FOCUSED EQUITIES FUND
PORTFOLIO MANAGER COMMENTARY*
<TABLE>
<S> <C>
IN THE FOLLOWING INTERVIEW, MR. MARSICO SHARES HIS VIEWS ON
NATIONS MARSICO FOCUSED EQUITIES FUND'S PERFORMANCE FOR THE
12-MONTH PERIOD ENDED MARCH 31, 2000 AND HIS OUTLOOK FOR THE
FUTURE.
PORTFOLIO MANAGER PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE.
Thomas F. Marsico is Portfolio The Fund seeks long-term growth of capital through a
Manager of Nations Marsico Focused relatively concentrated portfolio. Generally, the Fund holds
Equities Fund and Chief Executive 20 to 30 large-capitalization equities that we believe offer
Officer of Marsico Capital attractive growth potential. Because the Fund is not
Management, LLC, investment diversified, we may take large positions in individual
sub-adviser to the Fund. companies and typically will have substantial allocations to
INVESTMENT OBJECTIVE a limited number of economic sectors and industries. We seek
The Fund seeks long-term growth of investments in companies with strong brand franchises,
capital. improving financial returns and global presences.
PERFORMANCE REVIEW WHAT WERE ECONOMIC AND MARKET CONDITIONS LIKE DURING THE
For the 12-month period ended REPORTING PERIOD?
March 31, 2000, Nations Marsico The equity markets over the last 12 months were
Focused Equities Fund Investor A characterized by a great deal of volatility, which I believe
Shares provided a total return of was caused primarily by interest rate unease. Federal
36.62%.** Reserve Board Chairman Alan Greenspan has expressed concern
that the level of growth in the U.S. economy needs to be
slowed from the 7% rate we have seen recently down to about
4%.
This concern has led the Federal Reserve Board (the Fed) to
adopt a bias to tightening interest rates in 1999 and into
2000. However, complicating this outlook is the low level of
inflation we have experienced. As a result, we have seen the
market adopt an almost manic-depressive response to
tightening moves by the Fed on the one hand and benign
inflation reports on the other. This was most apparent in
the second half of 1999 when the Standard & Poor's 500
Composite Price Index (S&P 500 Index)*** swung from a 6.3%
decline in the third quarter to a 14.9% gain in the fourth
quarter.
Our outlook has been, and continues to be, that inflation
will remain modest because of high productivity, large
government surpluses, subdued wage increases, and continued
growth of free trade. All of these factors lead us to remain
optimistic regarding the equity markets.
</TABLE>
*The outlook for this Fund may differ from that
presented for other Nations Funds mutual funds.
**The performance shown does not reflect the maximum
front-end sales charge of 5.75%, which may
apply to purchases of Investor A Shares. For
standardized performance, please refer to the
Performance
table.
***The Standard & Poor's 500 Composite Stock Price
Index is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment.
Source for all statistical data -- Marsico Capital
Management, LLC
THE FUND NORMALLY INVESTS IN A CORE PORTFOLIO OF
20-30 COMMON STOCKS.
BY MAINTAINING A RELATIVELY CONCENTRATED PORTFOLIO,
THE FUND MAY BE SUBJECT TO GREATER RISK THAN A FUND
THAT IS MORE FULLY DIVERSIFIED.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
58
<PAGE> 63
NATIONS MARSICO
FOCUSED EQUITIES FUND
PORTFOLIO MANAGER COMMENTARY continued
<TABLE>
<S> <C>
WHAT IS YOUR INVESTMENT PROCESS?
We believe strongly that there is no substitute for direct,
comprehensive and disciplined research. Our investment team
does not rely on computer-based screening techniques,
ratio-driven analysis or Wall Street in order to generate
investment ideas. Rather, we foster creative, innovative
thinking, which in turn may lead to promising areas that
frequently are not well followed or well understood by other
investors.
In research, our investment team looks for information from
a variety of sources. One source of information is
direct -- we speak regularly with company management to get
its perspective. But we also go outside the company,
surveying customers, competitors, suppliers and distributors
for independent sources of information. In this process, our
central purpose is to uncover information and relationships
that are not obvious under conventional analytical
techniques. Our goal is to be able to act early by using
this independent information when it can provide the maximum
benefit to the Fund's investors.
PLEASE COMMENT ON THE FUND'S PERFORMANCE.+
For the 12-month period ending March 31, 2000, the Fund
(Investor A Shares) gained 36.62%. This return compares very
favorably to the S&P 500 Index, the Fund's primary
benchmark, which was up 17.94%.
Over the past 12 months, identifying growth industries and
picking the right stocks in those industries were critical
to success. Technology stocks, as would be expected, had
exceptionally strong performance. However, the portfolio
also benefited from investments in retail, consumer
services, biomedical, cellular communications and
financials.
While many of our most successful investments during the
year were in the technology sector, the Fund was diversified
within the sector. We held investments in telecom equipment,
computer software, internet software, memory devices, and
semiconductors. A common characteristic of these companies
is that they are all infrastructure plays on the internet.
These businesses have all experienced significant earnings
growth from the expansion of the internet.
TELL US ABOUT STOCKS YOU FIND TO BE PARTICULARLY PROMISING.
Genentech, Inc. is a stock we have held in the portfolio
since it went public last July. It has two drugs that we
think have great potential. One is Retuxin, which is used
for the treatment of non-Hodgkins' lymphoma. The other is
called Herceptin, which is used in the treatment of metastic
breast cancer. Genentech also, we think, has a tremendous
research and development pipeline. It has a number of drugs
in Phase III clinical trials which we believe have
tremendous potential. One is a treatment for asthma. The
other is designed to cut off the blood flow to certain types
of cancerous cells.
</TABLE>
+Portfolio holdings and characteristics are subject
to change and may not be representative of current
holdings and characteristics.
59
<PAGE> 64
NATIONS MARSICO
FOCUSED EQUITIES FUND
PORTFOLIO MANAGER COMMENTARY continued
<TABLE>
<S> <C>
We also continue to be big believers in the internet.
However, we have generally avoided the pure internet
plays -- particularly companies with no earnings. Instead,
we've chosen to invest in what I call the "arms suppliers"
to the internet, companies like Cisco Systems, Inc., EMC
Corporation, Oracle Corporation, and Sun Microsystems.
WHAT ECONOMIC DEVELOPMENTS DO YOU ANTICIPATE DURING THE REST
OF 2000?
We believe that the economy continues to be in a secular low
inflation/low interest rate environment, which is
attributable in large part to improved productivity. As a
result of the Fed's tightening moves the economy should
begin to slow by the second half of 2000 allowing for
interest rates to come down. That should be positive for the
equity markets.
</TABLE>
60
<PAGE> 65
NATIONS MARSICO
FOCUSED EQUITIES FUND
PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/00)
[PIE CHART]
<TABLE>
<S> <C>
Media 4.8%
Retail - Specialty 5.3%
Manufacturing 6.1%
Telecommunications 6.2%
Banking 6.3%
Semiconductors 7.4%
Medical products and supplies 7.9%
Computer software 8.0%
Computer related 9.6%
Networking equipment and products 14.5%
Other 23.9%
</TABLE>
<TABLE>
<C> <S> <C>
TOP 10 HOLDINGS
-------------------------------------------------
1 Genentech, Inc. 7.9%
-------------------------------------------------
2 Cisco Systems, Inc. 7.9%
-------------------------------------------------
3 EMC Corporation 5.9%
-------------------------------------------------
4 Oracle Corporation 5.4%
-------------------------------------------------
5 Corning Inc. 4.8%
-------------------------------------------------
6 Sony Corporation, ADR 4.7%
-------------------------------------------------
7 Fannie Mae 4.5%
-------------------------------------------------
8 Time Warner Inc. 3.8%
-------------------------------------------------
9 3Com Corporation 3.6%
-------------------------------------------------
10 Morgan Stanley Dean Witter & Company 3.4%
-------------------------------------------------
THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
PORTFOLIO HOLDINGS WERE CURRENT
AS OF MARCH 31, 2000, ARE
SUBJECT TO CHANGE AND MAY NOT BE
REPRESENTATIVE OF CURRENT HOLDINGS.
61
<PAGE> 66
NATIONS MARSICO
FOCUSED EQUITIES FUND
PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN
Investor A Shares
<TABLE>
<CAPTION>
SINCE INCEPTION NAV** MOP*
<S> <C> <C>
(12/31/97
through
3/31/00) 44.54% 40.78%
</TABLE>
The charts to the left show the
growth in value of a
hypothetical $10,000 investment
in Investor A Shares of Nations
Marsico Focused Equities Fund
from the inception of the share
class. Figures for the Standard
& Poor's 500 Composite Stock
Price Index (Standard & Poor's
500 Index), an unmanaged index
of 500 widely held common
stocks, include reinvestment of
dividends. Funds included in the
Lipper Large-Cap Growth Funds
Universe normally invest in
large-capitalization companies
whose long-term earnings are
expected to grow significantly.
It is not possible to invest in
the Index or Lipper Universe.
The performance of Primary A,
Investor B and Investor C Shares
may vary based on the
differences in sales loads and
fees paid by the shareholders
investing in each class.
[INVESTOR A SHARES AT MOP* RETURN CHART] [CHART LEGEND]
<TABLE>
<CAPTION>
NATIONS FOCUSED EQUITIES STANDARD|& POOR'S |500 LIPPER LARGE-CAP GROWTH
FUND|$21,564 INDEX|$15,920 FUNDS UNIVERSE|$20,229
------------------------ ---------------------- -----------------------
<S> <C> <C> <C>
Dec. 31|1997 9425.00 10000.00 10000.00
11442.00 11395.00 11467.00
12697.00 11771.00 12051.00
11556.00 10600.00 10702.00
1998 14151.00 12858.00 13500.00
15783.00 13499.00 14645.00
16298.00 14451.00 15230.00
16250.00 13548.00 14691.00
1999 21631.00 15564.00 18646.00
Mar. 31|2000 21564.00 15920.00 20229.00
</TABLE>
[INVESTOR A SHARES AT NAV** RETURN CHART]
<TABLE>
<CAPTION>
NATIONS FOCUSED EQUITIES STANDARD|& POOR'S|500 LIPPER LARGE-CAP GROWTH
FUND|$22,879 INDEX|$15,920 FUNDS UNIVERSE|$20,229
------------------------ --------------------- -----------------------
<S> <C> <C> <C>
Dec. 31|1997 10000.00 10000.00 10000.00
12140.00 11395.00 11467.00
13472.00 11771.00 12051.00
12261.00 10600.00 10702.00
1998 15014.00 12858.00 13500.00
16746.00 13499.00 14645.00
17292.00 14451.00 15230.00
17242.00 13548.00 14691.00
1999 22951.00 15564.00 18646.00
Mar. 31|2000 22879.00 15920.00 20229.00
</TABLE>
TOTAL RETURN (AS OF 3/31/00)
<TABLE>
<CAPTION>
INVESTOR A INVESTOR B INVESTOR C
PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Inception date 12/31/97 12/31/97 12/31/97 12/31/97
------------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 37.13% 36.62% 28.77% 35.71% 30.71% 35.72% 34.72%
------------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
SINCE INCEPTION 44.63% 44.54% 40.78% 43.69% 42.84% 43.89% 43.89%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of distributions.
*Figures at maximum offering price (MOP) reflect the maximum front-end sales
charge of 5.75%.
**Figures at net asset value (NAV) do not reflect any sales charges. Investor A
Shares are available with a reduced or waived sales charge only under certain
circumstances as described in the prospectus.
***Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
62
<PAGE> 67
NATIONS MIDCAP GROWTH FUND
GROWTH STRATEGIES TEAM COMMENTARY*
<TABLE>
<S> <C>
IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON
NATIONS MIDCAP GROWTH FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 2000 AND ITS OUTLOOK FOR THE FUTURE.
PORTFOLIO MANAGEMENT PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE.
The Fund is managed by the Growth The investment philosophy of the Nations MidCap Growth Fund
Strategies Team of Banc of America is based on the premise that stock prices are driven by
Capital Management, Inc., earnings growth and that superior stock market returns occur
investment sub-adviser to the when a company experiences rapid and accelerating earnings
Fund. growth due to superior fundamentals. Our approach emphasizes
INVESTMENT OBJECTIVE a rigorous, disciplined and fundamental-based process that
The Fund seeks capital seeks to identify successful mid-sized companies between
appreciation by investing in $750 million and $7 billion in market capitalization that
emerging growth companies that are are poised to become tomorrow's successful larger companies.
believed to have superior We attempt to identify these opportunities before their
long-term earnings growth potential is recognized by investors in general.
prospects. PLEASE COMMENT ON THE FUND'S PERFORMANCE.***
PERFORMANCE REVIEW The year ended March 31, 2000 was a good year for Nations
For the 12-month period ended MidCap Growth Fund. A final quarter gain of 21.03% brought
March 31, 2000, Nations MidCap the total return for the year to 74.82%. This compares
Growth Fund Investor A Shares favorably to the benchmark Standard & Poor's MidCap 400
provided shareholders with a total Index increases of 12.37% for the quarter and 36.49% for the
return of 74.82%.** year. The Fund also significantly outperformed its peer
group, the Lipper MidCap Core Funds Universe, which returned
60.23%.
Overall, it was a year for the record books in terms of both
volatility and the split between growth and value. Except
for a modest rally in a few of the depressed sectors in the
final month of the year, much of the market has languished
in a quiet bear market for several quarters. Meanwhile,
technology-related shares soared. Although market behavior
this past year was an extension of recent trends, the most
noticeable difference was that successful stock performance
broadened beyond exclusively large-cap companies.
Nations MidCap Growth Fund thrived due to a renewed interest
by investors in medium- and small-size companies, many with
compelling valuations. Within technology, the market focus
broadened from simply business.com (the Fund owns no
traditional e-commerce businesses) to the industries that
provide the nuts and
</TABLE>
*The outlook for this Fund may differ from that
presented for other Nations Funds mutual funds.
**The performance shown does not reflect the maximum
front-end sales charge of 5.75%, which may be
charged on purchases of Investor A Shares. For
standardized performance, please refer to the
Performance table.
***The Standard & Poor's MidCap 400 Index is a
market-value weighted index that measures the
market value of 400 domestic stocks chosen for market
size, liquidity and industry representation. It is
unmanaged and unavailable for investment.
Lipper Inc. is an independent mutual fund performance
monitor. Funds included in the Lipper MidCap
Core Funds Universe invest at least 75% of their
equity assets in companies with market
capitalizations
of less than $10 billion.
Source for all statistical data -- Banc of America
Capital Management, Inc.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
63
<PAGE> 68
NATIONS MIDCAP GROWTH FUND
GROWTH STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
bolts for building and delivering the Internet and the next
generation of communications services. The Fund owns many of
these companies.
WHAT PARTICULAR SECTORS OR STOCKS PROVED FAVORABLE FOR THE
FUND?+
The technology and telecommunications sectors contributed
significantly to the terrific gains for the year. The themes
were unmistakable and seemed always to intersect at the
points of internet infrastructure, broadband deployment and
communications devices. The Fund invests in many of the
medium-size suppliers that design and manufacture components
for these burgeoning industries.
An unusually large number of technology-related companies
experienced astounding gains in the past year, so just a few
are highlighted. The Fund owns shares in Xilinx, Inc.,
Altera Corporation and Vitesse Semiconductor Corporation,
which make integrated circuits used in broadband
communications applications. Each of these stocks rose more
than 200%. JDS Uniphase Corporation, a manufacturer of
fiber-optic components, returned over 700% as telecom
network spending exploded. Research In Motion Ltd. has
climbed approximately 250% since its purchase in October
1999 due to tremendous growth in its hand-held devices used
to send and receive full-text e-mail from a corporate
network. Finally, Checkpoint Software Technologies climbed
almost 700% (although down significantly from its high) on
increased demand for its software that provides
infrastructure for secure Internet communications.
In a more mundane segment of the market, the long-suffering
energy industry rebounded substantially as oil prices began
to stabilize, inventories remained tight and growth in
capital spending resumed. The Fund owns several drilling and
oil services companies, including BJ Services Company, Smith
International, Inc. and Weatherford International Inc., all
of which recovered sharply from distressed levels.
WHAT PARTICULAR SECTORS OR STOCKS WERE UNFAVORABLE FOR THE
FUND?
Retail and apparel stocks within the consumer cyclicals
sector underperformed over the last year. Results for
specialty retailers were strong, yet investors doubted that
consumer spending trends could be sustained. Apparel makers,
however, suffered from the weakness in the big department
store chains.
Also a disappointment for both the Fund and the market has
been the financial services sector. Banks struggled
throughout the year, largely due to the Federal Reserve
Board's steady campaign to slow the economy by increasing
short-term interest rates. SouthTrust, one of the banks
owned by the Fund, fell more than 30% during the year.
Elsewhere, Intertrust, which makes digital rights software
for the internet, fell roughly 50% in the month of March
after announcing the departure of key management.
</TABLE>
+Portfolio holdings and characteristics are subject
to change and may not be representative of current
holdings and characteristics.
64
<PAGE> 69
NATIONS MIDCAP GROWTH FUND
GROWTH STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
WHAT OPPORTUNITIES DO YOU ANTICIPATE IN THE COMING YEAR, AND
HOW ARE YOU POSITIONING THE FUND TO TAKE ADVANTAGE OF THOSE
OPPORTUNITIES?
Only a year or so ago, mid- and small-cap investors lamented
the treatment they were receiving from investors who ignored
the wonderful growth prospects of so many companies simply
because they were not large-cap stocks. Today, much of that
has corrected and there appear to be no longer scores of
woefully undervalued stocks that don't reflect their growth
potential. We are not ungrateful, however, given this
extraordinary year in which more than one-third of the
companies held in the Fund rose in excess of 100%.
In the final month of the fiscal year, and as we write this
commentary, the markets, in particular technology, have
experienced enormous volatility and have retraced some of
the spectacular gains. This particularly affects technology
and is to be expected. We are undeterred and continue to
place a heavy emphasis on the best of breed companies in
technology and telecommunications that can dominate their
rapidly growing markets.
We think many compelling growth opportunities exist outside
of technology and we also will continue to focus on areas
such as healthcare, retailing, broadcasting, capital goods
and select financials. Our challenge is to identify
businesses with sustainable competitive advantages and the
ability to consistently produce superior growth in revenue,
cash flow and earnings.
</TABLE>
65
<PAGE> 70
NATIONS MIDCAP GROWTH FUND
PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/00)
[PIE CHART]
<TABLE>
<S> <C>
Semiconductors 13.2
Networking equipment and products 12.2
Computer software 12
Telecommunications 5.4
Retail - Specialty 4.8
Financial services 4.7
Banking 4.7
Oil field services & equipment 4.4
Drugs 3.9
Electric power 3.6
Other 31.1
</TABLE>
<TABLE>
<C> <S> <C>
TOP 10 HOLDINGS
-------------------------------------------------
1 Comverse Technology, Inc. 3.6%
-------------------------------------------------
2 JDS Uniphase Corporation 3.5%
-------------------------------------------------
3 ADC Telecommunications, Inc. 3.5%
-------------------------------------------------
4 Altera Corporation 3.1%
-------------------------------------------------
5 Xilinx, Inc. 2.9%
-------------------------------------------------
6 Citrix Systems, Inc. 2.7%
-------------------------------------------------
7 Vitesse Semiconductor Corporation 2.7%
-------------------------------------------------
8 Maxim Integrated Products 2.5%
-------------------------------------------------
9 Univision Communications, Inc. 2.5%
-------------------------------------------------
10 BJ Services Company 2.4%
-------------------------------------------------
THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
PORTFOLIO HOLDINGS WERE CURRENT
AS OF MARCH 31, 2000, ARE
SUBJECT TO CHANGE AND MAY NOT BE
REPRESENTATIVE OF CURRENT HOLDINGS.
66
<PAGE> 71
NATIONS MIDCAP GROWTH FUND
PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN
Investor A Shares
<TABLE>
<CAPTION>
SINCE INCEPTION NAV** MOP*
<S> <C> <C>
(12/10/92
through
3/31/00) 20.46% 19.49%
</TABLE>
The charts to the left show the
growth in value of a
hypothetical $10,000 investment
in Investor A Shares of Nations
MidCap Growth Fund from the
inception of the share class.
Figures for the Standard &
Poor's MidCap 400 Index, an
unmanaged,
capitalization-weighted index of
400 domestic stocks chosen for
market size, liquidity and
industry representation, include
reinvestment of dividends. Funds
included in the Lipper MidCap
Core Funds Universe invest at
least 75% of their equity assets
in companies with market
capitalization of less than $10
billion. It is not possible to
invest in the Index or Lipper
Universe. The performance of
Primary A, Investor B and
Investor C Shares may vary based
on the differences in sales
loads and fees paid by the
shareholders investing in each
class.
[INVESTOR A SHARES AT MOP* RETURN CHART] [CHART LEGEND]
<TABLE>
<CAPTION>
NATIONS MIDCAP|GROWTH STANDARD |& POOR'S LIPPER MIDCAP|CORE FUNDS
FUND|$36,704 |MIDCAP|400 INDEX|$35,929 UNIVERSE|$38,331
--------------------- ------------------------- ------------------------
<S> <C> <C> <C>
Dec. 10|1992 9425.00 10000.00 10000.00
1992 9875.00 10280.00 10261.00
9487.00 10617.00 10418.00
9764.00 10865.00 10601.00
10604.00 11411.00 11402.00
1993 11025.00 11715.00 11809.00
10435.00 11269.00 11508.00
9749.00 10858.00 11016.00
11064.00 11593.00 11820.00
1994 11068.00 11294.00 11725.00
11630.00 12208.00 12584.00
12645.00 13285.00 13718.00
13961.00 14581.00 15220.00
1995 14357.00 14790.00 15371.00
15627.00 15701.00 16347.00
16772.00 16153.00 17115.00
17044.00 16623.00 17731.00
1996 16986.00 17630.00 18366.00
15654.00 17367.00 17420.00
18356.00 19921.00 20167.00
21563.00 23124.00 23309.00
1997 20465.00 23316.00 22431.00
22678.00 25883.00 25037.00
21705.00 25329.00 24496.00
15957.00 21664.00 19830.00
1998 21142.00 27771.00 24674.00
20996.00 25999.00 24084.00
24024.00 29678.00 26996.00
22866.00 27209.00 25768.00
1999 30327.00 31883.00 33279.00
Mar. 31|2000 36704.00 35929.00 38331.00
</TABLE>
[INVESTOR A SHARES AT NAV** RETURN CHART]
<TABLE>
<CAPTION>
NATIONS MIDCAP|GROWTH STANDARD |& POOR'S LIPPER MIDCAP|CORE FUNDS
FUND|$38,944 |MIDCAP|400 INDEX|$35,929 UNIVERSE|$38,331
--------------------- ------------------------- ------------------------
<S> <C> <C> <C>
Dec. 10|1992 10000.00 10000.00 10000.00
1992 10477.00 10280.00 10261.00
10065.00 10617.00 10418.00
10359.00 10865.00 10601.00
11251.00 11411.00 11402.00
1993 11698.00 11715.00 11809.00
11072.00 11269.00 11508.00
10345.00 10858.00 11016.00
11739.00 11593.00 11820.00
1994 11743.00 11294.00 11725.00
12340.00 12208.00 12584.00
13416.00 13285.00 13718.00
14813.00 14581.00 15220.00
1995 15233.00 14790.00 15371.00
16580.00 15701.00 16347.00
17795.00 16153.00 17115.00
18084.00 16623.00 17731.00
1996 18022.00 17630.00 18366.00
16609.00 17367.00 17420.00
19476.00 19921.00 20167.00
22878.00 23124.00 23309.00
1997 21714.00 23316.00 22431.00
24061.00 25883.00 25037.00
23029.00 25329.00 24496.00
16931.00 21664.00 19830.00
1998 22432.00 27771.00 24674.00
22277.00 25999.00 24084.00
25489.00 29678.00 26996.00
24261.00 27209.00 25768.00
1999 32177.00 31883.00 33279.00
Mar. 31|2000 38944.00 35929.00 38331.00
</TABLE>
TOTAL RETURN (AS OF 3/31/00)
<TABLE>
<CAPTION>
INVESTOR A INVESTOR B INVESTOR C
PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Inception date 12/4/92 12/10/92 6/7/93 12/18/92
-----------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 75.34% 74.82% 64.71% 73.47% 68.47% 73.50% 72.50%
-----------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS 33.15% 32.85% 30.27% 31.81% 31.23% 31.87% 31.87%
5 YEARS 26.13% 25.84% 24.35% 24.87% 24.71% 25.07% 25.07%
SINCE INCEPTION 20.48% 20.46% 19.49% 21.16% 21.16% 19.72% 19.72%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of distributions.
*Figures at maximum offering price (MOP) reflect the maximum front-end sales
charge of 5.75%.
**Figures at net asset value (NAV) do not reflect any sales charges. Investor A
Shares are available with a reduced or waived sales charge only under certain
circumstances as described in the prospectus.
***Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
67
<PAGE> 72
NATIONS SMALL COMPANY FUND
SMALLCAP STRATEGIES TEAM COMMENTARY*
<TABLE>
<S> <C>
IN THE FOLLOWING INTERVIEW, THE TEAM SHARES ITS VIEWS ON
NATIONS SMALL COMPANY FUND'S PERFORMANCE FOR THE 12-MONTH
PERIOD ENDED MARCH 31, 2000 AND ITS OUTLOOK FOR THE FUTURE.
PORTFOLIO MANAGEMENT PLEASE DESCRIBE THE FUND'S INVESTMENT PHILOSOPHY AND STYLE.
The Fund is managed by the The investment philosophy of Nations Small Company Fund is
SmallCap Strategies Team of Banc based on the premise that stock prices are driven by
of America Capital Management, earnings growth and that superior returns occur when a
Inc., investment sub-adviser to company experiences rapid and accelerating earnings growth
the Fund. due to improving fundamentals. The Fund typically invests in
INVESTMENT OBJECTIVE companies with market capitalizations of less than $2
The Fund seeks long-term capital billion and with projected earnings growth of more than 15%.
growth by investing primarily in The companies are subject to a rigorous fundamental
equity securities. analysis. This analysis includes, but is not limited to, an
PERFORMANCE REVIEW evaluation of the firm's competitive position, management
For the 12-month period ended ability and valuation attractiveness. We attempt to identify
March 31, 2000, Nations Small companies in the early stages of their economic lifecycles
Company Fund Investor A Shares and before their potential is recognized by the investing
provided shareholders with a total public.
return of 96.91%.** PLEASE COMMENT ON THE FUND'S PERFORMANCE.
Nations Small Company Fund began the first six months of the
year with somewhat modest performance in line with most
other small-cap funds. The economic environment was
favorable, although the Federal Reserve Board clearly
signaled its intention to raise interest rates. Investors
preferred large company stocks and small company stocks
languished. Then, as if someone rang a bell, small-caps took
off from September 1999 through March 2000. The Russell 2000
Index, a common benchmark for small company stocks,
outperformed the Standard & Poor's 500 Composite Stock Price
Index for two consecutive quarters.*** This performance was
primarily driven by growth stocks, and more specifically by
the technology sector. The initial public offering (IPO)
market remained robust as younger and more exciting
companies rushed to come public. Many of these offerings
doubled or tripled in value in their first day of trading.
Nations Small Company Fund participated in several of these
offerings, but our valuation discipline generally kept us
from chasing these and other speculative stocks. Overall, it
was a good small-cap stock environment, although the risk
profile of the market and the Fund
</TABLE>
*The outlook for this Fund may differ from that
presented for other Nations Funds mutual funds.
**The performance shown does not reflect the maximum
front-end sales charge of 5.75%, which may be
charged on purchases of Investor A Shares. For
standardized performance, please refer to the
Performance table. Performance shown includes the
effect of fee waivers by the investment adviser,
which
have the effect of increasing total return.
***The Russell 2000 Index is an unmanaged index
tracking the performance of 2000 small company
stocks. It is unavailable for investment.
The Standard & Poor's 500 Composite Stock Price Index
is an unmanaged index of 500 widely held
common stocks. It is unavailable for investment.
Source for all statistical data -- Banc of America
Capital Management, Inc.
BECAUSE SMALL COMPANIES OFTEN HAVE NARROWER MARKETS
AND LIMITED FINANCIAL RESOURCES, AND THEIR STOCKS ARE
NOT AS ACTIVELY TRADED AS LARGE COMPANY STOCKS, THEIR
SHARE PRICES MAY BE MORE VOLATILE.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
68
<PAGE> 73
NATIONS SMALL COMPANY FUND
SMALLCAP STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
increased because of narrowness of the market's focus on
technology sector and the high stock valuations.
For the year ended March 31, 2000, Nations Small Company
Fund significantly outperformed both its benchmark, the
Russell 2000 Index and its peer group, the Lipper SmallCap
Core Funds Universe. The Fund (Investor A Shares) returned
96.91% compared with a return of 37.29% for the Index and
54.26% for the peer group.+
WHAT PARTICULAR SECTORS OR STOCKS PROVED FAVORABLE FOR THE
FUND?++
Technology was far and away the best sector for the Fund.
More specifically, telecommunications equipment stocks were
a favorite of the market. The Fund benefited from having
over half of its technology holdings in telecommunications
equipment stocks. Investors focused on a bandwidth upgrade
cycle that is required to handle the vast amount of data
transmissions generated by the proliferation of the
Internet. Fund holdings that appear positioned to take
advantage of this wireline spending cycle are Ortel
Corporation, Harmonic Lightwaves Inc., C-Cor.Net and SDL
Inc. Wireless networks also experienced robust demand as
more consumers bought phones and existing users made longer
and more frequent phone calls. Several fund holdings
benefited, including RF Microdevices, Inc., Sawtek, Inc. and
Anaren Microwave, Inc.
WHAT PARTICULAR SECTORS OR STOCKS WERE UNFAVORABLE FOR THE
FUND?
The consumer cyclicals and health care services sectors
detracted most from performance over the 12 month period.
With the threat of rising interest rates, many investors
believed that consumer spending would decrease. Even though
this decline in spending never materialized, the perception
dragged down Fund holdings such as Quicksilver, Inc. and
ShopKo Stores, Inc. In the health care sector, government
pressures limiting reimbursement amounts and the threat of
new regulation hurt many of the Fund's holdings. We
attempted to move swiftly in removing names from the
portfolio when their fundamentals broke down. Holdings such
as Sunrise Assisted Living and Centennial Healthcare were
sold when it became apparent that their business environment
was much too challenging to overcome in the short term.
WHAT ECONOMIC FACTORS MOST INFLUENCED THE FUND'S
PERFORMANCE?
For the last 12 months, the economic environment has been
quite good. As the Far East recovered from the "Asian flu"
of 1998, the U.S. economy resumed its march forward. The
Federal Reserve Board has kept a watchful eye on inflation
and went so far as to raise short-term interest rates five
times during the past six months. The economy and the
markets have shrugged off this tightening, as we saw strong
fourth-quarter gross domestic product growth and the stock
market continued to advance. However, the threat of rising
interest rates has introduced an extra element
</TABLE>
+Lipper Inc. is an independent mutual fund
performance monitor. Funds included in the Lipper
SmallCap Core Funds invest at least 75% of their
equity assets in companies with market
capitalizations
of less than $3 billion.
++Portfolio holdings and characterisitics are subject
to change and may not be representative of current
holdings and characteristics.
69
<PAGE> 74
NATIONS SMALL COMPANY FUND
SMALLCAP STRATEGIES TEAM COMMENTARY continued
<TABLE>
<S> <C>
of volatility to the market. Small-cap stocks have responded
by outperforming their large-cap peers. Domestic real
interest rates remain at historically low levels and the
global economies appear to be improving. These factors
should provide a good economic environment for the coming
year.
WHAT INVESTMENT OPPORTUNITIES DO YOU ANTICIPATE, AND HOW ARE
YOU POSITIONING THE FUND TO TAKE ADVANTAGE OF THESE
OPPORTUNITIES?
We see a very healthy macroeconomic picture for the coming
year, although we continue to watch rising interest rates.
Global economies appear to be strengthening, despite some
fits and starts. Our primary concern has to do with the
narrowness of the small-cap market and the high valuations
in many technology stocks. While the fundamentals are
strong, the valuations introduce an additional element of
volatility into the portfolio.
We continue to see exciting new companies come to market, as
reflected in the enormous number of IPOs in the past year.
The Fund has historically invested a large percentage of
assets in the technology sector and we anticipate that this
will continue. Our challenge will be opportunistically to
take advantage of the volatility by establishing new
positions at what we believe are attractive valuations and
by taking profits when we feel the markets are overvalued.
All Fund holdings will continue to be subject to our
rigorous evaluation of their business plans, managements and
earnings prospects. In a downturn, our valuation overlay
should provide some relative protection, as a majority of
our holdings have earnings and trade at what we think are
reasonable valuations.
</TABLE>
70
<PAGE> 75
NATIONS SMALL COMPANY FUND
PORTFOLIO BREAKDOWN (AS A % OF NET ASSETS AS OF 3/31/00)
[PIE CHART]
<TABLE>
<S> <C>
Medical services 2.9%
Computer software 3.1%
Oil and gas 3.3%
Computer related 3.8%
Commercial services 3.9%
Apparel and textiles 4.6%
Drugs 4.8%
Technology 5.8%
Electronics 11.2%
Telecommunications 24.4%
Other 32.2%
</TABLE>
<TABLE>
<C> <S> <C>
TOP 10 HOLDINGS
-------------------------------------------------
1 C-COR Electronics 3.9%
-------------------------------------------------
2 Gilat Satellite Networks Ltd. 3.7%
-------------------------------------------------
3 Anaren Microwave, Inc. 3.5%
-------------------------------------------------
4 REMEC, Inc. 3.0%
-------------------------------------------------
5 P-Com, Inc. 2.7%
-------------------------------------------------
6 AudioCodes Ltd. 2.5%
-------------------------------------------------
7 Aeroflex, Inc. 2.4%
-------------------------------------------------
8 Sawtek, Inc. 2.4%
-------------------------------------------------
9 Affiliated Managers Group, Inc. 2.3%
-------------------------------------------------
10 SDL, Inc. 2.1%
-------------------------------------------------
THE TOP 10 HOLDINGS ARE PRESENTED TO ILLUSTRATE
EXAMPLES OF THE INDUSTRIES AND SECURITIES IN
WHICH THE FUND MAY INVEST.
</TABLE>
PORTFOLIO HOLDINGS WERE CURRENT
AS OF MARCH 31, 2000, ARE
SUBJECT TO CHANGE AND MAY NOT BE
REPRESENTATIVE OF CURRENT HOLDINGS.
71
<PAGE> 76
NATIONS SMALL COMPANY FUND
PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURN
Investor A Shares
<TABLE>
<CAPTION>
SINCE INCEPTION NAV** MOP*
<S> <C> <C>
(12/12/95
through
3/31/00) 24.72% 23.01%
</TABLE>
The charts to the left show the
growth in value of a
hypothetical $10,000 investment
in Investor A Shares of Nations
Small Company Fund from the
inception of the share class.
Figures for the Russell 2000
Index, an unmanaged
capitalization-weighted index
that includes 2,000 of the
smallest stocks, representing
approximately 11% of the U.S.
equity market, include
reinvestment of dividends. Funds
included in the Lipper SmallCap
Core Funds Universe invest at
least 75% of their equity assets
in companies with market
capitalization of less than $3
billion. It is not possible to
invest in the Index or Lipper
Universe. The performance of
Primary A, Investor B and
Investor C Shares may vary based
on the differences in sales
loads and fees paid by the
shareholders investing in each
class.
[INVESTOR A SHARES AT MOP* RETURN CHART] [CHART LEGEND]
<TABLE>
<S> <C> <C>
Nations Small Company Fund $24,376 Russell 2000 Index $18,514
Dec. 12|1995 9425 10000
1995 9313 10264
9843 10787
10474 11327
10584 11365
1996 11167 11956
10547 11338
12643 13176
14577 15137
1997 13341 14630
15732 16101
14764 15351
10955 12258
1998 13505 14257
12378 13484
14144 15581
14579 14596
1999 20868 17289
Mar. 31|2000 24376 18514
<S> <C>
Lipper SmallCap Funds Universe $21,318
Dec. 12|1995 10000
1995 10257
10942
11735
11862
1996 12280
11696
13741
16183
1997 15419
17177
16294
12755
1998 15143
14089
16416
15764
1999 19130
Mar. 31|2000 21318
</TABLE>
[INVESTOR A SHARES AT NAV** RETURN CHART]
<TABLE>
<CAPTION>
NATIONS SMALL COMPANY LIPPER SMALLCAP FUNDS
FUND $25,862 RUSSELL 2000 INDEX $18,514 UNIVERSE $21,318
--------------------- -------------------------- ---------------------
<S> <C> <C> <C>
Dec. 12|1995 10000.00 10000.00 10000.00
1995 9881.00 10264.00 10257.00
10443.00 10787.00 10942.00
11113.00 11327.00 11735.00
11229.00 11365.00 11862.00
11848.00 11956.00 12280.00
11190.00 11338.00 11696.00
13414.00 13176.00 13741.00
15466.00 15137.00 16183.00
1997 14155.00 14630.00 15419.00
16691.00 16101.00 17177.00
15665.00 15351.00 16294.00
11623.00 12258.00 12755.00
14329.00 14257.00 15143.00
13133.00 13484.00 14089.00
15007.00 15581.00 16416.00
15468.00 14596.00 15764.00
22141.00 17289.00 19130.00
Mar. 31|2000 25862.00 18514.00 21318.00
</TABLE>
TOTAL RETURN (AS OF 3/31/00)
<TABLE>
<CAPTION>
INVESTOR A INVESTOR B INVESTOR C
PRIMARY A NAV** MOP* NAV** CDSC*** NAV** CDSC***
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Inception date 12/12/95 12/12/95 12/12/95 9/22/97
-----------------------------------------------------------------------------------------------------------------------------------
1 YEAR PERFORMANCE 97.46% 96.91% 85.54% 95.79% 90.79% 95.76% 94.76%
-----------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS 32.56% 32.20% 29.60% 31.31% 30.73%
SINCE INCEPTION 25.14% 24.72% 23.01% 23.95% 23.72% 22.42% 22.42%
</TABLE>
THE PERFORMANCE SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF
FUTURE RESULTS. A MUTUAL FUND'S SHARE PRICE AND INVESTMENT RETURN WILL VARY WITH
MARKET CONDITIONS, AND THE PRINCIPAL VALUE OF SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST. Average annual returns are
historical in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestment of distributions.
*Figures at maximum offering price (MOP) reflect the maximum front-end sales
charge of 5.75%.
**Figures at net asset value (NAV) do not reflect any sales charges. Investor A
Shares are available with a reduced or waived sales charge only under certain
circumstances as described in the prospectus.
***Figures at CDSC reflect the maximum applicable contingent deferred sales
charge.
The performance shown includes the effect of fee waivers by the investment
adviser and the co-administrator, which have the effect of increasing total
return.
72
<PAGE> 77
NATIONS FUNDS
Nations Convertible Securities Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS -- 15.0%
COMPUTER RELATED -- 0.4%
50,000 Hutchinson Technology, Inc.++......... $ 881
12,000 Sanmina Corporation................... 811
--------
1,692
--------
COMPUTER SOFTWARE -- 0.9%
20,000 Affiliated Computer Services,
Inc.++.............................. 760
27,000 Microsoft Corporation++............... 2,869
--------
3,629
--------
ENERGY -- 2.4%
130,000 Avista Corporation++.................. 5,297
188,000 Enron Corporation++................... 4,148
--------
9,445
--------
INSURANCE -- 0.4%
90,000 Penn Treaty American Corporation++.... 1,502
--------
MANUFACTURING -- 0.4%
75,000 Mark IV Industries, Inc. ............. 1,655
--------
MEDIA -- 1.3%
55,263 AMFM Inc.++........................... 3,433
19,805 MediaOne Group, Inc.++................ 1,604
--------
5,037
--------
NETWORKING EQUIPMENT AND PRODUCTS -- 1.4%
70,000 Cisco Systems, Inc. .................. 5,412
--------
OIL -- INTERNATIONAL -- 0.7%
50,000 BP Amoco plc, ADR..................... 2,653
--------
OIL AND GAS -- 0.5%
50,000 Diamond Offshore Drilling, Inc. ...... 1,997
--------
RESTAURANTS AND LODGING -- 0.7%
70,000 McDonald's Corporation................ 2,629
--------
RETAIL -- SPECIALTY -- 1.3%
80,000 Home Depot Inc. ...................... 5,160
--------
SEMICONDUCTORS -- 3.9%
51,000 Intel Corporation..................... 6,728
7,000 Motorola, Inc. ....................... 997
120,000 Photronics, Inc.++.................... 4,238
48,000 Xilinx, Inc. ......................... 3,975
--------
15,938
--------
UTILITIES -- TELEPHONE -- 0.7%
50,000 AT&T Corporation...................... 2,813
--------
TOTAL COMMON STOCKS
(Cost $33,225)........................ 59,562
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
CONVERTIBLE BONDS AND NOTES -- 52.0%
AUTOMOBILE PARTS MANUFACTURERS -- 0.5%
3,000 Standard Motor Products, Inc., 6.750%
07/15/09............................ $ 2,141
--------
COMPUTER RELATED -- 6.0%
2,850 Affiliated Computer Services, Inc.,
4.000% 03/15/05..................... 2,896
4,000 ASM Lithography Holding N.V., 4.250%
11/30/04(+)......................... 4,740
7,100 Citrix Systems, Inc., 5.250%**
03/22/19............................ 6,852
6,400 Hewlett-Packard Company, 3.200%**
10/14/17............................ 4,912
1,700 Hutchinson Technology Inc., 6.000%
03/15/05............................ 1,315
1,250 Siebel Systems, Inc., 5.500%
09/15/06(+)......................... 3,203
--------
23,918
--------
FINANCIAL SERVICES -- 0.3%
1,697 BankAtlantic Bancorp, Inc.,
5.625% 12/01/07..................... 1,078
--------
HEALTHCARE -- 4.5%
3,925 Centocor, Inc.,
4.750% 02/15/05..................... 4,347
8,500 Elan International Finance
Corporation, 3.280%** 12/14/18...... 6,045
3,750 Roche Holding AG, 2.750%**
01/19/15(+)......................... 3,155
8,800 Roche Holdings, Inc., 5.800%**
05/06/12(+)......................... 4,180
--------
17,727
--------
INDUSTRIAL -- 2.4%
5,000 SCI Systems, Inc., 3.000% 03/15/07.... 5,487
5,850 Solectron Corporation, 4.000%**
01/27/19............................ 3,898
--------
9,385
--------
INSURANCE -- 0.9%
4,180 Penn Treaty American Corporation,
6.250% 12/01/03..................... 2,994
890 Penn Treaty American Corporation,
6.250% 12/01/03..................... 637
--------
3,631
--------
MACHINERY AND EQUIPMENT -- 1.3%
3,205 Kulicke and Soffa Industries, Inc.,
4.750% 12/15/06(+).................. 5,060
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
73
<PAGE> 78
NATIONS FUNDS
Nations Convertible Securities Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
MANUFACTURING -- 3.1%
5,300 CommScope, Inc., 4.000% 12/15/06(+)... $ 6,334
2,135 Mark IV Industries, Inc., 4.750%
11/01/04............................ 1,809
2,695 Sanmina Corporation, 4.250%
05/01/04............................ 4,342
--------
12,485
--------
MEDIA -- 2.5%
4,000 AT&T Corporation-Liberty Media Group,
4.000% 11/15/29..................... 6,235
4,000 Clear Channel Communications, Inc.,
1.500% 12/01/02..................... 3,720
--------
9,955
--------
MEDICAL SERVICES -- 1.2%
660 Affymetrix, Inc., 4.750%
02/15/07(+)......................... 448
1,430 Alkermes, Inc., 3.750% 02/15/07(+).... 1,201
1,890 COR Therapeutics, Inc.,
5.000% 03/01/07..................... 2,341
1,075 Invitrogen Corporation,
5.500% 03/01/07(+).................. 847
--------
4,837
--------
METALS AND MINING -- 1.1%
6,450 Agnico-Eagle Mines Ltd.,
3.500% 01/27/04..................... 4,176
--------
OIL -- DOMESTIC -- 4.6%
4,500 Devon Energy Corporation,
4.950% 08/15/08..................... 4,517
4,355 Kerr-McGee Corporation,
5.250% 02/15/10..................... 5,034
4,600 Loews Corporation,
3.125% 09/15/07..................... 4,037
2,900 Seacor Holdings, Inc.,
5.375% 11/15/06..................... 2,962
1,500 Seacor Holdings, Inc.,
5.375% 11/15/06..................... 1,532
--------
18,082
--------
PROFESSIONAL SERVICES -- 3.7%
5,750 America Online, Inc.,
3.250%** 12/06/19................... 3,134
3,600 Interpublic Group of Companies, Inc.,
1.870% 06/01/06..................... 3,632
3,550 Lamar Advertising Company,
5.250% 09/15/06..................... 3,976
4,290 Young & Rubicam Inc.,
3.000% 01/15/05(+).................. 3,968
--------
14,710
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
SEMICONDUCTORS -- 8.2%
4,225 Amkor Technologies, Inc.,
5.000% 03/15/07(+).................. $ 4,584
680 Atmel Corporation,
3.250% 06/01/02..................... 1,998
3,500 Cypress Semiconductor Corporation,
4.000% 02/01/05..................... 4,366
4,100 General Semiconductor, Inc.,
5.750% 12/15/06..................... 5,412
3,050 Lattice Semiconductor Corporation,
4.750% 11/01/06..................... 5,582
1,245 LSI Logic Corporation,
4.250% 03/15/04..................... 5,780
1,900 LSI Logic Corporation,
4.000% 02/15/05..................... 2,349
1,550 Micron Technology, Inc.,
7.000% 07/01/04..................... 2,914
--------
32,985
--------
TELECOMMUNICATIONS -- 8.7%
4,050 American Tower Corporation,
5.000% 02/15/10(+).................. 4,602
4,500 Bell Atlantic Financial Services,
5.750% 04/01/03..................... 4,579
5,000 Bell Atlantic Financial Services,
4.250% 09/15/05(+).................. 7,162
3,150 ITC Deltacom, Inc.,
4.500% 05/15/06..................... 4,725
2,370 Motorola, Inc.,
1.870%** 09/27/13................... 3,911
4,500 Nextel Communications, Inc.,
5.250% 01/15/10(+).................. 5,361
4,900 Pinnacle Holdings Inc.,
5.500% 09/15/07(+).................. 4,496
--------
34,836
--------
UTILITIES -- TELEPHONE -- 3.0%
4,000 Telefonos de Mexico SA,
4.250% 06/15/04..................... 6,215
8,200 US Cellular Corporation,
5.750%** 06/15/15................... 5,566
--------
11,781
--------
TOTAL CONVERTIBLE BONDS AND NOTES
(Cost $168,892)....................... 206,787
--------
CONVERTIBLE PREFERRED STOCKS -- 25.6%
AEROSPACE AND DEFENSE -- 1.3%
88,000 Titan Capital Trust++(+).............. 5,324
--------
CONTAINERS AND PACKAGING -- 0.9%
68,000 Sealed Air Corporation................ 3,532
--------
ELECTRIC POWER -- 0.8%
82,000 Nisource Inc. ........................ 2,993
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
74
<PAGE> 79
NATIONS FUNDS
Nations Convertible Securities Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
ENERGY -- 1.5%
42,000 CMS Energy Corporation................ $ 1,113
90,000 El Paso Energy Capital Trust I........ 4,725
--------
5,838
--------
ENTERTAINMENT -- 1.2%
30,000 Houston Industries Inc. .............. 4,770
--------
FINANCIAL SERVICES -- 3.7%
90,000 Calpine Capital Trust II++(+)......... 4,916
177,300 CNB Capital Trust I................... 5,762
35,000 Frontier Financing Trust++............ 197
62,000 Frontier Financing Trust++............ 349
80,000 Sovereign Capital Trust++............. 3,900
--------
15,124
--------
FOOD PRODUCERS -- 0.4%
49,000 Ralston Purina Company................ 1,430
--------
FOREST AND PAPER PRODUCTS -- 0.7%
65,000 International Paper Capital Trust..... 2,966
--------
HEALTHCARE -- 1.0%
88,000 Monsanto Company...................... 4,026
--------
INSURANCE -- 2.4%
165,000 AmerUs Life Holdings, Inc. ........... 3,465
380,000 Philadelphia Consolidated Holdings
Corporation......................... 2,755
65,000 Protective Life Corporation Capital
Trust II............................ 3,380
--------
9,600
--------
MANUFACTURING -- 0.2%
20,300 Fleetwood Capital Trust............... 601
--------
MEDIA -- 2.0%
21,000 Adelphia Communications............... 3,224
91,600 MediaOne Group, Inc. ................. 4,763
--------
7,987
--------
OIL -- DOMESTIC -- 2.0%
150,000 Coastal Corporation................... 4,247
80,000 Unocal Corporation.................... 3,550
--------
7,797
--------
PRINTING AND PUBLISHING -- 0.9%
120,000 Readers Digest Association............ 3,720
--------
REAL ESTATE INVESTMENT TRUSTS
(REITS) -- 0.9%
139,400 Apartment Investment and Management
Company............................. 3,450
--------
RESTAURANTS AND LODGING -- 0.7%
59,200 Wendy's Financing I................... 2,782
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
TELECOMMUNICATIONS -- 1.0%
16,000 Global Crossing Ltd.++(+)............. $ 3,884
--------
TRANSPORTATION -- 0.9%
18,000 Union Pacific Capital Trust++......... 709
72,000 Union Pacific Capital Trust++......... 2,835
--------
3,544
--------
UTILITIES -- ELECTRIC -- 1.8%
70,000 AES Trust III......................... 4,725
65,000 Texas Utilities Company............... 2,563
--------
7,288
--------
UTILITIES -- TELEPHONE -- 1.3%
80,000 Citizens Utilities Company++.......... 5,000
--------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $105,978)....................... 101,656
--------
<CAPTION>
SHARES
(000)
-------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 4.5%
(Cost $17,774)
17,774 Nations Cash Reserves#................ 17,774
--------
TOTAL INVESTMENTS
(Cost $325,869*)............... 97.1% 385,779
--------
OTHER ASSETS AND
LIABILITIES (NET).............. 2.9%
Cash.................................. $ 1
Receivable for investment securities
sold................................ 13,417
Receivable for Fund shares sold....... 668
Dividends receivable.................. 265
Interest receivable................... 1,420
Payable for Fund shares redeemed...... (1,784)
Investment advisory fee payable....... (218)
Administration fee payable............ (77)
Shareholder servicing and distribution
fees payable........................ (92)
Payable for investment securities
purchased........................... (1,938)
Accrued Trustees'/Directors' fees and
expenses............................ (11)
Accrued expenses and other
liabilities......................... (46)
--------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)............................... 11,605
--------
NET ASSETS..................... 100.0% $397,384
========
NET ASSETS CONSIST OF:
Undistributed net investment income... $ 1,161
Accumulated net realized gain on
investments sold.................... 63,683
Net unrealized appreciation of
investments......................... 59,910
Paid-in capital....................... 272,630
--------
NET ASSETS............................ $397,384
========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
75
<PAGE> 80
NATIONS FUNDS
Nations Convertible Securities Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
-----------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($13,688,100 / 617,243 shares
outstanding)........................ $22.18
------
------
INVESTOR A SHARES:
Net asset value and redemption price
per share ($369,487,613 / 16,667,946
shares outstanding)................. $22.17
------
------
Maximum sales charge.................. 5.75%
Maximum offering price per share...... $23.52
INVESTOR B SHARES:
Net asset value and offering price per
share+ ($11,175,029 / 506,464 shares
outstanding)........................ $22.06
------
------
INVESTOR C SHARES:
Net asset value and offering price per
share+ ($3,032,944 / 136,442 shares
outstanding)........................ $22.23
------
------
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $59,861 on
investment securities was comprised of gross appreciation of $82,585 and
gross depreciation of $22,724 for Federal income tax purposes. At March 31,
2000, the aggregate cost of securities for Federal income tax purposes was
$325,918.
** 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, normally to qualified institutional buyers.
++ Non-income producing security.
+ The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
76
<PAGE> 81
NATIONS FUNDS
Nations Balanced Assets Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
-------------------------------------------------------------
<C> <S> <C> <C>
ASSET-BACKED SECURITIES -- 1.8%
ASSET-BACKED -- AUTO LOANS -- 0.2%
$ 250 Premier Auto Trust,
Series 1998-1, Class B,
5.920% 10/06/04..................... $ 243
--------
ASSET-BACKED -- CREDIT CARD
RECEIVABLES -- 0.3%
325 Standard Credit Card Master Trust,
Series 1995-9, Class B,
6.650% 10/07/07..................... 312
--------
ASSET-BACKED -- HOME EQUITY
LOANS -- 1.3%
CS First Boston Mortgage Securities
843 Corporation, Series 1996-2, Class
A4,
6.620% 02/25/18.....................
836
452 IMC Home Equity Loan Trust,
Series 1997-7, Class A3,
6.540% 11/20/12..................... 448
--------
1,284
--------
TOTAL ASSET-BACKED SECURITIES
(Cost $1,871)......................... 1,839
--------
<CAPTION>
SHARES
---------
<C> <S> <C> <C>
COMMON STOCKS -- 55.4%
AEROSPACE AND DEFENSE -- 1.2%
23,687 Honeywell International Inc. ......... 1,248
--------
AUTOMOBILES AND TRUCKS -- 2.1%
25,450 Ford Motor Company.................... 1,170
11,525 General Motors Corporation............ 954
--------
2,124
--------
BANKING -- 4.5%
7,225 Bank of New York Company Inc. ........ 300
18,125 Chase Manhattan Corporation........... 1,579
23,825 Citigroup Inc. ....................... 1,413
39,925 Mellon Financial Corporation.......... 1,178
--------
4,470
--------
BEVERAGES -- 1.4%
13,590 Anheuser-Busch Companies, Inc. ....... 846
17,150 PepsiCo, Inc. ........................ 593
--------
1,439
--------
CHEMICALS -- BASIC -- 1.6%
6,925 Dow Chemical Company.................. 789
16,606 E.I. duPont de Nemours and Company.... 878
--------
1,667
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
COMPUTER RELATED -- 2.6%
9,800 Adaptec, Inc.=........................ $ 379
4,500 Apple Computer Inc.=.................. 611
8,075 International Business Machines
Corporation......................... 953
13,675 Pitney Bowes, Inc. ................... 611
--------
2,554
--------
COMPUTER SOFTWARE -- 0.6%
10,850 Computer Associates International
Inc. ............................... 642
--------
CONGLOMERATE -- 2.1%
21,175 Rockwell International Corporation.... 885
20,275 United Technologies Corporation....... 1,282
--------
2,167
--------
COSMETICS AND TOILETRIES -- 0.7%
15,300 Avon Products, Inc. .................. 445
3,875 Procter & Gamble Company.............. 218
--------
663
--------
DIVERSIFIED -- 1.1%
9,575 Minnesota Mining & Manufacturing
Company............................. 848
4,475 Textron Inc. ......................... 272
--------
1,120
--------
DRUGS -- 2.2%
20,750 Bristol-Myers Squibb Company.......... 1,199
28,525 Schering-Plough Corporation........... 1,048
--------
2,247
--------
ELECTRIC POWER -- 0.5%
16,200 Ameren Corporation.................... 501
--------
ELECTRICAL EQUIPMENT -- 1.1%
21,400 Emerson Electric Company.............. 1,132
--------
ELECTRONICS -- 1.0%
5,100 CTS Corporation....................... 291
10,325 LSI Logic Corporation=................ 750
--------
1,041
--------
ENERGY -- 1.9%
24,475 Coastal Corporation................... 1,126
42,975 TECO Energy, Inc. .................... 835
--------
1,961
--------
FINANCIAL SERVICES -- 2.9%
19,150 Freddie Mac........................... 846
14,975 MBNA Corporation...................... 382
5,275 Merrill Lynch & Company Inc. ......... 554
24,900 Paine Webber Group, Inc. ............. 1,096
--------
2,878
--------
FOOD PRODUCERS -- 1.7%
36,850 ConAgra Inc. ......................... 668
20,250 H.J. Heinz Company.................... 706
12,600 Kellogg Company....................... 323
--------
1,697
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
77
<PAGE> 82
NATIONS FUNDS
Nations Balanced Assets Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
FOREST AND PAPER PRODUCTS -- 0.3%
5,900 Weyerhaeuser Company.................. $ 336
--------
INSURANCE -- 1.9%
9,700 CIGNA Corporation..................... 735
35,375 Lincoln National Corporation Ltd. .... 1,185
--------
1,920
--------
MACHINERY AND EQUIPMENT -- 0.9%
23,050 Parker Hannifin Corporation........... 952
--------
MEDICAL PRODUCTS AND SUPPLIES -- 2.1%
26,725 Abbott Laboratories................... 940
15,425 Cardinal Health, Inc. ................ 708
7,175 Johnson & Johnson..................... 503
--------
2,151
--------
METALS AND MINING -- 1.1%
5,325 Alcoa Inc. ........................... 374
14,625 Nucor Corporation..................... 731
--------
1,105
--------
NETWORKING EQUIPMENT AND PRODUCTS -- 0.9%
4,875 Comverse Technology, Inc.=............ 921
--------
OFFICE EQUIPMENT -- 1.6%
13,825 Electronics for Imaging, Inc.=........ 830
29,975 Xerox Corporation..................... 779
--------
1,609
--------
OIL -- DOMESTIC -- 1.4%
37,263 Conoco, Inc., Class B................. 955
15,525 Unocal Corporation.................... 462
--------
1,417
--------
OIL -- INTERNATIONAL -- 2.5%
21,041 Exxon Mobil Corporation............... 1,637
14,850 Royal Dutch Petroleum Company......... 855
--------
2,492
--------
PHOTO AND OPTICAL -- 0.7%
12,125 Eastman Kodak Company................. 659
--------
PRINTING AND PUBLISHING -- 0.7%
13,550 Knight-Ridder Inc. ................... 690
--------
RETAIL -- GENERAL -- 1.7%
12,725 Federated Department Stores, Inc.=.... 531
15,525 Target Corporation.................... 1,161
--------
1,692
--------
RETAIL -- SPECIALTY -- 1.3%
21,250 Barnes & Noble, Inc.=.................. 489
14,825 Lowe's Companies Inc. ................ 865
--------
1,354
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
SEMICONDUCTORS -- 0.8%
2,175 Intel Corporation..................... $ 287
14,150 Intergrated Device Technology,
Inc.=............................... 561
--------
848
--------
TELECOMMUNICATIONS -- 1.3%
22,950 American Power Conversion
Corporation=........................ 984
7,625 CommScope, Inc.=...................... 348
--------
1,332
--------
TOBACCO -- 0.5%
1 R.J. Reynolds Tobacco Holdings,
Inc................................. 0
35,150 UST Inc. ............................. 549
--------
549
--------
TRANSPORTATION -- 0.7%
18,725 FedEx Corporation=.................... 730
--------
UTILITIES -- ELECTRIC -- 0.5%
27,275 Energy East Corporation............... 540
--------
UTILITIES -- NATURAL GAS -- 0.4%
10,875 NICOR Inc. ........................... 358
--------
UTILITIES -- TELEPHONE -- 4.5%
6,775 ALLTEL Corporation.................... 427
19,875 AT&T Corporation...................... 1,118
7,125 Bell Atlantic Corporation............. 436
16,400 BellSouth Corporation................. 771
7,000 GTE Corporation....................... 497
11,812 MCI Worldcom, Inc.=................... 535
15,125 SBC Communications Inc. .............. 635
--------
4,419
--------
UTILITIES -- WATER -- 0.4%
15,775 American Water Works Company,
Inc.=............................... 375
--------
TOTAL COMMON STOCKS
(Cost $49,152)........................ 56,000
--------
<CAPTION>
PRINCIPAL
AMOUNT
(000)
---------
<C> <S> <C> <C>
CORPORATE BONDS AND NOTES -- 14.5%
AEROSPACE AND DEFENSE -- 0.2%
$ 250 Raytheon Company,
6.750% 08/15/07..................... 232
--------
BANKING AND FINANCE -- 3.8%
500 FCB/NC Capital Trust I, Gtd. Notes,
8.050% 03/01/28..................... 428
500 First Union Corporation,
7.700% 02/15/05..................... 503
500 Goldman Sachs Group, LP,
6.625% 12/01/04(+).................. 483
500 Lehman Brothers Holdings Inc.,
6.625% 04/01/04..................... 482
875 NYNEX Capital Funding,
7.630% 10/15/09..................... 935
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
78
<PAGE> 83
NATIONS FUNDS
Nations Balanced Assets Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
-------------------------------------------------------------
<C> <S> <C> <C>
BANKING AND FINANCE -- (CONTINUED)
$ 750 Popular, Inc., MTN,
6.375% 09/15/03..................... $ 722
250 Union Planters Capital Trust,
8.200% 12/15/26..................... 219
--------
3,772
--------
BEVERAGES -- 0.4%
450 J. Seagram & Sons, Inc.,
6.625% 12/15/05..................... 427
--------
BROKERAGE SERVICES -- 1.4%
480 Donaldson Lufkin and Jenrette,
5.875% 04/01/02..................... 465
Morgan Stanley Dean Witter and
1,000 Company,
5.625% 01/20/04.....................
943
--------
1,408
--------
ENTERTAINMENT -- 0.1%
110 Time Warner Inc.,
8.110% 08/15/06..................... 113
--------
FINANCIAL SERVICES -- 3.6%
585 Bear Stearns Companies Inc.,
7.625% 02/01/05..................... 584
850 Chrysler Financial Company, LLC,
6.950% 03/25/02..................... 845
200 CIT Group, Inc.,
7.375% 03/15/03..................... 198
600 Ford Motor Credit Company,
7.500% 03/15/05..................... 600
750 General Motors Acceptance Corporation,
6.150% 04/05/07..................... 692
735 Paine Webber Group, Inc.,
6.375% 05/15/04..................... 703
--------
3,622
--------
INDUSTRIAL -- 1.1%
500 Tyco International Group SA,
6.375% 06/15/05..................... 469
250 USA Waste Services Inc.,
7.125% 10/01/07..................... 218
500 Xerox Capital Trust I, Gtd. Notes,
8.000% 02/01/27..................... 451
--------
1,138
--------
PROFESSIONAL SERVICES -- 0.3%
650 Service Corporation International,
6.000% 12/15/05..................... 325
--------
TELECOMMUNICATIONS -- 0.9%
500 Sprint Capital Corporation,
6.875% 11/15/28..................... 448
470 Vodafone AirTouch plc,
7.625% 02/15/05(+).................. 475
--------
923
--------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
-------------------------------------------------------------
<C> <S> <C> <C>
TRANSPORTATION -- 0.7%
$ 250 ERAC USA Finance Company,
6.950% 03/01/04(+).................. $ 243
500 ERAC USA Finance Company,
6.625% 02/15/05(+).................. 479
--------
722
--------
TRUCKING AND SHIPPING -- 0.6%
650 Ryder Systems Inc.,
6.600% 11/15/05..................... 605
--------
UTILITIES -- ELECTRIC -- 0.5%
480 Appalachian Power Company,
6.375% 03/01/01..................... 477
--------
UTILITIES -- TELEPHONE -- 0.9%
400 AT&T Corporation, Deb.,
8.125% 01/15/22..................... 388
500 Chesapeake Potomac Telephone
Maryland, Deb.,
8.000% 10/15/29..................... 522
--------
910
--------
TOTAL CORPORATE BONDS AND NOTES
(Cost $15,257)........................ 14,674
--------
FOREIGN BONDS AND NOTES -- 0.4%
(Cost $393)
395 AT&T Canada Inc.,
7.650% 09/15/06..................... 396
--------
MORTGAGE-BACKED SECURITIES -- 23.5%
COMMERCIAL MORTGAGE-BACKED
SECURITIES -- 8.7%
CS First Boston Mortgage Securities
430 Corporation, Series 1998-C1, Class
A1B,
6.480% 05/17/08.....................
401
454 DLJ Commercial Mortgage Corporation,
Series 1998-CG1, Class A1A,
6.110% 12/10/07..................... 432
750 DLJ Commercial Mortgage Corporation,
Series 1999-CG1, Class A1B1,
6.460% 01/10/09..................... 699
440 First Union-Chase Commercial Mortgage,
Series 1999-C2, Class A2,
6.645% 04/15/09..................... 416
560 First Union-Lehman Brothers-Bank of
America Commercial Mortgage, Series
1998-C2, Class A2,
6.560% 11/18/08..................... 529
363 GMAC Commercial Mortgage Securities
Inc., Series 1992-C2, Class A1,
6.570% 09/15/33..................... 348
750 GMAC Commercial Mortgage Securities
Inc., Series 1999-C1, Class A2,
6.175% 05/15/33..................... 684
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
79
<PAGE> 84
NATIONS FUNDS
Nations Balanced Assets Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
-------------------------------------------------------------
<C> <S> <C> <C>
COMMERCIAL MORTGAGE-BACKED
SECURITIES -- (CONTINUED)
$ 795 Heller Financial Commercial Mortgage
Asset Corporation, Series 1999-FH1,
Class A1,
6.500% 05/15/31..................... $ 766
800 Heller Financial Commercial Mortgage
Asset Corporation, Series 2000-PH1,
Class A2,
7.750% 11/15/09..................... 810
319 Morgan Stanley Capital I,
Series 1999-FNV1, Class A1,
6.120% 03/15/31..................... 302
207 Morgan Stanley Capital I,
Series 1999-WF1, Class A1,
5.910% 04/15/08..................... 196
500 Mortgage Capital Funding, Inc., Series
1998-MC2, Class A2,
6.423% 05/18/08..................... 463
Prudential Securities Secured
800 Financing Company, Series 1999-C2,
Class A2,
7.193% 04/15/09.....................
783
Prudential Securities Secured
560 Financing Corporation, Series
1998-C1, Class A1B,
6.506% 07/15/08.....................
524
750 Prudential Securities Secured
Financing Corporation, Series
1999-NRF1, Class A2,
6.480% 01/15/09..................... 699
750 Salomon Brothers Mortgage Securities,
Series 2000-NL1, Class A1,
6.601% 04/15/08(+).................. 721
--------
8,773
--------
FEDERAL HOME LOAN MORTGAGE CORPORATION
(FHLMC) CERTIFICATES -- 3.3%
80 8.000% 07/01/10....................... 81
451 7.000% 06/01/11....................... 445
901 8.000% 09/01/25....................... 907
1,985 7.500% 07/01/29....................... 1,951
--------
3,384
--------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA) CERTIFICATES -- 9.5%
1,244 6.500% 08/01/10....................... 1,214
622 8.500% 08/01/11....................... 638
319 7.000% 01/25/21....................... 313
3,599 6.500% 07/01/29....................... 3,378
2,774 7.000% 07/01/29....................... 2,666
1,465 6.500% 04/01/30....................... 1,374
--------
9,583
--------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA)
CERTIFICATES -- 2.0%
499 7.500% 12/15/23....................... 498
1,549 7.500% 10/15/27....................... 1,539
--------
2,037
--------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
-------------------------------------------------------------
<C> <S> <C> <C>
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $24,158)........................ $ 23,777
--------
U.S. TREASURY OBLIGATIONS -- 3.0%
U.S. TREASURY NOTES -- 0.9%
$ 825 10.750% 05/15/03...................... 922
--------
U.S. TREASURY STRIPS -- 2.1%
710 Interest only
.000% 08/15/09...................... 396
5,785 Principal only
.000% 11/15/21...................... 1,599
750 Principal only
.000% 02/15/27...................... 158
--------
2,153
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $2,824)......................... 3,075
--------
<CAPTION>
SHARES
(000)
---------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 5.2%
(Cost $5,258)
5,258 Nations Cash Reserves#................ 5,258
--------
TOTAL INVESTMENTS
(Cost $98,913*)................ 103.8% 105,019
--------
OTHER ASSETS AND LIABILITIES
(NET)........................ (3.8)%
Cash.................................. $ 1
Receivable for investment securities
sold................................ 738
Receivable for Fund shares sold....... 48
Dividends receivable.................. 72
Interest receivable................... 475
Collateral on securities loaned....... (2,253)
Payable for Fund shares redeemed...... (640)
Investment advisory fee payable....... (24)
Administration fee payable............ (20)
Shareholder servicing and distribution
fees payable........................ (50)
Payable for investment securities
purchased........................... (2,071)
Accrued Trustees'/Directors' fees and
expenses............................ (28)
Accrued expenses and other
liabilities......................... (52)
--------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)............................... (3,804)
--------
NET ASSETS..................... 100.0% $101,215
========
NET ASSETS CONSIST OF:
Undistributed net investment income... $ 134
Accumulated net realized loss on
investments sold.................... (1,689)
Net unrealized appreciation of
investments......................... 6,106
Paid-in capital....................... 96,664
--------
NET ASSETS............................ $101,215
--------
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
80
<PAGE> 85
NATIONS FUNDS
Nations Balanced Assets Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
-----------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($35,850,462 / 3,525,991 shares
outstanding)........................ $10.17
------
------
INVESTOR A SHARES:
Net asset value and redemption price
per share ($11,239,782 / 1,106,547
shares outstanding)................. $10.16
------
------
Maximum sales charge.................. 5.75%
Maximum offering price per share...... $10.78
INVESTOR B SHARES:
Net asset value and offering price per
share+ ($52,810,123 / 5,208,677
shares outstanding)................. $10.14
------
------
INVESTOR C SHARES:
Net asset value and offering price per
share+ ($1,314,919 / 130,195 shares
outstanding)........................ $10.10
------
------
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $5,876 on
investment securities was comprised of gross appreciation of $8,931 and gross
depreciation of $3,055 for Federal income tax purposes. At March 31, 2000,
the aggregate cost of securities for Federal income tax purposes was $99,143.
(+) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
= Non-income producing security.
+ The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
++ Amount represents less than $500.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc. A
portion of this amount represents cash collateral received from securities
lending activity (Note 8). The portion that represents cash collateral is
$2,253.
SEE NOTES TO FINANCIAL STATEMENTS.
81
<PAGE> 86
NATIONS FUNDS
Nations Asset Allocation Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
-------------------------------------------------------------
<C> <S> <C> <C>
ASSET-BACKED SECURITIES -- 1.1%
ASSET-BACKED -- AUTO LOANS -- 0.3%
$ 1,000 AESOP Funding II LLC, Series 1997-1A,
Class A1,
6.220% 10/20/01(+) ................. $ 999
383 Banc One Auto Grantor Trust, Series
1997-B, Class A,
6.290% 07/20/04..................... 380
--------
1,379
--------
ASSET-BACKED -- HOME EQUITY LOANS -- 0.7%
96 Access Financial Mortgage Loan Trust,
Series 1997-3, Class A2,
6.565% 05/18/24..................... 96
500 ContiMortgage Home Equity Loan Trust,
Series 1998-1, Class A4,
6.280% 01/15/13..................... 491
650 EQCC Home Equity Loan Trust, Series
1997-2, Class A6,
6.720% 02/15/12..................... 649
1,000 First Plus Home Loan Trust, Series
1996-3, Class A6,
7.600% 09/20/14..................... 998
650 First Plus Home Loan Trust, Series
1997-1, Class A6,
6.950% 12/10/15..................... 643
--------
2,877
--------
ASSET-BACKED -- OTHER -- 0.1%
439 Navistar Financial Corporation Owner
Trust, Series 1998-A, Class A,
5.940% 11/15/04..................... 434
--------
TOTAL ASSET-BACKED SECURITIES
(Cost $4,735)......................... 4,690
--------
</TABLE>
<TABLE>
<CAPTION>
SHARES
---------
<C> <S> <C> <C>
COMMON STOCKS -- 60.4%
AEROSPACE AND DEFENSE -- 0.3%
2,400 Alliant Techsystems Inc.=............. 141
9,700 Boeing Company........................ 368
1,500 Cordant Technologies Inc. ............ 85
14,100 Northrop Grumman Corporation.......... 747
--------
1,341
--------
APPAREL AND TEXTILES -- 0.2%
4,600 Jones Apparel Group, Inc.=............ 147
3,300 Kellwood Company...................... 58
1,050 Kenneth Cole Productions, Inc. ....... 41
10,500 Liz Claiborne Inc. ................... 481
1,900 Springs Industries Inc., Class A...... 72
--------
799
--------
AUTOMOBILE PARTS MANUFACTURERS -- 0.1%
2,900 Arvin Industries, Inc. ............... 66
2,100 Lear Corporation=..................... 59
5,200 Mascotech, Inc. ...................... 61
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-------------------------------------------------------------
<C> <S> <C> <C>
AUTOMOBILE PARTS MANUFACTURERS --
(CONTINUED)
3,700 Meritor Automotive, Inc. ............. $ 59
4,700 Tower Automotive Inc.=................ 76
--------
321
--------
AUTOMOBILES AND TRUCKS -- 0.7%
2,600 Copart, Inc. ......................... 46
29,200 Ford Motor Company.................... 1,341
20,200 General Motors Corporation............ 1,673
--------
3,060
--------
BANKING -- 4.3%
2,200 Associated Banc-Corp. ................ 66
6,200 Astoria Financial Corporation......... 176
4,817 Charter One Financial, Inc. .......... 101
51,500 Chase Manhattan Corporation........... 4,490
100,525 Citigroup Inc. ....................... 5,962
3,700 City National Corporation............. 125
5,000 Cullen Frost Bankers Inc. ............ 132
10,900 Dime Bancorp, Inc. ................... 202
2,600 Downey Financial Corporation.......... 55
29,200 Fannie Mae............................ 1,648
33,300 Firstar Corporation................... 764
5,900 FirstFed Financial Corporation=....... 78
62,300 FleetBoston Financial Corporation..... 2,274
2,729 Hudson United Bancorp................. 59
9,400 J.P. Morgan & Company Inc. ........... 1,238
9,600 North Fork Bancorporation, Inc. ...... 172
10,100 Pacific Century Financial
Corporation......................... 205
2,200 Provident Financial Group, Inc. ...... 75
2,100 Silicon Valley Bancshares=............ 151
2,200 Staten Island Bancorp, Inc. .......... 38
4,200 TCF Financial Corporation............. 100
600 U.S. Trust Corporation................ 113
--------
18,224
--------
BEVERAGES -- 1.0%
800 Adolph Coors Company, Class B......... 38
29,900 Anheuser-Busch Companies, Inc. ....... 1,860
2,900 Canandaigua Brands Inc., Class A=..... 148
1,100 Celestial Seasonings, Inc.=........... 38
14,500 Coca-Cola Company..................... 681
39,800 PepsiCo, Inc. ........................ 1,376
--------
4,141
--------
BROADCASTING -- 0.1%
1,000 Hispanic Broadcasting Corporation=.... 113
2,400 Univision Communications, Inc.=....... 271
1,700 Westwood One, Inc. ................... 62
--------
446
--------
BUILDING MATERIALS -- 0.0%(=)
3,100 American Standard Companies Inc.=..... 114
4,100 Mohawk Industries Inc.=............... 92
--------
206
--------
CHEMICALS -- BASIC -- 0.5%
6,400 Dow Chemical Company.................. 730
6,100 E.I. duPont de Nemours and Company.... 323
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
82
<PAGE> 87
NATIONS FUNDS
Nations Asset Allocation Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-------------------------------------------------------------
<C> <S> <C> <C>
CHEMICALS -- BASIC -- (CONTINUED)
2,000 Geon Company.......................... $ 43
15,400 Union Carbide Corporation............. 897
--------
1,993
--------
CHEMICALS -- SPECIALTY -- 0.1%
3,300 Albemarle Corporation................. 68
7,400 Cytec Industries Inc.=................ 226
2,600 Lubrizol Corporation.................. 75
1,000 OM Group, Inc. ....................... 46
1,900 Scotts Company, Class A=.............. 80
3,200 Solutia Inc. ......................... 43
--------
538
--------
COMMERCIAL SERVICES -- 0.5%
1,400 Catalina Marketing Corporation=....... 142
1,500 ChoicePoint Inc. ..................... 56
3,600 Comdisco, Inc. ....................... 159
2,550 Dendrite International, Inc. ......... 53
2,000 eLoyalty Corporation=................. 48
2,600 Factset Research Systems Inc. ........ 70
3,200 Fiserv, Inc. ......................... 119
2,300 Hertz Corporation..................... 78
3,100 Manpower Inc. ........................ 110
8,500 Omnicom Group Inc. ................... 795
3,100 Rent-A-Center, Inc.=.................. 47
2,600 Robert Half International Inc.=....... 123
700 SEI Investment Company................ 79
4,400 The ServiceMaster Company=............ 50
2,200 True North Communications............. 86
4,350 Valassis Communications Inc. ......... 145
--------
2,160
--------
COMPUTER RELATED -- 4.3%
14,400 Apple Computer Inc.=.................. 1,956
1,350 Cybex Computer Products Corporation... 51
35,000 EMC Corporation....................... 4,376
18,800 Hewlett-Packard Company............... 2,492
3,000 Jabil Circuit, Inc. .................. 130
9,100 Lexmark International Group, Inc.,
Class A............................. 962
1,300 Micros Systems, Inc.=................. 82
8,600 NCR Corporation....................... 345
9,800 Network Appliance, Inc. .............. 811
2,200 Pinnacle Systems, Inc.=............... 73
15,200 Pitney Bowes, Inc. ................... 679
800 Plexus Corporation=................... 53
2,600 Sanmina Corporation................... 176
3,200 SCI Systems, Inc. .................... 172
3,000 Sensormatic Electronics
Corporation=........................ 67
34,000 Solectron Corporation................. 1,362
46,500 Sun Microsystems, Inc. ............... 4,357
1,725 Symbol Technologies, Inc. ............ 142
1,033 Three-Five Systems, Inc. ............. 62
1,400 Zebra Technologies Corporation=....... 70
--------
18,418
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-------------------------------------------------------------
<C> <S> <C> <C>
COMPUTER SERVICES -- 0.1%
1,500 CSG Systems International, Inc.=...... $ 73
4,000 MarchFirst, Inc.=..................... 143
3,100 Sungard Data Systems, Inc.=........... 117
--------
333
--------
COMPUTER SOFTWARE -- 5.3%
800 Adobe Systems Inc. ................... 89
3,100 Affiliated Computer Services,
Inc.=............................... 118
4,700 American Management Systems=.......... 206
1,500 Aspen Technology, Inc.=............... 61
1,400 Autodesk, Inc. ....................... 64
2,750 BroadVision, Inc. .................... 123
700 Citrix Systems, Inc. ................. 46
16,100 Computer Associates International
Inc. ............................... 952
6,500 Concord EFS, Inc. .................... 149
3,700 Convergys Corporation=................ 143
3,000 DST Systems, Inc.=.................... 195
14,400 Electronic Data Systems Corporation... 923
1,800 FileNET Corporation=.................. 54
900 HNC Software Inc.=.................... 65
3,300 Intuit Inc. .......................... 179
2,100 Macromedia Inc.=...................... 190
2,800 MedQuist Inc.=........................ 76
4,200 Mercury Interactive Corporation....... 333
92,400 Microsoft Corporation=................ 9,817
3,500 National Computer Systems Inc. ....... 178
1,400 National Instruments Corporation...... 66
61,100 Oracle Corporation.................... 4,769
1,000 Project Software & Development,
Inc. ............................... 57
2,400 Rational Software Corporation=........ 184
1,900 Remedy Corporation=................... 80
1,600 RSA Security Inc.=.................... 83
5,500 Siebel Systems, Inc. ................. 657
2,300 Sybase, Inc.=......................... 47
2,400 Symantec Corporation=................. 180
900 The BISYS Group, Inc.=................ 60
6,550 VERITAS Software Corporation.......... 858
1,200 Verity, Inc. ......................... 49
11,300 Yahoo! Inc.=.......................... 1,936
--------
22,987
--------
CONGLOMERATE -- 1.6%
14,200 Dover Corporation..................... 680
4,100 Pentair, Inc. ........................ 152
22,400 Rockwell International Corporation.... 937
66,800 Tyco International Ltd. .............. 3,331
29,100 United Technologies Corporation....... 1,839
--------
6,939
--------
CONSTRUCTION -- 0.2%
18,200 Centex Corporation.................... 433
4,400 D.R. Horton Inc. ..................... 57
1,800 Dycom Industries Inc. ................ 88
900 Insituform Technologies Inc., Class
A=.................................. 28
4,100 M.D.C. Holdings, Inc. ................ 74
800 Martin Marietta Materials, Inc. ...... 38
3,800 Pulte Corporation..................... 79
3,700 Ryland Group Inc. .................... 69
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
83
<PAGE> 88
NATIONS FUNDS
Nations Asset Allocation Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-------------------------------------------------------------
<C> <S> <C> <C>
CONSTRUCTION -- (CONTINUED)
2,000 Toll Brothers Inc.=................... $ 40
900 USG Corporation....................... 38
--------
944
--------
CONSUMER GOODS AND SERVICES -- 0.0%+
3,100 ADVO Inc.=............................ 78
1,000 Harman International Industries....... 60
--------
138
--------
CONTAINERS AND PACKAGING -- 0.2%
3,600 AptarGroup Inc. ...................... 96
13,700 Avery-Dennison Corporation............ 837
--------
933
--------
COSMETICS AND TOILETRIES -- 1.0%
11,100 Avon Products, Inc. .................. 323
4,400 Church & Dwight Company, Inc. ........ 76
15,200 Colgate-Palmolive Company............. 857
28,100 Kimberly-Clark Corporation............ 1,573
23,200 Procter & Gamble Company.............. 1,305
--------
4,134
--------
DRUGS -- 3.7%
2,700 Alpharma Inc., Class A................ 99
18,300 Amgen Inc. ........................... 1,123
1,000 Barr Laboratories, Inc.=.............. 42
3,666 Bindley Western Industries............ 50
9,700 Biogen, Inc. ......................... 678
19,200 Bristol-Myers Squibb Company.......... 1,109
3,100 Chiron Corporation=................... 155
200 Enzo Biochem, Inc.=................... 14
2,400 Forest Laboratories, Inc.=............ 203
2,800 Genzyme Corporation=.................. 140
1,500 IDEC Pharmaceuticals Corporation...... 147
400 Incyte Pharmaceuticals, Inc.=......... 35
8,250 IVAX Corporation...................... 225
3,300 Jones Pharma Inc. .................... 100
2,000 Medicis Pharmaceutical Corporation,
Class A=............................ 80
1,400 MedImmune Inc.=....................... 244
42,800 Merck & Company, Inc. ................ 2,659
600 Millennium Pharmaceuticals, Inc.=..... 78
25,900 Monsanto Company...................... 1,334
3,100 NBTY, Inc.=........................... 42
56,500 Pfizer Inc. .......................... 2,066
400 Protein Design Labs, Inc.=............ 32
1,000 Regeneron Pharmaceuticals, Inc.=...... 30
49,100 Schering-Plough Corporation........... 1,804
32,900 Warner-Lambert Company................ 3,207
--------
15,696
--------
ELECTRIC POWER -- 0.3%
3,200 Calpine Corporation................... 301
15,100 Duke Energy Corporation............... 793
3,700 UniSource Energy Corporation=......... 54
--------
1,148
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-------------------------------------------------------------
<C> <S> <C> <C>
ELECTRICAL EQUIPMENT -- 0.1%
1,900 Arrow Electronics, Inc.=.............. $ 67
2,400 C&D Technologies, Inc. ............... 141
1,000 Cohu, Inc. ........................... 42
3,000 Littelfuse, Inc.=..................... 110
--------
360
--------
ELECTRONICS -- 0.0%+
1,700 Anixter International Inc.=........... 47
1,300 Audiovox Corporation=................. 57
1,600 Gentex Corporation=................... 59
--------
163
--------
ENERGY -- 0.3%
31,500 Coastal Corporation................... 1,449
--------
FINANCIAL SERVICES -- 1.8%
1,900 Advanta Corporation................... 39
6,800 Americredit Corporation=.............. 111
1,600 Bear Stearns Companies Inc. .......... 73
2,200 Commercial Federal Corporation........ 37
1,900 Eaton Vance Corporation............... 82
3,500 Legg Mason Inc. ...................... 151
16,600 Lehman Brothers Holdings Inc. ........ 1,610
47,500 MBNA Corporation...................... 1,211
2,000 Metris Companies Inc. ................ 78
50,100 Morgan Stanley Dean Witter &
Company............................. 4,085
2,700 T. Rowe Price Associates, Inc. ....... 107
--------
7,584
--------
FOOD PRODUCERS -- 0.7%
40,000 ConAgra Inc. ......................... 725
3,900 Earthgrains Company................... 58
6,600 Hormel Foods Corporation.............. 108
4,700 IBP, Inc. ............................ 74
3,200 McCormick and Company, Inc. .......... 103
2,400 Michael Foods Inc. ................... 50
2,600 Performance Food Group Company=....... 57
8,800 Quaker Oats Company................... 534
17,900 Ralston Purina Group.................. 490
2,200 Suiza Foods Corporation=.............. 89
18,200 SYSCO Corporation..................... 650
--------
2,938
--------
FOREST AND PAPER PRODUCTS -- 0.4%
3,100 Buckeye Technologies Inc.=............ 55
10,600 Champion International Corporation.... 564
6,100 Georgia-Pacific Corporation
(Timber Group)...................... 156
20,800 Georgia-Pacific Corporation........... 823
2,100 United Stationers Inc.=............... 75
--------
1,673
--------
FURNITURE AND APPLIANCES -- 0.0%(=)
1,600 Ethan Allen Interiors, Inc. .......... 40
2,900 Furniture Brands International,
Inc.=............................... 55
900 Salton, Inc.=......................... 39
--------
134
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
84
<PAGE> 89
NATIONS FUNDS
Nations Asset Allocation Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-------------------------------------------------------------
<C> <S> <C> <C>
HEALTHCARE -- 0.0%(=)
300 COR Therapeutics, Inc.=............... $ 20
--------
HOUSEHOLD PRODUCTS -- 0.1%
8,000 The Clorox Company.................... 260
--------
INSURANCE -- 1.5%
2,800 Ambac Financial Group, Inc. .......... 141
4,900 American International Group, Inc. ... 537
49,300 AXA Financial, Inc. .................. 1,769
43,400 Conseco Inc. ......................... 496
1,696 Delphi Financial Group Inc., Class
A................................... 52
700 E.W. Blanch Holdings, Inc. ........... 14
3,000 Enhance Financial Services Group
Inc. ............................... 42
4,300 Everest Re Group Ltd. ................ 140
34,400 Hartford Financial Services Group,
Inc. ............................... 1,815
28,500 MGIC Investment Corporation........... 1,243
3,500 PMI Group, Inc. ...................... 166
2,400 Radian Group Inc. .................... 114
900 RenaissanceRe Holdings Ltd. .......... 37
--------
6,566
--------
INTERNET -- 0.6%
37,100 America Online Inc. .................. 2,495
--------
MACHINERY AND EQUIPMENT -- 0.4%
3,200 Briggs & Stratton Corporation......... 132
1,200 Helix Technology Corporation.......... 72
4,000 Hughes Supply Inc. ................... 62
10,100 Illinois Tool Works, Inc. ............ 558
2,700 Manitowoc Company, Inc. .............. 73
16,500 Parker Hannifin Corporation........... 681
--------
1,578
--------
MANUFACTURING -- 1.9%
3,000 Belden Inc. .......................... 83
53,000 General Electric Company.............. 8,224
2,900 Watts Industries, Inc. ............... 36
--------
8,343
--------
MEDIA -- 1.8%
34,901 CBS Corporation=...................... 1,976
1,100 Comcast Corporation, Class A
Special............................. 48
10,800 MediaOne Group, Inc.=................. 875
25,000 Time Warner Inc. ..................... 2,500
5,500 Viacom Inc., Class B.................. 290
49,700 Walt Disney Company................... 2,056
--------
7,745
--------
MEDICAL PRODUCTS AND SUPPLIES -- 1.6%
6,400 Acuson Corporation=................... 95
16,200 Allergan, Inc. ....................... 810
14,800 Baxter International Inc. ............ 928
1,700 Beckman Coulter, Inc. ................ 109
17,600 Biomet, Inc. ......................... 640
1,400 C.R. Bard, Inc. ...................... 54
17,000 Cardinal Health, Inc. ................ 780
1,200 Cephalon, Inc.=....................... 45
1,100 Coherent Inc.=........................ 57
2,700 CONMED Corporation=................... 68
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-------------------------------------------------------------
<C> <S> <C> <C>
MEDICAL PRODUCTS AND SUPPLIES -- (CONTINUED)
2,200 Cooper Companies Inc. ................ $ 71
2,500 Datascope Corporation................. 79
1,000 Hooper Holmes, Inc. .................. 34
30,300 Johnson & Johnson..................... 2,124
2,600 Mentor Corporation.................... 70
800 Minimed Inc.=......................... 104
1,800 Patterson Dental Company=............. 69
7,100 PE Corp-PE Biosystems Group........... 685
1,837 Priority Healthcare Corporation....... 92
800 Techne Corporation=................... 55
800 Vertex Pharmaceuticals, Inc.=......... 37
700 Wesley Jessen Visioncare, Inc.=....... 25
--------
7,031
--------
MEDICAL SERVICES -- 0.4%
3,000 Coventry Health Care Inc.=............ 26
3,600 Lincare Holdings Inc.=................ 102
2,900 Orthodontic Centers of America=....... 54
5,500 Trigon Healthcare, Inc.=.............. 197
21,800 United Healthcare Corporation......... 1,299
1,400 Universal Health Services Inc., Class
B=.................................. 69
1,500 Wellpoint Health Networks Inc.=....... 105
--------
1,852
--------
METALS AND MINING -- 0.4%
10,900 Alcoa Inc. ........................... 765
2,800 Mueller Industries Inc.=.............. 85
14,700 Nucor Corporation..................... 735
3,700 Quanex Corporation.................... 67
2,700 Texas Industries Inc. ................ 84
7,500 Worthington Industries, Inc. ......... 93
--------
1,829
--------
NETWORKING EQUIPMENT AND PRODUCTS -- 2.9%
15,700 ADC Telecommunications, Inc. ......... 846
2,200 CIENA Corporation=.................... 277
143,800 Cisco Systems, Inc. .................. 11,118
900 Juniper Networks, Inc. ............... 237
--------
12,478
--------
OIL -- DOMESTIC -- 0.3%
1,600 Kerr-McGee Corporation................ 92
2,200 Murphy Oil Corporation................ 127
30,700 Occidental Petroleum Corporation...... 637
22,900 USX-Marathon Group Inc. .............. 597
--------
1,453
--------
OIL -- INTERNATIONAL -- 2.1%
28,500 Chevron Corporation................... 2,634
38,300 Exxon Mobil Corporation............... 2,980
57,100 Royal Dutch Petroleum Company......... 3,288
--------
8,902
--------
OIL AND GAS -- 0.4%
23,300 Apache Corporation.................... 1,160
3,100 Newfield Exploration Company=......... 109
2,700 Pogo Producing Company................ 77
2,300 Valero Energy Corporation............. 70
4,700 Vintage Petroleum, Inc. .............. 95
--------
1,511
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
85
<PAGE> 90
NATIONS FUNDS
Nations Asset Allocation Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-------------------------------------------------------------
<C> <S> <C> <C>
OIL FIELD SERVICES & EQUIPMENT -- 0.6%
1,100 Atwood Oceanics, Inc.=................ $ 73
4,000 BJ Services Company=.................. 296
23,300 ENSCO International Inc. ............. 841
3,500 Helmerich & Payne, Inc. .............. 109
3,500 Noble Drilling Corporation=........... 145
7,300 Offshore Logistics Inc.=.............. 101
10,100 Schlumberger Ltd. .................... 772
1,900 UTI Energy Corporation=............... 72
--------
2,409
--------
PRINTING AND PUBLISHING -- 0.5%
1,500 Houghton Mifflin Company.............. 64
20,700 McGraw-Hill Companies, Inc. .......... 941
14,500 New York Times Company, Class A....... 623
3,500 Readers Digest Association, Inc. ..... 124
3,000 Scholastic Corporation=............... 162
98 The Washington Post Company........... 53
--------
1,967
--------
REAL ESTATE INVESTMENT TRUSTS (REITS) -- 0.0%+
1,500 MeriStar Hospitality Corporation...... 26
--------
RECREATION -- 0.2%
3,600 Brunswick Corporation................. 68
5,600 Harley-Davidson Inc. ................. 446
7,600 Park Place Entertainment
Corporation=........................ 88
1,200 Polaris Industries Inc. .............. 36
1,900 Station Casinos, Inc.=................ 41
2,900 Winnebago Industries.................. 52
--------
731
--------
RESTAURANTS AND LODGING -- 0.5%
2,800 Applebees International Inc. ......... 79
3,800 Brinker International, Inc.=.......... 113
3,800 CEC Entertainment Inc. ............... 103
4,000 Darden Restaurants Inc. .............. 71
4,800 Jack in the Box Inc.=................. 102
20,500 Starbucks Corporation=................ 919
23,300 Tricon Global Restaurants Inc.=....... 724
--------
2,111
--------
RETAIL -- FOOD -- 0.3%
800 Hannaford Bros. Company............... 59
20,600 Safeway, Inc.=........................ 933
900 Whole Foods Market Inc.=.............. 37
2,550 Wild Oats Markets, Inc. .............. 52
--------
1,081
--------
RETAIL -- GENERAL -- 1.9%
2,900 Ames Department Stores=............... 71
34,300 Federated Department Stores, Inc.=.... 1,432
22,600 Sears, Roebuck and Company............ 698
5,700 Target Corporation.................... 426
96,600 Wal-Mart Stores, Inc. ................ 5,361
--------
7,988
--------
RETAIL -- SPECIALTY -- 1.5%
2,000 American Eagle Outfitters, Inc. ...... 76
4,100 Barnes & Noble, Inc.=................. 94
13,100 Best Buy Company, Inc.=............... 1,127
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-------------------------------------------------------------
<C> <S> <C> <C>
RETAIL -- SPECIALTY -- (CONTINUED)
3,700 BJ's Wholesale Club, Inc. ............ $ 143
1,400 CDW Computer Centers, Inc. ........... 118
2,500 Cost Plus, Inc.=...................... 85
5,700 CVS Corporation....................... 214
37,750 Home Depot Inc........................ 2,435
20,600 Limited Inc. ......................... 868
2,500 Linens 'N Things Inc.=................ 86
2,400 Pacific Sunwear of California......... 92
2,500 Talbots, Inc. ........................ 147
2,900 The Men's Wearhouse Inc.=............. 86
2,000 Tiffany & Company..................... 167
26,900 TJX Companies Inc. ................... 597
2,700 Zale Corporation=..................... 127
--------
6,462
--------
SEMICONDUCTORS -- 4.7%
900 Alpha Industries, Inc.=............... 86
2,500 Altera Corporation.................... 223
1,700 Analog Devices, Inc. ................. 137
40,500 Applied Materials, Inc. .............. 3,817
3,150 Burr-Brown Corporation................ 171
900 Cymer, Inc.=.......................... 45
3,900 Cypress Semiconductor Corporation=.... 192
1,800 Electro Scientific Industries,
Inc. ............................... 104
1,500 Electroglas, Inc.=.................... 51
45,300 Intel Corporation..................... 5,976
3,000 International Rectifier Corporation... 114
2,400 KEMET Corporation=.................... 152
1,400 Kulicke & Soffa Industries Inc.=...... 90
2,500 Lattice Semiconductor Corporation..... 169
4,400 Linear Technology Corporation......... 242
3,900 Maxim Integrated Products............. 277
2,000 Micrel Inc. .......................... 192
3,150 Microchip Technology Inc. ............ 207
15,000 Motorola, Inc. ....................... 2,136
1,300 National Semiconductor
Corporation=........................ 79
4,600 Novellus Systems Inc. ................ 258
700 PMC - Sierra, Inc. ................... 143
1,700 QLogic Corporation.................... 230
1,300 Sawtek, Inc. ......................... 68
2,500 Silicon Valley Group, Inc.=........... 69
28,600 Texas Instruments Inc. ............... 4,576
1,100 TriQuint Semiconductor, Inc.=......... 81
3,500 Vishay Intertechnology, Inc. ......... 195
7,800 Xilinx, Inc. ......................... 646
--------
20,726
--------
TELECOMMUNICATIONS -- 2.0%
900 ADTRAN, Inc.=......................... 53
5,200 American Power Conversion
Corporation=........................ 223
1,400 Apex Inc.=............................ 52
2,300 Aspect Communications Corporation=.... 85
900 Black Box Corporation=................ 62
2,000 Brocade Communications Systems,
Inc. ............................... 359
1,800 C-COR Electronics..................... 88
1,500 Foundry Networks, Inc. ............... 216
2,300 Intervoice Inc.=...................... 66
26,870 Nortel Networks Corporation........... 3,385
1,300 Polycom, Inc.=........................ 103
900 Powerwave Technologies, Inc.=......... 113
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
86
<PAGE> 91
NATIONS FUNDS
Nations Asset Allocation Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-------------------------------------------------------------
<C> <S> <C> <C>
TELECOMMUNICATIONS -- (CONTINUED)
600 Proxim, Inc.=......................... $ 72
17,400 QUALCOMM Inc. ........................ 2,598
15,000 Scientific-Atlanta, Inc. ............. 952
100 Terayon Communication Systems,
Inc.=............................... 21
1,300 Westell Technologies, Inc=............ 41
--------
8,489
--------
TOBACCO -- 0.2%
49,600 Philip Morris Companies Inc. ......... 1,048
--------
TRANSPORTATION -- 0.5%
1,500 Alaska Air Group, Inc.=............... 45
3,800 Arkansas Best Corporation=............ 40
16,900 Delta Air Lines, Inc. ................ 900
1,400 Expeditors International of
Washington, Inc. ................... 56
2,700 M.S. Carriers Inc.=................... 63
3,600 Roadway Express, Inc. ................ 73
1,500 Trinity Industries, Inc. ............. 36
5,400 U.S. Freightways Corporation.......... 202
15,600 Union Pacific Corporation............. 610
--------
2,025
--------
UTILITIES -- ELECTRIC -- 0.9%
5,500 Allegheny Energy, Inc. ............... 152
6,800 Conectiv, Inc. ....................... 119
1,700 DQE Inc. ............................. 77
3,200 DTE Energy Company.................... 93
7,600 Energy East Corporation............... 151
18,500 FPL Group Inc. ....................... 852
2,110 NSTAR................................. 89
26,300 PECO Energy Company................... 969
3,300 Pinnacle West Capital Corporation..... 93
6,500 Public Service Company of New
Mexico.............................. 102
2,300 The Montana Power Company=............ 147
25,400 Unicom Corporation.................... 927
1,700 United Illuminating Company........... 67
8,000 UtiliCorp United Inc. ................ 145
--------
3,983
--------
UTILITIES -- NATURAL GAS -- 0.2%
5,100 Energen Corporation................... 81
8,200 Enron Corporation..................... 614
5,400 KeySpan Corporation................... 149
2,200 National Fuel Gas Company............. 98
1,600 Piedmont Natural Gas Company, Inc. ... 42
3,500 Southwest Gas Corporation............. 67
--------
1,051
--------
UTILITIES -- TELEPHONE -- 4.2%
56,600 AT&T Corporation...................... 3,184
4,100 Bell Atlantic Corporation............. 251
78,000 BellSouth Corporation................. 3,666
3,100 Broadwing Inc.=....................... 115
52,600 GTE Corporation....................... 3,735
108,886 MCI Worldcom, Inc.=................... 4,933
2,200 Nextel Communications, Inc.=.......... 326
22,766 SBC Communications Inc. .............. 956
8,100 Sprint Corporation (PCS Group)........ 529
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-------------------------------------------------------------
<C> <S> <C> <C>
UTILITIES -- TELEPHONE -- (CONTINUED)
3,500 TALK.com, Inc.=....................... $ 56
1,600 Telephone and Data Systems, Inc. ..... 178
--------
17,929
--------
TOTAL COMMON STOCKS
(Cost $189,369)....................... 259,289
--------
CONVERTIBLE PREFERRED STOCK -- 0.1%
(Cost $245)
CONTAINERS AND PACKAGING -- 0.1%
4,845 Sealed Air Corporation................ 252
--------
<CAPTION>
PRINCIPAL
AMOUNT
(000)
---------
<C> <S> <C> <C>
CORPORATE BONDS AND NOTES -- 13.4%
AUTOMOBILE PARTS MANUFACTURERS -- 0.3%
$ 1,200 Delphi Automotive Systems Corporation,
6.125% 05/01/04..................... 1,131
--------
BANKING AND FINANCE -- 4.0%
1,600 American General Finance Corporation,
7.450% 01/15/05..................... 1,599
1,600 BHP Finance USA Ltd.,
6.420% 03/01/26..................... 1,548
1,600 Capital One Bank,
6.650% 03/15/04..................... 1,535
1,050 Crown Cork & Seal Financial plc,
6.750% 12/15/03..................... 990
1,625 Finova Capital Corporation,
7.250% 11/08/04..................... 1,547
1,625 First Union Corporation,
7.700% 02/15/05..................... 1,636
1,350 Hanson Overseas B.V.,
7.375% 01/15/03..................... 1,349
1,680 Heller Financial, Inc.,
6.000% 03/19/04..................... 1,589
1,200 Lehman Brothers Holdings Inc.,
6.625% 04/01/04..................... 1,156
1,500 MCN Investment Corporation,
6.890% 01/16/02..................... 1,475
1,200 Newcourt Credit Group Inc.,
6.875% 02/16/05..................... 1,166
1,300 Salomon Smith Barney Holdings,
6.250% 05/15/03..................... 1,259
--------
16,849
--------
BEVERAGES -- 0.4%
1,600 J. Seagram & Sons, Inc.,
6.625% 12/15/05..................... 1,520
--------
BROKERAGE SERVICES -- 0.4%
1,650 Donaldson Lufkin and Jenrette,
5.875% 04/01/02..................... 1,599
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
87
<PAGE> 92
NATIONS FUNDS
Nations Asset Allocation Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
-------------------------------------------------------------
<C> <S> <C> <C>
CHEMICALS -- SPECIALTY -- 0.3%
1,500 Praxair, Inc.,
6.750% 03/01/03..................... $ 1,459
--------
ELECTRIC POWER -- 0.3%
$ 1,300 Consumers Energy Company,
6.200% 05/01/03..................... $ 1,238
--------
FINANCIAL SERVICES -- 2.7%
1,600 Bear Stearns Companies Inc.,
7.625% 02/01/05..................... 1,597
500 Countrywide Home Loan Corporation,
7.450% 09/16/03..................... 499
1,150 DaimlerChrysler NA Holdings,
6.900% 09/01/04..................... 1,129
1,600 Ford Motor Credit Company,
7.500% 03/15/05..................... 1,601
1,000 General Motors Acceptance Corporation,
6.150% 04/05/07..................... 922
1,650 Household Finance Corporation,
6.000% 05/01/04..................... 1,563
1,250 Paine Webber Group, Inc.,
6.375% 05/15/04..................... 1,196
1,200 Sears Roebuck Acceptance Corporation,
6.000% 03/20/03..................... 1,157
1,600 Washington Mutual, Inc.,
7.500% 08/15/06..................... 1,575
--------
11,239
--------
GAS -- 0.6%
1,745 KN Energy, Inc.,
6.450% 03/01/03..................... 1,695
1,100 Williams Companies, Inc.,
6.500% 08/01/06..................... 1,029
--------
2,724
--------
INDUSTRIAL -- 0.5%
1,400 Case Credit Corporation,
6.125% 02/15/03..................... 1,328
1,000 USA Waste Services Inc.,
7.000% 07/15/28..................... 750
--------
2,078
--------
MACHINERY AND EQUIPMENT -- 0.3%
1,500 Thermo Electron Corporation,
7.625% 10/30/08..................... 1,416
--------
MANUFACTURING -- 0.2%
1,200 Tyco International Group SA,
7.000% 06/15/28..................... 1,044
--------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
-------------------------------------------------------------
<C> <S> <C> <C>
MEDIA -- 0.8%
$ 1,150 British Sky Broadcasting Group plc,
6.875% 02/23/09..................... $ 1,030
1,200 Cox Radio, Inc.,
6.250% 05/15/03..................... 1,156
1,500 USA Networks, Inc.,
6.750% 11/15/05..................... 1,437
--------
3,623
--------
OIL -- DOMESTIC -- 0.7%
1,700 Conoco Inc., Class A,
5.900% 04/15/04..................... 1,617
1,500 Occidental Petroleum Corporation,
7.650% 02/15/06..................... 1,475
--------
3,092
--------
PROFESSIONAL SERVICES -- 0.1%
1,100 Service Corporation International,
6.300% 03/15/03..................... 583
--------
RETAIL -- FOOD -- 0.7%
1,500 Nabisco Inc.,
6.125% 02/01/33..................... 1,429
1,700 Safeway Inc.,
7.250% 09/15/04..................... 1,690
--------
3,119
--------
TELECOMMUNICATIONS -- 0.8%
1,650 AirTouch Communications, Inc.,
6.350% 06/01/05..................... 1,569
1,700 Cable & Wireless Communications plc,
6.375% 03/06/03..................... 1,676
--------
3,245
--------
UTILITIES -- TELEPHONE -- 0.3%
1,400 MCI Worldcom, Inc.,
6.400% 08/15/05..................... 1,344
--------
TOTAL CORPORATE BONDS AND NOTES
(Cost $59,218)........................ 57,303
--------
FOREIGN BONDS AND NOTES -- 0.6%
1,000 Banco Latinoamericano,
7.200%** 05/28/02(+)................ 978
1,688 Pemex Finance Ltd.,
5.720% 11/15/03..................... 1,640
--------
TOTAL FOREIGN BONDS AND NOTES
(Cost $2,686)......................... 2,618
--------
MORTGAGE-BACKED SECURITIES -- 20.5%
COMMERCIAL MORTGAGE-BACKED SECURITIES -- 7.5%
1,750 Asset Securitization Corporation,
Series 1997-D5, Class A1C,
6.750% 02/14/41++................... 1,663
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
88
<PAGE> 93
NATIONS FUNDS
Nations Asset Allocation Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
-------------------------------------------------------------
<C> <S> <C> <C>
COMMERCIAL MORTGAGE-BACKED
SECURITIES -- (CONTINUED)
Commercial Mortgage Acceptance
$ 1,715 Corporation, Series 1998-C1, Class
A2,
6.490% 07/15/31.....................
$ 1,607
1,413 Criimi Mae CMBS Corporation, Series
1998-1, Class A1,
5.697% 10/20/01(+).................. 1,336
CS First Boston Mortgage Securities
1,800 Corporation, Series 1998-C1, Class
A1B,
6.480% 05/17/08++...................
1,677
2,620 DLJ Commercial Mortgage Corporation,
Series 1998-CG1, Class A1B,
6.410% 05/10/08++................... 2,444
2,600 DLJ Commercial Mortgage Corporation,
Series 1999-CG1, Class A1B1,
6.460% 01/10/09..................... 2,423
1,600 General Growth Properties,
Series 1997-1, Class A2,
6.602% 11/15/07..................... 1,507
2,075 GMAC Commercial Mortgage Securities
Inc., Series 1997-C2, Class A3,
6.566% 11/15/07++................... 1,942
2,650 GMAC Commercial Mortgage Securities
Inc., Series 1999-C1, Class A2,
6.175% 05/15/33++................... 2,415
2,600 GMAC Commercial Mortgage Securities
Inc., Series 1999-C2, Class A2,
6.945% 09/15/33++................... 2,464
JP Morgan Commercial Mortgage Finance
6,782 Corporation, Series 1997-C4, Class
X,
1.255%(++) 12/26/28.................
370
2,350 Lehman Brothers Commercial Conduit
Mortgage Trust, Series 1998-C1,
Class A3,
6.480% 01/18/08++................... 2,190
750 Mortgage Capital Funding, Inc., Series
1998-MC1, Class A2,
6.663% 01/18/08..................... 711
2,650 Mortgage Capital Funding, Inc., Series
1998-MC2, Class A2,
6.423% 05/18/08++................... 2,456
1,281 Nomura Asset Securities Corporation,
Series 1998-D6, Class A1A,
6.280% 03/17/28..................... 1,228
2,050 Nomura Asset Securities Corporation,
Series 1998-D6, Class A1B,
6.590% 03/17/28++................... 1,921
2,600 Prudential Securities Secured
Financing Corporation, Series
1999-NRF1, Class A2,
6.480% 01/15/09++................... 2,422
45,510 Vendee Mortgage Trust,
Series 1998-1, Class 2, IO,
.439%(++) 09/15/27++................ 880
48,714 Vendee Mortgage Trust,
Series 1998-3, Class 1, IO,
.304%(++) 03/15/29++................ 670
--------
32,326
--------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
-------------------------------------------------------------
<C> <S> <C> <C>
COMMERCIAL MORTGAGE-BACKED
SECURITIES -- (CONTINUED)
FEDERAL HOME LOAN MORTGAGE CORPORATION
(FHLMC) CERTIFICATES -- 2.3%
$ 75 8.000% 01/01/04....................... $ 75
1,032 7.000% 05/01/04....................... 1,018
604 6.500% 06/01/04....................... 590
445 6.500% 04/01/09....................... 436
1,781 6.500% 07/01/10....................... 1,733
3,106 6.500% 06/01/14++..................... 2,992
7 10.500% 04/01/19...................... 8
3,187 7.000% 10/01/29++..................... 3,065
--------
9,917
--------
FEDERAL HOUSING AUTHORITY (FHA)
CERTIFICATES -- 0.4%
570 6.750% 01/01/40....................... 523
25 6.750% 01/01/40(a).................... 23
15 6.850% 01/01/40(a).................... 14
17 7.000% 01/01/40(a).................... 16
403 7.000% 01/01/40....................... 378
273 6.850% 02/01/40....................... 251
446 6.530% 10/01/40....................... 400
194 6.530% 10/01/40(a).................... 175
--------
1,780
--------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA) CERTIFICATES -- 8.1%
293 7.500% 06/01/03....................... 292
983 7.000% 06/01/04....................... 970
810 6.500% 06/01/05....................... 790
296 6.500% 01/01/06....................... 292
196 6.500% 10/01/10....................... 190
458 7.500% 10/01/11....................... 458
2,116 6.500% 02/01/13....................... 2,039
498 10.000% 09/01/18...................... 532
5,405 6.500% 12/01/27++..................... 5,082
2,727 7.000% 05/01/28....................... 2,627
2,604 7.000% 08/01/28++..................... 2,508
5,660 6.500% 04/01/29....................... 5,308
3,272 7.000% 10/01/29....................... 3,146
7,488 8.000% 11/01/29++..................... 7,514
2,340 6.500% 04/01/30....................... 2,194
574 7.305%** 08/01/36**................... 593
--------
34,535
--------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA) CERTIFICATES -- 1.8%
305 6.550% 03/15/01....................... 279
802 6.750% 09/15/01....................... 735
410 6.600% 11/15/01....................... 375
23 10.000% 02/15/16...................... 25
136 9.000% 10/15/19....................... 141
98 9.000% 11/15/19....................... 102
522 9.000% 12/15/19....................... 543
175 9.000% 01/15/20....................... 182
2,005 8.000% 07/15/27++..................... 2,031
366 8.000% 09/15/27....................... 371
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
89
<PAGE> 94
NATIONS FUNDS
Nations Asset Allocation Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) (000)
-------------------------------------------------------------
<C> <S> <C> <C>
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA) CERTIFICATES --
(CONTINUED)
$ 101 8.000% 04/15/28....................... $ 102
2,767 8.000% 06/15/28++..................... 2,800
--------
7,686
--------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION II (GNMA) CERTIFICATES--
0.4%
496 6.650% 01/15/34....................... 455
1,197 7.375% 10/15/34....................... 1,164
--------
1,619
--------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $91,247)........................ 87,863
--------
U.S. TREASURY OBLIGATIONS -- 3.2%
U.S. TREASURY STRIPS -- 3.2%
4,620 Interest only 11/15/04................ 3,455
3,100 Interest only 08/15/09................ 1,728
26,400 Principal only 11/15/21............... 7,302
6,025 Principal only 02/15/27............... 1,270
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $13,175)........................ 13,755
--------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
-------------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 2.2%
(Cost $9,308)
9,308 Nations Cash Reserves#................ 9,308
--------
TOTAL INVESTMENTS
(Cost $369,983*)............... 101.5% $435,078
--------
OTHER ASSETS AND LIABILITIES
(NET)........................ (1.5)%
Cash.................................. $ 6
Receivable for investment securities
sold................................ 5,565
Receivable for Fund shares sold....... 854
Dividends receivable.................. 234
Interest receivable................... 1,530
Receivable for variation margin....... 3
Payable for Fund shares redeemed...... (948)
Investment advisory fee payable....... (152)
Administration fee payable............ (82)
Shareholder servicing and distribution
fees payable........................ (126)
Payable for investment securities
purchased........................... (13,086)
Accrued Trustees'/Directors' fees and
expenses............................ (12)
Accrued expenses and other
liabilities......................... (163)
--------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)............................... (6,377)
--------
NET ASSETS..................... 100.0% $428,701
========
NET ASSETS CONSIST OF:
Undistributed net investment income... $ 405
Accumulated net realized gain on
investments sold and futures
contracts........................... 22,021
Net unrealized appreciation of
investments and futures contracts... 65,115
Paid-in capital....................... 341,160
--------
NET ASSETS............................ $428,701
========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
90
<PAGE> 95
NATIONS FUNDS
Nations Asset Allocation Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
-------------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($15,531,954 / 637,786 shares
outstanding)........................ $24.35
------
------
INVESTOR A SHARES:
Net asset value and redemption price
per share ($83,411,599 / 3,425,823
shares outstanding)................. $24.35
------
------
Maximum sales charge.................. 5.75%
Maximum offering price per share...... $25.84
INVESTOR B SHARES:
Net asset value and offering price per
share+ ($121,644,558 / 5,017,495
shares outstanding)................. $24.24
------
------
INVESTOR C SHARES:
Net asset value and offering price per
share+ ($2,304,641 / 94,951 shares
outstanding)........................ $24.27
------
------
SEAFIRST SHARES:
Net asset value, offering and
redemption price per share
($205,807,870 / 11,389,826 shares
outstanding)........................ $18.07
------
------
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $64,822 on
investment securities was comprised of gross appreciation of $82,430 and
gross depreciation of $17,608 for Federal income tax purposes. At March 31,
2000, the aggregate cost of securities for Federal income tax purposes was
$370,256.
** 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, normally to qualified institutional buyers.
(++) Variable rate note. The interest rate shown reflects the rate in effect at
March 31, 1999.
= Non-income producing security.
+ The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
++ Security segregated as collateral for futures contracts.
(=) Amount represents less than 0.1%.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc.
(a) TBA -- Securities purchased on a forward commitment basis.
SEE NOTES TO FINANCIAL STATEMENTS.
91
<PAGE> 96
NATIONS FUNDS
Nations Equity Income Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS -- 100.5%
AEROSPACE AND DEFENSE -- 1.3%
122,000 Honeywell International Inc. ......... $ 6,428
--------
AUTOMOBILE PARTS MANUFACTURERS -- 0.7%
154,000 Genuine Parts Company................. 3,677
--------
AUTOMOBILES AND TRUCKS -- 2.1%
149,000 Ford Motor Company.................... 6,845
46,000 General Motors Corporation............ 3,809
--------
10,654
--------
BANKING -- 4.6%
77,000 Chase Manhattan Corporation........... 6,713
188,000 Citigroup Inc. ....................... 11,151
145,700 FleetBoston Financial Corporation..... 5,318
--------
23,182
--------
BEVERAGES -- 2.2%
110,000 Coca-Cola Company..................... 5,163
180,000 PepsiCo, Inc. ........................ 6,221
--------
11,384
--------
CHEMICALS -- BASIC -- 2.7%
56,000 Dow Chemical Company.................. 6,384
138,000 E.I. duPont de Nemours and Company.... 7,297
--------
13,681
--------
COMPUTER RELATED -- 6.6%
44,000 EMC Corporation....................... 5,500
82,000 Hewlett-Packard Company............... 10,869
124,000 International Business Machines
Corporation......................... 14,631
22,300 Pitney Bowes, Inc. ................... 997
19,900 Sun Microsystems, Inc. ............... 1,865
--------
33,862
--------
COMPUTER SOFTWARE -- 4.7%
225,000 Microsoft Corporation++............... 23,906
--------
CONGLOMERATE -- 0.8%
61,000 United Technologies Corporation....... 3,854
--------
CONTAINERS AND PACKAGING -- 0.6%
46,000 Avery-Dennison Corporation............ 2,809
--------
COSMETICS AND TOILETRIES -- 1.6%
47,000 Gillette Company...................... 1,771
112,000 Kimberly-Clark Corporation............ 6,272
--------
8,043
--------
DISTRIBUTION AND WHOLESALE -- 0.6%
62,000 Costco Wholesale Corporation.......... 3,259
--------
DIVERSIFIED -- 1.1%
66,000 Minnesota Mining & Manufacturing
Company............................. 5,845
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
DRUGS -- 6.5%
124,000 Bristol-Myers Squibb Company.......... $ 7,161
104,000 Eli Lilly and Company................. 6,552
136,000 Merck & Company, Inc. ................ 8,449
249,000 Pfizer Inc. .......................... 9,104
23,700 Schering-Plough Corporation........... 871
11,800 Warner-Lambert Company................ 1,151
--------
33,288
--------
ELECTRIC POWER -- 0.7%
118,500 Ameren Corporation.................... 3,666
--------
ELECTRICAL EQUIPMENT -- 1.7%
166,000 Emerson Electric Company.............. 8,777
--------
ENERGY -- 0.5%
118,000 TECO Energy, Inc. .................... 2,294
--------
ENVIRONMENTAL -- 0.9%
87,000 Johnson Controls Inc. ................ 4,703
--------
FINANCIAL SERVICES -- 3.3%
140,000 Freddie Mac........................... 6,186
250,000 MBNA Corporation...................... 6,375
40,000 Merrill Lynch & Company Inc. ......... 4,200
--------
16,761
--------
FOOD PRODUCERS -- 2.0%
153,000 ConAgra Inc. ......................... 2,773
135,000 H.J. Heinz Company.................... 4,709
82,000 SYSCO Corporation..................... 2,926
--------
10,408
--------
FOREST AND PAPER PRODUCTS -- 0.7%
63,500 Weyerhaeuser Company.................. 3,620
--------
INSURANCE -- 2.2%
104,000 American International Group, Inc. ... 11,388
--------
MACHINERY AND EQUIPMENT -- 1.9%
85,000 Illinois Tool Works, Inc. ............ 4,696
119,000 Parker Hannifin Corporation........... 4,916
--------
9,612
--------
MANUFACTURING -- 4.4%
143,000 General Electric Company.............. 22,192
--------
MEDICAL PRODUCTS AND SUPPLIES -- 2.5%
166,000 Abbott Laboratories................... 5,841
102,000 Johnson & Johnson..................... 7,147
--------
12,988
--------
METALS AND MINING -- 1.4%
62,700 Alcoa Inc. ........................... 4,404
37,900 Reynolds Metals Company............... 2,535
--------
6,939
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
92
<PAGE> 97
NATIONS FUNDS
Nations Equity Income Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
NETWORKING EQUIPMENT AND PRODUCTS -- 5.6%
264,800 Cisco Systems, Inc. .................. $ 20,472
129,200 Lucent Technologies, Inc. ............ 7,849
--------
28,321
--------
OIL -- DOMESTIC -- 1.8%
106,000 Atlantic Richfield Company............ 9,010
--------
OIL -- INTERNATIONAL -- 7.5%
109,000 BP Amoco plc, ADR..................... 5,784
103,000 Chevron Corporation................... 9,521
197,000 Exxon Mobil Corporation............... 15,328
70,100 Royal Dutch Petroleum Company......... 4,035
70,000 Texaco Inc. .......................... 3,754
--------
38,422
--------
PHOTO AND OPTICAL -- 0.9%
88,000 Eastman Kodak Company................. 4,780
--------
PRINTING AND PUBLISHING -- 1.4%
38,100 Dow Jones & Company Inc. ............. 2,736
91,000 McGraw-Hill Companies, Inc. .......... 4,141
--------
6,877
--------
RETAIL -- FOOD -- 1.0%
166,800 Albertson's Inc. ..................... 5,171
--------
RETAIL -- GENERAL -- 4.0%
335,700 May Department Stores Company......... 9,567
199,000 Wal-Mart Stores, Inc. ................ 11,045
--------
20,612
--------
RETAIL -- SPECIALTY -- 1.2%
98,000 Home Depot Inc. ...................... 6,321
--------
SEMICONDUCTORS -- 6.2%
188,000 Intel Corporation..................... 24,805
25,800 Motorola, Inc. ....................... 3,673
18,400 Texas Instruments Inc. ............... 2,944
--------
31,422
--------
TELECOMMUNICATIONS -- 0.9%
31,000 QUALCOMM Inc. ........................ 4,629
--------
TOBACCO -- 0.5%
179,000 UST Inc. ............................. 2,797
--------
TRUCKING AND SHIPPING -- 0.5%
40,000 United Parcel Service, Inc. .......... 2,520
--------
UTILITIES -- NATURAL GAS -- 0.7%
103,000 NICOR Inc. ........................... 3,393
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
UTILITIES -- TELEPHONE -- 9.2%
59,000 ALLTEL Corporation.................... $ 3,721
190,000 AT&T Corporation...................... 10,688
87,000 Bell Atlantic Corporation............. 5,318
168,400 GTE Corporation....................... 11,955
163,000 MCI Worldcom, Inc.++.................. 7,386
148,000 SBC Communications Inc. .............. 6,216
14,900 U.S. West Inc. ....................... 1,082
--------
46,366
--------
UTILITIES -- WATER -- 0.8%
166,000 American Water Works Company,
Inc.++.............................. 3,943
--------
TOTAL COMMON STOCKS
(Cost $409,669)....................... 511,804
--------
<CAPTION>
SHARES
(000)
-------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 1.6%
(Cost $8,210)
8,210 Nations Cash Reserves#................ 8,210
--------
TOTAL INVESTMENTS
(Cost $417,879*)............... 102.1% 520,014
--------
OTHER ASSETS AND LIABILITIES
(NET)........................ (2.1)%
Receivable for Fund shares sold....... $ 289
Dividends receivable.................. 644
Interest receivable................... 2
Collateral on securities loaned....... (5,968)
Payable for Fund shares redeemed...... (5,115)
Investment advisory fee payable....... (240)
Administration fee payable............ (99)
Shareholder servicing and distribution
fees payable........................ (74)
Accrued Trustees'/Directors' fees and
expenses............................ (15)
Accrued expenses and other
liabilities......................... (59)
--------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)............................... (10,635)
--------
NET ASSETS..................... 100.0% $509,379
========
NET ASSETS CONSIST OF:
Accumulated net realized gain on
investments sold.................... $ (619)
Net unrealized appreciation of
investments......................... 102,135
Paid-in capital....................... 407,863
--------
NET ASSETS............................ $509,379
========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
93
<PAGE> 98
NATIONS FUNDS
Nations Equity Income Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
-----------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($397,479,113 / 34,367,318 shares
outstanding)........................ $11.57
------
------
INVESTOR A SHARES:
Net asset value and redemption price
per share ($33,568,844 / 2,914,996
shares outstanding)................. $11.52
------
------
Maximum sales charge.................. 5.75%
Maximum offering price per share...... $12.22
INVESTOR B SHARES:
Net asset value and offering price per
share+ ($73,966,407 / 6,424,374
shares outstanding)................. $11.51
------
------
INVESTOR C SHARES:
Net asset value and offering price per
share+ ($4,364,820 / 374,346 shares
outstanding)........................ $11.66
------
------
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $101,542 on
investment securities was comprised of gross appreciation of $116,683 and
gross depreciation of $15,141 for Federal income tax purposes. At March 31,
2000, the aggregate cost of securities for Federal income tax purposes was
$418,472.
++ Non-income producing security.
+ The redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc. A
portion of this amount represents cash collateral received from securities
lending activity (Note 8). The portion that represents cash collateral is
$5,968.
SEE NOTES TO FINANCIAL STATEMENTS.
94
<PAGE> 99
NATIONS FUNDS
Nations Value Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS -- 99.4%
AEROSPACE AND DEFENSE -- 2.3%
658,000 Honeywell International Inc. ...... $ 34,668
----------
AUTOMOBILES AND TRUCKS -- 3.9%
706,875 Ford Motor Company................. 32,472
320,000 General Motors Corporation......... 26,500
----------
58,972
----------
BANKING -- 8.1%
200,450 Bank of New York Company Inc. ..... 8,331
503,204 Chase Manhattan Corporation........ 43,872
661,280 Citigroup Inc. .................... 39,222
1,108,300 Mellon Financial Corporation....... 32,695
----------
124,120
----------
BEVERAGES -- 2.6%
377,175 Anheuser-Busch Companies, Inc. .... 23,479
476,025 PepsiCo, Inc. ..................... 16,453
----------
39,932
----------
CHEMICALS -- BASIC -- 3.0%
192,000 Dow Chemical Company............... 21,888
461,000 E.I. duPont de Nemours and
Company.......................... 24,375
----------
46,263
----------
COMPUTER RELATED -- 3.6%
272,175 Adaptec, Inc.++.................... 10,513
224,000 International Business Machines
Corporation...................... 26,432
380,000 Pitney Bowes, Inc. ................ 16,981
----------
53,926
----------
COMPUTER SOFTWARE -- 1.2%
301,525 Computer Associates International
Inc.............................. 17,847
----------
CONGLOMERATE -- 4.0%
588,000 Rockwell International
Corporation...................... 24,586
563,100 United Technologies Corporation.... 35,581
----------
60,167
----------
COSMETICS AND TOILETRIES -- 0.8%
425,000 Avon Products, Inc. ............... 12,352
----------
DIVERSIFIED -- 2.1%
266,000 Minnesota Mining & Manufacturing
Company.......................... 23,557
124,575 Textron Inc. ...................... 7,584
----------
31,141
----------
DRUGS -- 4.1%
576,200 Bristol-Myers Squibb Company....... 33,276
792,275 Schering-Plough Corporation........ 29,116
----------
62,392
----------
ELECTRIC POWER -- 0.9%
450,000 Ameren Corporation................. 13,922
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C> <C>
ELECTRICAL EQUIPMENT -- 2.1%
594,000 Emerson Electric Company........... $ 31,408
----------
ELECTRONICS -- 1.4%
287,250 LSI Logic Corporation++............ 20,862
----------
ENERGY -- 3.6%
679,875 Coastal Corporation................ 31,274
1,193,000 TECO Energy, Inc. ................. 23,189
----------
54,463
----------
FINANCIAL SERVICES -- 5.3%
532,000 Freddie Mac........................ 23,508
416,000 MBNA Corporation................... 10,608
146,525 Merrill Lynch & Company Inc. ...... 15,385
691,225 Paine Webber Group, Inc. .......... 30,413
----------
79,914
----------
FOOD PRODUCERS -- 3.1%
1,023,000 ConAgra Inc. ...................... 18,542
562,000 H.J. Heinz Company................. 19,599
350,000 Kellogg Company.................... 8,969
----------
47,110
----------
FOREST AND PAPER PRODUCTS -- 0.3%
76,000 Weyerhaeuser Company............... 4,332
----------
INSURANCE -- 3.5%
269,245 CIGNA Corporation.................. 20,395
981,975 Lincoln National Corporation
Ltd. ............................ 32,896
----------
53,291
----------
MACHINERY AND EQUIPMENT -- 1.7%
640,000 Parker Hannifin Corporation........ 26,440
----------
MEDICAL PRODUCTS AND
SUPPLIES -- 3.0%
742,000 Abbott Laboratories................ 26,109
428,000 Cardinal Health, Inc. ............. 19,635
----------
45,744
----------
METALS AND MINING -- 2.0%
148,000 Alcoa Inc. ........................ 10,397
405,950 Nucor Corporation.................. 20,298
----------
30,695
----------
NETWORKING EQUIPMENT AND
PRODUCTS -- 1.7%
135,270 Comverse Technology, Inc.++........ 25,566
----------
OFFICE EQUIPMENT -- 2.9%
383,775 Electronics for Imaging, Inc.++.... 23,027
832,000 Xerox Corporation.................. 21,632
----------
44,659
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
95
<PAGE> 100
NATIONS FUNDS
Nations Value Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C> <C>
OIL -- DOMESTIC -- 2.6%
1,035,000 Conoco, Inc., Class B.............. $ 26,522
431,000 Unocal Corporation................. 12,822
----------
39,344
----------
OIL -- INTERNATIONAL -- 4.6%
584,109 Exxon Mobil Corporation............ 45,451
412,625 Royal Dutch Petroleum Company...... 23,752
----------
69,203
----------
PHOTO AND OPTICAL -- 1.2%
337,000 Eastman Kodak Company.............. 18,303
----------
PRINTING AND PUBLISHING -- 1.3%
376,000 Knight-Ridder Inc. ................ 19,153
----------
RETAIL -- GENERAL -- 3.1%
353,000 Federated Department Stores,
Inc.++........................... 14,738
431,325 Target Corporation................. 32,241
----------
46,979
----------
RETAIL -- SPECIALTY -- 2.5%
590,000 Barnes & Noble, Inc.++............. 13,570
411,350 Lowe's Companies Inc. ............. 24,013
----------
37,583
----------
SEMICONDUCTORS -- 1.0%
392,875 Intergrated Device Technology,
Inc.++........................... 15,568
----------
TELECOMMUNICATIONS -- 2.4%
637,425 American Power Conversion
Corporation++.................... 27,329
211,675 CommScope, Inc.++.................. 9,658
----------
36,987
----------
TOBACCO -- 1.0%
976,000 UST Inc. .......................... 15,250
----------
TRANSPORTATION -- 1.3%
520,000 FedEx Corporation++................ 20,280
----------
UTILITIES -- ELECTRIC -- 1.0%
757,325 Energy East Corporation............ 15,005
----------
UTILITIES -- NATURAL GAS -- 1.2%
541,500 NICOR Inc. ........................ 17,836
----------
UTILITIES -- TELEPHONE -- 8.0%
188,150 ALLTEL Corporation................. 11,865
552,000 AT&T Corporation................... 31,049
198,000 Bell Atlantic Corporation.......... 12,103
455,350 BellSouth Corporation.............. 21,401
194,195 GTE Corporation.................... 13,788
328,138 MCI Worldcom, Inc.++............... 14,869
420,000 SBC Communications Inc. ........... 17,640
----------
122,715
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C> <C>
UTILITIES -- WATER -- 1.0%
660,900 American Water Works Company,
Inc.++........................... $ 15,696
----------
TOTAL COMMON STOCKS
(Cost $1,161,309).................. 1,510,088
----------
INVESTMENT COMPANIES -- 4.1%
(Cost $62,063)
62,063 Nations Cash Reserves#............. 62,063
----------
TOTAL INVESTMENTS
(Cost $1,223,372*).......... 103.5% 1,572,151
----------
OTHER ASSETS AND
LIABILITIES (NET)......... (3.5)%
Receivable for investment
securities sold.................. $ 7,667
Receivable for Fund shares sold.... 1,477
Dividends receivable............... 1,701
Interest receivable................ 62
Collateral on securities loaned.... (50,196)
Payable for Fund shares redeemed... (11,438)
Investment advisory fee payable.... (833)
Administration fee payable......... (295)
Shareholder servicing and
distribution fees payable........ (134)
Payable for investment securities
purchased........................ (1,067)
Accrued Trustees'/Directors' fees
and expenses..................... (84)
Accrued expenses and other
liabilities...................... (141)
----------
TOTAL OTHER ASSETS AND
LIABILITIES (NET)................ (53,281)
----------
NET ASSETS.................. 100.0% $1,518,870
==========
NET ASSETS CONSIST OF:
Undistributed net investment
income........................... $ 234
Accumulated net realized gain on
investments sold................. 186,395
Net unrealized appreciation of
investments...................... 348,779
Paid-in capital.................... 983,462
----------
NET ASSETS......................... $1,518,870
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
96
<PAGE> 101
NATIONS FUNDS
Nations Value Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
------------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($1,290,572,313 / 79,458,732
shares outstanding).............. $16.24
------
------
INVESTOR A SHARES:
Net asset value and redemption
price per share
($94,255,792 / 5,803,455 shares
outstanding)..................... $16.24
------
------
Maximum sales charge............... 5.75%
Maximum offering price per share... $17.23
INVESTOR B SHARES:
Net asset value and offering price
per share+
($124,000,432 / 7,749,664 shares
outstanding)..................... $16.00
------
------
INVESTOR C SHARES:
Net asset value and offering price
per share+ ($10,041,845 / 627,896
shares outstanding).............. $15.99
------
------
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $348,521 on
investment securities was comprised of gross appreciation of $376,684 and
gross depreciation of $28,163 for Federal income tax purposes. At March 31,
2000, the aggregate cost of securities for Federal income tax purposes was
$1,223,630.
++ Non-income producing security.
+ The redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc. A
portion of this amount represents cash collateral received from securities
lending activity (Note 8). The portion that represents cash collateral is
$50,196.
SEE NOTES TO FINANCIAL STATEMENTS.
97
<PAGE> 102
NATIONS FUNDS
Nations LargeCap Index Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 99.3%
ADVERTISING AND MARKETING SERVICES -- 0.0%+
15,452 Young and Rubicam Inc. .......... $ 726
----------
AEROSPACE AND DEFENSE -- 0.9%
24,543 B.F. Goodrich Company............ 704
193,444 Boeing Company................... 7,339
44,723 General Dynamics Corporation..... 2,225
176,311 Honeywell International Inc. .... 9,289
88,280 Lockheed Martin Corporation...... 1,804
15,535 Northrop Grumman Corporation..... 822
75,509 Raytheon Company, Class B........ 1,340
27,140 TRW Inc. ........................ 1,588
----------
25,111
----------
APPAREL AND TEXTILES -- 0.1%
13,120 Liz Claiborne Inc. .............. 601
9,108 National Service Industries,
Inc. .......................... 192
61,590 Nike, Inc., Class B.............. 2,441
12,488 Reebok International, Ltd.=...... 116
7,143 Russell Corporation.............. 102
3,929 Springs Industries Inc., Class
A.............................. 149
26,424 V.F. Corporation................. 636
----------
4,237
----------
AUTOMOBILE PARTS MANUFACTURERS --
0.3%
30,720 AutoZone Inc.++.................. 852
16,950 Cooper Tire & Rubber Company..... 213
36,597 Dana Corporation................. 1,032
126,126 Delphi Automotive Systems
Corporation...................... 2,018
16,334 Eaton Corporation................ 1,274
39,628 Genuine Parts Company............ 946
34,816 Goodyear Tire & Rubber Company... 812
13,037 Snap-On Inc. .................... 341
----------
7,488
----------
AUTOMOBILES AND TRUCKS -- 0.9%
269,386 Ford Motor Company............... 12,375
142,727 General Motors Corporation....... 11,820
19,631 ITT Industries, Inc. ............ 610
14,103 Navistar International
Corporation=................... 566
17,500 PACCAR, Inc. .................... 875
----------
26,246
----------
BANKING -- 6.7%
87,215 AmSouth Bancorporation........... 1,303
255,733 Banc One Corporation............. 8,791
164,239 Bank of New York Inc. ........... 6,826
328,440 Bank of America Corporation(H)... 17,223
77,474 BB&T Corporation................. 2,174
184,053 Chase Manhattan Corporation...... 16,047
752,113 Citigroup Inc. .................. 44,610
34,899 Comerica Inc. ................... 1,461
228,593 Fannie Mae....................... 12,901
68,816 Fifth Third Bancorp.............. 4,335
220,384 First Union Corporation.......... 8,209
218,686 Firstar Corporation.............. 5,016
204,233 FleetBoston Financial
Corporation.................... 7,455
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
BANKING -- (CONTINUED)
35,065 Golden West Financial
Corporation.................... $ 1,125
51,050 Huntington Bancshares
Incorporated................... 1,142
38,562 J.P. Morgan & Company Inc. ...... 5,081
99,785 KeyCorp.......................... 1,896
113,455 Mellon Financial Corporation..... 3,347
137,548 National City Corporation........ 2,837
49,718 Northern Trust Corporation....... 3,359
27,223 Old Kent Financial Corporation... 880
65,519 PNC Bank Corporation............. 2,952
48,736 Regions Financial Corporation.... 1,112
37,397 SouthTrust Corporation........... 951
35,615 State Street Corporation......... 3,450
39,012 Summit Bancorp................... 1,024
71,413 SunTrust Banks, Inc. ............ 4,124
167,985 U.S. Bancorp..................... 3,675
31,419 Union Planters Corporation....... 968
45,256 Wachovia Corporation............. 3,058
368,206 Wells Fargo Company.............. 15,073
----------
192,405
----------
BEVERAGES -- 1.8%
8,209 Adolph Coors Company, Class B.... 392
103,815 Anheuser-Busch Companies,
Inc. .......................... 6,462
15,352 Brown-Forman Corporation, Class
B.............................. 836
549,995 Coca-Cola Company!!.............. 25,815
94,890 Coca-Cola Enterprises Inc. ...... 2,046
324,732 PepsiCo, Inc. ................... 11,224
96,672 Seagram Company Ltd. ............ 5,752
----------
52,527
----------
BUILDING MATERIALS -- 0.0%+
22,311 Vulcan Materials Company......... 1,022
----------
BUSINESS SERVICES -- 0.1%
54,830 Paychex, Inc. ................... 2,872
----------
CHEMICALS -- BASIC -- 1.0%
51,150 Air Products & Chemicals Inc. ... 1,455
48,919 Dow Chemical Company............. 5,577
232,972 E.I. duPont de Nemours and
Company........................ 12,318
17,500 Eastman Chemical Company......... 796
28,922 Ecolab, Inc. .................... 1,061
6,877 FMC Corporation=................. 389
23,743 Hercules, Inc. .................. 383
14,936 Mallinckrodt Group Inc. ......... 429
38,745 PPG Industries, Inc. ............ 2,027
35,432 Praxair Inc. .................... 1,475
48,736 Rohm & Haas Company.............. 2,175
29,904 Union Carbide Corporation........ 1,744
----------
29,829
----------
CHEMICALS -- SPECIALTY -- 0.1%
28,022 Engelhard Corporation............ 424
12,771 Great Lakes Chemical
Corporation.................... 434
22,245 Sigma-Aldrich Corporation........ 598
16,068 W.R. Grace & Company=............ 204
----------
1,660
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
98
<PAGE> 103
NATIONS FUNDS
Nations LargeCap Index Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
COMMERCIAL SERVICES -- 0.1%
39,378 Omnicom Group Inc. .............. $ 3,679
25,708 Quintiles Transnational
Corporation=................... 439
----------
4,118
----------
COMPUTER RELATED -- 7.4%
23,044 Adaptec, Inc.=.................... 890
35,898 Apple Computer Inc.=............. 4,875
32,218 Ceridian Corporation=............ 618
376,848 Compaq Computer Corporation...... 10,034
570,409 Dell Computer Corporation=....... 30,766
226,245 EMC Corporation.................. 28,281
70,265 Gateway Inc.=.................... 3,724
223,381 Hewlett-Packard Company.......... 29,612
68,400 IMS Health Inc. ................. 1,159
400,875 International Business Machines
Corporation.................... 47,303
28,222 Lexmark International Group,
Inc.,
Class A........................ 2,984
21,179 NCR Corporation.................. 850
67,501 Network Appliance, Inc. ......... 5,586
58,676 Pitney Bowes, Inc. .............. 2,622
47,953 Seagate Technology Inc.=......... 2,889
40,727 Silicon Graphics, Inc.=.......... 430
131,771 Solectron Corporation............ 5,279
350,890 Sun Microsystems, Inc. .......... 32,879
68,849 Unisys Corporation=.............. 1,756
----------
212,537
----------
COMPUTER SERVICES -- 0.4%
139,913 Automatic Data Processing
Inc. .......................... 6,751
37,230 Computer Sciences
Corporation=................... 2,946
31,602 Equifax Inc. .................... 798
----------
10,495
----------
COMPUTER SOFTWARE -- 8.3%
26,258 Adobe Systems Inc. .............. 2,923
13,670 Autodesk, Inc. .................. 622
54,280 BMC Software, Inc.=.............. 2,680
40,361 Cabletron Systems, Inc.=......... 1,183
39,828 Citrix Systems, Inc. ............ 2,639
120,366 Computer Associates International
Inc. .......................... 7,124
80,088 Compuware Corporation=........... 1,687
104,731 Electronic Data Systems
Corporation.................... 6,722
93,458 First Data Corporation........... 4,136
1,157,185 Microsoft Corporation=........... 122,952
72,596 Novell Inc.=..................... 2,078
627,203 Oracle Corporation............... 48,961
60,824 Parametric Technology
Corporation=................... 1,281
59,475 Peoplesoft, Inc.=................ 1,190
5,977 Shared Medical Systems
Corporation.................... 310
87,298 VERITAS Software Corporation..... 11,436
117,135 Yahoo! Inc. ..................... 20,074
----------
237,998
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
CONGLOMERATE -- 1.1%
45,106 Dover Corporation................ $ 2,159
42,309 Rockwell International
Corporation.................... 1,769
376,714 Tyco International Ltd. ......... 18,789
105,946 United Technologies
Corporation.................... 6,694
----------
29,411
----------
CONSTRUCTION -- 0.2%
8,925 Armstrong World Industries,
Inc. .......................... 160
13,220 Centex Corporation............... 315
14,719 Crane Company.................... 347
17,050 Fluor Corporation................ 529
10,623 Kaufman & Broad Home
Corporation.................... 228
99,702 Masco Corporation................ 2,044
12,138 Owens Corning.................... 235
9,641 Pulte Corporation................ 201
37,047 Sherwin-Williams Company......... 813
----------
4,872
----------
CONTAINERS AND PACKAGING -- 0.2%
25,175 Avery-Dennison Corporation....... 1,537
6,693 Ball Corporation................. 231
11,605 Bemis Company, Inc. ............. 428
28,922 Crown Cork & Seal Company,
Inc. .......................... 463
33,467 Owens-Illinois, Inc.=............ 565
38,213 Pactiv Corporation=.............. 334
18,648 Sealed Air Corporation=.......... 1,013
12,854 Tupperware Corporation........... 203
----------
4,774
----------
COSMETICS AND TOILETRIES -- 1.5%
12,321 Alberto-Culver Company, Class
B.............................. 293
54,097 Avon Products, Inc. ............. 1,572
129,956 Colgate-Palmolive Company........ 7,326
239,215 Gillette Company................. 9,015
23,477 International Flavors &
Fragrances, Inc. .............. 823
123,895 Kimberly-Clark Corporation....... 6,938
293,496 Procter & Gamble Company......... 16,509
----------
42,476
----------
DISTRIBUTION AND WHOLESALE --0.2%
98,837 Costco Wholesale Corporation..... 5,195
10,457 PerkinElmer, Inc. ............... 695
----------
5,890
----------
DIVERSIFIED -- 0.4%
5,977 Eastern Enterprises.............. 358
36,597 Fortune Brands Inc. ............. 915
88,996 Minnesota Mining & Manufacturing
Company........................ 7,882
33,118 Textron Inc. .................... 2,016
----------
11,171
----------
DRUGS -- 6.4%
22,761 ALZA Corporation=................ 855
290,682 American Home Products
Corporation.................... 15,588
227,211 Amgen Inc. ...................... 13,945
33,384 Biogen, Inc. .................... 2,333
441,468 Bristol-Myers Squibb Company..... 25,495
242,646 Eli Lilly and Company............ 15,287
520,041 Merck & Company, Inc.=........... 32,308
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
99
<PAGE> 104
NATIONS FUNDS
Nations LargeCap Index Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
DRUGS -- (CONTINUED)
141,478 Monsanto Company................. $ 7,286
861,174 Pfizer Inc. ..................... 31,487
115,354 Pharmacia & Upjohn, Inc. ........ 6,835
327,013 Schering-Plough Corporation...... 12,018
191,046 Warner-Lambert Company........... 18,627
21,263 Watson Pharmaceutical, Inc.=..... 844
----------
182,908
----------
ELECTRIC POWER -- 1.2%
46,055 AES Corporation=................. 3,627
30,537 Ameren Corporation............... 945
43,291 American Electric Power Inc. .... 1,291
35,315 Carolina Power & Light Company... 1,155
47,487 Central & South West
Corporation.................... 810
35,432 CINergy Corporation.............. 762
25,791 CMS Energy Corporation........... 468
49,268 Consolidated Edison, Inc. ....... 1,429
33,384 Constellation Energy............. 1,064
53,115 Dominion Resources, Inc. ........ 2,042
81,587 Duke Energy Corporation.......... 4,283
55,079 Entergy Corporation.............. 1,112
51,949 FirstEnergy Corporation.......... 1,071
21,296 Florida Progress Corporation..... 977
27,490 GPU, Inc. ....................... 753
25,791 New Century Energies, Inc. ...... 775
34,550 Northern States Power
Corporation.................... 687
85,599 P G & E Corporation.............. 1,798
32,052 PPL Corporation.................. 671
48,736 Public Service Enterprise
Group.......................... 1,444
65,969 Reliant Energy Inc. ............. 1,546
150,136 Southern Company................. 3,265
61,590 Texas Utilities Company.......... 1,828
----------
33,803
----------
ELECTRICAL COMPONENTS -- 0.1%
47,770 Conexant Systems Inc. ........... 3,392
----------
ELECTRICAL EQUIPMENT -- 0.3%
96,139 Emerson Electric Company......... 5,083
43,408 Molex Inc. ...................... 2,550
12,854 Thomas & Betts Corporation....... 363
20,630 W.W. Grainger Inc. .............. 1,119
----------
9,115
----------
ELECTRONICS -- 0.4%
40,893 KLA-Tencor Corporation........... 3,445
66,235 LSI Logic Corporation=........... 4,810
10,457 Tektronix, Inc. ................. 586
38,029 Teradyne, Inc. .................. 3,128
----------
11,969
----------
ENERGY -- 0.1%
47,670 Coastal Corporation.............. 2,193
18,116 Columbia Energy Group............ 1,073
----------
3,266
----------
ENVIRONMENTAL -- 0.1%
19,098 Johnson Controls Inc. ........... 1,032
10,007 Millipore Corporation............ 565
----------
1,597
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
EXPLORATION AND DRILLING -- 0.1%
47,970 Burlington Resources Inc. ....... $ 1,775
13,204 McDermott International Inc. .... 121
----------
1,896
----------
FINANCIAL SERVICES -- 3.4%
99,885 American Express Company......... 14,877
162,457 Associates First Capital
Corporation.................... 3,483
25,259 Bear Stearns Companies Inc. ..... 1,152
44,007 Capital One Financial
Corporation.................... 2,110
182,887 Charles Schwab Corporation....... 10,390
25,259 Countrywide Credit Industries,
Inc. .......................... 688
155,131 Freddie Mac...................... 6,855
104,881 Household International Inc. .... 3,913
26,774 Lehman Brothers Holdings Inc. ... 2,597
59,542 Marsh & McLennan Companies
Inc. .......................... 6,568
178,791 MBNA Corporation................. 4,559
82,652 Merrill Lynch & Company Inc. .... 8,678
248,506 Morgan Stanley Dean Witter &
Company........................ 20,269
31,869 Paine Webber Group, Inc. ........ 1,402
31,686 Providian Financial
Corporation.................... 2,745
35,432 SLM Holding Corporation.......... 1,180
62,389 Synovus Financial Corporation.... 1,178
26,691 T. Rowe Price Associates,
Inc. .......................... 1,054
128,807 Washington Mutual, Inc. ......... 3,413
----------
97,111
----------
FOOD PRODUCERS -- 1.3%
135,501 Archer-Daniels-Midland Company... 1,406
62,222 Bestfoods........................ 2,913
95,157 Campbell Soup Company............ 2,926
109,792 ConAgra Inc. .................... 1,990
67,134 General Mills Inc. .............. 2,429
79,172 H.J. Heinz Company............... 2,761
30,886 Hershey Foods Corporation........ 1,506
90,428 Kellogg Company.................. 2,317
72,745 Nabisco Group Holdings
Corporation.................... 873
29,904 Quaker Oats Company.............. 1,813
67,301 Ralston Purina Group............. 1,842
202,618 Sara Lee Corporation............. 3,647
73,395 SYSCO Corporation................ 2,619
127,458 Unilever NV...................... 6,134
25,708 Wm. Wrigley Jr. Company.......... 1,975
----------
37,151
----------
FOREST AND PAPER PRODUCTS -- 0.5%
12,771 Boise Cascade Corporation........ 444
21,512 Champion International
Corporation.................... 1,146
48,286 Fort James Corporation........... 1,062
38,113 Georgia-Pacific Corporation...... 1,508
92,293 International Paper Company...... 3,946
23,743 Louisiana Pacific Corporation.... 329
22,944 Mead Corporation................. 802
6,427 Potlatch Corporation............. 276
12,404 Temple-Inland Inc. .............. 618
22,311 Westvaco Corporation............. 745
52,399 Weyerhaeuser Company............. 2,987
24,909 Willamette Industries Inc. ...... 999
----------
14,862
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
100
<PAGE> 105
NATIONS FUNDS
Nations LargeCap Index Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
FURNITURE AND APPLIANCES -- 0.1%
19,364 Black & Decker Corporation....... $ 727
43,740 Leggett and Platt Incorporated... 940
18,832 Maytag Corporation............... 624
19,997 Stanley Works.................... 527
16,600 Whirlpool Corporation............ 973
----------
3,791
----------
HOUSEHOLD PRODUCTS -- 0.1%
62,838 Newell Rubbermaid Inc. .......... 1,559
52,748 The Clorox Company............... 1,714
----------
3,273
----------
INSURANCE -- 2.6%
31,869 Aetna Life and Casualty
Company........................ 1,775
59,358 Aflac, Inc. ..................... 2,704
179,591 Allstate Corporation............. 4,277
55,163 American General Corporation..... 3,096
345,262 American International Group,
Inc. .......................... 37,806
57,211 Aon Corporation.................. 1,845
39,278 Chubb Corporation................ 2,654
37,580 CIGNA Corporation................ 2,847
36,597 Cincinnati Financial
Corporation.................... 1,377
73,012 Conseco Inc. .................... 835
49,452 Hartford Financial Services
Group, Inc. ................... 2,609
23,294 Jefferson-Pilot Corporation...... 1,551
43,640 Lincoln National Corporation
Ltd. .......................... 1,462
23,743 Loews Corporation................ 1,187
22,228 MBIA Inc. ....................... 1,157
23,560 MGIC Investment Corporation...... 1,028
16,334 Progressive Corporation.......... 1,242
29,005 SAFECO Corporation............... 770
50,700 The St. Paul Companies, Inc. .... 1,730
29,371 Torchmark Corporation............ 679
53,464 UnumProvident Corporation........ 909
----------
73,540
----------
INTERNET -- 1.2%
507,553 America Online Inc. ............. 34,133
----------
MACHINERY AND EQUIPMENT -- 0.5%
5,178 Briggs & Stratton Corporation.... 213
79,356 Caterpillar Inc. ................ 3,130
21,063 Cooper Industries Inc. .......... 737
9,191 Cummins Engine Company, Inc. .... 345
52,215 Deere & Company.................. 1,984
66,951 Illinois Tool Works, Inc. ....... 3,699
36,514 Ingersoll-Rand Company........... 1,616
8,209 Milacron Inc. ................... 119
1,782 NACCO Industries Inc., Class A... 85
27,673 Pall Corporation................. 621
24,992 Parker Hannifin Corporation...... 1,032
34,850 Thermo Electron Corporation=..... 710
13,753 Timken Company................... 223
----------
14,514
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
MANUFACTURING -- 4.4%
57,843 Corning Inc. .................... $ 11,222
31,519 Danaher Corporation.............. 1,607
730,269 General Electric Company=........ 113,330
----------
126,159
----------
MEDIA -- 3.2%
169,800 CBS Corporation=................. 9,615
75,426 Clear Channel Communications,
Inc.=.......................... 5,209
206,398 Comcast Corporation, Class A..... 8,953
136,317 MediaOne Group, Inc.=............ 11,042
286,553 Time Warner Inc. ................ 28,655
155,414 Viacom Inc., Class B............. 8,198
461,165 Walt Disney Company.............. 19,081
----------
90,753
----------
MEDICAL PRODUCTS AND SUPPLIES --
2.5%
342,182 Abbott Laboratories.............. 12,041
29,122 Allergan, Inc. .................. 1,456
12,854 Bausch & Lomb Inc. .............. 671
64,347 Baxter International Inc. ....... 4,052
55,979 Becton Dickinson & Company....... 1,473
24,926 Biomet, Inc. .................... 907
92,476 Boston Scientific
Corporation=................... 1,971
11,173 C.R. Bard, Inc. ................. 432
62,755 Cardinal Health, Inc. ........... 2,879
68,300 Guidant Corporation=............. 4,017
309,863 Johnson & Johnson................ 21,710
265,524 Medtronic, Inc. ................. 13,658
45,805 PE Corp-PE Biosystems Group...... 4,420
18,582 St. Jude Medical Inc.=........... 480
----------
70,167
----------
MEDICAL SERVICES -- 0.4%
125,594 Columbia/HCA Healthcare
Corporation.................... 3,179
62,838 McKessan HBOC, Inc. ............. 1,320
86,132 HEALTHSOUTH Corporation=......... 479
37,313 Humana Inc.=..................... 273
23,027 Manor Care, Inc.=................ 311
69,532 Tenet Healthcare Corporation..... 1,599
37,846 United Healthcare Corporation.... 2,257
14,103 Wellpoint Health Networks
Inc.=.......................... 985
----------
10,403
----------
METALS AND MINING -- 0.5%
48,836 Alcan Aluminium Ltd. ............ 1,654
82,119 Alcoa Inc. ...................... 5,769
3,909 Arch Coal, Inc. ................. 27
87,015 Barrick Gold Corporation......... 1,365
36,414 Freeport-McMoran Copper &
Gold, Inc.=.................... 439
56,862 Homestake Mining Company......... 341
42,841 Inco Limited=.................... 785
37,230 Newmont Mining Corporation....... 835
41,776 Niagara Mohawk Holdings Inc.=.... 564
19,547 Nucor Corporation................ 977
18,116 Phelps Dodge Corporation......... 861
71,747 Placer Dome Inc. ................ 583
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
101
<PAGE> 106
NATIONS FUNDS
Nations LargeCap Index Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
METALS AND MINING -- (CONTINUED)
14,103 Reynolds Metals Company.......... $ 943
19,879 Worthington Industries, Inc. .... 246
----------
15,389
----------
NETWORKING EQUIPMENT AND PRODUCTS -- 6.0%
76,159 3Com Corporation++............... 4,236
66,785 ADC Telecommunications, Inc. .... 3,598
1,521,095 Cisco Systems, Inc. ............. 117,601
16,967 Comverse Technology, Inc.++...... 3,207
708,956 Lucent Technologies, Inc. ....... 43,069
----------
171,711
----------
OFFICE EQUIPMENT -- 0.2%
33,301 IKON Office Solutions, Inc. ..... 206
148,005 Xerox Corporation................ 3,848
----------
4,054
----------
OIL -- DOMESTIC -- 0.7%
19,764 Amerada Hess Corporation......... 1,277
15,884 Ashland Inc. .................... 531
71,946 Atlantic Richfield Company....... 6,115
139,530 Conoco, Inc. .................... 3,575
21,329 Kerr-McGee Corporation........... 1,232
81,953 Occidental Petroleum
Corporation.................... 1,701
55,995 Phillips Petroleum Company....... 2,590
20,080 Sunoco, Inc. .................... 550
54,014 Unocal Corporation............... 1,607
69,265 USX-Marathon Group Inc. ......... 1,805
----------
20,983
----------
OIL -- INTERNATIONAL -- 3.8%
27,973 Anadarko Petroleum Corporation... 1,082
146,140 Chevron Corporation.............. 13,509
767,899 Exxon Mobil Corporation++........ 59,752
476,850 Royal Dutch Petroleum Company.... 27,449
123,362 Texaco Inc. ..................... 6,615
55,646 Union Pacific Resources Group
Inc. .......................... 807
----------
109,214
----------
OIL AND GAS -- 0.0%+
25,109 Apache Corporation............... 1,249
----------
OIL FIELD SERVICES & EQUIPMENT -- 0.7%
73,378 Baker Hughes Inc. ............... 2,220
98,370 Halliburton Company.............. 4,033
20,363 Rowan Companies, Inc.++.......... 599
122,314 Schlumberger Ltd. ............... 9,357
45,605 Sempra Energy.................... 764
31,802 Tosco Corporation................ 968
46,504 Transocean Sedco Forex Inc. ..... 2,386
----------
20,327
----------
PHOTO AND OPTICAL -- 0.2%
70,431 Eastman Kodak Company............ 3,825
9,907 Polaroid Corporation............. 235
----------
4,060
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
PRINTING AND PUBLISHING -- 0.6%
14,452 American Greetings Corporation,
Class A........................ $ 264
16,417 Deluxe Corporation............... 435
19,747 Dow Jones & Company Inc. ........ 1,418
35,549 Dun & Bradstreet Corporation..... 1,018
62,039 Gannett Company, Inc. ........... 4,366
15,884 Harcourt General Inc. ........... 592
7,160 Jostens Inc. .................... 175
18,748 Knight-Ridder Inc. .............. 955
43,740 McGraw-Hill Companies, Inc. ..... 1,990
11,422 Meredith Corporation............. 316
38,029 New York Times Company, Class
A.............................. 1,633
28,206 R.R. Donnelley & Sons Company.... 591
13,304 The Times Mirror Company, Class
A.............................. 1,236
52,931 Tribune Company.................. 1,935
----------
16,924
----------
PROFESSIONAL SERVICES -- 0.2%
55,429 Franklin Resources, Inc. ........ 1,853
21,962 H & R Block, Inc. ............... 983
62,322 Interpublic Group Companies,
Inc. .......................... 2,945
----------
5,781
----------
RECREATION -- 0.4%
20,530 Brunswick Corporation............ 389
137,548 Carnival Corporation............. 3,413
33,567 Harley-Davidson Inc. ............ 2,664
28,655 Harrah's Entertainment Inc.++.... 532
41,128 Hasbro, Inc. .................... 679
93,808 Mattel, Inc. .................... 979
43,108 Mirage Resorts, Inc.++........... 835
28,655 Sabre Holdings Corporation++..... 1,058
----------
10,549
----------
RESTAURANTS AND LODGING -- 0.7%
157,546 Cendant Corporation++............ 2,915
28,239 Darden Restaurants Inc. ......... 503
82,303 Hilton Hotels Corporation........ 638
55,346 Marriott International Inc.,
Class A........................ 1,743
301,388 McDonald's Corporation........... 11,321
33,650 Tricon Global Restaurants
Inc.++......................... 1,045
26,358 Wendy's International Inc. ...... 532
----------
18,697
----------
RETAIL -- FOOD -- 0.4%
94,441 Albertson's Inc. ................ 2,928
113,455 Safeway, Inc.++.................. 5,134
31,153 Supervalu Inc. .................. 590
7,993 The Great Atlantic & Pacific Tea
Company, Inc. ................. 156
186,101 The Kroger Company............... 3,268
32,335 Winn-Dixie Stores Inc. .......... 629
----------
12,705
----------
RETAIL -- GENERAL -- 2.6%
24,726 Consolidated Stores
Corporation++.................. 281
23,477 Dillards, Inc., Class A.......... 386
58,826 Dollar General Corporation....... 1,581
46,771 Federated Department Stores,
Inc.++......................... 1,953
58,110 J.C. Penney Company, Inc. ....... 864
108,627 K Mart Corporation++............. 1,052
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
102
<PAGE> 107
NATIONS FUNDS
Nations LargeCap Index Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
RETAIL -- GENERAL -- (CONTINUED)
74,177 May Department Stores Company.... $ 2,114
84,351 Sears, Roebuck and Company....... 2,604
97,571 Target Corporation............... 7,293
53,464 Toys R Us, Inc.=................. 792
990,631 Wal-Mart Stores, Inc. ........... 54,980
----------
73,900
----------
RETAIL -- SPECIALTY -- 2.7%
31,336 Bed Bath & Beyond, Inc.=......... 1,234
45,522 Best Buy Company, Inc.=.......... 3,915
45,256 Circuit City Stores - Circuit
City Group..................... 2,755
87,298 CVS Corporation.................. 3,279
189,431 Gap Inc. ........................ 9,436
512,016 Home Depot Inc. ................. 33,025
36,248 Kohls Corporation=............... 3,715
47,853 Limited Inc. .................... 2,016
8,575 Longs Drug Stores Corporation.... 195
85,167 Lowe's Companies Inc. ........... 4,972
29,987 Nordstrom Inc. .................. 885
73,461 Office Depot, Inc. .............. 849
57,760 Rite Aid Corporation............. 318
104,714 Staples Inc.=.................... 2,094
43,024 Tandy Corporation................ 2,183
69,182 TJX Companies Inc. .............. 1,535
223,814 Walgreen Company................. 5,763
----------
78,169
----------
SEMICONDUCTORS -- 6.8%
32,851 Advanced Micro Devices=.......... 1,875
77,757 Analog Devices, Inc. ............ 6,264
170,333 Applied Materials, Inc. ......... 16,054
742,990 Intel Corporation................ 98,028
69,898 Linear Technology Corporation.... 3,844
60,174 Micron Technology, Inc.=......... 7,582
157,762 Motorola, Inc. .................. 22,461
38,129 National Semiconductor
Corporation=................... 2,312
180,873 Texas Instruments Inc. .......... 28,940
71,513 Xilinx, Inc. .................... 5,922
----------
193,282
----------
STEEL -- 0.0%+
20,879 Allegheny Technologies Inc. ..... 419
29,188 Bethlehem Steel Corporation=..... 175
19,731 USX - U.S. Steel Group Inc. ..... 493
----------
1,087
----------
TELECOMMUNICATIONS -- 2.8%
17,700 Andrew Corporation=.............. 405
169,234 Global Crossing, Ltd.=........... 6,928
321,253 Nortel Networks Corporation...... 40,478
164,189 QUALCOMM Inc. ................... 24,515
35,082 Scientific-Atlanta, Inc. ........ 2,226
89,546 Tellabs, Inc. ................... 5,640
----------
80,192
----------
TOBACCO -- 0.4%
527,799 Philip Morris Companies Inc. .... 11,150
38,113 UST Inc. ........................ 596
----------
11,746
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
TRANSPORTATION -- 0.6%
33,367 AMR Corporation=................. $ 1,064
101,933 Burlington Northern Santa Fe
Inc. .......................... 2,255
48,736 CSX Corporation.................. 1,145
28,738 Delta Air Lines, Inc. ........... 1,530
64,620 FedEx Corporation=............... 2,520
24,726 Kansas City Southern
Industries..................... 2,125
85,250 Norfolk Southern Corporation..... 1,225
112,556 Southwest Airlines Company....... 2,343
55,429 Union Pacific Corporation........ 2,169
15,968 US Airways Group Inc.=........... 444
----------
16,820
----------
TRUCKING AND SHIPPING -- 0.0%+
14,369 Ryder System Inc. ............... 326
----------
UTILITIES -- ELECTRIC -- 0.3%
32,318 DTE Energy Company............... 937
77,474 Edison International............. 1,283
39,994 FPL Group Inc. .................. 1,842
41,426 PECO Energy Company.............. 1,528
18,915 Pinnacle West Capital
Corporation.................... 533
48,552 Unicom Corporation............... 1,772
----------
7,895
----------
UTILITIES -- NATURAL GAS -- 0.7%
50,967 El Paso Energy Corporation....... 2,058
159,427 Enron Corporation................ 11,937
10,440 NICOR Inc. ...................... 344
6,877 Oneok Inc. ...................... 172
7,859 Peoples Energy Corporation....... 216
96,938 Williams Companies, Inc. ........ 4,259
----------
18,986
----------
UTILITIES -- TELEPHONE -- 7.3%
69,981 ALLTEL Corporation............... 4,413
711,004 AT&T Corporation................. 39,994
345,578 Bell Atlantic Corporation........ 21,123
418,790 BellSouth Corporation............ 19,683
31,153 CenturyTel, Inc. ................ 1,157
216,388 GTE Corporation.................. 15,364
631,465 MCI Worldcom, Inc.=.............. 28,613
81,237 Nextel Communications, Inc.=..... 12,043
759,440 SBC Communications Inc. ......... 31,896
193,245 Sprint Corporation (FON Group)... 12,174
192,012 Sprint Corporation (PCS Group)... 12,541
112,407 U.S. West Inc. .................. 8,164
----------
207,165
----------
WASTE MANAGEMENT -- 0.1%
42,125 Allied Waste Industries,
Inc.=.......................... 276
138,264 Waste Management, Inc. .......... 1,892
----------
2,168
----------
TOTAL COMMON STOCKS
(Cost $562,383).................. 2,835,047
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
103
<PAGE> 108
NATIONS FUNDS
Nations LargeCap Index Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
RIGHTS -- 0.0%+
(Cost $0)++
4 United States Surgical
Rights++....................... $ 0
----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
(000)
-------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 2.5%
(Cost $70,484)
70,484 Nations Cash Reserves#............... $ 70,484
----------
TOTAL INVESTMENTS
(Cost $2,318,193*)............ 101.8% 2,905,531
----------
OTHER ASSETS AND
LIABILITIES (NET)........... (1.8)%
Receivable for investment securities
sold............................... $ 27
Receivable for Fund shares sold...... 5,466
Dividends receivable................. 996
Interest receivable.................. 98
Receivable for variation margin...... 157
Other assets......................... 5
Collateral on securities loaned...... (48,021)
Payable for Fund shares redeemed..... (2,250)
Investment advisory fee payable...... (57)
Administration fee payable........... (219)
Shareholder servicing and
distribution fees payable.......... (6)
Payable for investment securities
purchased.......................... (6,181)
Accrued Trustees'/Directors' fees and
expenses........................... (42)
Accrued expenses and other
liabilities........................ (75)
----------
TOTAL OTHER ASSETS AND LIABILITIES
(NET).............................. (50,102)
----------
NET ASSETS.................... 100.0% $2,855,429
==========
NET ASSETS CONSIST OF:
Undistributed net investment
income............................. $ 63
Accumulated net realized loss on
investments sold and futures
contracts.......................... (7,097)
Net unrealized appreciation of
investments and futures
contracts.......................... 588,862
Paid-in capital...................... 2,273,601
----------
NET ASSETS........................... $2,855,429
==========
<CAPTION>
VALUE
------------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($2,826,485,857 / 97,797,542 shares
outstanding)....................... $28.90
------
------
INVESTOR A SHARES:
Net asset value and redemption price
per share ($28,942,916 / 1,006,475
shares outstanding)................ $28.76
------
------
Maximum sales charge................. 5.75%
Maximum offering price per share..... $30.52
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $583,054 on
investment securities was comprised of gross appreciation of $618,075 and
gross depreciation of $35,021 for Federal income tax purposes. At March 31,
2000, the aggregate cost of securities for Federal income tax purposes was
$2,322,477.
++ Non-income producing security.
++ Security segregated as collateral for futures contracts.
+ Amount represents less than 0.1%.
++ Amount represents less than $500.
H Affiliated Security.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc. A
portion of this amount represents cash collateral received from securities
lending activity (Note 8). The portion that represents cash collateral is
$48,021.
SEE NOTES TO FINANCIAL STATEMENTS.
104
<PAGE> 109
NATIONS FUNDS
Nations Marsico Growth & Income Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
(000)
------------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 99.3%
Investment in Nations Master
Investment Trust, Marsico Growth &
Income Master Portfolio*........... $624,979
--------
TOTAL INVESTMENTS............. 99.3% 624,979
--------
OTHER ASSETS AND
LIABILITIES (NET)........... 0.7%
Receivable for Fund shares sold...... $ 6,025
Payable for Fund shares redeemed..... (1,134)
Administration fee payable........... (68)
Shareholder servicing and
distribution fees payable.......... (337)
Accrued Trustees'/Directors' fees and
expenses........................... (18)
Accrued expenses and other
liabilities........................ (168)
--------
TOTAL OTHER ASSETS
AND LIABILITIES (NET).............. 4,300
--------
NET ASSETS.................... 100.0% $629,279
========
NET ASSETS CONSIST OF:
Net investment loss.................. $ (3)
Accumulated net realized gain on
investment......................... 1,001
Net unrealized appreciation of
investment......................... 161,460
Paid-in capital...................... 466,821
--------
NET ASSETS........................... $629,279
========
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($113,028,340 / 5,229,260 shares
outstanding)....................... $21.61
------
------
INVESTOR A SHARES:
Net asset value and redemption
price per share
($175,859,367 / 8,135,651 shares
outstanding)....................... $21.62
------
------
Maximum sales charge.......... 5.75%
Maximum offering price per share..... $22.94
INVESTOR B SHARES:
Net asset value and offering price
per share+
($305,606,900 / 14,341,722 shares
outstanding)....................... $21.31
------
------
INVESTOR C SHARES:
Net asset value and offering price
per share+ ($34,784,695 / 1,630,350
shares outstanding)................ $21.34
------
------
</TABLE>
---------------
* The financial statements of the Nations Marsico Growth & Income Master
Portfolio, including its portfolio of investments, are included elsewhere
within this report and should be read in conjunction with the Nations Marsico
Growth & Income Fund's financial statements.
+ The redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
105
<PAGE> 110
NATIONS FUNDS
Nations Blue Chip Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
(000)
-----------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 100.2%
Investment in Nations Master
Investment Trust, Blue Chip Master
Portfolio*.......................... $995,592
--------
TOTAL INVESTMENTS.............. 100.2% 995,592
--------
OTHER ASSETS AND LIABILITIES
(NET)........................ (0.2%)
Receivable for Fund shares sold....... $ 1,361
Payable for Fund shares redeemed...... (3,394)
Administration fee payable............ (176)
Shareholder servicing and distribution
fees payable........................ (160)
Accrued Trustees'/Directors' fees and
expenses............................ (13)
Accrued expenses and other
liabilities......................... (100)
--------
TOTAL OTHER ASSETS AND
LIABILITIES (NET)................... (2,482)
--------
NET ASSETS..................... 100.0% $993,110
========
NET ASSETS CONSIST OF:
Undistributed net investment income... $ 71
Accumulated net realized gain on
investment.......................... 60,070
Net unrealized appreciation of
investment.......................... 290,822
Paid-in capital....................... 642,147
--------
NET ASSETS............................ $993,110
========
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($36,392,959 / 974,833 shares
outstanding)........................ $37.33
------
------
INVESTOR A SHARES:
Net asset value and redemption price
per share ($394,070,335 / 10,583,038
shares outstanding)................. $37.24
------
------
Maximum sales charge.................. 5.75%
Maximum offering price per share...... $39.51
INVESTOR B SHARES:
Net asset value and offering price per
share+ ($75,538,142 / 2,052,408
shares outstanding)................. $36.80
------
------
INVESTOR C SHARES:
Net asset value and offering price per
share+ ($17,123,237 / 466,499 shares
outstanding)........................ $36.71
------
------
SEAFIRST SHARES:
Net asset value, offering and
redemption price per share
($469,985,190 / 14,517,114 shares
outstanding)........................ $32.37
------
------
</TABLE>
---------------
* The financial statements of the Blue Chip Master Portfolio, including its
portfolio of investments, are included elsewhere within this report and should
be read in conjunction with the Blue Chip Fund's financial statements.
+ The redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
106
<PAGE> 111
NATIONS FUNDS
Nations Strategic Growth Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS -- 96.6%
AEROSPACE AND DEFENSE -- 1.0%
167,075 Honeywell International Inc. ......... $ 8,803
--------
BANKING -- 3.1%
333,025 Citigroup Inc. ....................... 19,753
108,350 Northern Trust Corporation............ 7,320
--------
27,073
--------
BEVERAGES -- 0.8%
140,100 Coca-Cola Company..................... 6,576
--------
CHEMICALS -- BASIC -- 0.7%
113,900 E.I. duPont de Nemours and Company.... 6,022
--------
COMPUTER RELATED -- 7.3%
246,075 Dell Computer Corporation++........... 13,273
125,250 EMC Corporation....................... 15,656
158,275 International Business Machines
Corporation......................... 18,676
174,275 Sun Microsystems, Inc. ............... 16,330
--------
63,935
--------
COMPUTER SOFTWARE -- 5.6%
55,400 BMC Software, Inc.++.................. 2,735
370,075 Microsoft Corporation++............... 39,321
43,100 Phone.com, Inc. ...................... 7,031
--------
49,087
--------
CONGLOMERATE -- 1.6%
279,225 Tyco International Ltd. .............. 13,926
--------
CONTAINERS AND PACKAGING -- 0.8%
120,775 Avery-Dennison Corporation............ 7,375
--------
COSMETICS AND TOILETRIES -- 0.6%
93,250 Procter & Gamble Company.............. 5,245
--------
DISTRIBUTION AND WHOLESALE -- 1.1%
183,425 Costco Wholesale Corporation.......... 9,641
--------
DRUGS -- 7.7%
287,650 Amgen Inc. ........................... 17,654
218,625 Bristol-Myers Squibb Company.......... 12,626
120,725 Eli Lilly and Company................. 7,606
131,750 Merck & Company, Inc. ................ 8,185
392,075 Pfizer Inc. .......................... 14,335
184,275 Schering-Plough Corporation........... 6,772
--------
67,178
--------
ELECTRIC POWER -- 1.0%
114,675 AES Corporation++..................... 9,031
--------
ELECTRICAL EQUIPMENT -- 0.8%
128,975 Emerson Electric Company.............. 6,820
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
ENERGY -- 1.3%
243,925 Coastal Corporation................... $ 11,221
--------
FINANCIAL SERVICES -- 5.1%
144,825 Charles Schwab Corporation............ 8,228
180,500 Freddie Mac........................... 7,976
147,550 Merrill Lynch & Company Inc. ......... 15,492
157,375 Morgan Stanley Dean Witter &
Company............................. 12,836
--------
44,532
--------
INSURANCE -- 2.0%
160,900 American International Group, Inc. ... 17,619
--------
MACHINERY AND EQUIPMENT -- 1.5%
117,100 Illinois Tool Works, Inc. ............ 6,470
143,725 Ingersoll-Rand Company................ 6,360
--------
12,830
--------
MANUFACTURING -- 3.8%
214,075 General Electric Company.............. 33,222
--------
MEDIA -- 3.2%
129,375 Clear Channel Communications,
Inc.++.............................. 8,935
185,600 Time Warner Inc. ..................... 18,560
--------
27,495
--------
MEDICAL PRODUCTS AND SUPPLIES -- 2.8%
194,800 Abbott Laboratories................... 6,855
153,725 Guidant Corporation++................. 9,040
123,100 Johnson & Johnson..................... 8,625
--------
24,520
--------
NETWORKING EQUIPMENT AND PRODUCTS --
9.1%
90,800 3Com Corporation++.................... 5,051
48,900 CIENA Corporation++................... 6,168
548,250 Cisco Systems, Inc. .................. 42,386
192,350 Lucent Technologies, Inc. ............ 11,685
62,600 Nokia Corporation, Class A, ADR....... 13,599
--------
78,889
--------
OIL -- INTERNATIONAL -- 2.4%
106,100 BP Amoco plc, ADR..................... 5,630
195,200 Exxon Mobil Corporation............... 15,189
--------
20,819
--------
OIL FIELD SERVICES & EQUIPMENT -- 1.0%
115,900 Schlumberger Ltd...................... 8,866
--------
PRINTING AND PUBLISHING -- 1.0%
83,900 McGraw-Hill Companies, Inc. .......... 3,817
136,625 Tribune Company....................... 4,996
--------
8,813
--------
PROFESSIONAL SERVICES -- 1.0%
181,725 Interpublic Group Companies, Inc. .... 8,587
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
107
<PAGE> 112
NATIONS FUNDS
Nations Strategic Growth Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
RESTAURANTS AND LODGING -- 0.5%
144,000 Marriott International Inc., Class
A................................... $ 4,536
--------
RETAIL -- FOOD -- 0.6%
107,800 Safeway, Inc.++....................... 4,878
--------
RETAIL -- GENERAL -- 2.4%
378,125 Wal-Mart Stores, Inc. ................ 20,986
--------
RETAIL -- SPECIALTY -- 5.4%
85,000 Best Buy Company, Inc.++.............. 7,310
194,550 Gap Inc. ............................. 9,691
206,450 Home Depot Inc. ...................... 13,316
95,050 Lowe's Companies Inc. ................ 5,549
118,200 Tandy Corporation..................... 5,999
219,825 Walgreen Company...................... 5,660
--------
47,525
--------
SEMICONDUCTORS -- 8.8%
287,825 Intel Corporation..................... 37,974
189,950 Linear Technology Corporation......... 10,447
93,850 Texas Instruments Inc. ............... 15,016
152,600 Xilinx, Inc........................... 12,637
--------
76,074
--------
TELECOMMUNICATIONS -- 4.6%
46,000 Nortel Networks Corporation........... 5,796
118,750 QUALCOMM Inc. ........................ 17,730
207,000 Qwest Communications International,
Inc. ............................... 10,040
152,600 Western Wireless Corporation++........ 6,991
--------
40,557
--------
TRANSPORTATION -- 0.5%
117,200 FedEx Corporation++................... 4,571
--------
UTILITIES -- TELEPHONE -- 7.5%
257,975 AT&T Corporation...................... 14,511
106,275 BellSouth Corporation................. 4,995
376,675 MCI Worldcom, Inc.++.................. 17,068
128,900 Nextel Communications, Inc.++......... 19,110
151,175 Sprint Corporation (FON Group)........ 9,524
--------
65,208
--------
TOTAL COMMON STOCKS
(Cost $646,823)....................... 842,460
--------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
-----------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 4.1%
(Cost $35,751)
35,751 Nations Cash Reserves#................. $ 35,751
--------
TOTAL INVESTMENTS
(Cost $682,574*)............... 100.7% 878,211
--------
OTHER ASSETS AND LIABILITIES
(NET)........................ (0.7)%
Cash................................... $ 1
Receivable for investment securities
sold................................. 6,504
Receivable for Fund shares sold........ 3,114
Dividends receivable................... 347
Interest receivable.................... 164
Payable for Fund shares redeemed....... (2,247)
Investment advisory fee payable........ (448)
Administration fee payable............. (159)
Shareholder servicing and distribution
fees payable......................... (6)
Payable for investment securities
purchased............................ (13,104)
Accrued Trustees'/Directors' fees and
expenses............................. (13)
Accrued expenses and other
liabilities.......................... (98)
--------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)................................ (5,945)
--------
NET ASSETS..................... 100.0% $872,266
========
NET ASSETS CONSIST OF:
Accumulated net realized gain on
investments sold..................... $ 1,377
Net unrealized appreciation of
investments.......................... 195,637
Paid-in capital........................ 675,252
--------
NET ASSETS............................. $872,266
========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
108
<PAGE> 113
NATIONS FUNDS
Nations Strategic Growth Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
-----------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($860,124,218 / 50,519,008 shares
outstanding)......................... $17.03
------
------
INVESTOR A SHARES:
Net asset value and redemption price
per share ($5,502,619 / 324,031
shares outstanding).................. $16.98
------
------
Maximum sales charge................... 5.75%
Maximum offering price per share....... $18.02
INVESTOR B SHARES:
Net asset value and offering price per
share+
($4,933,808 / 291,894 shares
outstanding)......................... $16.90
------
------
INVESTOR C SHARES:
Net asset value and offering price per
share+
($1,705,581 / 100,825 shares
outstanding)......................... $16.92
------
------
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $195,637 on
investment securities was comprised of gross appreciation of $217,809 and
gross depreciation of $22,172 for Federal income tax purposes. At March 31,
2000, the aggregate cost of securities for Federal income tax purposes was
$682,574.
++ Non-income producing security.
+ The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
109
<PAGE> 114
NATIONS FUNDS
Nations Capital Growth Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS -- 99.0%
BANKING -- 2.6%
91,170 Chase Manhattan Corporation.......... $ 7,949
84,700 Citigroup Inc. ...................... 5,024
204,315 Fannie Mae........................... 11,531
----------
24,504
----------
BEVERAGES -- 1.5%
412,135 PepsiCo, Inc. ....................... 14,244
----------
COMPUTER RELATED -- 11.3%
344,605 Dell Computer Corporation++.......... 18,587
264,890 EMC Corporation...................... 33,111
125,570 International Business Machines
Corporation........................ 14,817
447,425 Sun Microsystems, Inc. .............. 41,926
----------
108,441
----------
COMPUTER SOFTWARE -- 8.7%
623,285 Compuware Corporation++.............. 13,128
354,830 Microsoft Corporation++.............. 37,701
418,360 Oracle Corporation................... 32,658
----------
83,487
----------
CONGLOMERATE -- 4.8%
617,160 Tyco International Ltd. ............. 30,781
243,615 United Technologies Corporation...... 15,393
----------
46,174
----------
DISTRIBUTION AND WHOLESALE -- 0.5%
95,000 Costco Wholesale Corporation......... 4,993
----------
DRUGS -- 9.9%
182,320 American Home Products Corporation... 9,777
153,575 Bristol-Myers Squibb Company......... 8,869
606,900 Elan Corporation ADR................. 28,828
126,665 Merck & Company, Inc. ............... 7,869
211,830 Pfizer Inc. ......................... 7,745
244,840 Schering-Plough Corporation.......... 8,998
234,495 Warner-Lambert Company............... 22,863
----------
94,949
----------
ELECTRICAL EQUIPMENT -- 0.8%
144,000 Emerson Electric Company............. 7,614
----------
FINANCIAL SERVICES -- 4.3%
366,170 Capital One Financial Corporation.... 17,553
212,760 Household International Inc. ........ 7,939
618,590 MBNA Corporation..................... 15,774
----------
41,266
----------
HOUSEHOLD PRODUCTS -- 0.7%
214,510 The Clorox Company................... 6,972
----------
INSURANCE -- 1.4%
124,762 American International Group,
Inc. .............................. 13,661
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C> <C>
INTERNET -- 2.3%
329,760 America Online Inc. ................. $ 22,176
----------
MANUFACTURING -- 4.2%
257,090 General Electric Company............. 39,897
----------
MEDIA -- 3.4%
166,475 CBS Corporation++.................... 9,427
140,000 Clear Channel Communications,
Inc.++............................. 9,669
135,445 Time Warner Inc. .................... 13,544
----------
32,640
----------
MEDICAL PRODUCTS AND SUPPLIES -- 4.3%
140,250 Baxter International Inc. ........... 8,792
197,205 Guidant Corporation++................ 11,598
403,825 Medtronic, Inc. ..................... 20,772
----------
41,162
----------
NETWORKING EQUIPMENT AND PRODUCTS --
10.3%
611,770 Cisco Systems, Inc. ................. 47,298
404,377 Lucent Technologies, Inc. ........... 24,566
125,400 Nokia Corporation, Class A, ADR...... 27,243
----------
99,107
----------
OIL -- INTERNATIONAL -- 0.7%
88,900 Exxon Mobil Corporation.............. 6,918
----------
OIL FIELD SERVICES & EQUIPMENT --2.1%
246,955 Halliburton Company.................. 10,125
127,185 Schlumberger Ltd. ................... 9,730
----------
19,855
----------
RETAIL -- FOOD -- 0.6%
120,025 Safeway, Inc.++...................... 5,431
----------
RETAIL -- GENERAL -- 2.6%
224,405 Target Corporation................... 16,774
147,000 Wal-Mart Stores, Inc. ............... 8,159
----------
24,933
----------
RETAIL -- SPECIALTY -- 7.0%
111,010 Best Buy Company, Inc.++............. 9,547
391,365 Circuit City Stores - Circuit City
Group.............................. 23,824
285,935 CVS Corporation...................... 10,740
163,035 Home Depot Inc. ..................... 10,516
220,840 Lowe's Companies Inc. ............... 12,892
----------
67,519
----------
SEMICONDUCTORS -- 6.7%
307,310 Intel Corporation.................... 40,546
101,718 Motorola, Inc. ...................... 14,482
114,200 Xilinx, Inc. ........................ 9,457
----------
64,485
----------
TELECOMMUNICATIONS -- 4.4%
207,655 Nortel Networks Corporation.......... 26,164
115,680 Tellabs, Inc. ....................... 7,286
157,600 Vodafone AirTouch plc, ADR........... 8,757
----------
42,207
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
110
<PAGE> 115
NATIONS FUNDS
Nations Capital Growth Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C> <C>
TRUCKING AND SHIPPING -- 0.4%
63,195 United Parcel Service, Inc. ......... $ 3,981
----------
UTILITIES -- TELEPHONE -- 3.5%
155,555 AT&T Corporation..................... 8,750
542,555 MCI Worldcom, Inc.++................. 24,584
----------
33,334
----------
TOTAL COMMON STOCKS
(Cost $444,375)...................... 949,950
----------
INVESTMENT COMPANIES -- 7.0%
(Cost $66,831)
66,831 Nations Cash Reserves#............... 66,831
----------
TOTAL INVESTMENTS
(Cost $511,206*).............. 106.0% 1,016,781
----------
OTHER ASSETS AND LIABILITIES
(NET)....................... (6.0)%
Cash................................. $ 1
Receivable for investment securities
sold............................... 30,922
Receivable for Fund shares sold...... 11,792
Dividends receivable................. 407
Interest receivable.................. 39
Collateral on securities loaned...... (65,941)
Payable for Fund shares redeemed..... (5,403)
Investment advisory fee payable...... (504)
Administration fee payable........... (179)
Shareholder servicing and
distribution fees payable.......... (79)
Distributions payable................ (119)
Payable for investment securities
purchased.......................... (28,704)
Accrued Trustees'/Directors' fees and
expenses........................... (53)
Accrued expenses and other
liabilities........................ (107)
----------
TOTAL OTHER ASSETS AND LIABILITIES
(NET).............................. (57,928)
----------
NET ASSETS.................... 100.0% $ 958,853
==========
NET ASSETS CONSIST OF:
Accumulated net realized gain on
investments sold................... $ 31,848
Net unrealized appreciation of
investments........................ 505,575
Paid-in capital...................... 421,430
----------
NET ASSETS........................... $ 958,853
==========
</TABLE>
<TABLE>
<CAPTION>
VALUE
-----------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and redemption
price per share
($816,370,589 / 55,946,242 shares
outstanding)........................... $14.59
======
INVESTOR A SHARES:
Net asset value and redemption price per
share ($61,756,041 / 4,279,702 shares
outstanding)........................... $14.43
======
Maximum sales charge..................... 5.75%
Maximum offering price per share......... $15.31
INVESTOR B SHARES:
Net asset value and offering price per
share+ ($75,843,862 / 5,586,529 shares
outstanding)........................... $13.58
======
INVESTOR C SHARES:
Net asset value and offering price per
share+ ($4,882,877 / 356,532 shares
outstanding)........................... $13.70
======
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $504,040 on
investment securities was comprised of gross appreciation of $507,919 and
gross depreciation of $3,879 for Federal income tax purposes. At March 31,
2000, the aggregate cost of securities for Federal income tax purposes was
$512,741.
++ Non-income producing security.
+ The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc. A
portion of this amount represents cash collateral received from securities
lending activity (Note 8). The portion that represents cash collateral is
$65,941.
SEE NOTES TO FINANCIAL STATEMENTS.
111
<PAGE> 116
NATIONS FUNDS
Nations Disciplined Equity Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 97.8%
AEROSPACE AND DEFENSE -- 1.1%
83,600 Northrop Grumman Corporation.......... $ 4,426
--------
AUTOMOBILES AND TRUCKS -- 1.1%
97,675 Ford Motor Company.................... 4,487
--------
BEVERAGES -- 1.3%
115,575 Coca-Cola Company..................... 5,425
--------
COMPUTER RELATED -- 8.2%
240,000 Adaptec, Inc.++....................... 9,270
82,275 Dell Computer Corporation++........... 4,438
45,775 EMC Corporation....................... 5,722
131,725 Lexmark International Group, Inc.,
Class A............................. 13,930
15,600 Palm, Inc.++.......................... 700
--------
34,060
--------
COMPUTER SERVICES -- 2.7%
143,100 Computer Sciences Corporation++....... 11,323
--------
COMPUTER SOFTWARE -- 10.2%
409,000 Compuware Corporation++............... 8,615
192,700 Microsoft Corporation++............... 20,474
108,575 Oracle Corporation.................... 8,476
29,575 Phone.com, Inc. ...................... 4,824
--------
42,389
--------
CONGLOMERATE -- 2.5%
163,100 United Technologies Corporation....... 10,306
--------
COSMETICS AND TOILETRIES -- 2.3%
167,800 Kimberly-Clark Corporation............ 9,397
--------
DRUGS -- 2.4%
44,100 Eli Lilly and Company................. 2,778
72,550 Warner-Lambert Company................ 7,074
--------
9,852
--------
ELECTRIC POWER -- 0.3%
16,400 AES Corporation++..................... 1,292
--------
ENERGY -- 4.1%
281,500 Coastal Corporation................... 12,949
70,900 Columbia Energy Group................. 4,201
--------
17,150
--------
ENTERTAINMENT -- 1.0%
56,175 Electronic Arts Inc.++................ 3,999
--------
FINANCIAL SERVICES -- 6.1%
168,000 MBNA Corporation...................... 4,284
153,650 Morgan Stanley Dean Witter &
Company............................. 12,532
199,750 Paine Webber Group, Inc. ............. 8,789
--------
25,605
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
INSURANCE -- 1.8%
70,325 American International Group, Inc. ... $ 7,701
--------
INTERNET -- 1.6%
99,850 America Online Inc. .................. 6,715
--------
MACHINERY AND EQUIPMENT -- 1.0%
74,450 Illinois Tool Works, Inc. ............ 4,113
--------
MANUFACTURING -- 3.7%
98,600 General Electric Company.............. 15,301
--------
MEDIA -- 1.0%
61,725 Clear Channel Communications,
Inc.++.............................. 4,263
--------
MEDICAL PRODUCTS AND SUPPLIES -- 6.2%
301,000 Allergan, Inc. ....................... 15,049
79,600 Cardinal Health, Inc. ................ 3,652
104,000 Johnson & Johnson..................... 7,287
--------
25,988
--------
NETWORKING EQUIPMENT AND PRODUCTS -- 8.2%
69,950 3Com Corporation++.................... 3,891
232,150 Cisco Systems, Inc. .................. 17,948
205,200 Lucent Technologies, Inc. ............ 12,466
--------
34,305
--------
PRINTING AND PUBLISHING -- 1.0%
82,500 Knight-Ridder Inc. ................... 4,202
--------
RETAIL -- GENERAL -- 4.2%
108,800 Dollar General Corporation............ 2,924
109,300 Federated Department Stores, Inc.++... 4,563
18,000 Target Corporation.................... 1,346
153,900 Wal-Mart Stores, Inc. ................ 8,541
--------
17,374
--------
RETAIL -- SPECIALTY -- 5.7%
167,900 Best Buy Company, Inc.++.............. 14,440
70,775 Circuit City Stores - Circuit City
Group............................... 4,308
76,700 Home Depot Inc. ...................... 4,947
--------
23,695
--------
SEMICONDUCTORS -- 9.4%
240,800 Altera Corporation.................... 21,491
118,925 Intel Corporation..................... 15,691
15,425 Motorola, Inc. ....................... 2,196
--------
39,378
--------
TELECOMMUNICATIONS -- 2.0%
30,700 QUALCOMM Inc. ........................ 4,584
85,575 Western Wireless Corporation++........ 3,920
--------
8,504
--------
UTILITIES -- TELEPHONE -- 8.7%
136,900 ALLTEL Corporation.................... 8,633
116,300 AT&T Corporation...................... 6,542
223,100 BellSouth Corporation................. 10,486
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
112
<PAGE> 117
NATIONS FUNDS
Nations Disciplined Equity Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
UTILITIES -- (CONTINUED)
218,700 SBC Communications Inc. .............. $ 9,185
20,725 U.S. West Inc. ....................... 1,505
--------
36,351
--------
TOTAL COMMON STOCKS
(Cost $297,580)....................... 407,601
--------
</TABLE>
<TABLE>
<CAPTION>
SHARES
(000)
-------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 3.3%
(Cost $13,940)
13,940 Nations Cash Reserves#................ 13,940
--------
TOTAL INVESTMENTS
(Cost $311,520*)............... 101.1% 421,541
--------
OTHER ASSETS AND LIABILITIES
(NET)........................ (1.1)%
Receivable for investment securities
sold................................ $ 7,881
Receivable for Fund shares sold....... 814
Dividends receivable.................. 183
Interest receivable................... 88
Collateral on securities loaned....... (6,698)
Payable for Fund shares redeemed...... (865)
Investment advisory fee payable....... (230)
Administration fee payable............ (82)
Shareholder servicing and distribution
fees payable........................ (46)
Payable for investment securities
purchased........................... (5,451)
Accrued Trustees'/Directors' fees and
expenses............................ (23)
Accrued expenses and other
liabilities......................... (93)
--------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)............................... (4,522)
--------
NET ASSETS..................... 100.0% $417,019
========
NET ASSETS CONSIST OF:
Undistributed net investment income... $ (26)
Accumulated net realized loss on
investments sold.................... (3,588)
Net unrealized appreciation of
investments......................... 110,023
Paid-in capital....................... 310,610
--------
NET ASSETS............................ $417,019
========
</TABLE>
<TABLE>
<CAPTION>
VALUE
-----------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($328,219,336 / 15,921,617 shares
outstanding)........................ $20.61
------
------
INVESTOR A SHARES:
Net asset value and redemption price
per share ($47,624,015 / 2,331,065
shares outstanding)................. $20.43
------
------
Maximum sales charge.................. 5.75%
Maximum offering price per share...... $21.68
INVESTOR B SHARES:
Net asset value and offering price per
share+ ($39,679,991 / 2,033,564
shares outstanding)................. $19.51
------
------
INVESTOR C SHARES:
Net asset value and offering price per
share+ ($1,495,657 / 75,172 shares
outstanding)........................ $19.90
------
------
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $109,959 on
investment securities was comprised of gross appreciation of $120,542 and
gross depreciation of $10,583 for Federal income tax purposes. At March 31,
2000, the aggregate cost of securities for Federal income tax purposes was
$311,582.
++ Non-income producing security.
+ The redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
#Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc. A
portion of this amount represents cash collateral received from securities
lending activity (Note 8). The portion that represents cash collateral is
$6,698.
SEE NOTES TO FINANCIAL STATEMENTS.
113
<PAGE> 118
NATIONS FUNDS
Nations Marsico Focused Equities Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
(000)
-------------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 98.7%
Investment in Nations Master
Investment Trust, Marsico Focused
Equities Master Portfolio*........ $2,239,424
----------
TOTAL INVESTMENTS............ 98.7% 2,239,424
----------
OTHER ASSETS AND LIABILITIES
(NET)...................... 1.3%
Receivable for Fund shares sold..... $ 34,735
Payable for Fund shares redeemed.... (3,767)
Administration fee payable.......... (295)
Shareholder servicing and
distribution fees payable......... (1,238)
Accrued Trustees'/Directors' fees
and expenses...................... (19)
Accrued expenses and other
liabilities....................... (580)
----------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)............................. 28,836
----------
NET ASSETS................... 100.0% $2,268,260
==========
NET ASSETS CONSIST OF:
Accumulated net realized gain on
investment........................ $ 2,156
Net unrealized appreciation of
investment........................ 510,378
Paid-in capital..................... 1,755,726
----------
NET ASSETS.......................... $2,268,260
==========
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($326,744,538 / 14,465,916 shares
outstanding)...................... $22.59
------
------
INVESTOR A SHARES:
Net asset value and redemption price
per share
($690,165,723 / 30,597,320 shares
outstanding)...................... $22.56
------
------
Maximum sales charge................ 5.75%
Maximum offering price per share.... $23.94
INVESTOR B SHARES:
Net asset value and offering price
per share+
($1,003,840,027 / 45,086,401
shares outstanding)............... $22.26
------
------
INVESTOR C SHARES:
Net asset value and offering price
per share+
($247,509,203 / 11,082,601 shares
outstanding)...................... $22.33
------
------
</TABLE>
---------------
* The financial statements of the Nations Marsico Focused Equities Master
Portfolio, including its portfolio of investments, are included elsewhere
within this report and should be read in conjunction with the Nations Marsico
Focused Equities Fund's financial statements.
+ The redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
114
<PAGE> 119
NATIONS FUNDS
Nations MidCap Growth Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 95.0%
ADVERTISING AND MARKETING SERVICES -- 1.0%
80,000 Lamar Advertising Company++........... $ 3,640
--------
APPAREL AND TEXTILES -- 1.4%
155,000 Jones Apparel Group, Inc.++........... 4,941
--------
BANKING -- 4.7%
230,000 Charter One Financial, Inc. .......... 4,830
110,000 City National Corporation............. 3,706
80,000 Northern Trust Corporation............ 5,405
114,000 SouthTrust Corporation................ 2,900
--------
16,841
--------
BROADCASTING -- 2.5%
80,000 Univision Communications, Inc.++...... 9,040
--------
COMMERCIAL SERVICES -- 0.7%
200,000 Modis Professional Services, Inc.++... 2,475
--------
COMPUTER RELATED -- 2.8%
100,000 Solectron Corporation................. 4,006
70,000 Symbol Technologies, Inc. ............ 5,762
1,260 webMethods, Inc.++.................... 304
--------
10,072
--------
COMPUTER SERVICES -- 2.5%
50,000 CSG Systems International, Inc.++..... 2,441
175,000 Sungard Data Systems, Inc.++.......... 6,606
--------
9,047
--------
COMPUTER SOFTWARE -- 12.0%
75,000 BMC Software, Inc.++.................. 3,703
45,200 Check Point Software Technologies..... 7,732
145,000 Citrix Systems, Inc. ................. 9,605
243,000 Concord EFS, Inc. .................... 5,574
123,200 Convergys Corporation++............... 4,759
40,000 Intertrust Technologies Corporation... 1,700
73,000 Intuit Inc. .......................... 3,969
20,000 Phone.com, Inc. ...................... 3,263
21,000 Quest Software, Inc.++................ 2,368
--------
42,673
--------
CONGLOMERATE -- 1.0%
100,000 Pentair, Inc. ........................ 3,706
--------
CONSTRUCTION -- 0.5%
34,000 Martin Marietta Materials, Inc. ...... 1,615
--------
DRUGS -- 3.9%
60,000 Biogen, Inc. ......................... 4,192
20,000 MedImmune Inc.++...................... 3,483
23,400 Millennium Pharmaceuticals, Inc.++.... 3,039
82,600 Watson Pharmaceutical, Inc.++......... 3,278
--------
13,992
--------
ELECTRIC POWER -- 3.6%
90,000 AES Corporation++..................... 7,088
62,300 Calpine Corporation................... 5,856
--------
12,944
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
ELECTRICAL COMPONENTS -- 0.9%
100,000 ECI Telecom Ltd....................... $ 3,138
--------
ENTERTAINMENT -- 1.5%
130,000 SFX Entertainment, Inc. .............. 5,306
--------
FINANCIAL SERVICES -- 4.7%
150,998 Legg Mason Inc. ...................... 6,530
58,000 Providian Financial Corporation....... 5,024
126,500 Waddell & Reed Financial, Inc. ....... 5,353
--------
16,907
--------
INSURANCE -- 1.1%
159,500 Reinsurance Group of America, Inc. ... 3,798
--------
MEDIA -- 2.1%
299,146 Metro-Goldwyn-Mayer, Inc.++........... 7,610
--------
MEDICAL PRODUCTS AND SUPPLIES -- 1.1%
55,600 Stryker Corporation................... 3,878
--------
MEDICAL SERVICES -- 2.2%
15,500 Affymetrix, Inc.++.................... 2,301
397,500 Health Management Associates, Inc.,
Class A++........................... 5,664
--------
7,965
--------
NETWORKING EQUIPMENT AND PRODUCTS -- 12.2%
230,000 ADC Telecommunications, Inc. ......... 12,391
68,000 Comverse Technology, Inc.++........... 12,852
103,000 JDS Uniphase Corporation.............. 12,418
45,000 Sycamore Networks, Inc. .............. 5,805
--------
43,466
--------
OIL FIELD SERVICES & EQUIPMENT -- 4.4%
115,000 BJ Services Company++................. 8,495
50,000 Smith International, Inc.++........... 3,875
55,000 Weatherford International, Inc.++..... 3,242
--------
15,612
--------
PRINTING AND PUBLISHING -- 1.0%
6,800 The Washington Post Company........... 3,679
--------
RECREATION -- 0.8%
60,000 International Speedway Corporation.... 2,696
--------
RETAIL -- SPECIALTY -- 4.8%
148,000 Bed Bath & Beyond, Inc.++............. 5,827
55,500 Best Buy Company, Inc.++.............. 4,773
121,500 Staples Inc.++........................ 2,430
140,000 The Men's Wearhouse Inc.++............ 4,148
--------
17,178
--------
SEMICONDUCTORS -- 13.2%
124,000 Altera Corporation.................... 11,066
124,000 Linear Technology Corporation......... 6,820
128,000 Maxim Integrated Products............. 9,096
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
115
<PAGE> 120
NATIONS FUNDS
Nations MidCap Growth Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
SEMICONDUCTORS -- (CONTINUED)
99,000 Vitesse Semiconductor Corporation..... $ 9,529
126,500 Xilinx, Inc. ......................... 10,476
--------
46,987
--------
TELECOMMUNICATIONS -- 5.4%
81,000 American Power Conversion
Corporation++....................... 3,473
30,000 Next Level Communication, Inc. ....... 3,263
70,000 Research In Motion Ltd.++............. 7,454
62,000 Time Warner Telecom, Inc.++........... 4,929
--------
19,119
--------
UTILITIES - TELEPHONE -- 3.0%
146,200 Broadwing Inc.++...................... 5,437
83,400 CenturyTel, Inc....................... 3,096
60,300 Rhythms NetConnections Inc.++......... 2,220
--------
10,753
--------
TOTAL COMMON STOCKS
(Cost $161,552)..................... 339,078
--------
</TABLE>
<TABLE>
<CAPTION>
SHARES
(000)
--------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 21.8%
(Cost $77,946)
77,946 Nations Cash Reserves#............... 77,946
--------
TOTAL INVESTMENTS
(Cost $239,498*)............ 116.8% 417,024
--------
OTHER ASSETS AND LIABILITIES
(NET)....................... (16.8)%
Cash................................. $ 1
Receivable for investment securities
sold............................... 3,109
Receivable for Fund shares sold...... 3,929
Dividends receivable................. 44
Interest receivable.................. 92
Collateral on securities loaned...... (63,788)
Payable for Fund shares redeemed..... (323)
Investment advisory fee payable...... (196)
Administration fee payable........... (69)
Shareholder servicing and
distribution fees payable.......... (50)
Payable for investment securities
purchased.......................... (2,756)
Accrued Trustees'/Directors' fees and
expenses........................... (32)
Accrued expenses and other
liabilities........................ (59)
--------
TOTAL OTHER ASSETS AND
LIABILITIES (NET)........... (60,098)
--------
NET ASSETS.................... 100.0% $356,926
========
NET ASSETS CONSIST OF:
Accumulated net realized gain on
investments sold................... $ 27,318
Net unrealized appreciation of
investments........................ 177,526
Paid-in capital...................... 152,082
--------
NET ASSETS........................... $356,926
========
</TABLE>
<TABLE>
<CAPTION>
VALUE
-----------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($281,950,532 / 12,582,582 shares
outstanding)....................... $22.41
------
------
INVESTOR A SHARES:
Net asset value and redemption price
per share ($22,740,829 / 1,039,730
shares outstanding)................ $21.87
------
------
Maximum sales charge................. 5.75%
Maximum offering price per share..... $23.20
INVESTOR B SHARES:
Net asset value and offering price
per share+ ($49,606,083 / 2,433,517
shares outstanding)................ $20.38
------
------
INVESTOR C SHARES:
Net asset value and offering price
per share+ ($2,628,481 / 128,399
shares outstanding)................ $20.47
------
------
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $177,526 on
investment securities was comprised of gross appreciation of $182,723 and
gross depreciation of $5,197 for Federal income tax purposes. At March 31,
2000, the aggregate cost of securities for Federal income tax purposes was
$239,498.
++ Non-income producing security.
+ The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc. A
portion of this amount represents cash collateral received from securities
lending activity (Note 8). The portion that represents cash collateral is
$63,788.
SEE NOTES TO FINANCIAL STATEMENTS.
116
<PAGE> 121
NATIONS FUNDS
Nations Small Company Fund
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS -- 89.4%
APPAREL AND TEXTILES -- 4.6%
225,600 Columbia Sportswear Company++........ $ 5,527
340,200 Kenneth Cole Productions, Inc. ...... 13,354
542,600 Quiksilver, Inc. .................... 9,529
561,900 Tefron Ltd.++........................ 8,955
84,000 Timberland Company, Class A.......... 4,284
--------
41,649
--------
BANKING -- 2.2%
393,200 City National Corporation............ 13,246
376,100 National Commerce Bancorp............ 6,958
--------
20,204
--------
BROADCASTING -- 0.4%
276,420 Salem Communications Corporation++... 3,300
--------
COMMERCIAL SERVICES -- 3.9%
468,400 Dendrite International, Inc. ........ 9,808
464,542 Encompass Services Corporation....... 2,671
287,300 Iron Mountain Incorporated++......... 9,786
324,800 Luminant Worldwide Corporation++..... 5,400
281,115 Nova Corporation++................... 8,187
--------
35,852
--------
COMPUTER RELATED -- 3.8%
414,262 Cybex Computer Products
Corporation........................ 15,587
278,200 Plexus Corporation++................. 18,534
3,400 webMethods, Inc.++................... 821
--------
34,942
--------
COMPUTER SERVICES -- 0.0%+
1,300 Organic, Inc.++...................... 28
--------
COMPUTER SOFTWARE -- 3.1%
16,900 Breezecom Ltd.++..................... 632
293,465 Hyperion Solutions Corporation++..... 9,538
7,700 OTG Software, Inc.++................. 310
8,200 Private Business, Inc.++............. 25
420,850 Rogue Wave Software++................ 3,209
402,300 Segue Software, Inc.++............... 4,953
72,900 Software.Com, Inc.++................. 9,395
--------
28,062
--------
CONSTRUCTION -- 0.4%
173,500 Kaufman & Broad Home Corporation..... 3,719
--------
CONSUMER GOODS AND SERVICES -- 0.7%
73,200 Macrovision Corporation.............. 6,304
--------
DRUGS -- 4.8%
156,100 Allos Therapeutics Inc.++............ 2,234
115,400 Human Genome Sciences, Inc. ......... 9,585
438,747 Martek Biosciences Corporation++..... 5,759
333,100 Shire Pharmaceuticals plc++.......... 17,071
275,879 Vical, Inc.++........................ 9,242
--------
43,891
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C> <C>
EDUCATION -- 0.6%
316,200 ITT Educational Services, Inc.++..... $ 5,059
--------
ELECTRONICS -- 11.2%
444,200 Aeroflex, Inc.++..................... 21,987
328,100 Anaren Microwave, Inc.++............. 31,456
447,900 AstroPower, Inc.++................... 14,473
138,000 Dionex Corporation++................. 4,545
56,300 Ortel Corporation++.................. 10,567
3,750 Quantum Effect Devices, Inc.++....... 299
89,800 SDL, Inc. ........................... 19,116
--------
102,443
--------
FINANCIAL SERVICES -- 2.3%
444,600 Affiliated Managers Group, Inc.++.... 21,119
--------
FURNITURE AND APPLIANCES -- 0.7%
256,262 Ethan Allen Interiors, Inc. ......... 6,407
--------
HEALTHCARE -- 0.4%
12,400 Aspect Medical Systems, Inc.++....... 445
725,898 US Oncology, Inc.++.................. 3,266
--------
3,711
--------
INSURANCE -- 1.3%
266,346 Delphi Financial Group Inc., Class
A.................................. 8,090
181,700 Triad Guaranty, Inc.++............... 3,691
--------
11,781
--------
INTERNET -- 2.0%
760 Lante Corporation.................... 23
29,300 ProsoftTraining.com++................ 661
448,875 USinternetworking, Inc. ............. 17,394
--------
18,078
--------
MACHINERY AND EQUIPMENT -- 0.8%
241,000 Applied Power, Inc., Class A......... 6,869
--------
MANUFACTURING -- 0.9%
184,920 Lennox International Inc. ........... 1,618
508,900 Polymer Group, Inc. ................. 6,489
--------
8,107
--------
MEDICAL PRODUCTS AND SUPPLIES -- 0.3%
91,200 CONMED Corporation++................. 2,286
--------
MEDICAL SERVICES -- 2.9%
447,600 OrthAlliance, Inc.++................. 3,133
571,000 Orthodontic Centers of America++..... 10,706
447,200 Province Healthcare Company++........ 12,802
--------
26,641
--------
NETWORKING EQUIPMENT AND PRODUCTS -- 0.0%+
2,500 Finisar Corporation++................ 366
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
117
<PAGE> 122
NATIONS FUNDS
Nations Small Company Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C> <C>
OIL AND GAS -- 3.3%
368,400 Kinder Morgan Energy Partners,
L.P. .............................. $ 14,621
573,300 Marine Drilling Companies, Inc.++.... 15,730
--------
30,351
--------
PROFESSIONAL SERVICES -- 2.9%
647,100 AHL Services, Inc.++................. 6,552
377,500 Career Education Corporation++....... 13,213
872,400 SCB Computer Technology, Inc.++...... 2,508
366,300 Trammell Crow Company++.............. 4,052
--------
26,325
--------
RESTAURANTS AND LODGING -- 0.3%
222,700 Garden Fresh Restaurant
Corporation++...................... 2,450
--------
RETAIL -- GENERAL -- 0.5%
233,700 ShopKo Stores, Inc.++................ 4,148
--------
RETAIL -- SPECIALTY -- 1.3%
391,400 Blue Rhino Corporation++............. 4,770
304,225 Fossil, Inc.......................... 7,130
672 Score Board, Inc.++++................ 0
--------
11,900
--------
SEMICONDUCTORS -- 2.5%
412,900 Sawtek, Inc. ........................ 21,704
12,300 Virata Corporation++................. 1,228
--------
22,932
--------
TECHNOLOGY -- 5.8%
1,347,800 P-Com, Inc.++........................ 24,934
549,200 REMEC, Inc.++........................ 27,735
--------
52,669
--------
TELECOMMUNICATIONS -- 24.4%
134,500 AirGate PCS, Inc.++.................. 14,190
223,600 AudioCodes Ltd.++.................... 22,444
727,900 C-COR Electronics.................... 35,667
480,100 Classic Communications, Inc., Class
A++................................ 7,562
111,300 Entercom Communications
Corporation++...................... 5,676
289,800 Gilat Communications Ltd.++.......... 7,716
288,800 Gilat Satellite Networks Ltd.++...... 33,860
125,600 Harmonic Lightwaves, Inc. ........... 10,456
95,900 Plantronics Inc.++................... 8,937
384,500 PNV.net, Inc.++...................... 1,730
149,500 Proxim, Inc.++....................... 17,893
132,100 RF Micro Devices, Inc. .............. 17,751
439,600 Spectrasite Holdings, Inc.++......... 12,446
271,200 Spectrian Corporation++.............. 6,102
960 Telaxis Communications
Corporation++...................... 58
45,600 Tollgrade Communications, Inc. ...... 2,417
95,900 Triton PCS Holdings, Inc., Class
A++................................ 5,730
388,700 TTI Team Telecom International
Ltd.++............................. 12,827
--------
223,462
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
------------------------------------------------------------
<C> <S> <C> <C>
TRANSPORTATION -- 1.1%
174,500 Midway Airlines Corporation++........ $ 873
230,300 SkyWest Inc. ........................ 9,010
--------
9,883
--------
TOTAL COMMON STOCKS
(Cost $473,952)...................... 814,938
--------
</TABLE>
<TABLE>
<CAPTION>
SHARES
(000)
-------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 16.0%
(Cost $145,278)
145,278 Nations Cash Reserves#................ $145,278
--------
TOTAL INVESTMENTS
(Cost $619,230*)............... 105.4% 960,216
--------
OTHER ASSETS AND LIABILITIES
(NET)........................ (5.4)%
Cash.................................. $ 622
Receivable for investment securities
sold................................ 11,895
Receivable for Fund shares sold....... 24,708
Dividends receivable.................. 66
Interest receivable................... 379
Collateral on securities loaned....... (80,133)
Payable for Fund shares redeemed...... (351)
Investment advisory fee payable....... (686)
Administration fee payable............ (180)
Shareholder servicing and distribution
fees payable........................ (67)
Payable for investment securities
purchased........................... (5,639)
Accrued Trustees'/Directors' fees and
expenses............................ (16)
Accrued expenses and other
liabilities......................... (137)
--------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)............................... (49,539)
--------
NET ASSETS..................... 100.0% $910,677
========
NET ASSETS CONSIST OF:
Accumulated net realized gain on
investments sold.................... $ 46,255
Net unrealized appreciation of
investments......................... 340,986
Paid-in capital....................... 523,436
--------
NET ASSETS............................ $910,677
========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
118
<PAGE> 123
NATIONS FUNDS
Nations Small Company Fund
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
-----------------------------------------------------------
<C> <S> <C> <C>
PRIMARY A SHARES:
Net asset value, offering and
redemption price per share
($647,824,972 / 28,589,900 shares
outstanding)........................ $22.66
------
------
INVESTOR A SHARES:
Net asset value and redemption price
per share ($245,424,874 / 10,936,968
shares outstanding)................. $22.44
------
------
Maximum sales charge.................. 5.75%
Maximum offering price per share...... $23.81
INVESTOR B SHARES:
Net asset value and offering price per
share+ ($13,839,311 / 630,713 shares
outstanding)........................ $21.94
------
------
INVESTOR C SHARES:
Net asset value and offering price per
share+ ($3,587,846 / 161,516 shares
outstanding)........................ $22.21
------
------
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $338,556 on
investment securities was comprised of gross appreciation of $405,404 and
gross depreciation of $66,848 for Federal income tax purposes. At March 31,
2000, the aggregate cost of securities for Federal income tax purposes was
$621,660.
++ Non-income producing security.
+ The redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
+ Amount represents less than 0.1%.
++ Amount represents less than $500.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc. A
portion of this amount represents cash collateral received from securities
lending activity (Note 8). The portion that represents cash collateral is
$80,133.
SEE NOTES TO FINANCIAL STATEMENTS.
119
<PAGE> 124
NATIONS FUNDS
STATEMENTS OF OPERATIONS
For the period ended March 31, 2000
<TABLE>
CONVERTIBLE SECURITIES
-------------------------------
FOR THE PERIOD FOR THE PERIOD
MAY 15, 1999 MARCH 1, 1999
TO MARCH 31, TO MAY 14, BALANCED
2000 1999(a) ASSETS
------------------------------------------------
<S> <C> <C> <C>
(IN THOUSANDS)
INVESTMENT INCOME:
Dividends (Net of foreign withholding taxes of $2, $0, $16,
$16, $0, $30, $363, $127 and $26, respectively)........... $ 5,294 $ 1,910 $ 1,192
Dividends allocated from Portfolio (Net of foreign
withholding taxes of $0, $0, $0, $0, $0, $0, $0, $0 and
$9, respectively)+........................................ -- -- --
Interest.................................................... 6,316 1,340 3,345
Interest allocated from Portfolio+.......................... -- -- --
Securities lending.......................................... -- -- 12
Expenses allocated from Portfolio+.......................... -- -- --
-------------- -------------- --------------
Total investment income................................. 11,610 3,250 4,549
-------------- -------------- --------------
EXPENSES:
Investment advisory fee..................................... 2,002 335 837
Administration fee.......................................... 711 149 271
Transfer agent fees......................................... 56 182 56
Custodian fees.............................................. 24 14 17
Legal and audit fees........................................ 73 4 89
Registration and filing fees................................ 42 23 44
Trustees'/Directors' fees and expenses...................... 19 3 19
Interest expense............................................ --* -- 4
Other....................................................... 119 85 106
-------------- -------------- --------------
Subtotal................................................ 3,046 795 1,443
Shareholder servicing and distribution fees:
Primary B Shares.......................................... -- -- --
Investor A Shares......................................... 716 182 41
Investor B Shares......................................... 57 8 666
Investor C Shares......................................... 21 9 15
Seafirst Shares........................................... -- -- --
-------------- -------------- --------------
Total expenses.......................................... 3,840 994 2,165
Fees waived by investment advisor, administrator and/or
distributor............................................... -- (17) (172)
Fees reduced by credits allowed by the custodian............ (25) -- --*
-------------- -------------- --------------
Net expenses............................................ 3,815 977 1,993
-------------- -------------- --------------
NET INVESTMENT INCOME/(LOSS)................................ 7,795 2,273 2,556
-------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain/(loss) from:
Security transactions..................................... 69,747 12,894 1,268
Security transactions allocated from Portfolio+........... -- -- --
Written options........................................... -- -- --
Futures contracts......................................... -- -- --
Foreign currency and net other assets..................... -- -- --
Foreign currency and net other assets allocated from
Portfolio+.............................................. -- -- --
-------------- -------------- --------------
Net realized gain/(loss) on investments..................... 69,747 12,894 1,268
-------------- -------------- --------------
Change in unrealized appreciation/(depreciation) of:
Securities (Note 10)...................................... 26,348 6,835 (3,486)
Securities allocated from Portfolio (Note 10)+............ -- -- --
Futures contracts......................................... -- -- --
-------------- -------------- --------------
Net change in unrealized appreciation/(depreciation) of
investments............................................... 26,348 6,835 (3,486)
-------------- -------------- --------------
Net realized and unrealized gain/(loss) of investments...... 96,095 19,729 (2,218)
-------------- -------------- --------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ 103,890 $ 22,002 $ 338
============== ============== ==============
</TABLE>
---------------
* Amount represents less than $500.
+ Allocated from Growth & Income Master Portfolio.
# Amount represents results from operations prior to conversion to
master-feeder structure.
(a) Represents financial information for the Pacific Horizon Capital Income
Fund, which was reorganized into Convertible Securities on May 21, 1999.
(b) Represents financial information for the Pacific Horizon Asset Allocation
Fund, which was reorganized into Asset Allocation on May 21, 1999.
(c) As of October 8, 1999, Growth & Income Fund converted to a master-feeder
structure.
SEE NOTES TO FINANCIAL STATEMENTS.
120
<PAGE> 125
NATIONS FUNDS
STATEMENTS OF OPERATIONS (CONTINUED)
<TABLE>
ASSET ALLOCATION
-----------------------------------
FOR THE PERIOD FOR THE PERIOD
MAY 15, 1999 MARCH 1, 1999
TO MARCH 31, TO MAY 14, EQUITY LARGECAP GROWTH &
2000 1999(b) INCOME VALUE INDEX INCOME(C)
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 8,990 $ 414 $ 13,057 $ 29,208 $ 13,008 $ 761#
-- -- -- -- -- 778
2,160 1,541 589 1,816 727 281#
-- -- -- -- -- 1,207
-- -- 24 100 51 5#
-- -- -- -- -- (1,896)
-------------- -------------- -------------- -------------- -------------- --------------
11,150 1,955 13,670 31,124 13,786 1,136
-------------- -------------- -------------- -------------- -------------- --------------
2,168 244 3,652 13,134 4,326 1,027#
767 92 1,402 4,255 2,291 616
125 49 275 564 444 206
47 42 57 147 103 14#
74 4 83 131 90 89
115 30 44 31 12 173
19 3 19 19 19 19
--* -- 5 16 10 --
121 118 4 85 144 317
-------------- -------------- -------------- -------------- -------------- --------------
3,436 582 5,541 18,382 7,439 2,461
-- -- -- -- -- --
167 38 108 312 54 210
729 16 961 1,488 -- 1,803
25 4 53 117 -- 146
441 110 -- -- -- --
-------------- -------------- -------------- -------------- -------------- --------------
4,798 750 6,663 20,299 7,493 4,620
(688) (112) (3) (37) (3,748) --
(11) -- (4) (12) (2) (2)
-------------- -------------- -------------- -------------- -------------- --------------
4,099 638 6,656 20,250 3,743 4,618
-------------- -------------- -------------- -------------- -------------- --------------
7,051 1,317 7,014 10,874 10,043 (3,482)
-------------- -------------- -------------- -------------- -------------- --------------
23,761 9,905 7,088 358,083 2,451 (2,486)#
-- -- -- -- -- 9,167
-- -- -- -- -- 51#
-- -- 1,619 -- (436) --
-- -- -- -- -- --
-- -- -- -- -- (14)
-------------- -------------- -------------- -------------- -------------- --------------
23,761 9,905 8,707 358,083 2,015 6,718
-------------- -------------- -------------- -------------- -------------- --------------
5,450 1,712 16,199 (366,372) 159,456 257,111#
-- -- -- -- -- (121,686)
20 -- 731 -- 1,796 --
-------------- -------------- -------------- -------------- -------------- --------------
5,470 1,712 16,930 (366,372) 161,252 135,425
-------------- -------------- -------------- -------------- -------------- --------------
29,231 11,617 25,637 (8,289) 163,267 142,143
-------------- -------------- -------------- -------------- -------------- --------------
$ 36,282 $ 12,934 $ 32,651 $ 2,585 $ 173,310 $ 138,661
============== ============== ============== ============== ============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
121
<PAGE> 126
NATIONS FUNDS
STATEMENTS OF OPERATIONS (CONTINUED)
For the period ended March 31, 2000
<TABLE>
BLUE CHIP
---------------------------------
FOR THE PERIOD FOR THE PERIOD
MAY 15, 1999 MARCH 1, 1999
TO MARCH 31, TO MAY 14, STRATEGIC
2000 1999(a) GROWTH
-----------------------------------------------
<S> <C> <C> <C>
(IN THOUSANDS)
INVESTMENT INCOME:
Dividends (Net of foreign withholding taxes of $0, $13, $13,
$37, $0, $8, $8 and $0, respectively)..................... $ -- $ -- $ 3,024
Dividends allocated from Portfolio (Net of foreign
withholding taxes of $33, $0, $0, $0, $0, $13, $0 and $0,
respectively)+............................................ 8,204 2,150 --
Interest.................................................... -- -- 1,006
Interest allocated from Portfolio+.......................... 882 170 --
Securities lending.......................................... -- -- --
Expenses allocated from Portfolio+.......................... (5,861) (1,123) --
-------------- -------------- --------------
Total investment income................................. 3,225 1,197 4,030
-------------- -------------- --------------
EXPENSES:
Investment advisory fee..................................... -- -- 3,062
Administration fee.......................................... 1,439 277 1,033
Transfer agent fees......................................... 268 266 184
Custodian fees.............................................. -- 5 34
Legal and audit fees........................................ 61 14 99
Registration and filing fees................................ 98 27 15
Trustees'/Directors' fees and expenses...................... 19 9 19
Interest expense............................................ -- -- --
Other....................................................... 122 271 78
-------------- -------------- --------------
Subtotal................................................ 2,007 869 4,524
Shareholder servicing and distribution fees:
Investor A Shares......................................... 814 216 3
Investor B Shares......................................... 377 34 9
Investor C Shares......................................... 117 30 4
Seafirst Shares........................................... 952 226 --
-------------- -------------- --------------
Total expenses.......................................... 4,267 1,375 4,540
Fees waived by investment advisor, administrator and/or
distributor............................................... (1,205) (396) --
Fees reduced by credits allowed by the custodian............ -- -- (7)
-------------- -------------- --------------
Net expenses.............................................. 3,062 979 4,533
-------------- -------------- --------------
NET INVESTMENT INCOME/(LOSS)................................ 163 218 (503)
-------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain/(loss) from:
Security transactions..................................... -- -- 2,255
Security transactions allocated from Portfolio+........... 79,588 53,032 --
Written options........................................... -- -- --
Futures contracts......................................... -- -- --
Foreign currency and net other assets..................... -- -- --
-------------- -------------- --------------
Net realized gain/(loss) on investments..................... 79,588 53,032 2,255
-------------- -------------- --------------
Change in unrealized appreciation/(depreciation) of:
Securities (Note 10)...................................... -- -- 123,466
Securities allocated from Portfolio (Note 10)+............ 44,368 10,012 --
Futures contracts......................................... -- -- --
Foreign currency and net other assets..................... -- -- --
-------------- -------------- --------------
Net change in unrealized appreciation/(depreciation) of
investments............................................... 44,368 10,012 123,466
-------------- -------------- --------------
Net realized and unrealized gain/(loss) of investments...... 123,956 63,044 125,721
-------------- -------------- --------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ 124,119 $ 63,262 $ 125,218
============== ============== ==============
</TABLE>
---------------
* Amount represents less than $500.
+ Allocated from Blue Chip Master Portfolio and Focused Equities Master
Portfolio, respectively.
# Amount represents results from operations prior to conversion to
master-feeder structure.
(a) Represents financial information for the Pacific Horizon Blue Chip Fund,
which was reorganized into Blue Chip on May 21, 1999.
(b) As of October 8, 1999, Focused Equities Fund converted to a master-feeder
structure.
SEE NOTES TO FINANCIAL STATEMENTS.
122
<PAGE> 127
NATIONS FUNDS
STATEMENTS OF OPERATIONS (CONTINUED)
<TABLE>
CAPITAL DISCIPLINED FOCUSED MIDCAP
GROWTH EQUITY EQUITIES(b) GROWTH SMALL COMPANY
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 4,530 $ 5,314 $ 2,186# $ 847 $ 1,230
-- -- 2,802 -- --
421 353 1,205# 444 1,278
-- -- 4,049 -- --
94 21 9# 153 354
-- -- (6,771) -- --
-------------- -------------- -------------- -------------- --------------
5,045 5,688 3,480 1,444 2,862
-------------- -------------- -------------- -------------- --------------
5,726 3,349 3,616# 1,732 5,441
1,879 1,093 2,213 573 1,334
359 214 727 109 241
60 35 42# 18 48
85 94 109 89 124
45 60 431 42 32
19 19 19 19 19
5 13 -- 3 9
125 49 887 49 118
-------------- -------------- -------------- -------------- --------------
8,303 4,926 8,044 2,634 7,366
133 150 1,002 42 388
683 499 5,896 373 77
43 18 925 17 29
-- -- -- -- --
-------------- -------------- -------------- -------------- --------------
9,162 5,593 15,867 3,066 7,860
-- --* -- -- (555)
(1) (5) (5) (3) (16)
-------------- -------------- -------------- -------------- --------------
9,161 5,588 15,862 3,063 7,289
-------------- -------------- -------------- -------------- --------------
(4,116) 100 (12,382) (1,619) (4,427)
-------------- -------------- -------------- -------------- --------------
91,754 31,467 (9,090)# 45,199 94,410
-- -- 25,968 -- --
-- -- 190# -- --
-- (746) -- -- --
-- -- (89) -- --
-------------- -------------- -------------- -------------- --------------
91,754 30,721 16,979 45,199 94,410
-------------- -------------- -------------- -------------- --------------
140,970 (33,570) 40,122# 110,683 342,129
-- -- 376,082 -- --
-- -- -- -- --
-- -- -- -- --
-------------- -------------- -------------- -------------- --------------
140,970 (33,570) 416,204 110,683 342,129
-------------- -------------- -------------- -------------- --------------
232,724 (2,849) 433,183 155,882 436,539
-------------- -------------- -------------- -------------- --------------
$ 228,608 $ (2,749) $ 420,801 $ 154,263 $ 432,112
============== ============== ============== ============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
123
<PAGE> 128
NATIONS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
CONVERTIBLE SECURITIES BALANCED ASSETS
------------------------------------------------ ------------------------------
PERIOD ENDED PERIOD ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/00 5/14/99(a) 2/28/99(a) 3/31/00 3/31/99
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS)
Net investment income / (loss)....... $ 7,795 $ 2,273 $ 11,459 $ 2,556 $ 3,071
Net realized gain / (loss) on
investments........................ 69,747 12,894 12,406 1,268 (2,434)
Net change in unrealized
appreciation / (depreciation) of
investments........................ 26,348 6,835 (8,323) (3,486) (4,896)
-------------- -------------- -------------- -------------- --------------
Net increase / (decrease) in net
assets resulting from operations... 103,890 22,002 15,542 338 (4,259)
Distributions to shareholders from
net investment income:
Primary A Shares................... (204) -- -- (1,132) (1,396)
Primary B Shares................... -- (2,168) (11,928) -- (25)
Investor A Shares.................. (7,793) (17) (77) (381) (490)
Investor B Shares.................. (117) (21) (32) (1,144) (902)
Investor C Shares.................. (47) -- -- (27) (19)
Seafirst Shares.................... -- -- -- -- --
Distributions to shareholders in
excess of net investment income:... -- -- -- -- --
Primary A Shares................... -- -- -- -- --
Primary B Shares................... -- -- -- -- --
Investor A Shares.................. -- -- -- -- --
Investor B Shares.................. -- -- -- -- --
Investor C Shares.................. -- -- -- -- --
Seafirst Shares....................
Distributions to shareholders from
net realized gain on
investments:....................... -- -- -- -- --
Primary A Shares................... (577) -- -- -- (1,225)
Primary B Shares................... -- -- (4,002) -- (120)
Investor A Shares.................. (23,353) -- (34) -- (1,032)
Investor B Shares.................. (449) -- (18) -- (5,096)
Investor C Shares.................. (150) -- -- -- (123)
Seafirst Shares....................
Net increase / (decrease) in net
assets from Fund share
transactions....................... (34,193) (22,853) (29,688) (41,140) 40,450
-------------- -------------- -------------- -------------- --------------
Net increase / (decrease) in net
assets............................. 37,007 (3,057) (30,237) (43,486) 25,763
NET ASSETS:
Beginning of period.................. 360,377 363,434 393,671 144,701 118,938
-------------- -------------- -------------- -------------- --------------
End of period........................ $ 397,384 $ 360,377 $ 363,434 101,215 $ 144,701
============== ============== ============== ============== ==============
Undistributed net investment income /
(distributions in excess of net
investment income) at end of
period............................. $ 1,161 $ 1,527 $ 1,460 $ 134 $ 258
============== ============== ============== ============== ==============
</TABLE>
---------------
* Amount represents less than $500.
(a) Represents financial information for the Pacific Horizon Capital Income
Fund, which was reorganized into Convertible Securities on May 21, 1999.
(b) Represents financial information for the Pacific Horizon Asset Allocation
Fund, which was reorganized into Asset Allocation on May 21, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
124
<PAGE> 129
NATIONS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
ASSET ALLOCATION EQUITY INCOME VALUE
------------------------------- -------------------------------
----------------------------------------------------
PERIOD ENDED PERIOD ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/00 5/14/99(b) 2/28/99(b) 3/31/00 3/31/99 3/31/00 3/31/99
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 7,051 $ 1,317 $ 7,196 $ 7,014 $ 16,277 $ 10,874 $ 15,999
23,761 9,905 23,765 8,707 21,410 358,083 197,138
5,470 1,712 6,281 16,930 (151,838) (366,372) (130,060)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
36,282 12,934 37,242 32,651 (114,151) 2,585 83,077
(208) -- -- (6,631) (14,121) (10,165) (15,869)
-- (352) (1,375) -- -- -- --
(1,207) (27) (20) (457) (986) (456) (741)
(937) (8) (25) (334) (1,024) (18) --
(18) (1,429) (5,496) (18) (68) (1) (7)
(4,797)
-- -- -- -- -- -- --
-- -- -- -- -- -- --
-- -- -- -- -- -- --
-- -- -- -- -- -- --
-- -- -- -- -- -- --
-- -- -- -- -- -- --
(430) -- -- (6,078) (71,792) (181,165) (267,249)
-- -- (4,627) -- -- --
(2,658) -- (164) (521) (5,474) (13,331) (17,975)
(3,480) -- (106) (1,172) (11,747) (15,816) (18,826)
(64) -- (17,214) (64) (775) (1,251) (1,658)
(8,339) -- -- -- -- -- --
116,201 (22) 31,247 (247,899) (178,872) (504,038) (79,457)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
130,345 11,096 39,462 (230,523) (399,010) (723,656) (318,705)
298,356 287,260 247,798 739,902 1,138,912 2,242,526 2,561,231
-------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 428,701 $ 298,356 $ 287,260 $ 509,379 $ 739,902 $ 1,518,870 $ 2,242,526
============== ============== ============== ============== ============== ============== ==============
$ 405 $ 499 $ 1,029 $ -- $ 389 $ 234 $ --
============== ============== ============== ============== ============== ============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
125
<PAGE> 130
NATIONS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
LARGECAP INDEX GROWTH & INCOME
------------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/00 3/31/99 3/31/00(c) 3/31/99
----------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
Net investment income / (loss)....................... $ 10,043 $ 8,920 $ (3,482) $ (462)
Net realized gain / (loss) on investments............ 2,015 6,845 (2,435)# 128
Net realized gain / (loss) on investments allocated
from Portfolio+.................................... -- -- 9,153 --
Net change in unrealized
appreciation / (depreciation) of investments....... 161,252 127,208 257,111# 24,906
Net change in unrealized
appreciation / (depreciation) of investments
allocated from Portfolio+.......................... -- -- (121,686) --
-------------- -------------- -------------- --------------
Net increase / (decrease) in net assets resulting
from operations.................................... 173,310 142,973 138,661 24,572
Distributions to shareholders from net investment
income:
Primary A Shares................................... (9,866) (8,807) -- --
Primary B Shares................................... -- (2) -- --
Investor A Shares.................................. (159) (84) -- --
Investor B Shares.................................. -- -- -- --
Investor C Shares.................................. -- -- -- --
Seafirst Shares.................................... -- -- -- --
Distributions to shareholders in excess of net
investment income:
Primary A Shares................................... -- -- -- --
Primary B Shares................................... -- -- -- --
Investor A Shares.................................. -- -- -- --
Investor B Shares.................................. -- -- -- --
Investor C Shares.................................. -- -- -- --
Seafirst Shares.................................... -- -- -- --
Distributions to shareholders from net realized gain
on investments:
Primary A Shares................................... (10,202) (29,335) (175) (3)
Primary B Shares................................... -- (5) -- --
Investor A Shares.................................. (241) (212) (156) (1)
Investor B Shares.................................. -- -- (353) (10)
Investor C Shares.................................. -- -- (19) --
Seafirst Shares.................................... -- -- -- --
Net increase / (decrease) in net assets from Fund
share transactions................................. 1,755,447 181,371 293,210 161,470
-------------- -------------- -------------- --------------
Net increase / (decrease) in net assets.............. 1,908,289 285,899 431,168 186,028
NET ASSETS:
Beginning of period.................................. 947,140 661,241 198,111 12,083
-------------- -------------- -------------- --------------
End of period........................................ $ 2,855,429 $ 947,140 $ 629,279 $ 198,111
============== ============== ============== ==============
Undistributed net investment income / (distributions
in excess of net investment income) at end of
period............................................. $ 63 $ 44 $ (3,481) $ --
============== ============== ============== ==============
</TABLE>
---------------
* Amount Represents less than $500.
+ Allocated from Growth & Income Master Portfolio and Blue Chip Master
Portfolio, respectively.
# Amount represents results from operations prior to conversion to
master-feeder structure.
(a) Represents financial information for the Pacific Horizon Blue Chip Fund,
which was reorganized into Blue Chip on May 21, 1999.
(b) Strategic Equity commenced operations on October 2, 1998.
(c) As of October 8, 1999, Growth & Income Fund converted to a master-feeder
structure.
SEE NOTES TO FINANCIAL STATEMENTS.
126
<PAGE> 131
NATIONS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
BLUE CHIP STRATEGIC GROWTH CAPITAL GROWTH
------------------------------- ------------------------------
-------------------------------------------------
PERIOD ENDED PERIOD ENDED YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
3/31/00 5/14/99(a) 2/28/99(a) 3/31/00 3/31/99(b) 3/31/00 3/31/99
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 163 $ 218 $ 3,117 $ (503) $ (30) $ (4,116) $ (1,058)
-- -- 58,971 2,255 4,357 91,754 70,219
79,588 53,032 -- -- -- -- --
-- -- 67,561 123,466 72,170 140,970 39,437
44,368 10,012 -- -- -- -- --
-------------- -------------- -------------- -------------- -------------- -------------- --------------
124,119 63,262 129,649 125,218 76,497 228,608 108,598
(28) -- -- -- -- -- --
-- -- -- -- -- -- --
-- (3) (1,252) -- -- -- --
-- -- (3) -- -- -- --
-- -- --* -- -- -- --
(438) (343) (2,302) -- -- -- --
-- -- -- -- -- -- --
-- -- -- -- -- -- --
-- -- -- -- -- -- --
-- -- -- -- -- -- --
-- -- -- -- -- -- --
-- -- -- -- -- -- --
(2,964) -- -- (4,912) (87) (50,238) (181,366)
-- -- -- -- -- -- (61)
(34,227) -- (20,307) (4) -- (3,711) (9,887)
(4,060) -- (336) (3) -- (4,876) (13,915)
(1,239) -- (574) (2) -- (309) (1,210)
(45,811) -- (23,680) -- -- -- --
54,280 (4,053) 98,005 485,146 190,413 (71,428) (22,825)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
89,632 58,863 179,200 605,443 266,823 98,046 (120,666)
903,478 844,615 665,415 266,823 -- 860,807 981,473
-------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 993,110 $ 903,478 $ 844,615 $ 872,266 $ 266,823 $ 958,853 $ 860,807
============== ============== ============== ============== ============== ============== ==============
71
$ $ 152 $ 279 $ -- $ -- $ -- $ --
============== ============== ============== ============== ============== ============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
127
<PAGE> 132
NATIONS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
DISCIPLINED EQUITY
-------------------------------
YEAR ENDED YEAR ENDED
3/31/00 3/31/99
-------------------------------
<S> <C> <C>
(IN THOUSANDS)
Net investment income/(loss)................................ $ 100 $ (50)
Net realized gain/(loss) on investments..................... 30,721 46,327
Net realized gain/(loss) on investments allocated from
Portfolio+................................................ -- --
Net change in unrealized appreciation/(depreciation) of
investments............................................... (33,570) 22,472
Net change in unrealized appreciation/(depreciation) of
investments allocated from Portfolio+..................... -- --
-------------- --------------
Net increase/(decrease) in net assets resulting from
operations................................................ (2,749) 68,749
Distributions to shareholders from net investment income:
Primary A Shares.......................................... (82) --
Primary B Shares.......................................... -- --
Investor A Shares......................................... --* --
Investor B Shares......................................... -- --
Investor C Shares......................................... -- --
Seafirst Shares........................................... -- --
Distributions to shareholders in excess of net investment
income:
Primary A Shares.......................................... -- (227)
Primary B Shares.......................................... -- --
Investor A Shares......................................... -- --
Investor B Shares......................................... -- --
Investor C Shares......................................... -- --
Seafirst Shares........................................... -- --
Distributions to shareholders from net realized gain on
investments:*
Primary A Shares.......................................... (48,417) (17,824)
Primary B Shares.......................................... -- --
Investor A Shares......................................... (7,321) (2,919)
Investor B Shares......................................... (6,431) (3,828)
Investor C Shares......................................... (220) (118)
Seafirst Shares........................................... -- --
Net increase/(decrease) in net assets from Fund share
transactions.............................................. (49,719) 294,617
-------------- --------------
Net increase/(decrease) in net assets....................... (114,939) 338,450
NET ASSETS:
Beginning of year........................................... 531,958 193,508
-------------- --------------
End of year................................................. $ 417,019 $ 531,958
============== ==============
Undistributed net investment income/(distributions in excess
of net investment income) at end of year.................. $ (26) $ --
============== ==============
</TABLE>
---------------
* Amount includes distributions in excess of realized gains in the amount of
$3,275.
+ Allocated from Focused Equities Master Portfolio.
# Amount represents results from operations prior to conversion to
master-feeder structure.
(a) As of October 8, 1999, Focused Equities Fund converted to a master-feeder
structure.
SEE NOTES TO FINANCIAL STATEMENTS.
128
<PAGE> 133
NATIONS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
FOCUSED EQUITIES MIDCAP GROWTH SMALL COMPANY
----------------------------------- ------------------------------- -------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
3/31/00(a) 3/31/99 3/31/00 3/31/99 3/31/00 3/31/99
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ (12,382) $ (1,308) $ (1,619) $ (1,246) $ (4,427) $ (1,679)
(5,148)# -- 45,199 3,479 94,410 (18,201)
22,127 3,566 -- -- -- --
40,122# -- 110,683 (35,342) 342,129 (83,458)
376,082 90,876 -- -- -- --
-------------- -------------- -------------- -------------- -------------- --------------
420,801 93,134 154,263 (33,109) 432,112 (103,338)
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
(1,702) (13) (7,942) (43,365) (682) (22,341)
-- -- -- (3) -- --
(3,761) (12) (711) (3,190) (268) (901)
(5,232) (36) (1,551) (6,532) (12) (327)
(435) (1) (71) (320) (4) (217)
-- -- -- -- -- --
1,194,947 534,792 (17,593) (70,866) 128,329 229,621
-------------- -------------- -------------- -------------- -------------- --------------
1,604,618 627,864 126,395 (157,385) 559,475 102,497
663,642 35,778 230,531 387,916 351,202 248,705
-------------- -------------- -------------- -------------- -------------- --------------
$ 2,268,260 $ 663,642 $ 356,926 $ 230,531 $ 910,677 $ 351,202
============== ============== ============== ============== ============== ==============
$ -- $ -- $ -- $ -- $ -- $ (1,069)
============== ============== ============== ============== ============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
129
<PAGE> 134
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY
<TABLE>
<CAPTION>
CONVERTIBLE SECURITIES
PERIOD ENDED PERIOD ENDED YEAR ENDED
MARCH 31, 2000 MAY 14, 1999(a) FEBRUARY 28, 1999(a)
-------------------- ------------------ ---------------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold..................................... 738 $ 13,925 -- $ -- -- $ --
Issued as reinvestment of dividends...... 15 284 -- -- -- --
Redeemed................................. (136) (2,464) -- -- -- --
------- --------- ------ -------- ------ ---------
Net increase/(decrease).................. 617 $ 11,745 -- $ -- -- $ --
======= ========= ====== ======== ====== =========
INVESTOR A SHARES:
Sold..................................... 859 $ 16,460 249 $ 4,450 3,936 $ 68,014
Issued as reinvestment of dividends...... 1,556 28,423 110 1,937 867 14,499
Redeemed................................. (4,975) (94,506) (1,666) (29,719) (6,909) (116,880)
------- --------- ------ -------- ------ ---------
Net increase/(decrease).................. (2,560) $ (49,623) (1,307) $(23,332) (2,106) $ (34,367)
======= ========= ====== ======== ====== =========
INVESTOR B SHARES:
Sold..................................... 294 $ 5,681 52 $ 918 220 $ 3,707
Issued as reinvestment of dividends...... 30 541 1 17 3 50
Redeemed................................. (58) (1,115) (6) (113) (29) (488)
------- --------- ------ -------- ------ ---------
Net increase/(decrease).................. 266 $ 5,107 47 $ 822 194 $ 3,269
======= ========= ====== ======== ====== =========
INVESTOR C SHARES:
Sold..................................... 72 $ 1,364 23 $ 417 162 $ 2,751
Issued as reinvestment of dividends...... 11 196 1 21 7 111
Redeemed................................. (158) (2,982) (43) (781) (85) (1,453)
------- --------- ------ -------- ------ ---------
Net increase/(decrease).................. (75) $ (1,422) (19) $ (343) 84 $ 1,409
======= ========= ====== ======== ====== =========
Total net increase/(decrease)............ (1,752) $ (34,193) (1,279) $(22,853) (1,828) $ (29,689)
======= ========= ====== ======== ====== =========
</TABLE>
---------------
(a) Represents financial information for the Pacific Horizon Capital Income
Fund, which was reorganized into Convertible Securities on May 21, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
130
<PAGE> 135
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
BALANCED ASSETS
YEAR ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999
------------------ ------------------
SHARES DOLLARS SHARES DOLLARS
------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 149 $ 1,589 737 $ 7,600
Issued in exchange for Institutional Shares of Emerald
Balanced Fund (Note 10)................................. -- -- 6,310 68,185
Issued as reinvestment of dividends....................... 93 950 220 2,295
Redeemed.................................................. (1,371) (14,441) (4,378) (45,725)
------ -------- ------ --------
Net increase/(decrease)................................... (1,129) $(11,902) 2,889 $ 32,355
====== ======== ====== ========
PRIMARY B SHARES:+
Sold...................................................... -- $ -- -- $ --
Issued as reinvestment of dividends....................... -- -- 11 120
Redeemed.................................................. -- -- (174) (1,835)
------ -------- ------ --------
Net increase/(decrease)................................... -- $ -- (163) $ (1,715)
====== ======== ====== ========
INVESTOR A SHARES:
Sold...................................................... 123 $ 1,296 681 $ 7,093
Issued in exchange for Retail Shares of Emerald Balanced
Fund (Note 10).......................................... -- -- 806 8,702
Issued as reinvestment of dividends....................... 34 352 141 1,485
Redeemed.................................................. (1,072) (11,093) (1,001) (10,278)
------ -------- ------ --------
Net increase/(decrease)................................... (915) $ (9,445) 627 $ 7,002
====== ======== ====== ========
INVESTOR B SHARES:
Sold...................................................... 418 $ 4,430 1,397 $ 14,540
Issued as reinvestment of dividends....................... 106 1,091 551 5,853
Redeemed.................................................. (2,433) (25,045) (1,713) (17,442)
------ -------- ------ --------
Net increase/(decrease)................................... (1,909) $(19,524) 235 $ 2,951
====== ======== ====== ========
INVESTOR C SHARES:
Sold...................................................... 23 $ 242 52 $ 546
Issued as reinvestment of dividends....................... 3 27 13 141
Redeemed.................................................. (52) (538) (80) (830)
------ -------- ------ --------
Net increase/(decrease)................................... (26) $ (269) (15) $ (143)
====== ======== ====== ========
Total net increase/(decrease)............................. (3,979) $(41,140) 3,573 $ 40,450
====== ======== ====== ========
</TABLE>
---------------
+ There were no longer any public shareholders of Balanced Assets Primary B
Shares as of January 5, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
131
<PAGE> 136
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
ASSET ALLOCATION
PERIOD ENDED PERIOD ENDED YEAR ENDED
MARCH 31, 2000 MAY 14, 1999(a) FEBRUARY 28, 1999(a)
----------------- ---------------- ---------------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold................................................ 677 $ 15,720 -- $ -- -- $ --
Issued as reinvestment of dividends................. 16 366 -- -- -- --
Redeemed............................................ (55) (1,271) -- -- -- --
------ -------- ---- ------- ------ --------
Net increase/(decrease)............................. 638 $ 14,815 -- $ -- -- $ --
====== ======== ==== ======= ====== ========
INVESTOR A SHARES:
Sold................................................ 301 $ 7,189 129 $ 3,014 1,494 $ 32,958
Issued in exchange for:
A Shares of Time Horizon Portfolio I (Note 10).... 336 7,832 -- -- -- --
A Shares of Time Horizon Portfolio II (Note 10)... 489 11,379 -- -- -- --
A Shares of Time Horizon Portfolio III (Note
10)............................................. 529 12,317 -- -- -- --
Issued as reinvestment of dividends................. 153 3,514 15 338 265 5,769
Redeemed............................................ (1,468) (34,435) (261) (6,117) (856) (18,891)
------ -------- ---- ------- ------ --------
Net increase/(decrease)............................. 340 $ 7,796 (117) $(2,765) 903 $ 19,836
====== ======== ==== ======= ====== ========
INVESTOR B SHARES:
Sold................................................ 1,127 $ 26,086 199 $ 4,627 246 $ 5,456
Issued in exchange for:
B Shares of Time Horizon Portfolio I (Note 10).... 1,063 24,689 -- -- -- --
B Shares of Time Horizon Portfolio II (Note 10)... 1,381 32,027 -- -- -- --
B Shares of Time Horizon Portfolio III (Note
10)............................................. 1,641 38,074 -- -- -- --
Issued as reinvestment of dividends................. 159 3,640 1 27 8 183
Redeemed............................................ (797) (18,438) (6) (130) (6) (139)
------ -------- ---- ------- ------ --------
Net increase/(decrease)............................. 4,574 $106,078 194 $ 4,524 248 $ 5,500
====== ======== ==== ======= ====== ========
INVESTOR C SHARES:
Sold................................................ 77 $ 1,782 26 $ 611 48 $ 1,051
Issued in exchange for:
K Shares of Time Horizon Portfolio I (Note 10).... --* 11 -- -- -- --
K Shares of Time Horizon Portfolio II (Note 10)... --* 8 -- -- -- --
K Shares of Time Horizon Portfolio III (Note
10)............................................. --* 1 -- -- -- --
Issued as reinvestment of dividends................. 3 82 -- 8 6 131
Redeemed............................................ (84) (1,978) (7) (176) (52) (1,161)
------ -------- ---- ------- ------ --------
Net increase/(decrease)............................. (4) $ (94) 19 $ 443 2 $ 21
====== ======== ==== ======= ====== ========
SEAFIRST SHARES:
Sold................................................ 118 $ 2,600 211 $ 3,725 860 $ 14,710
Issued as reinvestment of dividends................. 763 13,135 82 1,428 1,370 22,704
Redeemed............................................ (1,584) (28,129) (418) (7,377) (1,854) (31,524)
------ -------- ---- ------- ------ --------
Net increase/(decrease)............................. (703) $(12,394) (125) $(2,224) 376 $ 5,890
====== ======== ==== ======= ====== ========
Total net increase/(decrease)....................... 4,845 $116,201 (29) $ (22) 1,529 $ 31,247
====== ======== ==== ======= ====== ========
</TABLE>
---------------
* Amount represents less than 500 shares.
(a) Represents financial information for the Pacific Horizon Asset Allocation
Fund, which was reorganized into Asset Allocation on May 21, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
132
<PAGE> 137
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
EQUITY INCOME
YEAR ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999
-------------------- --------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 3,880 $ 45,563 10,668 $ 124,337
Issued in exchange for Assets of NationsBank Common Trust
Equity Income Fund (Note 10)............................ -- -- 4,737 62,189
Issued as reinvestment of dividends....................... 45 515 636 8,101
Redeemed.................................................. (20,182) (237,504) (31,078) (358,488)
------- --------- ------- ---------
Net increase/(decrease)................................... (16,257) $(191,426) (15,037) $(163,861)
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 516 $ 6,159 1,295 $ 15,303
Issued as reinvestment of dividends....................... 76 886 475 5,953
Redeemed.................................................. (2,210) (26,050) (2,132) (24,670)
------- --------- ------- ---------
Net increase/(decrease)................................... (1,618) $ (19,005) (362) $ (3,414)
======= ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 160 $ 1,918 989 $ 12,090
Issued as reinvestment of dividends....................... 124 1,422 982 12,328
Redeemed.................................................. (3,384) (39,252) (2,892) (33,271)
------- --------- ------- ---------
Net increase/(decrease)................................... (3,100) $ (35,912) (921) $ (8,853)
======= ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 19 $ 226 35 $ 434
Issued as reinvestment of dividends....................... 7 82 66 839
Redeemed.................................................. (158) (1,864) (333) (4,017)
------- --------- ------- ---------
Net increase/(decrease)................................... (132) $ (1,556) (232) $ (2,744)
======= ========= ======= =========
Total net increase/(decrease)............................. (21,107) $(247,899) (16,552) $(178,872)
======= ========= ======= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
133
<PAGE> 138
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
VALUE
YEAR ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999
-------------------- --------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 6,945 $ 118,586 29,523 $ 533,366
Issued in exchange for:
Assets of NationsBank Common Trust Long-Term Equity
Fund.................................................. -- -- 6,395 120,426
Institutional Shares of Emerald Equity Value Fund (Note
10)................................................... -- -- 1,059 19,791
Issued as reinvestment of dividends....................... 4,592 79,800 5,598 103,270
Redeemed.................................................. (38,909) (661,959) (48,601) (877,373)
------- --------- ------- ---------
Net increase/(decrease)................................... (27,372) $(463,573) (6,026) $(100,520)
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 3,144 $ 54,395 2,114 $ 37,964
Issued in exchange for Retail Shares of Emerald Equity
Value Fund (Note 10).................................... -- -- 354 6,603
Issued as reinvestment of dividends....................... 702 12,174 946 17,374
Redeemed.................................................. (5,568) (94,505) (3,378) (59,394)
------- --------- ------- ---------
Net increase/(decrease)................................... (1,722) $ (27,936) 36 $ 2,547
======= ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 968 $ 17,110 1,531 $ 28,200
Issued as reinvestment of dividends....................... 889 15,224 1,007 18,348
Redeemed.................................................. (2,666) (44,195) (1,531) (27,558)
------- --------- ------- ---------
Net increase/(decrease)................................... (809) $ (11,861) 1,007 $ 18,990
======= ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 105 $ 1,806 206 $ 3,701
Issued as reinvestment of dividends....................... 71 1,219 91 1,663
Redeemed.................................................. (221) (3,693) (331) (5,838)
------- --------- ------- ---------
Net increase/(decrease)................................... (45) $ (668) (34) $ (474)
======= ========= ======= =========
Total net increase/(decrease)............................. (29,948) $(504,038) (5,017) $ (79,457)
======= ========= ======= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
134
<PAGE> 139
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
LARGECAP INDEX
YEAR ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999
-------------------- --------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 8,490 $ 224,859 29,340 $ 653,241
Issued in exchange for assets of Collective Trust Equity
Index Fund (Note 10).................................... 58,487 $1,690,266 -- --
Issued as reinvestment of dividends....................... 511 13,544 1,400 30,587
Redeemed.................................................. (6,934) (184,945) (22,794) (509,984)
------ ---------- ------- ---------
Net increase/(decrease)................................... 60,554 $1,743,724 7,946 $ 173,844
====== ========== ======= =========
PRIMARY B SHARES:+
Sold...................................................... -- $ -- 13 $ 295
Issued as reinvestment of dividends....................... -- -- -- 7
Redeemed.................................................. -- -- (19) (450)
------ ---------- ------- ---------
Net increase/(decrease)................................... -- $ -- (6) $ (148)
====== ========== ======= =========
INVESTOR A SHARES:
Sold...................................................... 918 $ 24,361 459 $ 10,251
Issued as reinvestment of dividends....................... 13 350 13 279
Redeemed.................................................. (479) (12,988) (123) (2,855)
------ ---------- ------- ---------
Net increase/(decrease)................................... 452 $ 11,723 349 $ 7,675
====== ========== ======= =========
Total net increase/(decrease)............................. 61,006 $1,755,447 8,289 $ 181,371
====== ========== ======= =========
</TABLE>
---------------
+ There were no longer any public shareholders of LargeCap Index Primary B
Shares as of February 15, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
135
<PAGE> 140
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
GROWTH & INCOME
YEAR ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999
------------------- ------------------
SHARES DOLLARS SHARES DOLLARS
-----------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 6,082 $110,230 4,035 $ 54,522
Issued as reinvestment of dividends....................... 7 118 --* 3
Redeemed.................................................. (4,363) (78,685) (741) (9,475)
------- -------- ------ --------
Net increase/(decrease)................................... 1,726 $ 31,663 3,294 $ 45,050
======= ======== ====== ========
INVESTOR A SHARES:
Sold...................................................... 6,807 $128,700 3,300 $ 41,279
Issued as reinvestment of dividends....................... 6 95 --* 1
Redeemed.................................................. (1,580) (28,598) (493) (6,453)
------- -------- ------ --------
Net increase/(decrease)................................... 5,233 $100,197 2,807 $ 34,827
======= ======== ====== ========
INVESTOR B SHARES:
Sold...................................................... 8,825 $156,540 6,484 $ 84,968
Issued as reinvestment of dividends....................... 21 328 --* 9
Redeemed.................................................. (1,190) (21,099) (457) (5,812)
------- -------- ------ --------
Net increase/(decrease)................................... 7,656 $135,769 6,027 $ 79,165
======= ======== ====== ========
INVESTOR C SHARES:
Sold...................................................... 1,506 $ 27,336 197 $ 2,723
Issued as reinvestment of dividends....................... 1 15 --* --*
Redeemed.................................................. (94) (1,770) (23) (295)
------- -------- ------ --------
Net increase/(decrease)................................... 1,413 $ 25,581 174 $ 2,428
======= ======== ====== ========
Total net increase/(decrease)............................. 16,028 $293,210 12,302 $161,470
======= ======== ====== ========
</TABLE>
---------------
* Amount represents less than 500 shares and $500.
SEE NOTES TO FINANCIAL STATEMENTS.
136
<PAGE> 141
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
BLUE CHIP
PERIOD ENDED PERIOD ENDED YEAR ENDED
MARCH 31, 2000 MAY 14, 1999(a) FEBRUARY 28, 1999(a)
------------------- ------------------ ---------------------
SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold.................................... 1,263 $ 45,270 -- $ -- -- $ --
Issued as reinvestment of dividends..... 33 1,102 -- -- -- --
Redeemed................................ (321) (11,193) -- -- -- --
------ --------- ---- -------- ------ ---------
Net increase/(decrease)................. 975 $ 35,179 -- $ -- -- $ --
====== ========= ==== ======== ====== =========
INVESTOR A SHARES:
Sold.................................... 1,493 $ 53,082 520 $ 18,418 5,779 $ 181,140
Issued as reinvestment of dividends..... 914 30,421 -- 6 625 19,069
Redeemed................................ (3,608) (128,588) (721) (25,590) (4,060) (125,766)
------ --------- ---- -------- ------ ---------
Net increase/(decrease)................. (1,201) $ (45,085) (201) $ (7,166) 2,344 $ 74,443
====== ========= ==== ======== ====== =========
INVESTOR B SHARES:
Sold.................................... 1,525 $ 53,125 210 $ 7,461 390 $ 12,295
Issued as reinvestment of dividends..... 117 3,877 -- -- 11 336
Redeemed................................ (177) (5,879) (9) (311) (15) (480)
------ --------- ---- -------- ------ ---------
Net increase/(decrease)................. 1,465 $ 51,123 201 $ 7,150 386 $ 12,151
====== ========= ==== ======== ====== =========
INVESTOR C SHARES:
Sold.................................... 296 $ 10,373 58 $ 2,048 277 $ 8,600
Issued as reinvestment of dividends..... 37 1,233 -- -- 19 577
Redeemed................................ (288) (10,175) (37) (1,319) (126) (4,046)
------ --------- ---- -------- ------ ---------
Net increase/(decrease)................. 45 $ 1,431 21 $ 729 170 $ 5,131
====== ========= ==== ======== ====== =========
SEAFIRST SHARES:
Sold.................................... 273 $ 8,531 350 $ 10,944 1,723 $ 48,126
Issued as reinvestment of dividends..... 1,597 46,245 11 343 964 25,981
Redeemed................................ (1,389) (43,144) (513) (16,053) (2,459) (67,827)
------ --------- ---- -------- ------ ---------
Net increase/(decrease)................. 481 $ 11,632 (152) $ (4,766) 228 $ 6,280
====== ========= ==== ======== ====== =========
Total net increase/(decrease)........... 1,765 $ 54,280 (131) $ (4,053) 3,128 $ 98,005
====== ========= ==== ======== ====== =========
</TABLE>
---------------
(a) Represents financial information for the Pacific Horizon Blue Chip Fund,
which was reorganized into Blue Chip on May 21, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
137
<PAGE> 142
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
STRATEGIC GROWTH
YEAR ENDED PERIOD ENDED
MARCH 31, 2000(b) MARCH 31, 1999(a)
------------------ ------------------
SHARES DOLLARS SHARES DOLLARS
------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 36,734 $556,572 20,226 $202,441
Issued as reinvestment of dividends....................... 38 543 -- --
Redeemed.................................................. (5,508) (83,129) (970) (12,028)
------ -------- ------ --------
Net increase/(decrease)................................... 31,264 $473,986 19,256 $190,413
====== ======== ====== ========
INVESTOR A SHARES:
Sold...................................................... 365 $ 5,684 -- $ --
Issued as reinvestment of dividends....................... --* 3 -- --
Redeemed.................................................. (41) (630) -- --
------ -------- ------ --------
Net increase/(decrease)................................... 324 $ 5,057 -- $ --
====== ======== ====== ========
INVESTOR B SHARES:
Sold...................................................... 301 $ 4,692 -- $ --
Issued as reinvestment of dividends....................... --* 3 -- --
Redeemed.................................................. (9) (145) -- --
------ -------- ------ --------
Net increase/(decrease)................................... 292 $ 4,550 -- $ --
====== ======== ====== ========
INVESTOR C SHARES:
Sold...................................................... 101 $ 1,555 -- $ --
Issued as reinvestment of dividends....................... --* 2 -- --
Redeemed.................................................. --* (4) -- --
------ -------- ------ --------
Net increase/(decrease)................................... 101 $ 1,553 -- $ --
====== ======== ====== ========
Total net increase/(decrease)............................. 31,981 $485,146 19,256 $190,413
====== ======== ====== ========
</TABLE>
---------------
* Amount represents less than 500 shares.
(a) Strategic Growth Primary A Shares commenced operations on October 2, 1998.
(b) Strategic Growth Investor A, Investor B and Investor C Shares commenced
operations on August 2, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
138
<PAGE> 143
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
CAPITAL GROWTH
YEAR ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999
-------------------- --------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 10,051 $ 130,555 14,323 $ 183,544
Issued as reinvestment of dividends....................... 1,564 18,939 5,911 65,638
Redeemed.................................................. (16,881) (216,390) (24,584) (296,237)
------- --------- ------- ---------
Net increase/(decrease)................................... (5,266) $ (66,896) (4,350) $ (47,055)
======= ========= ======= =========
PRIMARY B SHARES: +
Sold...................................................... -- $ -- -- $ --
Issued as reinvestment of dividends....................... -- -- 6 61
Redeemed.................................................. -- -- (26) (283)
------- --------- ------- ---------
Net increase/(decrease)................................... -- $ -- (20) $ (222)
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 12,595 $ 159,304 2,165 $ 24,731
Issued as reinvestment of dividends....................... 268 3,217 811 8,950
Redeemed.................................................. (13,011) (164,173) (1,821) (20,456)
------- --------- ------- ---------
Net increase/(decrease)................................... (148) $ (1,652) 1,155 $ 13,225
======= ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 462 $ 5,452 889 $ 10,383
Issued as reinvestment of dividends....................... 418 4,739 1,294 13,706
Redeemed.................................................. (1,117) (13,279) (994) (11,322)
------- --------- ------- ---------
Net increase/(decrease)................................... (237) $ (3,088) 1,189 $ 12,767
======= ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 68 $ 824 113 $ 1,473
Issued as reinvestment of dividends....................... 26 299 112 1,200
Redeemed.................................................. (74) (915) (367) (4,213)
------- --------- ------- ---------
Net increase/(decrease)................................... 20 $ 208 (142) $ (1,540)
======= ========= ======= =========
Total net increase/(decrease)............................. (5,631) $ (71,428) (2,168) $ (22,825)
======= ========= ======= =========
</TABLE>
---------------
+ There were no longer any public shareholders of Capital Growth Primary B
Shares as of December 1, 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
139
<PAGE> 144
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
DISCIPLINED EQUITY
YEAR ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999
------------------- -------------------
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 3,001 $ 77,380 5,761 $ 122,198
Issued in exchange for:
Assets of NationsBank Common Trust Growth Fund (Note
10)................................................... -- -- 2,279 47,340
Assets of NationsBank Common Trust Oklahoma Growth Fund
(Note 10)............................................. -- -- 205 4,245
Institutional Shares of Emerald Equity Fund (Note 10)... -- -- 11,872 249,848
Issued as reinvestment of dividends....................... 1,774 37,908 596 12,584
Redeemed.................................................. (6,497) (150,271) (9,046) (192,810)
------ --------- ------ ---------
Net increase/(decrease)................................... (1,722) $ (34,983) 11,667 $ 243,405
====== ========= ====== =========
INVESTOR A SHARES:
Sold...................................................... 2,593 $ 57,533 3,454 $ 71,438
Issued in exchange for Retail Shares of Emerald Equity
Fund (Note 10).......................................... -- -- 2,242 47,004
Issued as reinvestment of dividends....................... 318 6,776 132 2,780
Redeemed.................................................. (3,479) (75,702) (3,913) (80,705)
------ --------- ------ ---------
Net increase/(decrease)................................... (568) $ (11,393) 1,915 $ 40,517
====== ========= ====== =========
INVESTOR B SHARES:
Sold...................................................... 369 $ 9,218 672 $ 13,830
Issued as reinvestment of dividends....................... 304 6,194 183 3,754
Redeemed.................................................. (900) (18,890) (359) (7,232)
------ --------- ------ ---------
Net increase/(decrease)................................... (227) $ (3,478) 496 $ 10,352
====== ========= ====== =========
INVESTOR C SHARES:
Sold...................................................... 25 $ 577 35 $ 723
Issued as reinvestment of dividends....................... 10 218 6 118
Redeemed.................................................. (31) (660) (24) (498)
------ --------- ------ ---------
Net increase/(decrease)................................... 4 $ 135 17 $ 343
====== ========= ====== =========
Total net increase/(decrease)............................. (2,513) $ (49,719) 14,095 $ 294,617
====== ========= ====== =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
140
<PAGE> 145
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
FOCUSED EQUITIES
YEAR ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999
--------------------- ------------------
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 19,546 $ 392,072 6,465 $ 91,675
Issued as reinvestment of dividends....................... 53 923 --* 11
Redeemed.................................................. (11,452) (235,823) (873) (11,954)
------- ---------- ------ --------
Net increase/(decrease)................................... 8,147 $ 157,172 5,592 $ 79,732
======= ========== ====== ========
INVESTOR A SHARES:
Sold...................................................... 23,689 $ 469,267 14,569 $219,849
Issued as reinvestment of dividends....................... 189 3,274 --* 12
Redeemed.................................................. (7,516) (147,452) (833) (11,959)
------- ---------- ------ --------
Net increase/(decrease)................................... 16,362 $ 325,089 13,736 $207,902
======= ========== ====== ========
INVESTOR B SHARES:
Sold...................................................... 29,697 $ 567,819 17,825 $250,192
Issued as reinvestment of dividends....................... 281 4,822 3 35
Redeemed.................................................. (3,330) (63,436) (1,076) (15,197)
------- ---------- ------ --------
Net increase/(decrease)................................... 26,648 $ 509,205 16,752 $235,030
======= ========== ====== ========
INVESTOR C SHARES:
Sold...................................................... 10,976 $ 217,458 809 $ 12,547
Issued as reinvestment of dividends....................... 16 285 --* --*
Redeemed.................................................. (730) (14,262) (27) (419)
------- ---------- ------ --------
Net increase/(decrease)................................... 10,262 $ 203,481 782 $ 12,128
======= ========== ====== ========
Total net increase/(decrease)............................. 61,419 $1,194,947 36,862 $534,792
======= ========== ====== ========
</TABLE>
---------------
* Amount represents less than 500 shares and $500.
SEE NOTES TO FINANCIAL STATEMENTS.
141
<PAGE> 146
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
MIDCAP GROWTH
YEAR ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999
-------------------- --------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 1,226 $ 23,013 2,838 $ 39,174
Issued as reinvestment of dividends....................... 362 5,621 1,415 20,768
Redeemed.................................................. (2,368) (37,950) (10,129) (129,391)
------- --------- ------- ---------
Net increase/(decrease)................................... (780) $ (9,316) (5,876) $ (69,449)
======= ========= ======= =========
PRIMARY B SHARES:+
Sold...................................................... -- $ -- -- $ --
Issued as reinvestment of dividends....................... -- -- --* 3
Redeemed.................................................. -- -- (2) (23)
------- --------- ------- ---------
Net increase/(decrease)................................... -- $ -- (2) $ (20)
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 13,817 $ 222,914 23,995 $ 284,885
Issued as reinvestment of dividends....................... 45 688 192 2,766
Redeemed.................................................. (14,206) (228,626) (24,128) (287,495)
------- --------- ------- ---------
Net increase/(decrease)................................... (344) $ (5,024) 59 $ 156
======= ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 191 $ 3,200 295 $ 3,696
Issued as reinvestment of dividends....................... 107 1,516 469 6,405
Redeemed.................................................. (572) (8,217) (974) (11,323)
------- --------- ------- ---------
Net increase/(decrease)................................... (274) $ (3,501) (210) $ (1,222)
======= ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 57 $ 944 54 $ 622
Issued as reinvestment of dividends....................... 5 70 23 319
Redeemed.................................................. (46) (766) (110) (1,272)
------- --------- ------- ---------
Net increase/(decrease)................................... 16 $ 248 (33) $ (331)
======= ========= ======= =========
Total net increase/(decrease)............................. (1,382) $ (17,593) (6,062) $ (70,866)
======= ========= ======= =========
</TABLE>
---------------
* Amount represents less than 500 shares.
+ There were no longer any public shareholders of MidCap Growth Primary B
Shares as of June 11, 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
142
<PAGE> 147
NATIONS FUNDS
SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
SMALL COMPANY
YEAR ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999
-------------------- --------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
PRIMARY A SHARES:
Sold...................................................... 19,767 $ 320,356 15,945 $ 214,344
Issued in exchange for:
Assets of NationsBank Common Trust Special Equity Fund
(Note 10)............................................. -- -- 464 7,075
Institutional Shares of Emerald Small Capitalization
Fund (Note 10)........................................ -- -- 9,319 139,205
Issued as reinvestment of dividends....................... 35 524 1,069 14,012
Redeemed.................................................. (19,725) (312,274) (13,195) (161,496)
------- --------- ------- ---------
Net increase/(decrease)................................... 77 $ 8,606 13,602 $ 213,140
======= ========= ======= =========
INVESTOR A SHARES:
Sold...................................................... 22,290 $ 343,670 8,141 $ 95,698
Issued in exchange for A Shares of Pacific Horizon
Aggressive Growth Fund (Note 10)........................ 12,965 159,453 -- --
Issued in exchange for Retail Shares of Emerald Small
Capitalization Fund (Note 10)........................... -- -- 933 13,883
Issued as reinvestment of dividends....................... 17 250 64 828
Redeemed.................................................. (25,748) (386,849) (8,156) (96,977)
------- --------- ------- ---------
Net increase/(decrease)................................... 9,524 $ 116,524 982 $ 13,432
======= ========= ======= =========
INVESTOR B SHARES:
Sold...................................................... 248 $ 4,544 353 $ 4,713
Issued in exchange for B Shares of Pacific Horizon
Aggressive Growth Fund (Note 10)........................ 49 591 -- --
Issued as reinvestment of dividends....................... 1 12 25 322
Redeemed.................................................. (124) (1,696) (139) (1,729)
------- --------- ------- ---------
Net increase/(decrease)................................... 174 $ 3,451 239 $ 3,306
======= ========= ======= =========
INVESTOR C SHARES:
Sold...................................................... 62 $ 1,002 13 $ 177
Issued in exchange for K Shares of Pacific Horizon
Aggressive Growth Fund (Note 10)........................ 337 4,122 -- --
Issued as reinvestment of dividends....................... --* 4 15 213
Redeemed.................................................. (409) (5,380) (55) (647)
------- --------- ------- ---------
Net increase/(decrease)................................... (10) $ (252) (27) $ (257)
======= ========= ======= =========
Total net increase/(decrease)............................. 9,765 $ 128,329 14,796 $ 229,621
======= ========= ======= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
143
<PAGE> 148
NATIONS FUNDS
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT
OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONVERTIBLE SECURITIES
PRIMARY A SHARES
Period ended 3/31/2000***#................ $18.15 $ 0.42 $ 5.52 $5.94 $(0.50)
INVESTOR A SHARES*
Period ended 3/31/2000#................... $18.31 $ 0.46 $ 5.26 $5.72 $(0.45)
Period ended 5/14/1999.................... 17.34 0.12 0.96 1.08 (0.11)
Year ended 2/28/1999...................... 17.28 0.51 0.25 0.76 (0.52)
Year ended 2/28/1998...................... 17.35 0.58 2.89 3.47 (0.59)
Year ended 2/28/1997**.................... 16.42 0.57 2.34 2.91 (0.57)
Year ended 2/29/1996...................... 13.65 0.62 2.84 3.46 (0.69)
INVESTOR B SHARES*
Period ended 3/31/2000#................... $18.27 $ 0.44 $ 5.12 $5.56 $(0.36)
Period ended 5/14/1999.................... 17.30 0.09 0.96 1.05 (0.27)
Period ended 2/28/1999***................. 17.67 0.22 (0.17) 0.05 (0.24)
INVESTOR C SHARES*
Period ended 3/31/2000#................... $18.35 $ 0.38 $ 5.22 $5.60 $(0.31)
Period ended 5/14/1999.................... 17.37 0.10 0.97 1.07 (0.09)
Year ended 2/28/1999...................... 17.24 0.40 0.31 0.71 (0.40)
Year ended 2/28/1998...................... 17.30 0.48 2.89 3.37 (0.48)
Period ended 2/28/1997***................. 16.24 0.32 2.43 2.75 (0.28)
<CAPTION>
DISTRIBUTIONS
FROM NET
REALIZED
CAPITAL GAINS
-------------
<S> <C>
CONVERTIBLE SECURITIES
PRIMARY A SHARES
Period ended 3/31/2000***#................ $(1.41)
INVESTOR A SHARES*
Period ended 3/31/2000#................... $(1.41)
Period ended 5/14/1999.................... --
Year ended 2/28/1999...................... (0.18)
Year ended 2/28/1998...................... (2.95)
Year ended 2/28/1997**.................... (1.41)
Year ended 2/29/1996...................... --
INVESTOR B SHARES*
Period ended 3/31/2000#................... $(1.41)
Period ended 5/14/1999.................... --
Period ended 2/28/1999***................. (0.18)
INVESTOR C SHARES*
Period ended 3/31/2000#................... $(1.41)
Period ended 5/14/1999.................... --
Year ended 2/28/1999...................... (0.18)
Year ended 2/28/1998...................... (2.95)
Period ended 2/28/1997***................. (1.41)
</TABLE>
---------------
* The financial information for the fiscal periods through May 14, 1999
reflect the financial information for the Pacific Horizon Capital Income
Fund A, B and K Shares, which were reorganized into the Convertible
Securities Investor A, Investor B and Investor C Shares, respectively, as of
May 21, 1999. Prior to May 21, 1999, the Fund's investment adviser was Bank
of America National Trust and Savings Association. Effective May 21, 1999,
its investment adviser became Banc of America Advisors, Inc. and its
investment sub-adviser became Banc of America Capital Management, Inc.
** As of July 22, 1996, the Portfolio designated the existing series of shares
as "A" Shares.
*** Convertible Securities Primary A, Investor B and Investor C Shares
commenced operations on May 21, 1999, July 15, 1998 and October 21, 1996,
respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares method.
(a) The effect of the custodial expense offset (Note 2) on the operating
expense ratio, with and without waivers and/or expense reimbursements, was
less than 0.01%.
(b) The effect of interest expense on the operating expense ratio was less than
0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
144
<PAGE> 149
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(1.91) $22.18 35.21% $ 13,688 0.97%+(b) 2.21%+ 65% 0.98%+
$(1.86) $22.17 33.68% $369,488 1.22%+(b) 1.96%+ 65% 1.23%+
(0.11) 18.31 6.25 352,000 1.30+ 3.07+ 16 1.32+
(0.70) 17.34 4.64 356,000 1.15(a) 2.97 66 1.16(a)
(3.54) 17.28 21.54 391,000 1.10(a) 3.35 69 1.12(a)
(1.98) 17.35 18.53 309,000 1.18(a) 3.40 124 1.19(a)
(0.69) 16.42 25.96 247,000 1.23(a) 4.05 57 1.26(a)
$(1.77) $22.06 32.76% $ 11,175 1.97%+(b) 1.21%+ 65% 1.98%+
(0.08) 18.27 6.10 4,000 2.06+ 2.34+ 16 2.08+
(0.42) 17.30 0.44 3,000 1.96+(a) 2.14+ 66 1.97(a)+
$(1.72) $22.23 32.81% $ 3,033 1.97%+(b) 1.21%+ 65% 1.98%+
(0.09) 18.35 6.17 4,000 1.80+ 2.56+ 16 2.07+
(0.58) 17.37 4.29 4,000 1.65(a) 2.45 66 1.91(a)
(3.43) 17.24 20.97 3,000 1.60 2.85 69 1.86
(1.69) 17.30 17.47 1,000 1.66+ 2.85+ 124 1.91+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
145
<PAGE> 150
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
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(LOSS) INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCED ASSETS
PRIMARY A SHARES
Year ended 3/31/2000#........... $10.39 $0.30 $(0.22) $ 0.08 $(0.30) --
Year ended 3/31/1999#........... 11.49 0.26 (0.39) (0.13) (0.23) (0.74)
Year ended 3/31/1998............ 11.15 0.29 2.68 2.97 (0.29) (2.34)
Year ended 3/31/1997............ 11.65 0.39 1.03 1.42 (0.38) (1.54)
Period ended 3/31/1996(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)
INVESTOR A SHARES
Year ended 3/31/2000#........... $10.38 $0.24 $(0.19) $ 0.05 $(0.27) --
Year ended 3/31/1999#........... 11.47 0.23 (0.38) (0.15) (0.20) (0.74)
Year ended 3/31/1998............ 11.13 0.27 2.68 2.95 (0.27) (2.34)
Year ended 3/31/1997............ 11.64 0.34 1.05 1.39 (0.36) (1.54)
Period ended 3/31/1996(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)
INVESTOR B SHARES
Year ended 3/31/2000#........... $10.36 $0.17 $(0.20) $(0.03) $(0.19) --
Year ended 3/31/1999#........... 11.45 0.15 (0.38) (0.23) (0.12) (0.74)
Year ended 3/31/1998............ 11.11 0.19 2.68 2.87 (0.19) (2.34)
Year ended 3/31/1997............ 11.62 0.29 1.04 1.33 (0.30) (1.54)
Period ended 3/31/1996(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)
INVESTOR C SHARES
Year ended 3/31/2000#........... $10.32 $0.17 $(0.20) $(0.03) $(0.19) --
Year ended 3/31/1999#........... 11.41 0.15 (0.38) (0.23) (0.12) (0.74)
Year ended 3/31/1998............ 11.08 0.20 2.67 2.87 (0.20) (2.34)
Year ended 3/31/1997............ 11.60 0.33 1.02 1.35 (0.33) (1.54)
Period ended 3/31/1996(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)
</TABLE>
---------------
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares method.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) The effect of the custodial expense offset (Note 2) 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.
146
<PAGE> 151
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.30) $10.17 0.73% $ 35,850 1.01%(b)(c) 2.61% 103% 1.15%(b)
(0.97) 10.39 (1.20) 48,373 1.00(b)(c) 2.43 126 1.00(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
$(0.27) $10.16 0.47% $ 11,240 1.26%(b)(c) 2.36% 103% 1.40%(b)
(0.94) 10.38 (1.36) 20,979 1.25(b)(c) 2.18 126 1.25(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
$(0.19) $10.14 (0.30)% $ 52,810 2.01%(b)(c) 1.61% 103% 2.15%(b)
(0.86) 10.36 (2.13) 73,735 2.00(b)(c) 1.43 126 2.00(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 62,275 1.74 2.50 174 1.74
$(0.19) $10.10 (0.27)% $ 1,315 2.01%(b)(c) 1.61% 103% 2.15%(b)
(0.86) 10.32 (2.17) 1,614 2.00(b)(c) 1.43 126 2.00(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
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
147
<PAGE> 152
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
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/(LOSS) INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION
PRIMARY A SHARES
Period ended 3/31/2000***#..... $23.06 $0.49 $1.93 $2.42 $(0.41) $(0.72)
INVESTOR A SHARES*
Period ended 3/31/2000#........ $23.40 $0.43 $1.59 $2.02 $(0.35) $(0.72)
Period ended 5/14/1999......... 22.50 0.10 0.91 1.01 (0.11) --
Year ended 2/28/1999........... 21.41 0.55 2.48 3.03 (0.45) (1.49)
Year ended 2/28/1998........... 19.40 0.52 3.72 4.24 (0.47) (1.76)
Year ended 2/28/1997**......... 17.52 0.48 2.50 2.98 (0.46) (0.64)
Year ended 2/29/1996........... 15.15 0.52 2.86 3.38 (0.53) (0.48)
INVESTOR B SHARES*
Period ended 3/31/2000#........ $23.32 $0.47 $1.39 $1.86 $(0.22) $(0.72)
Period ended 5/14/1999......... 22.45 0.06 0.89 0.95 (0.08) --
Period ended 2/28/1999***...... 23.17 0.22 0.75 0.97 (0.20) (1.49)
INVESTOR C SHARES*
Period ended 3/31/2000#........ $23.33 $0.42 $1.43 $1.85 $(0.19) $(0.72)
Period ended 5/14/1999......... 22.45 0.05 0.92 0.97 (0.09) --
Year ended 2/28/1999........... 21.36 0.44 2.49 2.93 (0.35) (1.49)
Year ended 2/28/1998........... 19.40 0.41 3.66 4.07 (0.36) (1.75)
Period ended 2/28/1997***...... 17.23 0.19 2.80 2.99 (0.18) (0.64)
SEAFIRST SHARES*
Period ended 3/31/2000#........ $17.66 $0.32 $1.22 $1.54 $(0.41) $(0.72)
Period ended 5/14/1999......... 17.01 0.08 0.69 0.77 (0.12) --
Year ended 2/28/1999........... 16.63 0.45 1.88 2.33 (0.46) (1.49)
Year ended 2/28/1998***........ 15.79 0.30 1.65 1.95 (0.24) (0.87)
</TABLE>
---------------
* The financial information for the fiscal periods through May 14, 1999
reflect the financial information for the Pacific Horizon Asset Allocation
Fund A, B, K and SRF Shares, which were reorganized into the Asset
Allocation Investor A, Investor B, Investor C and Seafirst Shares,
respectively, as of May 21, 1999. Prior to May 21, 1999, the Fund's
investment adviser was Bank of America National Trust and Savings
Association. Effective May 21, 1999, its investment adviser became Banc of
America Advisors, Inc. and its investment sub-adviser became Banc of America
Capital Management, Inc.
** As of July 22, 1996, the Fund designated the existing series of shares as
"A" Shares.
*** Asset Allocation Primary A, Investor B, Investor C and Seafirst Shares
commenced operations on May 21, 1999, July 15, 1998, November 11, 1996 and
June 23, 1997, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares method.
(a) The effect of the custodial expense offset (Note 2) on the operating
expense ratio, with and without waivers and/or expense reimbursements, was
less than 0.01%.
(b) The effect of interest expense on the operating expense ratio was less than
0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
148
<PAGE> 153
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(1.13) $24.35 10.88% $ 15,532 0.95%+(a)(b) 1.85%+ 84% 1.02%+(a)
$(1.07) $24.35 8.99% $ 83,412 1.20%+(a)(b) 1.60%+ 84% 1.27%+(a)
(0.11) 23.40 4.50 72,000 1.18+ 2.01+ 20 1.20+
(1.94) 22.50 14.72 72,000 0.94 2.64 114 0.94
(2.23) 21.41 23.07 49,000 1.03 2.67 67 1.09
(1.10) 19.40 17.64 35,000 1.25 2.59 116 1.94
(1.01) 17.52 22.80 22,000 0.62 3.49 157 2.92
$(0.94) $24.24 8.31% $121,644 1.95%+(a)(b) 0.85%+ 84% 2.02%+(a)
(0.08) 23.32 4.26 10,000 1.95+ 1.26+ 20 1.97+
(1.69) 22.45 4.59 6,000 1.74+ 1.92+ 114 1.74
$(0.91) $24.27 8.24% $ 2,305 1.95%+(a)(b) 0.85%+ 84% 2.02%+(a)
(0.09) 23.33 4.31 2,000 1.67+ 1.52+ 20 1.96+
(1.84) 22.45 14.23 2,000 1.44 2.14 114 1.69
(2.11) 21.36 22.10 2,000 1.52 2.17 67 1.58
(0.82) 19.40 17.69 1,000 1.94+ 2.31+ 116 3.26+
$(1.13) $18.07 9.23% $205,808 0.95%+ 1.85%+ 84% 1.27%+
(0.12) 17.66 4.52 214,000 0.95+ 2.23+ 20 1.19+
(1.95) 17.01 14.76 208,000 0.93 2.65 114 0.94
(1.11) 16.63 13.56 197,000 0.95+ 2.73+ 67 0.97+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
149
<PAGE> 154
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
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/(LOSS) INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQUITY INCOME
PRIMARY A SHARES
Year ended 3/31/2000........... $11.36 $0.15 $ 0.36 $ 0.51 $(0.15) $(0.15)
Year ended 3/31/1999#.......... 13.94 0.23 (1.45) (1.22) (0.23) (1.13)
Year ended 3/31/1998#.......... 12.30 0.29 3.79 4.08 (0.28) (2.16)
Year ended 3/31/1997........... 13.14 0.43 1.55 1.98 (0.41) (2.41)
Period ended 3/31/1996(a)...... 11.81 0.30 1.77 2.07 (0.37) (0.37)
Year ended 5/31/1995........... 11.43 0.42 1.11 1.53 (0.42) (0.73)
INVESTOR A SHARES
Year ended 3/31/2000........... $11.31 $0.12 $ 0.36 $ 0.48 $(0.12) $(0.15)
Year ended 3/31/1999#.......... 13.89 0.20 (1.45) (1.25) (0.20) (1.13)
Year ended 3/31/1998#.......... 12.26 0.26 3.77 4.03 (0.24) (2.16)
Year ended 3/31/1997........... 13.11 0.36 1.58 1.94 (0.38) (2.41)
Period ended 3/31/1996(a)...... 11.78 0.27 1.77 2.04 (0.34) (0.37)
Year ended 5/31/1995........... 11.41 0.40 1.10 1.50 (0.40) (0.73)
INVESTOR B SHARES
Year ended 3/31/2000........... $11.31 $0.03 $ 0.36 $ 0.39 $(0.04) $(0.15)
Year ended 3/31/1999#.......... 13.87 0.11 (1.45) (1.34) (0.09) (1.13)
Year ended 3/31/1998#.......... 12.25 0.17 3.77 3.94 (0.16) (2.16)
Year ended 3/31/1997........... 13.10 0.31 1.57 1.88 (0.32) (2.41)
Period ended 3/31/1996(a)...... 11.77 0.22 1.76 1.98 (0.28) (0.37)
Year ended 5/31/1995........... 11.40 0.34 1.11 1.45 (0.35) (0.73)
INVESTOR C SHARES
Year ended 3/31/2000........... $11.45 $0.03 $ 0.37 $ 0.40 $(0.04) $(0.15)
Year ended 3/31/1999#.......... 14.01 0.12 (1.44) (1.32) (0.11) (1.13)
Year ended 3/31/1998#.......... 12.35 0.18 3.83 4.01 (0.19) (2.16)
Year ended 3/31/1997........... 13.19 0.33 1.59 1.92 (0.35) (2.41)
Period ended 3/31/1996(a)...... 11.83 0.21 1.78 1.99 (0.26) (0.37)
Year ended 5/31/1995........... 11.47 0.32 1.08 1.40 (0.31) (0.73)
</TABLE>
---------------
* Equity Income Investor B Shares commenced operations on June 7, 1993.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares method.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
May 31.
(b) The effect of the custodial expense offset (Note 2) 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.
150
<PAGE> 155
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.30) $11.57 4.51% $397,479 0.85%(b)(c) 1.25% 54% 0.85%(b)
(1.36) 11.36 (9.40) 575,076 0.80(b)(c) 1.92 69 0.80(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
$(0.27) $11.52 4.26% $ 33,569 1.10%(b)(c) 1.00% 54% 1.10%(b)
(1.33) 11.31 (9.87) 51,278 1.05(b)(c) 1.67 69 1.05(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
$(0.19) $11.51 3.43% $ 73,966 1.85%(b)(c) 0.25% 54% 1.85%(b)
(1.22) 11.31 (10.49) 107,747 1.80(b)(c) 0.92 69 1.80(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
$(0.19) $11.66 3.46% $ 4,365 1.85%(b)(c) 0.25% 54% 1.85%(b)
(1.24) 11.45 (10.28) 5,801 1.64(b)(c) 1.08 69 1.80(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
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
151
<PAGE> 156
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
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/(LOSS) INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
VALUE
PRIMARY A SHARES
Year ended 3/31/2000#.......... $18.16 $ 0.11 $(0.06) $ 0.05 $(0.11) $(1.86)
Year ended 3/31/1999#.......... 19.92 0.13 0.64 0.77 (0.14) (2.39)
Year ended 3/31/1998#.......... 17.87 0.20 5.98 6.18 (0.19) (3.94)
Year ended 3/31/1997........... 16.60 0.26 2.69 2.95 (0.26) (1.42)
Period ended 3/31/1996(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)
INVESTOR A SHARES
Year ended 3/31/2000#.......... $18.16 $ 0.07 $(0.07) $ 0.00 $(0.06) $(1.86)
Year ended 3/31/1999#.......... 19.92 0.09 0.63 0.72 (0.09) (2.39)
Year ended 3/31/1998#.......... 17.87 0.15 5.98 6.13 (0.14) (3.94)
Year ended 3/31/1997........... 16.60 0.21 2.70 2.91 (0.22) (1.42)
Period ended 3/31/1996(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)
INVESTOR B SHARES
Year ended 3/31/2000#.......... $18.00 $(0.06) $(0.08) $(0.14) $(0.00) $(1.86)
Year ended 3/31/1999#.......... 19.81 (0.05) 0.63 0.58 -- (2.39)
Year ended 3/31/1998#.......... 17.81 0.02 5.96 5.98 (0.04) (3.94)
Year ended 3/31/1997........... 16.55 0.14 2.68 2.82 (0.14) (1.42)
Period ended 3/31/1996(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)
INVESTOR C SHARES
Year ended 3/31/2000#.......... $17.98 $(0.06) $(0.07) $(0.13) $(0.00) $(1.86)
Year ended 3/31/1999#.......... 19.75 (0.02) 0.65 0.63 (0.01) (2.39)
Year ended 3/31/1998#.......... 17.75 0.04 5.95 5.99 (0.05) (3.94)
Year ended 3/31/1997........... 16.50 0.17 2.68 2.85 (0.18) (1.42)
Period ended 3/31/1996(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)
</TABLE>
---------------
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares method.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) The effect of the custodial expense offset (Note 2) 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.
152
<PAGE> 157
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(1.97) $16.24 (0.16)% $1,290,572 0.93%(b)(c) 0.65% 95% 0.93%(b)
(2.53) 18.16 4.15 1,939,704 0.94(b)(c) 0.76 38 0.94(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
$(1.92) $16.24 (0.47)% $ 94,256 1.18%(b)(c) 0.40% 95% 1.18%(b)
(2.48) 18.16 3.96 136,691 1.19(b)(c) 0.51 38 1.19(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
$(1.86) $16.00 (1.24)% $ 124,000 1.93%(b)(c) (0.35)% 95% 1.93%(b)
(2.39) 18.00 3.11 154,025 1.94(b)(c) (0.24) 38 1.94(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
$(1.86) $15.99 (1.18)% $ 10,042 1.93%(b)(c) (0.32)% 95% 1.93%(b)
(2.40) 17.98 3.39 12,106 1.70(b)(c) 0.00 38 1.94(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
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
153
<PAGE> 158
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
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/(LOSS) INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LARGECAP INDEX
PRIMARY A SHARES
Year ended 3/31/2000#.......... $25.06 $0.26 $4.09 $4.35 $(0.25) $(0.26)
Year ended 3/31/1999........... 22.41 0.26 3.63 3.89 (0.25) (0.99)
Year ended 3/31/1998# 15.89.. 0.27 7.11 7.38 (0.27) (0.59)
Year ended 3/31/1997........... 13.58 0.26 2.36 2.62 (0.26) (0.05)
Period ended 3/31/1996(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)
INVESTOR A SHARES
Year ended 3/31/2000#.......... $24.94 $0.19 $4.08 $4.27 $(0.19) $(0.26)
Year ended 3/31/1999........... 22.31 0.19 3.63 3.82 (0.20) (0.99)
Year ended 3/31/1998#.......... 15.87 0.21 7.05 7.26 (0.23) (0.59)
Year ended 3/31/1997........... 13.58 0.25 2.32 2.57 (0.23) (0.05)
Period ended 3/31/1996(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>
---------------
* LargeCap Index Primary A and Investor A Shares commenced operations on
December 15, 1993 and October 10, 1995, respectively.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares method.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was
November 30.
(b) The effect of the custodial expense offset (Note 2) 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.
154
<PAGE> 159
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
RATIO OF AND/OR EXPENSE
OPERATING REIMBURSEMENTS
EXPENSES TO ---------------
RATIO OF AVERAGE RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET ASSETS NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCLUDING INCOME/(LOSS) TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET INTEREST AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS EXPENSE ASSETS RATE NET ASSETS
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(0.51) $28.90 17.58% $2,826,486 0.35%(b)(c) -- 0.96% 7% 0.71%(b)
(1.24) 25.06 18.26 933,313 0.35(b) -- 1.17 4 0.71(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) -- 1.91 5 0.70(b)
(0.27) 13.58 7.33 192,388 0.35+(c) -- 1.99+ 2 0.73+
(0.41) 12.91 36.35 145,021 0.37 0.38 2.44 18 0.78
$(0.45) $28.76 17.32% $ 28,943 0.60%(b)(c) -- 0.71% 7% 0.96%(b)
(1.19) 24.94 18.00 13,827 0.60(b) -- 0.92 4 0.96(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) -- 1.66 5 0.95(b)
(0.26) 13.58 7.26 95 0.35+(c) -- 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.
155
<PAGE> 160
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
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 (LOSS) INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GROWTH & INCOME
PRIMARY A SHARES
Year ended 3/31/2000........... $14.91 $(0.07) $6.81 $6.74 -- $(0.04)
Year ended 3/31/1999#.......... 12.03.. 0.00(b) 2.89 2.89 -- (0.01)
Period ended 3/31/1998*#....... 10.00 0.01 2.02 2.03 -- --
INVESTOR A SHARES
Year ended 3/31/2000........... $14.95 $(0.11) $6.82 $6.71 -- $(0.04)
Year ended 3/31/1999#.......... 12.02 (0.03) 2.97 2.94 -- (0.01)
Period ended 3/31/1998*#....... 10.00 0.00(b) 2.02 2.02 -- --
INVESTOR B SHARES
Year ended 3/31/2000........... $14.85 $(0.24) $6.74 $6.50 -- $(0.04)
Year ended 3/31/1999#.......... 12.02 (0.12) 2.96 2.84 -- (0.01)
Period ended 3/31/1998*#....... 10.00 (0.02) 2.04 2.02 -- --
INVESTOR C SHARES
Year ended 3/31/2000........... $14.86 $(0.25) $6.77 $6.52 -- $(0.04)
Year ended 3/31/1999#.......... 12.02 (0.12) 2.97 2.85 -- (0.01)
Period ended 3/31/1998*#....... 10.00 (0.02) 2.04 2.02 -- --
</TABLE>
---------------
* Growth & Income 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,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares method.
(a) The effect of the custodial expense offset (Note 2) 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.
(c) Amount represents results prior to conversion to a master-feeder structure.
SEE NOTES TO FINANCIAL STATEMENTS.
156
<PAGE> 161
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE NET
DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE ASSETS
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(0.04) $21.61 45.33% $113,028 1.23%(a) (0.37)% 55%(c) 1.23%(a)
(0.01) 14.91 24.05 52,229 1.25(a) 0.05 150 1.25(a)
-- 12.03 20.30 2,517 1.09+(a) 0.38+ 22 1.97+(a)
$(0.04) $21.62 45.01% $175,859 1.48%(a) (0.62)% 55%(c) 1.48%(a)
(0.01) 14.95 24.38 43,392 1.50(a) (0.20) 150 1.50(a)
-- 12.02 20.20 1,141 1.34+(a) 0.13+ 22 2.22+(a)
$(0.04) $21.31 43.90% $305,607 2.23%(a) (1.37)% 55%(c) 2.23%(a)
(0.01) 14.85 23.55 99,257 2.25(a) (0.95) 150 2.25(a)
-- 12.02 20.20 7,907 2.09+(a) (0.62)+ 22 2.97+(a)
$(0.04) $21.34 43.93% $ 34,785 2.23%(a) (1.37)% 55%(c) 2.23%(a)
(0.01) 14.86 23.63 3,233 2.25(a) (0.95) 150 2.25(a)
-- 12.02 20.20 518 2.09+(a) (0.62)+ 22 2.97+(a)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
157
<PAGE> 162
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS
VALUE NET AND UNREALIZED (DECREASE) IN FROM NET
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT
OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BLUE CHIP
PRIMARY A SHARES
Period ended 3/31/2000***#...................... $35.00 $ 0.06 $5.65 $5.71 $(0.03)
INVESTOR A SHARES*
Period ended 3/31/2000#......................... $35.92 $ 0.02 $4.65 $4.67 --
Period ended 5/14/1999.......................... 33.43 0.00(a) 2.49 2.49 --
Year ended 2/28/1999............................ 29.90 0.09 5.26 5.35 $(0.10)
Year ended 2/28/1998............................ 25.22 0.16 7.91 8.07 (0.15)
Year ended 2/28/1997**.......................... 20.53 0.23 5.21 5.44 (0.22)
Year ended 2/29/1996............................ 15.81 0.26 4.96 5.22 (0.28)
INVESTOR B SHARES*
Period ended 3/31/2000#......................... $35.77 $(0.26) $4.64 $4.38 --
Period ended 5/14/1999.......................... 33.34 (0.02) 2.45 2.43 --
Period ended 2/28/1999***....................... 33.73 (0.05) 1.39 1.34 $(0.01)
INVESTOR SHARES C*
Period ended 3/31/2000#......................... $35.69 $(0.24) $4.61 $4.37 --
Period ended 5/14/1999.......................... 33.24 (0.04) 2.49 2.45 --
Year ended 2/28/1999............................ 29.79 (0.06) 5.23 5.17 --
Year ended 2/28/1998............................ 25.20 0.04 7.83 7.87 $(0.04)
Period ended 2/28/1997***....................... 20.38 0.07 5.35 5.42 (0.07)
SEAFIRST SHARES*
Period ended 3/31/2000#......................... $31.64 $ 0.05 $4.06 $4.11 $(0.03)
Period ended 5/14/1999.......................... 29.45 0.02 2.19 2.21 (0.02)
Year ended 2/28/1999............................ 26.53 0.14 4.66 4.80 (0.16)
Period ended 2/28/1998***....................... 24.02 0.14 3.99 4.13 (0.12)
</TABLE>
---------------
* The financial information for the fiscal periods through May 14, 1999
reflect the financial information for the Pacific Horizon Blue Chip Fund A,
B, K and SRF Shares, which were reorganized into the Blue Chip Investor A,
Investor B, Investor C and Seafirst Shares, respectively, as of May 21,
1999. Prior to May 21, 1999, the Fund's investment adviser was Bank of
America National Trust and Savings Association. Effective May 21, 1999, its
investment adviser became Banc of America Advisors, Inc. and its investment
sub-adviser became Banc of America Capital Management, Inc.
** As of July 22, 1996, the Fund designated the existing series of shares as
"A" Shares.
*** Blue Chip Primary A, Investor B, Investor C and Seafirst Shares commenced
operations on May 21, 1999, July 15, 1998, November 11, 1996 and June 23,
1997.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares method.
(a) Amount represents less than $0.01.
SEE NOTES TO FINANCIAL STATEMENTS.
158
<PAGE> 163
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF RATIO OF
DISTRIBUTIONS TOTAL NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING
FROM NET DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) TO EXPENSES TO
REALIZED AND END OF TOTAL PERIOD AVERAGE NET AVERAGE NET AVERAGE
CAPITAL GAINS DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS ASSETS NET ASSETS
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(3.35) $(3.38) $37.33 17.54% $ 36,393 0.95%+ 0.17%+ 0.98%+
$(3.35) $(3.35) $37.24 14.10% $394,071 1.20%+ (0.08)%+ 1.23%+
-- -- 35.92 7.45 423,000 1.29+ (0.03)+ 1.33+
(1.72) (1.82) 33.43 18.58 401,000 1.16 0.31 1.17
(3.24) (3.39) 29.90 33.96 288,000 1.18 0.63 1.22
(0.53) (0.75) 25.22 27.01 153,000 1.28 0.99 1.71
(0.22) (0.50) 20.53 33.39 67,000 0.83 1.63 2.28
$(3.35) $(3.35) $36.80 13.37% $ 75,538 1.95%+ (0.83)%+ 1.98%+
-- -- 35.77 7.29 21,000 2.05+ (0.77)+ 2.09+
(1.72) (1.73) 33.34 4.53 13,000 1.97+ (0.58)+ 1.99+
$(3.35) $(3.35) $36.71 13.35% $ 17,123 1.95%+ (0.83)%+ 1.98%+
-- -- 35.69 7.37 15,000 1.80+ (0.54)+ 2.08+
(1.72) (1.72) 33.24 17.96 13,000 1.66 (0.22) 1.92
(3.24) (3.28) 29.79 33.08 7,000 1.67 0.12 1.69
(0.53) (0.60) 25.20 26.96 1,000 1.92+ 0.45+ 2.12+
$(3.35) $(3.38) $32.37 14.32% $469,985 0.95%+ 0.17%+ 1.23%+
-- (0.02) 31.64 7.52 444,000 0.95+ 0.32+ 1.34+
(1.72) (1.88) 29.45 18.89 418,000 0.95 0.52 1.17
(1.50) (1.62) 26.53 19.30 370,000 0.95+ 0.81+ 1.15+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
159
<PAGE> 164
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share outstanding throughout each period.
<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>
STRATEGIC GROWTH
PRIMARY A SHARES
Year ended 3/31/2000# ....................... $13.86 $(0.02) $3.39 $3.37 $(0.20)
Period ended 3/31/1999*#..................... 10.00 0.00(b) 3.87 3.87 (0.01)
INVESTOR A SHARES
Period ended 3/31/2000**#.................... $13.88 $(0.03) $3.19 $3.16 $(0.06)
INVESTOR B SHARES
Period ended 3/31/2000**#.................... $13.88 $(0.10) $3.18 $3.08 $(0.06)
INVESTOR C SHARES
Period ended 3/31/2000**#.................... $13.88 $(0.10) $3.20 $3.10 $(0.06)
</TABLE>
---------------
* Strategic Growth Primary A Shares commenced operations on October 2, 1998.
** Strategic Growth Investor A, Investor B and Investor C Shares commenced
operations on August 2, 1999.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares method.
(a) The effect of the custodial expense offset (Note 2) 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.
160
<PAGE> 165
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF RATIO OF
NET ASSETS OPERATING NET INVESTMENT OPERATING
NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO
VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$17.03 24.63% $860,124 0.97% (0.10)% 23% 0.97%
13.86 38.65 266,823 1.07+(a) (0.03)+ 34 1.07+(a)
$16.98 22.86% $ 5,503 1.22%+ (0.35)%+ 23% 1.22%+
$16.90 22.29% $ 4,934 1.97%+ (1.10)%+ 23% 1.97%+
$16.92 22.36% $ 1,706 1.97%+ (1.10)%+ 23% 1.97%+
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
161
<PAGE> 166
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
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/(LOSS) INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL GROWTH
PRIMARY A SHARES
Year ended 3/31/2000........... $12.05 $(0.05) $3.47 $3.42 -- $(0.88)
Year ended 3/31/1999#.......... 13.30 0.00(b) 1.59 1.59 -- (2.84)
Year ended 3/31/1998#.......... 11.70 0.02 5.27 5.29 $(0.01) (3.68)
Year ended 3/31/1997#.......... 13.43 0.05 1.66 1.71 (0.05) (3.39)
Period ended 3/31/1996(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)
INVESTOR A SHARES
Year ended 3/31/2000........... $11.97 $(0.08) $3.42 $3.34 -- $(0.88)
Year ended 3/31/1999#.......... 13.26 (0.03) 1.58 1.55 -- (2.84)
Year ended 3/31/1998#.......... 11.67 (0.01) 5.28 5.27 -- (3.68)
Year ended 3/31/1997#.......... 13.41 0.02 1.65 1.67 $(0.02) (3.39)
Period ended 3/31/1996(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)
INVESTOR B SHARES
Year ended 3/31/2000........... $11.39 $(0.17) $3.24 $3.07 -- $(0.88)
Year ended 3/31/1999#.......... 12.83 (0.11) 1.51 1.40 -- (2.84)
Year ended 3/31/1998#.......... 11.47 (0.10) 5.14 5.04 -- (3.68)
Year ended 3/31/1997#.......... 13.31 (0.08) 1.63 1.55 -- (3.39)
Period ended 3/31/1996(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)
INVESTOR C SHARES
Year ended 3/31/2000........... $11.48 $(0.16) $3.26 $3.10 -- $(0.88)
Year ended 3/31/1999#.......... 12.92 (0.11) 1.51 1.40 -- (2.84)
Year ended 3/31/1998#.......... 11.50 (0.08) 5.18 5.10 -- (3.68)
Year ended 3/31/1997#.......... 13.26 (0.01) 1.64 1.63 -- (3.39)
Period ended 3/31/1996(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)
</TABLE>
---------------
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares 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 custodial expense offset (Note 2) 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.
162
<PAGE> 167
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.88) $14.59 29.90% $816,371 0.96%(c)(d) (0.38)% 39% 0.96%(c)
(2.84) 12.05 14.99 737,620 0.96(c) (0.04) 39 0.96(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
$(0.88) $14.43 29.41% $ 61,756 1.21%(c)(d) (0.63)% 39% 1.21%(c)
(2.84) 11.97 14.70 52,987 1.21(c) (0.29) 39 1.21(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
$(0.88) $13.58 28.42% $ 75,844 1.96%(c)(d) (1.38)% 39% 1.96%(c)
(2.84) 11.39 13.86 66,338 1.96(c) (1.04) 39 1.96(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
$(0.88) $13.70 28.46% $ 4,883 1.96%(c)(d) (1.38)% 39% 1.96%(c)
(2.84) 11.48 13.76 3,862 1.96(c) (1.04) 39 1.96(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
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
163
<PAGE> 168
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
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/(LOSS) INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DISCIPLINED EQUITY
PRIMARY A SHARES
Year ended 3/31/2000#.......... $23.36 $ 0.03 $(0.03) $ 0.00 $(0.01) $(2.74)
Year ended 3/31/1999........... 22.17 0.02 3.22 3.24 (0.01)## (2.04)
Year ended 3/31/1998#.......... 18.47 0.08 7.88 7.96 (0.03) (4.23)
Year ended 3/31/1997........... 17.19 0.14 2.79 2.93 (0.14) (1.51)
Period ended 3/31/1996(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) --
INVESTOR A SHARES
Year ended 3/31/2000#.......... $23.23 $(0.02) $(0.04) $(0.06) -- $(2.74)
Year ended 3/31/1999........... 22.09 (0.03) 3.21 3.18 -- (2.04)
Year ended 3/31/1998#.......... 18.44 0.02 7.87 7.89 (0.01) (4.23)
Year ended 3/31/1997........... 17.16 0.08 2.80 2.88 (0.09) (1.51)
Period ended 3/31/1996(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) --
INVESTOR B SHARES
Year ended 3/31/2000#.......... $22.47 $(0.18) $(0.04) $(0.22) -- $(2.74)
Year ended 3/31/1999........... 21.57 (0.17) 3.11 2.94 -- (2.04)
Year ended 3/31/1998#.......... 18.20 (0.12) 7.72 7.60 -- (4.23)
Year ended 3/31/1997........... 17.00 (0.05) 2.76 2.71 -- (1.51)
Period ended 3/31/1996(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) --
INVESTOR C SHARES
Year ended 3/31/2000#.......... $22.86 $(0.18) $(0.04) $(0.22) -- $(2.74)
Year ended 3/31/1999........... 21.92 (0.17) 3.15 2.98 -- (2.04)
Year ended 3/31/1998#.......... 18.41 (0.09) 7.83 7.74 -- (4.23)
Year ended 3/31/1997........... 17.10 0.04 2.79 2.83 (0.01) (1.51)
Period ended 3/31/1996(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>
---------------
* Disciplined Equity Investor C Shares commenced operations on May 10, 1995.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares method.
## Amount includes distributions in excess of net investment income of less
than $0.01 per share.
(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 custodial expense offset (Note 2) on the operating
expense ratio, with and without waivers and/or expense reimbursements, was
less than 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
164
<PAGE> 169
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(2.75) $20.61 (0.16)% $328,219 0.98%(c)(d) 0.15% 79% 0.98%(d)
(2.05) 23.36 15.74 412,176 0.97(c)(d) 0.12 72 0.97(d)
(4.26) 22.17 48.65 132,504 0.98(c)(d) 0.37 79 0.98+(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
$(2.74) $20.43 (0.41)% $ 47,624 1.23%(c)(d) (0.10)% 79% 1.23%(d)
(2.04) 23.23 15.49 67,356 1.22(c)(d) (0.13) 72 1.22(d)
(4.24) 22.09 48.28 21,725 1.23(c)(d) 0.12 79 1.23(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
$(2.74) $19.51 (1.19)% $ 39,680 1.98%(c)(d) (0.85)% 79% 1.98%(d)
(2.04) 22.47 14.69 50,797 1.97(c)(d) (0.88) 72 1.97(d)
(4.23) 21.57 47.14 38,079 1.98(c)(d) (0.63) 79 1.98(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
$(2.74) $19.90 (1.16)% $ 1,496 1.98%(c)(d) (0.85)% 79% 1.98%(d)
(2.04) 22.86 14.64 1,629 1.97(c)(d) (0.88) 72 1.97(d)
(4.23) 21.92 47.38 1,199 1.81(c)(d) (0.46) 79 1.81(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>
SEE NOTES TO FINANCIAL STATEMENTS.
165
<PAGE> 170
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED NET INCREASE/
VALUE NET AND UNREALIZED (DECREASE) IN
BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE
OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS
---------------------------------------------------------------
<S> <C> <C> <C> <C>
FOCUSED EQUITIES
PRIMARY A SHARES
Year ended 3/31/2000#....................................... $16.69 $(0.01) $6.14 $6.13
Year ended 3/31/1999#....................................... 12.13 (0.01) 4.58 4.57
Period ended 3/31/1998*#.................................... 10.00 (0.01) 2.14 2.13
INVESTOR A SHARES
Year ended 3/31/2000#....................................... $16.73 $(0.03) $6.09 $6.06
Year ended 3/31/1999#....................................... 12.14 (0.04) 4.64 4.60
Period ended 3/31/1998*#.................................... 10.00 (0.01) 2.15 2.14
INVESTOR B SHARES
Year ended 3/31/2000#....................................... $16.62 $(0.09) $5.96 $5.87
Year ended 3/31/1999#....................................... 12.13 (0.12) 4.62 4.50
Period ended 3/31/1998*#.................................... 10.00 (0.04) 2.17 2.13
INVESTOR C SHARES
Year ended 3/31/2000#....................................... $16.67 $(0.08) $5.97 $5.89
Year ended 3/31/1999#....................................... 12.13 (0.14) 4.69 4.55
Period ended 3/31/1998*#.................................... 10.00 (0.04) 2.17 2.13
</TABLE>
---------------
* 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,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares method.
(a) The effect of the custodial expense offset (Note 2) on the operating
expense ratio, with and without waivers and/or expense reimbursements, was
0.01%.
(b) Amount represents results prior to conversion to a master-feeder structure.
SEE NOTES TO FINANCIAL STATEMENTS.
166
<PAGE> 171
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF RATIO OF
DISTRIBUTIONS TOTAL NET ASSET NET ASSETS OPERATING NET INVESTMENT OPERATING
FROM NET DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO
REALIZED AND END OF TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
CAPITAL GAINS DISTRIBUTIONS PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(0.23) $(0.23) $22.59 37.13% $ 326,745 1.16%(a) (0.35)% 53%(b) 1.16%(a)
(0.01) (0.01) 16.69 37.73 105,458 1.06(a) 0.05 177 1.06(a)
-- -- 12.13 21.30 8,808 1.52+(a) (0.30)+ 25 1.52+(a)
$(0.23) $(0.23) $22.56 36.62% $ 690,166 1.41%(a) (0.60)% 53%(b) 1.41%(a)
(0.01) (0.01) 16.73 37.94 238,137 1.31(a) (0.20) 177 1.31(a)
-- -- 12.14 21.40 6,056 1.77+(a) (0.55)+ 25 1.77+(a)
$(0.23) $(0.23) $22.26 35.71% $1,003,840 2.16%(a) (1.35)% 53%(b) 2.16%(a)
(0.01) (0.01) 16.62 37.15 306,365 2.06(a) (0.95) 177 2.06(a)
-- -- 12.13 21.30 20,446 2.52+(a) (1.30)+ 25 2.52+(a)
$(0.23) $(0.23) $22.33 35.72% $ 247,509 2.16%(a) (1.35)% 53%(b) 2.16%(a)
(0.01) (0.01) 16.67 37.56 13,682 2.06(a) (0.95) 177 2.06(a)
-- -- 12.13 21.30 469 2.52+(a) (1.30)+ 25 2.52+(a)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
167
<PAGE> 172
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
For a share outstanding throughout each period.
<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>
MIDCAP GROWTH
PRIMARY A SHARES
Year ended 3/31/2000#........................ $13.31 $(0.07) $ 9.81 $ 9.74 $(0.64)
Year ended 3/31/1999#........................ 16.56 (0.04) (0.94) (0.98) (2.27)
Year ended 3/31/1998#........................ 12.86 (0.06) 5.55 5.49 (1.79)
Year ended 3/31/1997#........................ 14.04 (0.04) 0.20 0.16 (1.34)
Period ended 3/31/1996#(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)
INVESTOR A SHARES
Year ended 3/31/2000#........................ $13.04 $(0.12) $ 9.59 $ 9.47 $(0.64)
Year ended 3/31/1999#........................ 16.30 (0.07) (0.92) (0.99) (2.27)
Year ended 3/31/1998#........................ 12.69 (0.10) 5.50 5.40 (1.79)
Year ended 3/31/1997#........................ 13.91 (0.07) 0.19 0.12 (1.34)
Period ended 3/31/1996#(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)
INVESTOR B SHARES
Year ended 3/31/2000#........................ $12.28 $(0.22) $ 8.96 $ 8.74 $(0.64)
Year ended 3/31/1999#........................ 15.58 (0.15) (0.88) (1.03) (2.27)
Year ended 3/31/1998#........................ 12.29 (0.20) 5.28 5.08 (1.79)
Year ended 3/31/1997#........................ 13.61 (0.18) 0.20 0.02 (1.34)
Period ended 3/31/1996#(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)
INVESTOR C SHARES
Year ended 3/31/2000#........................ $12.33 $(0.22) $ 9.00 $ 8.78 $(0.64)
Year ended 3/31/1999#........................ 15.63 (0.15) (0.88) (1.03) (2.27)
Year ended 3/31/1998#........................ 12.31 (0.18) 5.29 5.11 (1.79)
Year ended 3/31/1997#........................ 13.56 (0.10) 0.19 0.09 (1.34)
Period ended 3/31/1996#(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)
</TABLE>
---------------
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares 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 custodial expense offset (Note 2) 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.
168
<PAGE> 173
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
RATIO OF AND/OR EXPENSE
OPERATING REIMBURSEMENTS
EXPENSES TO ---------------
RATIO OF AVERAGE RATIO OF RATIO OF
NET ASSETS OPERATING NET ASSETS NET INVESTMENT OPERATING
NET ASSET END OF EXPENSES TO INCLUDING INCOME/(LOSS) TO PORTFOLIO EXPENSES TO
VALUE TOTAL PERIOD AVERAGE NET INTEREST AVERAGE NET TURNOVER AVERAGE
END OF PERIOD RETURN++ (000) ASSETS EXPENSE ASSETS RATE NET ASSETS
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$22.41 75.34% $281,951 1.00%(c)(d) -- (0.45)% 46% 1.00%(c)
13.31 (7.21) 177,861 0.98(c)(d) -- (0.29) 43 0.98(c)
16.56 45.09 318,584 0.98(c) 0.99% (0.42) 76 0.98(c)
12.86 0.48 267,319 0.98(c) -- (0.26) 93 0.98(c)
14.04 9.87 295,764 0.99+ -- (0.06)+ 39 0.99+
14.28 29.95 269,484 0.98 -- 0.08 139 0.98
$21.87 74.82% $ 22,741 1.25%(c)(d) -- (0.70)% 46% 1.25%(c)
13.04 (7.41) 18,042 1.23(c)(d) -- (0.54) 43 1.23(c)
16.30 44.86 21,591 1.23(c) -- (0.67) 76 1.23(c)
12.69 0.18 12,126 1.23(c) -- (0.51) 93 1.23(c)
13.91 9.80 7,802 1.24+ -- (0.31)+ 39 1.24+
14.17 29.65 5,765 1.23 -- (0.17) 139 1.23
$20.38 73.47% $ 49,606 2.00%(c)(d) -- (1.45)% 46% 2.00%(c)
12.28 (8.10) 33,245 1.98(c)(d) -- (1.29) 43 1.98(c)
15.58 43.64 45,451 1.98(c) 1.99% (1.42) 76 1.98(c)
12.29 (0.57) 33,342 1.98(c) -- (1.26) 93 1.98(c)
13.61 9.52 34,989 1.99+ -- (1.06)+ 39 1.99+
13.93 28.75 32,349 1.98 -- (0.92) 139 1.98
$20.47 73.50% $ 2,628 2.00%(c)(d) -- (1.45)% 46% 2.00%(c)
12.33 (8.08) 1,383 1.98(c)(d) -- (1.29) 43 1.98(c)
15.63 43.80 2,266 1.81(c) 1.82% (1.25) 76 1.81(c)
12.31 (0.04) 1,437 1.48(c) -- (0.76) 93 1.48(c)
13.56 9.64 936 1.61+ -- (0.68)+ 39 1.61+
13.87 28.67 805 1.98 -- (0.92) 139 1.98
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
169
<PAGE> 174
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
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/(LOSS) INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SMALL COMPANY
PRIMARY A SHARES
Year ended 3/31/2000#.......... $11.50 $(0.10) $11.29 $11.19 -- $(0.03)
Year ended 3/31/1999#.......... 15.79 (0.05) (3.11) (3.16) -- (1.13)
Period ended 3/31/1998*........ 12.07 0.01 4.43 4.44 $(0.01) (0.71)
Period ended 5/16/1997*........ 10.65 0.04 1.47 1.51 (0.04) (0.05)
Period ended 8/31/1996*(a)..... 10.00 0.09 0.64 0.73 (0.08) --
INVESTOR A SHARES
Year ended 3/31/2000#.......... $11.43 $(0.15) $11.19 $11.04 -- $(0.03)
Year ended 3/31/1999#.......... 15.74 (0.07) (3.11) (3.18) -- (1.13)
Period ended 3/31/1998*........ 12.05 (0.02) 4.42 4.40 -- (0.71)
Period ended 5/16/1997*........ 10.64 0.03 1.46 1.49 $(0.03) (0.05)
Period ended 8/31/1996*(a)..... 10.00 0.05 0.64 0.69 (0.05) --
INVESTOR B SHARES
Year ended 3/31/2000#.......... $11.23 $(0.25) $10.99 $10.74 -- $(0.03)
Year ended 3/31/1999#.......... 15.59 (0.11) (3.12) (3.23) -- (1.13)
Period ended 3/31/1998*........ 12.03 (0.08) 4.35 4.27 -- (0.71)
Period ended 5/16/1997*........ 10.65 (0.03) 1.46 1.43 -- (0.05)
Period ended 8/31/1996*(a)..... 10.00 0.01 0.65 0.66 $(0.01) --
INVESTOR C SHARES
Year ended 3/31/2000#.......... $11.38 $(0.23) $11.09 $10.86 -- $(0.03)
Year ended 3/31/1999#.......... 15.74 (0.12) (3.11) (3.23) -- (1.13)
Period ended 3/31/1998**....... 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 Pilot, Class A and Class B Shares, which were reorganized into the
Small Company Primary A, Investor A and Investor B Shares, respectively, as
of the close of business on May 23, 1997. Prior to May 23, 1997, the
investment adviser to Small Company was Boatmen's Trust Company. Effective
May 23, 1997, the investment sub-adviser to Small Company became TradeStreet
Investment Associates, Inc. (now known as Banc of America Capital
Management, Inc.).
** Small Company Investor C Shares commenced operations on September 22, 1997.
+ Annualized.
++ Total return represents aggregate total return for the period indicated,
assumes reinvestment of all distributions, and does not reflect the
deduction of any applicable sales charges.
# Per share net investment income has been calculated using the monthly
average shares method.
(a) Represents the period from December 12, 1995 (commencement of operations)
to August 31, 1996.
(b) The effect of the custodial expense offset (Note 2) 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.
170
<PAGE> 175
NATIONS FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
---------------
RATIO OF RATIO OF RATIO OF
TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING
DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO
AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE
DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.03) $22.66 97.46% $647,825 1.13%(b)(c) (0.65)% 63% 1.22%(b)
(1.13) 11.50 (21.05) 327,981 0.95(b) (0.42) 87 1.22(b)
(0.72) 15.79 37.27 235,427 0.95+(b) 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+
$(0.03) $22.44 96.91% $245,425 1.38%(b)(c) (0.90)% 63% 1.47%(b)
(1.13) 11.43 (21.32) 16,143 1.20(b) (0.67) 87 1.47(b)
(0.71) 15.74 37.02 6,772 1.20+(b) (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+
$(0.03) $21.94 95.79% $ 13,839 2.13%(b)(c) (1.65)% 63% 2.22%(b)
(1.13) 11.23 (21.86) 5,127 1.95(b) (1.42) 87 2.22(b)
(0.71) 15.59 36.06 3,384 1.87+(b) (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+
$(0.03) $22.21 95.76% $ 3,588 2.13%(b)(c) (1.65)% 63% 2.22%(b)
(1.13) 11.38 (21.66) 1,951 1.70(b) (1.17) 87 2.22(b)
(0.71) 15.74 8.75 3,122 1.95+(b) (0.95)+ 59 2.26+(b)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
171
<PAGE> 176
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS
Nations Fund Trust (the "Trust"), Nations Fund, Inc. (the "Company") and Nations
Reserves ("Reserves") are each registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end investment company. At March
31, 2000, the Trust offered thirty-six separate portfolios, the Company offered
seven separate portfolios and Reserves offered sixteen separate portfolios.
These financial statements pertain only to certain domestic stock portfolios of
the Trust, the Company and Reserves: Convertible Securities Fund (formerly
Capital Income Fund), Balanced Assets Fund, Asset Allocation Fund, Equity Income
Fund, Value Fund, LargeCap Index Fund (formerly Equity Index Fund), Growth &
Income Fund, Blue Chip Fund, Strategic Growth Fund (formerly Strategic Equity
Fund), Capital Growth Fund, Disciplined Equity Fund, Focused Equities Fund,
MidCap Growth Fund (formerly Emerging Growth Fund) and Small Company Fund
(formerly Small Company Growth Fund) (each a "Fund" and collectively, the
"Funds"). Financial statements for the other portfolios of the Trust, the
Company and Reserves are presented under separate cover. The Funds (except Asset
Allocation Fund, LargeCap Index Fund and Blue Chip Fund) currently offer four
classes of shares: Primary A Shares, Investor A Shares, Investor B Shares and
Investor C Shares. Asset Allocation Fund and Blue Chip Fund also offer Seafirst
Shares. LargeCap Index Fund currently offers only Primary A Shares and Investor
A 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 that class and separate
voting rights on matters in which the interests of one class differ from the
interests of any other class.
On October 8, 1999, the Growth & Income Fund and Focused Equities Fund converted
to a master-feeder structure. The Growth & Income Fund, Blue Chip Fund and
Focused Equities Fund (the "Feeder Funds") seek to achieve their investment
objectives by investing substantially all of their assets in the Growth & Income
Master Portfolio, Blue Chip Master Portfolio and Focused Equities Master
Portfolio, respectively (the "Master Portfolios"), each a series of Nations
Master Investment Trust (the "Master Trust"), another open-end investment
company in the Nations Funds family. The Master Portfolios each have the same
investment objective as that of its corresponding Feeder Fund. The value of the
Feeder Funds' investments in the respective Master Portfolios included in the
Statements of net assets reflects the Feeder Funds' proportionate beneficial
interest in the net assets of the respective Master Portfolio (99.3% at March
31, 2000 for Growth & Income Master Portfolio, 95.1% for Blue Chip Master
Portfolio and 99.0% for Focused Equities Master Portfolio, respectively). The
financial statements of the Master Portfolios, including their schedules of
investments, are included elsewhere within this report and should be read in
conjunction with the Feeder Funds' financial statements. Other funds not
registered under the 1940 Act offered by the Nations Offshore Funds and managed
by Banc of America Advisors, Inc. ("BAAI"), whose financial statements are not
presented here, also invest in the Master Portfolios.
1. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make certain 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 sale price on the exchange or market on which
such securities are primarily traded. Securities traded only over-the-counter
are valued at the last sale price, or if no sale occurred on such day, at the
mean of the current bid and asked prices. Certain securities are valued using
broker quotations or on the basis of prices provided by pricing services.
Restricted securities, securities for which market quotations are not readily
available, and certain other assets may be valued under procedures adopted by
the Board of Trustees/Directors. Short-term investments that mature in 60 days
or less are valued at amortized cost, which approximates current value.
The valuation of each Feeder Fund's investment in it corresponding Master
Portfolio is based on the reported net asset value of that Portfolio. The Master
Portfolios use valuation policies consistent with those described above.
Futures contracts: The Equity Income, Value and LargeCap Index Funds may invest
in futures contracts. Upon entering into a futures contract, a Fund is required
to deposit with the broker an amount of cash or cash equivalents equal to a
specified percentage of the contract amount. This is known as the "initial
margin." Subsequent payments ("variation margin") are made or
172
<PAGE> 177
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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. A 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 of investments in futures contracts include the possible movement of the
securities or indices underlying the contracts, the possibility that there may
not be a liquid secondary market for the 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 trade date. 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.
The Feeder Funds record their share of the investment income and realized and
unrealized gains and losses reported by the Master Portfolios on a daily basis.
The investment income and realized and unrealized gains and losses are allocated
daily to investors in the Master Portfolios based upon the relative value of
their investments in the Master Portfolios.
Dividends and distributions to shareholders: Distributions from net investment
income are declared and paid each calendar quarter by the Convertible
Securities, Balanced Assets, Asset Allocation, LargeCap Index, Growth & Income,
Blue Chip, Focused Equities and MidCap Growth Funds; all other Funds declare and
pay distributions monthly. Each Fund will distribute net realized capital gains
(including net short-term capital gains) at least 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.
Certain reclassifications are made to each Fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryforwards) under Federal income tax regulations. These reclassifications are
due to different book and tax accounting for paydowns, net operating losses,
currency gains and losses and each Fund's use of the tax accounting practice
known as equalization.
Reclassifications for the period ended March 31, 2000 were as follows:
<TABLE>
<CAPTION>
INCREASE/
(DECREASE) INCREASE/
INCREASE/ UNDISTRIBUTED (DECREASE)
(DECREASE) NET ACCUMULATED
PAID-IN INVESTMENT NET REALIZED
CAPITAL INCOME GAIN/(LOSS)
(000) (000) (000)
-----------------------------------------
<S> <C> <C> <C>
Convertible Securities.... $ 6,735 -- $ (6,735)
Balanced Assets........... -- $ 4 (4)
Asset Allocation.......... (2,806) 23 2,783
Equity Income............. 1,248 37 (1,285)
Value..................... 53,298 -- (53,298)
LargeCap Index............ 442 -- (442)
Growth & Income........... 1,191 3,478 (4,669)
Blue Chip................. 10,292 221 (10,513)
Strategic Growth.......... (277) 503 (226)
Capital Growth............ 4,387 4,116 (8,503)
Disciplined Equity........ 355 (44) (311)
Focused Equities.......... 6,454 12,382 (5,928)
MidCap Growth............. 9,093 1,619 (10,712)
Small Company............. 10,180 5,496 (15,676)
</TABLE>
------------
* Amount represents less than $500.
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 taxes.
Expenses: General expenses of the Trust, the Company and Reserves are allocated
to the Funds based upon their relative net assets or other expense allocation
methodologies determined by the nature of the expense. Expenses directly
attributable to a Fund or class of shares are charged to such Fund or class. The
Feeder Funds record their share of the expenses reported by the Master
Portfolios on a daily basis. The expenses are allocated daily to investors in
the Master Portfolios based upon the value of the Feeder Funds' investments in
the Master Portfolios.
173
<PAGE> 178
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS
Each of the Trust, the Company and Reserves has entered into an investment
advisory agreement (the "Investment Advisory Agreements") with BAAI, a
wholly-owned subsidiary of Bank of America, N.A., ("Bank of America"), which in
turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank
holding company organized as a Delaware corporation, pursuant to which BAAI
provides investment advisory services to the Funds. Under the terms of the
Investment Advisory Agreements, BAAI 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............................... 0.90%
Convertible Securities, Balanced Assets,
Asset Allocation, Value, Strategic Growth,
Capital Growth, Disciplined Equity, MidCap
Growth.................................... 0.65%
LargeCap Index.............................. 0.40%
</TABLE>
<TABLE>
<CAPTION>
FEES ON
FEES ON NET ASSETS FEES ON
NET ASSETS BETWEEN $100 NET ASSETS
UP TO AND $250 EXCEEDING
$100 MILLION MILLION $250 MILLION
----------------------------------------------
<S> <C> <C> <C>
Equity Income........ 0.65% 0.60% 0.50%
</TABLE>
Effective May 14, 1999, the maximum advisory fee payable by the Funds decreased
by 0.10% of the Funds' average daily net assets (except Asset Allocation and
Blue Chip Fund). The table above shows the current maximum annual rate.
The Feeder Funds indirectly pay for investment advisory services through their
investments in corresponding Master Portfolios (See Note 2 of Notes to financial
statements of the Master Portfolios).
Each of the Trust, the Company and Reserves has entered into a sub-advisory
agreement with BAAI and Banc of America Capital Management, Inc. ("BACAP")
(formerly known as TradeStreet Investment Associates, Inc.), a wholly-owned
subsidiary of Bank of America, pursuant to which BACAP is entitled to receive a
sub-advisory fee from BAAI at the following maximum annual rate of each Fund's
average daily net assets:
<TABLE>
<CAPTION>
ANNUAL RATE
-----------
<S> <C>
Convertible Securities, Balanced Assets,
Value, Strategic Growth, Capital Growth,
Disciplined Equity, MidCap Growth, Small
Company................................... 0.25%
Equity Income............................... 0.20%
LargeCap Index.............................. 0.10%
</TABLE>
Reserves has, on behalf of the Asset Allocation Fund, entered into a
sub-advisory agreement with BAAI and BACAP, pursuant to which BACAP is entitled
to receive a sub-advisory fee from BAAI for management of the fixed income and
money market portions of the Fund at the annual rate of 0.25% of the Fund's
average daily net assets.
Reserves has, on behalf of the Asset Allocation Fund, entered into a
sub-advisory agreement with BAAI and Chicago Equity Partners Corporation
("Chicago Equity"), a wholly-owned subsidiary of Bank of America, pursuant to
which Chicago Equity Partners is entitled to receive a sub-advisory fee from
BAAI for management of the equity portion of the Fund at the annual rate of
0.25% of the Fund's average daily net assets.
Prior to February 14, 2000, the Trust had, on behalf of the Strategic Growth
Fund, entered into a sub-advisory agreement with BAAI and Bank of America
through its division, Bank of America Investment Management, pursuant to which
Bank of America was entitled to receive a sub-advisory fee from BAAI at the
annual rate of 0.25% of the Fund's average daily net assets. On February 14,
2000, BACAP became the investment sub-advisor to Strategic Growth Fund and is
entitled to receive the same fee as Bank of America was entitled to receive.
Stephens Inc. ("Stephens") and BAAI serve as co-administrators of the Trust, the
Company and Reserves. Under the co-administration agreements, Stephens and BAAI
are currently entitled to receive a combined fee, computed daily and paid
monthly, at the maximum annual rate of 0.23% of the average daily net assets of
all Funds except for Blue Chip Fund, which pays a monthly fee at the maximum
annual rate of 0.18% of its average daily net assets and Growth & Income and
Focused Equities Funds, which pay a monthly fee at the maximum annual rate of
0.13% of their average daily net assets. Effective May 14, 1999, the combined
co-administration fee payable by the Funds (except Asset Allocation and Blue
Chip Fund) to Stephens and BAAI increased by 0.10% of the Fund's average daily
net assets. Effective January 3, 2000, the combined co-administration fee
payable by the Growth & Income and Focused Equities Funds decreased by 0.05% of
the Fund's average daily net assets. The Bank of New York ("BNY") serves as
sub-administrator of the Trust, the Company and Reserves pursuant to agreements
with BAAI. For the period ended March 31, 2000, Stephens and BAAI earned
174
<PAGE> 179
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
$5,914,178 and $8,258,124, respectively, from the Funds for their
co-administration services.
BAAI and/or the sub-advisers and Stephens may, from time to time, reduce their
fees payable by each Fund. Effective August 1, 1999, BAAI and/or the
sub-advisers and Stephens agreed to reimburse expenses and/or waive fees until
May 2000 to the extent that total expenses (excluding shareholder servicing and
distribution fees), as a percentage of the respective Fund's average daily net
assets, exceeded the following annual rates: 0.98% for the Convertible
Securities Fund and 0.95% for the Asset Allocation and Blue Chip Funds.
Effective August 1, 1999, BAAI and/or the sub-advisers and Stephens agreed to
reimburse expenses and/or waive fees until July 31, 2000 to the extent that
total expenses (excluding shareholder servicing and distribution fees), as a
percentage of the respective Fund's average daily net assets, exceed the
following annual rates: 0.35% for the LargeCap Index Fund and 1.15% for the
Small Company Fund. Effective October 1, 1999, BAAI and/or the sub-advisers and
Stephens voluntarily agreed to reimburse expenses and/or waive fees until July
31, 2000 to the extent that total expenses (excluding shareholder servicing and
distribution fees), as a percentage of Balanced Assets Fund's average daily net
assets, exceed the annual rate maintained for the Asset Allocation Fund. Prior
to these dates, BAAI and/or the sub-advisers and Stephens had voluntarily agreed
to reimburse expenses and/or waive their fees to maintain these total expense
limits.
BNY serves as the custodian of the Trust's, the Company's and Reserves' assets.
For the period ended March 31, 2000, expenses of the Funds were reduced by
$93,940 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.
Effective December 1, 1999, First Data Investor Services Group, Inc. ("First
Data"), the transfer agent for the Funds' shares, was acquired by PFPC, Inc.
("PFPC"). PFPC provides the same services as the transfer agent for the Funds'
shares as were previously provided by First Data. Bank of America serves as the
sub-transfer agent for the Primary A and B Shares of the Funds. For the period
ended March 31, 2000, Bank of America earned approximately $430,232 for
providing such services.
Stephens also serves as distributor of the Funds' shares. For the period ended
March 31, 2000, the Funds were informed that the distributor received
$161,092,208 in front-end sales charges for sales of Investor A Shares and
$3,143,167 in contingent deferred sales charges from redemption of shares which
were subject to such charges. A substantial portion of these fees is paid to
affiliates of Bank of America.
The Trust's, the Company's and Reserves' eligible Trustees/Directors may
participate in non-qualified deferred compensation and retirement plans which
may be terminated at any time. All benefits provided under these plans are
unfunded and any payments to plan participants are paid solely out of the Funds'
assets. Income earned on each plan participant's deferral account is tied to the
rate of return of the eligible mutual funds selected by the participants or, if
no funds are selected, to the rate of return of Nations Treasury Fund, 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.
Certain Funds have made daily investments of cash balances in Nations Cash
Reserves, a portfolio of Reserves, pursuant to an exemptive order received from
the Securities and Exchange Commission. For the period ended March 31, 2000, the
Funds earned $7,078,978 in the aggregate from such investments, which is
included in interest income.
A significant portion of each Fund's Primary A Shares represents investments by
fiduciary accounts over which Bank of America has either sole or joint
investment discretion.
3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS
The Trust, the Company and Reserves each have adopted shareholder servicing
plans and distribution plans for the Investor B and Investor C Shares of each
Fund, a combined distribution and shareholder servicing plan for Investor A
Shares of each Fund and a shareholder servicing plan for Seafirst Shares of
Asset Allocation and Blue Chip Funds. (LargeCap Index has no Investor B and
Investor C 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 1940 Act, permit the Funds to compensate or reimburse the distributor
(and for Investor A Shares, the distributor and/or selling agents) for
activities or expenses primarily intended to result in the sale of the classes'
shares. Payments are made at an annual rate, as a percentage of average daily
net assets set from time to time by the Board of Trustees/Directors, and are
charged as expenses of each Fund directly to the
175
<PAGE> 180
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
applicable class. A substantial portion of the expenses incurred pursuant to
these plans is paid to affiliates of Bank of America and BAAI.
At March 31, 2000, the rates in effect and plan limits, as a percentage of
average daily net assets, were as follows:
<TABLE>
<CAPTION>
CURRENT PLAN
RATE LIMIT
------------------
<S> <C> <C>
Investor A Combined Distribution
and Shareholder Servicing Plan... 0.25% 0.25%
Investor B Distribution Plan....... 0.75% 0.75%
Investor C Distribution Plan....... 0.75% 0.75%
Investor B and Investor C
Shareholder Servicing Plans...... 0.25% 0.25%
Seafirst Shareholder Servicing
Plan............................. 0.00%* 0.25%
</TABLE>
---------------
* Currently, all plan fees are voluntarily waived on Seafirst Shares.
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 period
ended March 31, 2000 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
(000) (000)
------------------------
<S> <C> <C>
Convertible Securities...... $ 199,184 $ 277,176
Balanced Assets............. 99,246 130,652
Asset Allocation............ 258,416 198,946
Equity Income............... 343,352 549,515
Value....................... 1,820,411 2,483,602
LargeCap Index.............. 111,873 76,868
Growth & Income*............ 236,898 143,848
Strategic Growth............ 558,320 102,529
Capital Growth.............. 331,285 457,609
Disciplined Equity.......... 391,650 515,829
Focused Equities*........... 874,018 490,685
MidCap Growth............... 117,203 157,734
Small Company............... 385,220 363,005
</TABLE>
---------------
* Prior to conversion to master-feeder structure.
The aggregate cost of purchases and proceeds from sales of long-term U.S.
government securities for the period ended March 31, 2000 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
(000) (000)
--------------------
<S> <C> <C>
Balanced Assets.................. $ 27,261 $38,190
Asset Allocation................. 113,882 83,765
</TABLE>
176
<PAGE> 181
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. FUTURES CONTRACTS
At March 31, 2000, the following Funds had futures contracts open:
<TABLE>
<CAPTION>
UNREALIZED
VALUE OF CONTRACT MARKET VALUE OF APPRECIATION/
NUMBER OF WHEN OPENED CONTRACTS (DEPRECIATION)
DESCRIPTION CONTRACTS (000) (000) (000)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSET ALLOCATION:
U.S. 5 year Treasury note (short position) expiring June
2000(a)................................................... 235 $(22,931) $(23,148) $ (217)
U.S. 2 year Treasury note (long position) expiring June
2000(a)................................................... 35 6,919 6,929 10
U.S. 10 year Treasury note (long position) expiring June
2000(a)................................................... 100 9,620 9,808 188
U.S. 30 year Treasury bond (long position) expiring June
2000(a)................................................... 15 1,425 1,465 40
LARGECAP INDEX:
S&P 500 Futures (long position) expiring June 2000(a)....... 65 23,100 24,624 1,524
</TABLE>
---------------
(a) Securities have been segregated as collateral for the Asset Allocation and
LargeCap Index Funds for open futures contracts.
6. SHARES OF BENEFICIAL INTEREST/CAPITAL STOCK
As of March 31, 2000, an unlimited number of shares of beneficial interest
without par value were authorized for each the Trust and Reserves and
480,000,000,000 shares of $.001 par value capital stock were authorized for the
Company. The Trust's and Reserves' 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 Schedules of capital stock activity.
7. LINES OF CREDIT
The Trust, the Company and Reserves each participate with other Nations Funds in
an uncommitted line of credit provided by BNY under a line of credit agreement
(the "Agreement"). 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 a specified 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 amounts borrowed pursuant to the Agreement) to the
aggregate amount of indebtedness pursuant to the Agreement.
At March 31, 2000, there were no loans outstanding under this Agreement. For the
period ended March 31, 2000, borrowings by the Funds under the Agreement were as
follows:
<TABLE>
<CAPTION>
AVERAGE AVERAGE
AMOUNT INTEREST
OUTSTANDING RATE
FUND (000) --------
-----------------------------------------------------------
<S> <C> <C>
Convertible Securities............ $ 4 5.91%
Balanced Assets................... 81 5.48
Asset Allocation.................. 2 6.26
Equity Income..................... 90 5.88
Value............................. 254 6.23
LargeCap Index.................... 174 5.56
Capital Growth.................... 78 6.27
Disciplined Equity................ 226 5.79
MidCap Growth..................... 54 5.79
Small Company..................... 155 5.56
</TABLE>
The average amount outstanding was calculated based on daily balances in the
period.
The Trust, the Company and Reserves also participate with other Nations Funds in
a committed line of credit provided by BNY. Interest on borrowings under the
committed line is payable at a specified Federal Funds rate plus 0.50% on an
annualized basis. A facility fee of 0.09% per annum of the total amounts
available under the line of credit is charged, of which each Fund has agreed to
pay its pro rata share. This fee is paid quarterly in arrears. Each
participating Fund is required to maintain an asset coverage ratio of at least
300% under the terms of the arrangement. For the period ended March 31, 2000
there were no borrowings by the Funds under the committed line of credit.
8. SECURITIES LENDING
Under an agreement with BNY, the Funds can lend their securities to approved
brokers, dealers and other financial
177
<PAGE> 182
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 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 the risk of loss with respect to the
investment of collateral.
At March 31, 2000, the following Funds had securities on loan:
<TABLE>
<CAPTION>
MARKET VALUE OF MARKET VALUE
LOANED SECURITIES OF COLLATERAL
FUND (000) (000)
---------------------------------------------------------------
<S> <C> <C>
Balanced Assets............ $ 2,241 $ 2,253
Equity Income.............. 5,736 5,968
Value...................... 51,372 50,196
Disciplined Equity......... 6,590 6,698
MidCap Growth.............. 63,644 63,788
Small Company.............. 76,826 80,133
</TABLE>
9. CAPITAL LOSS CARRYFORWARD
At March 31, 2000, Balanced Assets had available for Federal income tax purposes
unused capital losses expiring March 31, 2007 of $1,459,711.
At March 31, 2000, Balanced Assets Fund utilized $1,132,849 of capital loss
carry forwards.
Under the current tax law, capital and currency losses realized after October
31, may be deferred and treated as occurring on the first day of the following
fiscal year. For the tax year ended March 31, 2000, the Fund(s) elected to defer
losses occurring between November 1, 1999 and March 31, 2000, as follows:
<TABLE>
<CAPTION>
POST OCTOBER
CAPITAL/
CURRENCY
LOSSES
FUND DEFERRED
---------------------------------------------------
<S> <C>
Equity Income Fund................... $ 25
LargeCap Index Fund.................. 781
Disciplined Equity Fund.............. 3,524
Growth & Income Fund................. 3
</TABLE>
10. REORGANIZATIONS
ACQUISITION OF THE EMERALD FUNDS
On May 15, 1998, certain Funds, as listed below (each an "Acquiring Fund"),
acquired the assets and certain liabilities of The Emerald 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 Schedules of capital stock activity. Net
assets and unrealized appreciation as of the reorganization date were as
follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS
TOTAL NET ASSETS TOTAL NET ASSETS OF ACQUIRING FUND ACQUIRED FUND
OF ACQUIRED FUND OF ACQUIRING FUND AFTER ACQUISITION UNREALIZED APPRECIATION
ACQUIRING FUND ACQUIRED FUND (000) (000) (000) (000)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balanced Assets Emerald Balanced
Fund $ 76,887 $ 121,047 $197,934 $ 8,904
Disciplined Equity Emerald Equity Fund 296,852 258,201 555,053 67,060
Small Company Growth Emerald Small
Capitalization Fund 153,088 313,094 466,182 20,046
Value Emerald Equity Value
Fund 26,394 2,570,167 2,596,561 4,855
</TABLE>
178
<PAGE> 183
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
CONVERSION OF COMMON TRUST FUNDS
On April 17 and April 29, 1998, certain Funds, as listed below (each an
"Acquiring Fund"), acquired the assets of certain common trust funds, managed by
NationsBank, N.A., also listed below (each an "Acquired Fund"), in a tax-free
exchange for shares of the Acquiring Fund. The number and value of shares issued
by the Acquiring Fund are presented in the Schedules of capital stock activity.
Net assets and unrealized appreciation as of the conversion date were as
follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS
TOTAL NET ASSETS TOTAL NET ASSETS OF ACQUIRING FUND ACQUIRED FUND
OF ACQUIRED FUND OF ACQUIRING FUND AFTER CONVERSION UNREALIZED APPRECIATION
ACQUIRING FUND ACQUIRED FUND (000) (000) (000) (000)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
APRIL 17, 1998
Equity Income NationsBank Common
Trust Equity Income
Fund $ 62,189 $1,085,070 $1,147,259 $13,366
Small Company Growth NationsBank Common
Trust Special Equity
Fund 7,075 238,952 246,027 1,126
Value NationsBank Common
Trust Long-Term
Equity Fund 120,426 2,484,751 2,605,177 61,907
APRIL 29, 1998
Disciplined Equity NationsBank Common
Trust Growth Stock
Fund 47,340 201,122 248,462 3,636
Disciplined Equity NationsBank Common
Trust Oklahoma
Growth Stock Fund 4,245 248,463 252,708 282
</TABLE>
ACQUISITION OF PACIFIC HORIZON FUNDS
On May 14, 1999, the Small Company Growth Fund (the "Acquiring Fund"), acquired
the assets and liabilities of the Pacific Horizon Aggressive Growth Fund (the
"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 Schedules of capital stock activity. Net assets and
unrealized appreciation as of the reorganization date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS
TOTAL NET ASSETS TOTAL NET ASSETS OF ACQUIRING FUND ACQUIRED FUND
OF ACQUIRED FUND OF ACQUIRING FUND AFTER ACQUISITION UNREALIZED APPRECIATION
(000) (000) (000) (000)
----------------------------------------------------------------------------------
<S> <C> <C> <C>
$164,166 $366,213 $530,379 $12,433
</TABLE>
On May 21, 1999, the Capital Income Fund, Asset Allocation Fund and Blue Chip
Fund, newly established portfolios, acquired the assets and liabilities of the
Pacific Horizon Capital Income Fund, Pacific Horizon Asset Allocation Fund and
Pacific Horizon Blue Chip Fund, respectively, pursuant to a plan of
reorganization approved by its shareholders. The acquisition was accomplished by
a tax-free exchange of shares of Capital Income Fund, Asset Allocation Fund and
Blue Chip Fund in an amount equal to the outstanding shares of the Pacific
Horizon Capital Income Fund, Pacific Horizon Asset Allocation Fund and Pacific
Horizon Blue Chip Fund, respectively. The financial statements of the Capital
Income Fund, Asset Allocation Fund and Blue Chip Fund reflect the historical
financial results of the Pacific Horizon Capital Income Fund, Pacific Horizon
Asset Allocation Fund and Pacific Horizon Blue Chip Fund prior to the
reorganization.
179
<PAGE> 184
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
PACIFIC HORIZON FUND SHARE CLASS CORRESPONDING RESERVES SHARE CLASS
---------------------------------------------------------------------
<S> <C>
Capital Income Nations Capital Income
A Shares Investor A Shares
B Shares Investor B Shares
K Shares Investor C Shares
Asset Allocation Nations Asset Allocation
A Shares Investor A Shares
B Shares Investor B Shares
K Shares Investor C Shares
SRF Shares Seafirst Shares
Blue Chip Nations Blue Chip
A Shares Investor A Shares
B Shares Investor B Shares
K Shares Investor C Shares
SRF Shares Seafirst Shares
</TABLE>
ACQUISITION OF THE TIME HORIZON FUNDS
On August 20, 1999, the Asset Allocation Fund (the "Acquiring Fund"), acquired
the assets and liabilities of the Time Horizon Funds, 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
Funds' shareholders. The number and value of shares issued by the Acquiring Fund
are presented in the Schedules of capital stock activity. Net assets and
unrealized appreciation as of the reorganization date were as follows:
<TABLE>
<CAPTION>
TOTAL NET ASSETS
TOTAL NET ASSETS TOTAL NET ASSETS OF ACQUIRING FUND
OF ACQUIRED FUND OF ACQUIRING FUND AFTER ACQUISITION
ACQUIRING FUND ACQUIRED FUND (000) (000) (000)
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Asset Allocation Time Horizon Portfolio I $32,506 $293,022 $419,334
Asset Allocation Time Horizon Portfolio II 43,414 293,022 419,334
Asset Allocation Time Horizon Portfolio III 50,392 293,022 419,334
<CAPTION>
ACQUIRED
FUND
UNREALIZED APPRECIATION
ACQUIRING FUND (000)
--------------------- -----------------------
<S> <C>
Asset Allocation $1,890
Asset Allocation 3,206
Asset Allocation 5,511
</TABLE>
ACQUISITION OF THE COLLECTIVE TRUST EQUITY INDEX FUND
On March 31, 2000 the LargeCap Index Fund (the "Acquiring Fund") acquired the
assets of the Collective Trust Equity Index Fund (the "Acquired Fund"), managed
by Bank of America, in a taxable exchange for shares of the Acquiring Fund. The
number and value of shares issued by the Acquiring Fund are presented in the
Schedules of capital stock activity. Net assets as of the conversion date of the
Acquired Fund and the Acquiring Fund prior to conversion, and the Acquiring Fund
immediately after the conversion, were $1,690,266,000, $1,165,163,000 and
$2,855,429,000, respectively.
CHANGE OF REGISTERED INVESTMENT COMPANY
On August 20, 1999, the Growth & Income and Focused Equities Funds, newly
established shell portfolios of Reserves (the "Successor Funds"), acquired the
assets and liabilities of their predecessor funds, which were series of the
Trust, pursuant to a plan of reorganization approved by each predecessor fund's
shareholders. The predecessor funds had the same name, investment objective and
principal investment strategies as the Successor Funds. The acquisition was
accomplished by a tax-free exchange of shares of the Successor Funds in an
amount equal to the value of the outstanding shares of the predecessor funds.
The financial statements of the Successor Funds reflect the historical financial
results of the predecessor funds prior to the reorganizations.
11. SUBSEQUENT EVENTS
Effective April 17, 2000, Disciplined Equity Fund will change its investment
objective and principal investment strategies to reflect that it will seek
capital appreciation by investing in the common stocks of large and medium-sized
U.S.
180
<PAGE> 185
NATIONS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
companies that have market capitalizations of $500 million or more. The Fund
will also change its name to Nations Aggressive Growth Fund on the same date.
On April 30, 2000, Chicago Equity Partners Corporation will be merged into a new
entity, Chicago Equity Partners LLC. Bank of America will hold no ownership
interest in the new entity, which will continue to serve as investment sub-
adviser to the Asset Allocation and Blue Chip Funds after that date. The
investment sub-advisory agreements with the new entity, whose terms are
substantially the same as those of the current agreements with Chicago Equity
Partners LLC, are subject to approval by shareholders of Asset Allocation Fund
and interestholders of Blue Chip Master Portfolio.
On May 12, 2000, certain Funds (each an "Acquiring Fund"), will acquire the
assets of certain common trust funds managed by Bank of America (each an
"Acquired Fund"), in a tax free exchange for shares of the Acquiring Fund. The
following Nations Funds are involved in the conversion:
<TABLE>
<CAPTION>
ACQUIRING FUND ACQUIRED FUND
----------------------------------------------
<S> <C>
Asset Allocation Balanced Investment Fund
Equity Income Equity Income Fund
BCA Equity Income Fund
Value Equity Value Fund
Kansas Stock Fund
LargeCap Index Equity Index Fund
Strategic Growth BCA Diversified Stock Fund
Disciplined Equity BCA Retail Trust Equity
Small Company Managed Small Cap Fund
</TABLE>
Effective June 23, 2000, Asset Allocation and Blue Chip will no longer offer
Seafirst Shares.
181
<PAGE> 186
NATIONS FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS, DIRECTORS AND TRUSTEES OF NATIONS FUNDS
In our opinion, the accompanying statements of net assets, and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Nations Convertible Securities Fund (formerly, Nations Capital Income Fund),
Nations Balanced Assets Fund, Nations Asset Allocation Fund, Nations Equity
Income Fund, Nations Value Fund, Nations LargeCap Index Fund (formerly, Nations
Equity Index Fund), Nations Marsico Growth & Income Fund, Nations Blue Chip
Fund, Nations Strategic Growth Fund (formerly, Nations Strategic Equity Fund),
Nations Capital Growth Fund, Nations Disciplined Equity Fund, Nations Marsico
Focused Equities Fund, Nations MidCap Growth Fund (formerly, Emerging Growth
Fund) and Nations Small Company Fund (formerly, Nations Small Company Growth
Fund) (portfolios of Nations Fund Trust, Nations Institutional Reserves or
Nations Fund, Inc., hereafter referred to as the "Funds") at March 31, 2000, and
the results of each of their operations, the changes in each of their net assets
and the financial highlights for each of the periods indicated, in conformity
with accounting principles generally accepted in the United States. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Funds' management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at March 31, 2000 by correspondence with the custodian, provide a
reasonable basis for the opinion expressed above. The financial statements of
Nations Small Company Growth Fund, formerly Pilot Small Capitalization Equity
Fund, for the periods ended May 16, 1997 were audited by other independent
accountants whose report dated June 20, 1997 expressed an unqualified opinion on
those statements.
PricewaterhouseCoopers LLP
New York, New York
May 19, 2000
182
<PAGE> 187
NATIONS FUNDS
TAX INFORMATION (UNAUDITED)
For the fiscal year ended March 31, 2000, the amount of long-term capital gains
designated by the Trust and/or the Company were as follows:
<TABLE>
<CAPTION>
FUND TOTAL
--------------------------------------------------------------------------
<S> <C>
Convertible Securities...................................... $ 14,194,184
Asset Allocation............................................ 16,486,173
Equity Income............................................... 9,085,401
Value....................................................... 275,495,107
LargeCap Index.............................................. 8,974,982
Growth & Income............................................. 474,728
Blue Chip................................................... 98,554,615
Strategic Growth............................................ 5,146,636
Capital Growth.............................................. 67,431,515
Disciplined Equity.......................................... 49,731,269
Focused Equities............................................ 2,070,912
MidCap Growth............................................... 18,096,308
Small Company............................................... 12,038,564
</TABLE>
Of the ordinary income (including short-term capital gain) distributions made by
the Trust and the Company during the fiscal year ended March 31, 2000, the
following percentages qualify for the dividend received deduction available to
corporate shareholders:
<TABLE>
<S> <C>
Convertible Securities...................................... 10.17%
Balanced Assets............................................. 47.59%
Asset Allocation............................................ 17.40%
Equity Income............................................... 99.77%
Value....................................................... 100.00%
LargeCap Index.............................................. 90.39%
Growth & Income............................................. 34.20%
Blue Chip................................................... 65.31%
Disciplined Equity.......................................... 55.03%
Small Company............................................... 0.32%
</TABLE>
183
<PAGE> 188
NATIONS MASTER INVESTMENT TRUST
Nations Marsico Growth & Income Master Portfolio, Nations Blue Chip Master
Portfolio and Nations Marsico Focused Equities Master Portfolio Annual Report
MARCH 31, 2000
The following pages should be read in conjunction with Nations Marsico Growth &
Income, Nations Blue Chip and Nations Marsico Focused Equities Funds' Annual
Report.
184
<PAGE> 189
NATIONS MASTER INVESTMENT TRUST
Nations Marsico Growth & Income Master Portfolio
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS -- 87.6%
AUTOMOBILES AND TRUCKS -- 1.5%
117,729 General Motors Corporation............. $ 9,749
-------
BANKING -- 4.8%
317,843 Citigroup Inc. ........................ 18,852
139,808 Fannie Mae............................. 7,890
53,561 Northern Trust Corporation............. 3,619
-------
30,361
-------
BEVERAGES -- 0.9%
91,174 Anheuser-Busch Companies, Inc. ........ 5,676
-------
BROADCASTING -- 0.8%
66,426 UnitedGlobalCom Inc. .................. 4,986
-------
COMMERCIAL SERVICES -- 0.9%
57,682 Omnicom Group Inc. .................... 5,390
-------
COMPUTER RELATED -- 7.6%
236,611 EMC Corporation........................ 29,576
21,580 Lexmark International Group, Inc.,
Class A.............................. 2,282
173,013 Sun Microsystems, Inc. ................ 16,212
-------
48,070
-------
COMPUTER SERVICES -- 0.7%
50,440 Entrust Technologies Inc.++............ 4,291
-------
COMPUTER SOFTWARE -- 6.2%
99,087 Adobe Systems Inc. .................... 11,030
359,877 Oracle Corporation..................... 28,093
-------
39,123
-------
CONSTRUCTION -- 0.2%
67,191 M.D.C. Holdings, Inc. ................. 1,205
-------
COSMETICS AND TOILETRIES -- 0.2%
30,630 Estee Lauder Companies Inc. ........... 1,533
-------
ELECTRICAL EQUIPMENT -- 4.9%
110,389 Sony Corporation, ADR.................. 30,923
-------
ELECTRONICS -- 3.4%
300,000 Flextronics International Ltd. ........ 21,131
-------
FINANCIAL SERVICES -- 2.9%
221,724 Morgan Stanley Dean Witter & Company... 18,084
-------
INTERNET -- 3.3%
267,177 America Online Inc. ................... 17,968
17,011 Commerce One, Inc.++................... 2,539
-------
20,507
-------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C> <C>
MANUFACTURING -- 3.2%
62,123 Corning Inc. .......................... $12,052
51,448 General Electric Company............... 7,984
-------
20,036
-------
MEDIA -- 6.4%
127,641 Clear Channel Communications, Inc.++... 8,815
164,032 Comcast Corporation, Class A Special... 7,115
229,239 Time Warner Inc. ...................... 22,924
22,177 Viacom Inc., Class B................... 1,170
-------
40,024
-------
MEDICAL PRODUCTS AND SUPPLIES -- 5.4%
200,527 Genentech, Inc. ....................... 30,480
70,769 Priority Healthcare Corporation........ 3,556
-------
34,036
-------
NETWORKING EQUIPMENT AND PRODUCTS -- 11.4%
412,373 3Com Corporation++..................... 22,938
451,446 Cisco Systems, Inc. ................... 34,903
55,886 JDS Uniphase Corporation............... 6,738
27,857 Juniper Networks, Inc. ................ 7,342
-------
71,921
-------
PHOTO AND OPTICAL -- 0.4%
23,377 Agilent Technologies Inc++............. 2,431
-------
RESTAURANTS AND LODGING -- 1.2%
173,262 Four Seasons Hotels Inc. .............. 7,808
-------
RETAIL -- GENERAL -- 1.8%
205,660 Wal-Mart Stores, Inc. ................. 11,414
-------
RETAIL -- SPECIALTY -- 3.9%
220,444 Home Depot Inc. ....................... 14,219
119,515 Tiffany & Company...................... 9,994
-------
24,213
-------
SEMICONDUCTORS -- 5.6%
188,748 Applied Materials, Inc. ............... 17,789
11,976 Broadcom Corporation, Class A.......... 2,909
20,999 Motorola, Inc. ........................ 2,990
73,442 Texas Instruments Inc. ................ 11,751
-------
35,439
-------
TELECOMMUNICATIONS -- 6.7%
17,533 Flag Telecom Holdings Limited++........ 397
64,229 General Motors Corporation - Class
H++.................................. 7,997
144,954 QUALCOMM Inc. ......................... 21,643
222,730 Vodafone AirTouch plc, ADR............. 12,375
-------
42,412
-------
UTILITIES -- TELEPHONE -- 3.3%
315,232 Sprint Corporation (PCS Group)......... 20,589
-------
TOTAL COMMON STOCKS
(Cost $394,412)........................ 551,352
-------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
185
<PAGE> 190
NATIONS MASTER INVESTMENT TRUST
Nations Marsico Growth & Income Master Portfolio
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C> <C>
CONVERTIBLE BONDS AND NOTES -- 7.8%
ADVERTISING AND MARKETING SERVICES -- 0.7%
$ 3,777 BEA Systems Inc.,
4.000% 12/15/06(+).................. $ 4,603
-------
COMPUTER RELATED -- 5.4%
4,220 i2 Technologies, Inc.,
5.250% 12/15/06(+).................. 7,564
25,575 Juniper Networks, Inc.,
4.750% 03/15/07..................... 25,383
993 Redback Networks Inc.,
5.000% 04/01/07(+).................. 941
-------
33,888
-------
MEDICAL PRODUCTS AND SUPPLIES -- 0.8%
6,271 Alexion Pharmaceuticals, Inc.,
5.750% 03/15/07(+).................. 4,860
-------
MEDICAL SERVICES -- 0.2%
1,300 Alkermes, Inc.,
3.750% 02/15/07(+).................. 1,092
-------
TELECOMMUNICATIONS -- 0.7%
2,700 Level 3 Communications, Inc.,
6.000% 09/15/09..................... 4,577
-------
TOTAL CONVERTIBLE
BONDS AND NOTES
(Cost $44,836)........................ 49,020
-------
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------
<C> <S> <C> <C>
CONVERTIBLE PREFERRED STOCK -- 0.6%
(Cost $2,743)
UTILITIES -- ELECTRIC -- 0.6%
54,859 AES Trust III......................... 3,703
-------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
(000)
---------
<C> <S> <C> <C>
CORPORATE BONDS AND NOTES -- 0.1%
(Cost $535)
CONSTRUCTION -- 0.1%
$ 550 M.D.C. Holdings, Inc.,
8.375% 02/01/08..................... 462
-------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 3.6%
(Cost $22,593)
FEDERAL HOME LOAN MORTGAGE CORPORATION
(FHLMC) CERTIFICATES -- 3.6%
22,600 Discount note 04/03/00................ 22,589
-------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
-----------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 11.1%
(Cost $70,302)
70,302 Nations Cash Reserves#............... $ 70,302
--------
TOTAL INVESTMENTS
(Cost $535,421*).............. 110.8% 697,428
--------
OTHER ASSETS
AND LIABILITIES (NET)....... (10.8)%
Cash................................. $ 67
Receivable for investment securities
sold............................... 2,366
Dividends receivable................. 85
Interest receivable.................. 246
Collateral on securities loaned...... (70,203)
Investment advisory fee payable...... (393)
Administration fee payable........... (53)
Accrued Trustees'/Directors' fees and
expenses........................... (3)
Accrued expenses and other
liabilities........................ (41)
--------
TOTAL OTHER ASSETS AND
LIABILITIES (NET).................. (67,929)
--------
NET ASSETS.................... 100.0% $629,499
========
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $159,440 on
investment securities was comprised of gross appreciation of $170,600 and
gross depreciation of $11,160 for Federal income tax purposes. At March 31,
2000, the aggregate cost of securities for Federal income tax purposes was
$537,988.
(+) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
++ Non-income producing security.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc. A
portion of this amount represents cash collateral received from securities
lending activity (Note 7). The portion that represents cash collateral is
$70,203.
SEE NOTES TO FINANCIAL STATEMENTS.
186
<PAGE> 191
NATIONS MASTER INVESTMENT TRUST
Nations Blue Chip Master Portfolio
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 97.1%
AEROSPACE AND DEFENSE -- 0.5%
42,800 Boeing Company........................ $ 1,624
63,500 Northrop Grumman Corporation.......... 3,361
--------
4,985
--------
APPAREL AND TEXTILES -- 0.2%
34,500 Liz Claiborne Inc..................... 1,581
--------
AUTOMOBILE PARTS MANUFACTURERS -- 0.0%+
3 Delphi Automotive Systems
Corporation++....................... 0
--------
AUTOMOBILES AND TRUCKS -- 1.3%
127,100 Ford Motor Company.................... 5,839
91,000 General Motors Corporation............ 7,536
--------
13,375
--------
BANKING -- 6.9%
226,800 Chase Manhattan Corporation........... 19,774
443,700 Citigroup Inc. ....................... 26,317
131,800 Fannie Mae............................ 7,438
146,700 Firstar Corporation................... 3,365
274,500 FleetBoston Financial Corporation..... 10,019
42,000 J.P. Morgan & Company Inc. ........... 5,534
--------
72,447
--------
BEVERAGES -- 1.6%
131,900 Anheuser-Busch Companies, Inc. ....... 8,211
62,100 Coca-Cola Company..................... 2,915
176,100 PepsiCo, Inc. ........................ 6,086
--------
17,212
--------
CHEMICALS -- BASIC -- 0.8%
30,200 Dow Chemical Company.................. 3,443
27,000 E.I. duPont de Nemours and Company.... 1,428
67,300 Union Carbide Corporation............. 3,924
--------
8,795
--------
COMMERCIAL SERVICES -- 0.3%
39,200 Omnicom Group Inc. ................... 3,663
--------
COMPUTER RELATED -- 7.4%
64,400 Apple Computer Inc.++................. 8,746
158,200 EMC Corporation....................... 19,775
82,200 Hewlett-Packard Company............... 10,897
40,600 Lexmark International Group, Inc.,
Class A............................. 4,293
37,300 NCR Corporation....................... 1,497
43,200 Network Appliance, Inc. .............. 3,575
67,800 Pitney Bowes, Inc. ................... 3,030
153,200 Solectron Corporation................. 6,138
209,000 Sun Microsystems, Inc. ............... 19,584
--------
77,535
--------
COMPUTER SOFTWARE -- 8.3%
12,300 BroadVision, Inc. .................... 552
73,800 Computer Associates International
Inc. ............................... 4,368
66,300 Electronic Data Systems Corporation... 4,256
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE -- (CONTINUED)
407,400 Microsoft Corporation++++............. $ 43,286
272,600 Oracle Corporation.................... 21,280
6,950 Siebel Systems, Inc. ................. 830
24,700 VERITAS Software Corporation.......... 3,236
50,600 Yahoo! Inc.++......................... 8,672
--------
86,480
--------
CONGLOMERATE -- 2.9%
61,800 Dover Corporation..................... 2,959
99,300 Rockwell International Corporation.... 4,152
298,000 Tyco International Ltd. .............. 14,862
129,900 United Technologies Corporation....... 8,208
--------
30,181
--------
CONSTRUCTION -- 0.2%
84,300 Centex Corporation.................... 2,007
--------
CONTAINERS AND PACKAGING -- 0.3%
55,700 Avery-Dennison Corporation............ 3,401
--------
COSMETICS AND TOILETRIES -- 1.7%
50,000 Avon Products, Inc. .................. 1,453
67,600 Colgate-Palmolive Company............. 3,811
125,600 Kimberly-Clark Corporation............ 7,033
104,100 Procter & Gamble Company.............. 5,856
--------
18,153
--------
DRUGS -- 6.0%
82,200 Amgen Inc. ........................... 5,045
43,500 Biogen, Inc. ......................... 3,040
87,700 Bristol-Myers Squibb Company.......... 5,065
195,800 Merck & Company, Inc. ................ 12,164
118,400 Monsanto Company...................... 6,098
248,900 Pfizer Inc. .......................... 9,100
218,900 Schering-Plough Corporation........... 8,045
145,100 Warner-Lambert Company................ 14,146
--------
62,703
--------
ELECTRIC POWER -- 0.4%
70,400 Duke Energy Corporation............... 3,696
--------
ENERGY -- 0.6%
139,200 Coastal Corporation................... 6,403
--------
FINANCIAL SERVICES -- 2.9%
73,100 Lehman Brothers Holdings Inc. ........ 7,091
211,700 MBNA Corporation...................... 5,398
224,900 Morgan Stanley Dean Witter &
Company............................. 18,343
--------
30,832
--------
FOOD PRODUCERS -- 1.0%
173,300 ConAgra Inc. ......................... 3,141
39,700 Quaker Oats Company................... 2,407
84,500 Ralston Purina Group.................. 2,313
82,700 SYSCO Corporation..................... 2,951
--------
10,812
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
187
<PAGE> 192
NATIONS MASTER INVESTMENT TRUST
Nations Blue Chip Master Portfolio
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
FOREST AND PAPER PRODUCTS -- 0.6%
47,400 Champion International Corporation.... $ 2,524
90,600 Georgia-Pacific Corporation........... 3,584
--------
6,108
--------
HOUSEHOLD PRODUCTS -- 0.1%
35,900 The Clorox Company.................... 1,167
--------
INSURANCE -- 2.5%
49,600 American General Corporation.......... 2,784
20,900 American International Group, Inc. ... 2,289
217,000 AXA Financial, Inc. .................. 7,784
151,100 Hartford Financial Services Group,
Inc. ............................... 7,970
126,500 MGIC Investment Corporation........... 5,519
--------
26,346
--------
INTERNET -- 1.1%
166,300 America Online Inc. .................. 11,184
--------
MACHINERY AND EQUIPMENT -- 0.5%
44,900 Illinois Tool Works, Inc. ............ 2,481
70,800 Parker Hannifin Corporation........... 2,925
--------
5,406
--------
MANUFACTURING -- 3.4%
232,500 General Electric Company(++).......... 36,081
--------
MEDIA -- 3.3%
153,733 CBS Corporation++..................... 8,705
3,500 Comcast Corporation, Class A
Special............................. 152
48,300 MediaOne Group, Inc.++................ 3,912
111,300 Time Warner Inc. ..................... 11,131
23,400 Viacom Inc., Class B.................. 1,234
221,800 Walt Disney Company................... 9,177
--------
34,311
--------
MEDICAL PRODUCTS AND SUPPLIES -- 2.6%
74,200 Allergan, Inc. ....................... 3,710
65,900 Baxter International Inc. ............ 4,131
75,000 Biomet, Inc. ......................... 2,728
78,000 Cardinal Health, Inc. ................ 3,578
138,700 Johnson & Johnson..................... 9,718
32,500 PE Corp-PE Biosystems Group........... 3,136
--------
27,001
--------
MEDICAL SERVICES -- 0.5%
95,700 United Healthcare Corporation......... 5,706
--------
METALS AND MINING -- 0.7%
49,600 Alcoa Inc. ........................... 3,484
66,500 Nucor Corporation..................... 3,325
--------
6,809
--------
NETWORKING EQUIPMENT AND PRODUCTS -- 5.2%
67,600 ADC Telecommunications, Inc. ......... 3,642
9,400 CIENA Corporation++................... 1,186
633,700 Cisco Systems, Inc. .................. 48,992
4,100 Juniper Networks, Inc. ............... 1,081
--------
54,901
--------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
OIL -- DOMESTIC -- 0.5%
135,300 Occidental Petroleum Corporation...... $ 2,807
100,400 USX-Marathon Group Inc. .............. 2,617
--------
5,424
--------
OIL -- INTERNATIONAL -- 3.8%
125,200 Chevron Corporation................... 11,573
172,677 Exxon Mobil Corporation............... 13,436
251,100 Royal Dutch Petroleum Company......... 14,455
--------
39,464
--------
OIL AND GAS -- 0.5%
104,600 Apache Corporation.................... 5,204
--------
OIL FIELD SERVICES & EQUIPMENT -- 0.6%
74,700 ENSCO International Inc. ............. 2,699
45,300 Schlumberger Ltd. .................... 3,465
--------
6,164
--------
PRINTING AND PUBLISHING -- 0.7%
89,300 McGraw-Hill Companies, Inc. .......... 4,063
65,800 New York Times Company, Class A....... 2,825
--------
6,888
--------
RECREATION -- 0.2%
25,500 Harley-Davidson Inc. ................. 2,024
--------
RESTAURANTS AND LODGING -- 0.7%
99,000 Starbucks Corporation++............... 4,437
102,800 Tricon Global Restaurants Inc.++...... 3,193
--------
7,630
--------
RETAIL -- FOOD -- 0.4%
95,400 Safeway, Inc.++....................... 4,317
--------
RETAIL -- GENERAL -- 3.4%
154,400 Federated Department Stores, Inc.++... 6,446
99,700 Sears, Roebuck and Company............ 3,078
25,400 Target Corporation.................... 1,899
426,800 Wal-Mart Stores, Inc.................. 23,687
--------
35,110
--------
RETAIL -- SPECIALTY -- 2.2%
59,100 Best Buy Company, Inc.++.............. 5,083
25,400 CVS Corporation....................... 954
166,950 Home Depot Inc. ...................... 10,767
94,400 Limited Inc. ......................... 3,977
121,500 TJX Companies Inc. ................... 2,696
--------
23,477
--------
SEMICONDUCTORS -- 7.3%
180,000 Applied Materials, Inc. .............. 16,965
201,700 Intel Corporation..................... 26,613
66,100 Motorola, Inc. ....................... 9,411
129,400 Texas Instruments Inc. ............... 20,704
27,400 Xilinx, Inc. ......................... 2,269
--------
75,962
--------
TELECOMMUNICATIONS -- 3.2%
8,600 Brocade Communications Systems,
Inc. ............................... 1,542
6,400 Foundry Networks, Inc. ............... 920
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
188
<PAGE> 193
NATIONS MASTER INVESTMENT TRUST
Nations Blue Chip Master Portfolio
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS -- (CONTINUED)
118,100 Nortel Networks Corporation........... $ 14,880
77,600 QUALCOMM Inc. ........................ 11,587
66,600 Scientific-Atlanta, Inc. ............. 4,225
--------
33,154
--------
TOBACCO -- 0.4%
218,600 Philip Morris Companies Inc. ......... 4,618
--------
TRANSPORTATION -- 0.6%
74,200 Delta Air Lines, Inc. ................ 3,951
68,200 Union Pacific Corporation............. 2,668
--------
6,619
--------
UTILITIES -- ELECTRIC -- 1.2%
81,500 FPL Group Inc. ....................... 3,754
116,900 PECO Energy Company................... 4,311
110,800 Unicom Corporation.................... 4,044
--------
12,109
--------
UTILITIES -- NATURAL GAS -- 0.3%
36,600 Enron Corporation..................... 2,740
--------
UTILITIES -- TELEPHONE -- 7.3%
250,350 AT&T Corporation...................... 14,082
105,642 Bell Atlantic Corporation............. 6,457
343,700 BellSouth Corporation................. 16,154
132,800 GTE Corporation....................... 9,429
391,150 MCI Worldcom, Inc.++.................. 17,725
33,100 Nextel Communications, Inc.++......... 4,907
193,501 SBC Communications Inc. .............. 8,127
--------
76,881
--------
TOTAL COMMON STOCKS
(Cost $707,038)..................... 1,017,066
--------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
(000)
---------
<C> <S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 0.3%
(Cost $2,937)
U.S. TREASURY BILLS -- 0.3%
$ 3,000 Discount note
08/17/00(++)..................... 2,934
----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
-----------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 2.6%
(Cost $27,379)
27,379 Nations Cash Reserves#............. $ 27,379
----------
TOTAL INVESTMENTS
(Cost $737,354*)............ 100.0% 1,047,379
----------
OTHER ASSETS AND LIABILITIES
(NET)..................... 0.0%+
Cash............................... $ 92
Receivable for investment
securities sold.................. 11,918
Dividends receivable............... 875
Interest receivable................ 134
Receivable for variation margin.... 165
Investment advisory fee payable.... (560)
Administration fee payable......... (55)
Payable for investment securities
purchased........................ (12,714)
Accrued Trustees'/Directors' fees
and expenses..................... (5)
Accrued expenses and other
liabilities...................... (126)
----------
TOTAL OTHER ASSETS AND LIABILITIES
(NET)............................ (276)
----------
NET ASSETS.................. 100.0% $1,047,103
==========
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $309,612 on
investment securities was comprised of gross appreciation of $338,784 and
gross depreciation of $29,172 for Federal income tax purposes. At March 31,
2000, the aggregate cost of securities for Federal income tax purposes was
$737,767.
++Non-income producing security.
+ Amount represents less than 0.1%.
(=) Amount represents less than $500.
(++)A portion of the security is segregated as collateral for future contracts.
# Money market mutual fund registered under the Investment Company Act of
1940, as amended, and sub-advised by Banc of America Capital Management,
Inc.
SEE NOTES TO FINANCIAL STATEMENTS.
189
<PAGE> 194
NATIONS MASTER INVESTMENT TRUST
Nations Marisco Focused Equities Master Portfolio
STATEMENT OF NET ASSETS MARCH 31, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 95.5%
BANKING -- 6.3%
668,980 Citigroup Inc. ................... $ 39,679
1,820,670 Fannie Mae........................ 102,754
----------
142,433
----------
COMPUTER RELATED -- 9.7%
1,074,894 EMC Corporation................... 134,361
173,480 Lexmark International Group, Inc.,
Class A......................... 18,346
701,781 Sun Microsystems, Inc............. 65,759
----------
218,466
----------
COMPUTER SERVICES -- 0.7%
183,649 Entrust Technologies Inc.++....... 15,625
----------
COMPUTER SOFTWARE -- 8.1%
529,108 Adobe Systems Inc................. 58,896
1,582,221 Oracle Corporation................ 123,512
----------
182,408
----------
ELECTRICAL EQUIPMENT -- 4.7%
383,246 Sony Corporation, ADR............. 107,357
----------
FINANCIAL SERVICES -- 3.4%
940,891 Morgan Stanley Dean Witter &
Company......................... 76,741
----------
INTERNET -- 2.9%
978,761 America Online Inc................ 65,822
----------
MANUFACTURING -- 6.1%
563,980 Corning Inc....................... 109,412
188,604 General Electric Company.......... 29,269
----------
138,681
----------
MEDIA -- 4.8%
324,765 Clear Channel Communications,
Inc.++.......................... 22,429
874,010 Time Warner Inc................... 87,401
----------
109,830
----------
MEDICAL PRODUCTS AND SUPPLIES -- 8.0%
1,187,174 Genentech, Inc.................... 180,450
----------
NETWORKING EQUIPMENT AND PRODUCTS -- 14.6%
1,482,420 3Com Corporation++................ 82,460
2,315,421 Cisco Systems, Inc................ 179,012
341,765 JDS Uniphase Corporation.......... 41,204
101,023 Juniper Networks, Inc............. 26,626
----------
329,302
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
-----------------------------------------------------------
<C> <S> <C>
RESTAURANTS AND LODGING -- 1.0%
484,107 Four Seasons Hotels Inc........... $ 21,815
----------
RETAIL -- GENERAL -- 3.0%
1,215,285 Wal-Mart Stores, Inc.............. 67,448
----------
RETAIL -- SPECIALTY -- 5.3%
1,125,206 Home Depot Inc.................... 72,576
582,861 Tiffany & Company................. 48,742
----------
121,318
----------
SEMICONDUCTORS -- 7.4%
683,988 Applied Materials, Inc............ 64,466
411,477 Motorola, Inc..................... 58,584
282,609 Texas Instruments Inc............. 45,217
----------
168,267
----------
TELECOMMUNICATIONS -- 6.2%
506,049 QUALCOMM Inc...................... 75,559
1,172,851 Vodafone AirTouch plc, ADR........ 65,167
----------
140,726
----------
UTILITIES -- TELEPHONE -- 3.3%
1,154,010 Sprint Corporation (PCS Group).... 75,371
----------
TOTAL COMMON STOCKS
(Cost $1,654,787)................. 2,162,060
----------
<CAPTION>
PRINCIPAL
(000)
---------
<C> <S> <C>
CONVERTIBLE BONDS AND NOTES -- 1.6%
(Cost $30,459)
TELECOMMUNICATIONS -- 1.6%
$ 30,459 Nextel Communications, Inc.,
5.250% 01/15/10(+).............. 36,284
----------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 4.8%
(Cost $109,164)
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC)
CERTIFICATES -- 4.8%
109,200 Discount note 04/03/00............ 109,146
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
190
<PAGE> 195
NATIONS MASTER INVESTMENT TRUST
Nations Marisco Focused Equities Master Portfolio
STATEMENT OF NET ASSETS (CONTINUED) MARCH 31, 2000
<TABLE>
<CAPTION>
SHARES VALUE
(000) (000)
------------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT COMPANIES -- 10.1%
(Cost $227,806)
227,806 Nations Cash Reserves#............... $ 227,806
----------
TOTAL INVESTMENTS 112.0% 2,535,296
(Cost $2,022,216*)..........
----------
OTHER ASSETS AND LIABILITIES (12.0)%
(NET).......................
Cash................................. $ 526
Receivable for investment securities 6,751
sold...............................
Dividends receivable................. 267
Interest receivable.................. 327
Collateral on securities loaned...... (227,705)
Investment advisory fee payable...... (1,424)
Administration fee payable........... (191)
Payable for investment securities (50,639)
purchased..........................
Accrued Trustees'/Directors' fees and (4)
expenses...........................
Accrued expenses and other (38)
liabilities........................
----------
TOTAL OTHER ASSETS AND LIABILITIES (272,130)
(NET)..............................
----------
NET ASSETS.................... 100.0% $2,263,166
==========
</TABLE>
---------------
* Federal Income Tax Information: Net unrealized appreciation of $507,183 on
investment securities was comprised of gross appreciation of $537,204 and
gross depreciation of $30,021 for Federal income tax purposes. At March 31,
2000, the aggregate cost of securities for Federal income tax purposes was
$2,026,113.
(+) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
++ Non-income producing security.
# Money market mutual fund registered under the Investment Company Act of 1940,
as amended, and sub-advised by Banc of America Capital Management, Inc. A
portion of this amount represents cash collateral received from securities
lending activity (Note 7). The portion that represents cash collateral is
$227,705.
SEE NOTES TO FINANCIAL STATEMENTS.
191
<PAGE> 196
NATIONS MASTER INVESTMENT TRUST
STATEMENTS OF OPERATIONS
For the period ended March 31, 2000
<TABLE>
GROWTH & INCOME FOCUSED EQUITIES
MASTER PORTFOLIO MASTER PORTFOLIO
----------------- BLUE CHIP MASTER PORTFOLIO -----------------
FOR THE PERIOD --------------------------------------- FOR THE PERIOD
OCTOBER 8, 1999 FOR THE PERIOD FOR THE PERIOD OCTOBER 8, 1999
TO MAY 15, 1999 TO MARCH 1, 1999 TO TO
MARCH 31, 2000(a) MARCH 31, 2000 MAY 14, 1999(b) MARCH 31, 2000(c)
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
INVESTMENT INCOME:
Dividends (Net of foreign withholding
taxes of $9, $0, $0 and $9,
respectively).......................... $ 665 $ 8,790 $ 2,312 $ 2,453
Interest................................. 1,057 884 182 3,595
Securities lending income................ 93 -- -- 224
----------------- ----------------- ----------------- -----------------
Total investment income......... 1,815 9,674 2,494 6,272
----------------- ----------------- ----------------- -----------------
EXPENSES:
Investment advisory fee.................. 1,666 5,545 984 6,068
Administration fee....................... 177 429 98 649
Fund accounting fees and expenses........ -- -- 58 --
Custodian fees........................... 16 87 21 57
Legal and audit fees..................... 36 51 -- 33
Directors' fees and expenses............. 7 16 9 8
Interest expense......................... -- 4 -- --
Other.................................... 5 111 37 9
----------------- ----------------- ----------------- -----------------
Total expenses.................. 1,907 6,243 1,207 6,824
Fees reduced by credits allowed by the
custodian.............................. (2) (4) -- (12)
----------------- ----------------- ----------------- -----------------
Net expenses......................... 1,905 6,239 1,207 6,812
----------------- ----------------- ----------------- -----------------
NET INVESTMENT INCOME.................... (90) 3,435 1,287 (540)
----------------- ----------------- ----------------- -----------------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS:
Net realized gain/(loss) from:
Security transactions.................. 10,939 86,353 57,394 32,010
Written options........................ (1,859) -- -- (7,384)
Futures contracts...................... -- 294 -- --
Foreign currency and net other
assets............................... 21 -- -- (91)
----------------- ----------------- ----------------- -----------------
Net realized gain/(loss) on
investments............................ 9,101 86,647 57,394 24,535
Change in unrealized
appreciation/(depreciation) of:
Securities (Note 8).................... 43,475 43,505 10,459 137,004
Futures contracts...................... -- 1,115 -- --
----------------- ----------------- ----------------- -----------------
Net change in unrealized
appreciation/(depreciation) of
investments............................ 43,475 44,620 10,459 137,004
Net realized and unrealized gain/(loss)
on investments......................... 52,576 131,267 67,853 161,539
----------------- ----------------- ----------------- -----------------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.............. $ 52,486 $ 134,702 $ 69,140 $ 160,999
================= ================= ================= =================
</TABLE>
---------------
(a) Growth & Income Master Portfolio commenced operations on October 8, 1999.
(b) Represents financial information for the Pacific Horizon Blue Chip
Portfolio, which was reorganized into Blue Chip Master Portfolio on May 21,
1999.
(c) Focused Equities Master Portfolio commenced operations on October 8, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
192
<PAGE> 197
NATIONS MASTER INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
GROWTH & INCOME
MASTER PORTFOLIO BLUE CHIP MASTER PORTFOLIO
----------------- ------------------------------------------------------
PERIOD ENDED PERIOD ENDED PERIOD ENDED YEAR ENDED
3/31/00(a) 3/31/00 5/14/99(b) 2/28/99(b)
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(IN THOUSANDS)
Net investment income....... $ (90) $ 3,435 $ 1,287 $ 7,024
Net realized gain/(loss) on
investments............... 9,101 86,647 57,394 64,380
Net change in unrealized
appreciation/(depreciation)
of investments............ 43,475 44,620 10,459 72,411
----------------- ----------------- ----------------- -----------------
Net increase/(decrease) in
net assets resulting from
operations................ 52,486 134,702 69,140 143,815
Contributions............... 670,827 37,026 45,223 268,651
Withdrawals................. (93,814) (96,955) (49,779) (223,374)
----------------- ----------------- ----------------- -----------------
Net increase/(decrease) in
net assets................ 629,499 74,773 64,584 189,092
NET ASSETS:
Beginning of period......... -- 972,330 907,746 718,654
----------------- ----------------- ----------------- -----------------
End of period............... $ 629,499 $ 1,047,103 $ 972,330 $ 907,746
================= ================= ================= =================
FOCUSED EQUITIES
MASTER PORTFOLIO
-----------------
PERIOD ENDED
3/31/00(c)
--------------------------------------------------------
<S> <C>
(IN THOUSANDS)
Net investment income....... $ (540)
Net realized gain/(loss) on
investments............... 24,535
Net change in unrealized
appreciation/(depreciation)
of investments............ 137,004
-----------------
Net increase/(decrease) in
net assets resulting from
operations................ 160,999
Contributions............... 2,482,428
Withdrawals................. (380,261)
-----------------
Net increase/(decrease) in
net assets................ 2,263,166
NET ASSETS:
Beginning of period......... --
-----------------
End of period............... $ 2,263,166
=================
</TABLE>
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
WITHOUT WAIVERS
AND/OR EXPENSE
REIMBURSEMENTS
----------------
RATIO OF RATIO OF NET RATIO OF
OPERATING INVESTMENT OPERATING
EXPENSES INCOME/(LOSS) PORTFOLIO EXPENSES TO
TO AVERAGE TO AVERAGE TURNOVER AVERAGE
NET ASSETS NET ASSETS RATE NET ASSETS
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GROWTH & INCOME MASTER PORTFOLIO:
Period ended 3/31/2000(a).................... 0.86%+(d) (0.04)%+ 60% 0.86%+(d)
BLUE CHIP MASTER PORTFOLIO:
Period ended 3/31/2000....................... 0.73%+(d) 0.40%+ 47% 0.73%+(d)
Period ended 5/14/1999(b).................... 0.61+ 0.65+ 19 0.61
Year ended 2/28/1999(b)...................... 0.62 0.85 57 0.62
Year ended 2/28/1998(b)...................... 0.65 1.11 67 1.06
Year ended 2/28/1997(b)...................... 0.62 1.62 91 1.34
Year ended 2/29/1996(b)...................... 0.31 2.16 108 1.57
FOCUSED EQUITIES MASTER PORTFOLIO:
Period ended 3/31/2000(c).................... 0.84%+(d) (0.07)%+ 84% 0.84%+(d)
</TABLE>
---------------
+ Annualized.
(a) Growth & Income Master Portfolio commenced operations on October 8, 1999.
(b) Represents financial information for the Pacific Horizon Blue Chip
Portfolio, which was reorganized into Blue Chip Master Portfolio on May 21,
1999.
(c) Focused Equities Master Portfolio commenced operations on October 8, 1999.
(d) The effect of the custodial expense offset (Note 2) on the operating
expense ratio, with and without waivers and/or expense reimbursements, was
less than 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS.
193
<PAGE> 198
NATIONS MASTER INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
Nations Master Investment Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company. At March 31, 2000, the Trust offered seven separate series
of master portfolios. These financial statements pertain only to the Growth &
Income Master Portfolio, Blue Chip Master Portfolio and Focused Equities Master
Portfolio (each a "Master Portfolio" and collectively, the "Master Portfolios").
Financial statements for the other portfolios of the Trust are presented under
separate cover.
The following shareholders were invested in the Portfolios at March 31, 2000:
<TABLE>
<S> <C>
Growth & Income Master Portfolio:
Nations Marsico Growth & Income Fund... 99.3%
Nations Marsico Growth & Income Fund
(Offshore)........................... 0.7%
Blue Chip Master Portfolio:
Nations Blue Chip Fund................. 95.1%
Nations Blue Chip Fund (Offshore)
(formerly World Horizon U.S. Equity
Fund)................................ 4.9%
Focused Equities Master Portfolio:
Nations Marsico Focused Equities
Fund................................. 99.0%
Nations Marsico Focused Equities Fund
(Offshore)........................... 1.0%
</TABLE>
Growth & Income Master Portfolio and Focused Equities Master Portfolio commenced
operations on October 8, 1999, upon their receipt of certain assets and
liabilities, from their corresponding Feeder Funds, including securities with a
value of $306,916,860 and $1,082,184,889, respectively, and net unrealized
appreciation of $117,981 and $376,076, respectively.
1. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make certain 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 Master Portfolios 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 last sale price or, if no sale occurred on such day, at the
mean of the current bid and asked prices. Certain securities are valued using
broker quotations on the basis of prices provided by pricing services.
Restricted securities, securities for which market quotations are not readily
available, and certain other assets may be valued under procedures adopted by
the Board of Trustees. Short-term investments that mature in 60 days or less are
valued at amortized cost, which approximates current market value.
Futures contracts: The Blue Chip Master Portfolio may invest in futures
contracts. Upon entering into a futures contract, the Master Portfolio 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
Master Portfolio 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 Master Portfolio
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 Master Portfolio's basis in the contract.
Risks of investments in futures contracts include the possible movement of the
securities or indices underlying the contracts, the possibility that there may
not be a liquid secondary market for the 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 trade date. 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.
Expenses: General expenses of the Trust are allocated to the Funds based upon
their relative net assets and other expense allocation methodologies determined
by the nature of the expense. Expenses directly attributable to a Master
Portfolio are charged to such Portfolio.
Federal income taxes: The Master Portfolios are treated as partnerships for
Federal income tax purposes and therefore are not subject to Federal income tax.
Each investor in the Master Portfolios will be taxed on its share of the Master
Portfolio's ordinary income and capital gains.
194
<PAGE> 199
NATIONS MASTER INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS
The Trust has entered into an investment advisory agreement (the "Investment
Advisory Agreement") with BAAI, a wholly-owned subsidiary of Bank of America,
N.A. ("Bank of America"), which in turn is a wholly-owned banking subsidiary of
Bank of America Corporation, a bank holding company organized as a Delaware
corporation, pursuant to which BAAI provides investment advisory services to the
Master Portfolios. Under the terms of the Investment Advisory Agreement, BAAI 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
Portfolio:
<TABLE>
<CAPTION>
ANNUAL
RATE
------
<S> <C>
Growth & Income Master Portfolio.............. 0.75%
Blue Chip Master Portfolio.................... 0.65%
Focused Equities Master Portfolio............. 0.75%
</TABLE>
The Trust has, on behalf of the Growth & Income and Focused Equities Master
Portfolios, entered into a sub-advisory agreement with Marsico Capital
Management, LLC ("Marsico"), pursuant to which Marsico is entitled to receive a
sub-advisory fee from BAAI at the annual rate of 0.45% of each Master
Portfolio's average daily net assets. Marsico Management Holdings, LLC, a
wholly-owned subsidiary of Bank of America, owns 50% of the equity of Marisco.
The Trust has, on behalf of the Blue Chip Master Portfolio, entered into a
sub-advisory agreement with Chicago Equity Partners Corporation ("Chicago
Equity"), a wholly-owned subsidiary of Bank of America, pursuant to which
Chicago Equity is entitled to receive a sub-advisory fee from BAAI at the annual
rate of 0.25% of the Master Portfolio's average daily net assets.
Stephens Inc. ("Stephens") and BAAI serve as co-administrators of the Trust.
Under the co-administration agreements, Stephens and BAAI are currently entitled
to receive a combined fee, computed daily and paid monthly, at the maximum
annual rate of 0.05% of the Blue Chip Master Portfolio's average daily net
assets and 0.10% of the Growth & Income and Focused Equities Master Portfolios'
average daily net assets. Effective January 3, 2000, the combined
co-administration fee payable by the Growth & Income and Focused Equities Master
Portfolios increased by 0.05% of the Master Portfolios' average daily net
assets. The Bank of New York ("BNY") serves as sub-administrator of the Trust
pursuant to an agreement with BAAI. For the period ended March 31, 2000, BAAI
earned $1,329,136 from the Master Portfolios for its co-administration services.
BNY serves as the custodian of the Trust's assets. For the period ended March
31, 2000, expenses of the Master Portfolios were reduced by $18,033 under
expense offset arrangements with BNY. The Master Portfolios 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.
No officer, director or employee of Bank of America or BAAI, or any affiliate
thereof, receives any compensation from the Trust for serving as a Trustee or
Officer of the Trust.
For the year ended March 31, 2000, the Growth & Income Master Portfolio and
Focused Equities Master Portfolio paid commissions of $45,740 and $221,646,
respectively, to certain affiliates of BAAI in connection with the execution of
various portfolio transactions.
The Trust's eligible Trustees 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 Master Portfolios' 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 Nations Fund,
Inc., another registered investment company in the Nation's Funds family. The
expense for the deferred compensation and retirement plans is included in
"Trustees' fees and expenses" in the Statements of operations.
The Master Portfolios have made daily investments of cash balances in Nations
Cash Reserves, a portfolio of Reserves, pursuant to an exemptive order received
from the Securities and Exchange Commission. For the period ended March 31,
2000, the Funds earned $861,457 in the aggregate from such investments, which is
included in interest income.
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, excluding
long-term U.S. government
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NATIONS MASTER INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
securities and short-term investments, for the period ended March 31, 2000 were
as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
(000) (000)
------------------------
<S> <C> <C>
Growth & Income Master
Portfolio................. $ 454,907 $ 270,771
Blue Chip Master
Portfolio................. 451,457 525,346
Focused Equities Master
Portfolio................. 2,143,584 1,405,068
</TABLE>
There were no purchases and sales of long-term U.S. government securities for
the period ended March 31, 2000.
4. FUTURES CONTRACTS
At March 31, 2000, the following Portfolio had futures contracts open:
<TABLE>
<CAPTION>
VALUE OF
CONTRACT WHEN MARKET VALUE UNREALIZED
NUMBER OF OPENED OF CONTRACTS APPRECIATION
DESCRIPTION CONTRACTS (000) (000) (000)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BLUE CHIP MASTER
PORTFOLIO:
S&P 500 Futures (long
position) expiring
June 2000(a)........ 60 $21,418 $22,730 $1,312
</TABLE>
---------------
(a) Securities have been segregated as collateral for the Blue Chip Mater
Portfolio for open futures contracts.
5. WRITTEN OPTIONS
Written Options for the Growth & Income and Focused Equities Portfolios for the
year ended March 31, 2000 aggregated the following:
<TABLE>
<CAPTION>
GROWTH & INCOME FOCUSED EQUITIES
-------------------- ---------------------
NUMBER OF PREMIUM NUMBER OF PREMIUM
SUMMARY OF WRITTEN OPTIONS CONTRACTS (000) CONTRACTS (000)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Outstanding at
March 31, 1999............................................ 0 $ 0 0 $ 0
Contracts opened.......................................... 763 3,162 2,906 12,350
Contracts closed.......................................... (763) (3,162) (2,906) (12,350)
---- ------- ------- --------
Outstanding at
March 31, 2000............................................ 0 $ 0 0 $ 0
==== ======= ======= ========
</TABLE>
6. LINES OF CREDIT
The Trust participates with other Funds in an uncommitted line of credit
provided by BNY under a line of credit agreement (the "Agreement"). 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 Master
Portfolio maintains a ratio of no less than 4 to 1 net assets (not including
amounts borrowed pursuant to the Agreement) to the aggregate amount of
indebtedness pursuant to the Agreement.
At March 31, 2000, there were no loans outstanding under this Agreement. For the
period ended March 31, 2000, borrowings by the Master Portfolios under the
Agreement were as follows:
<TABLE>
<CAPTION>
AVERAGE
AMOUNT AVERAGE
OUTSTANDING INTEREST
PORTFOLIO (000) RATE
------------------------------------------------------------
<S> <C> <C>
Blue Chip Master Portfolio......... $63 5.69%
</TABLE>
The average amount outstanding was calculated based on daily balances in the
period.
The Trust also participates with other Nations Funds in a committed line of
credit provided by BNY. Interest on borrowings under the committed line is
payable at a specified Federal Funds rate plus 0.50% on an annualized basis. A
facility fee of 0.09% per annum of the total amounts available under the line of
credit is charged, of which each Master Portfolio has agreed to pay its pro rata
share. This fee is paid quarterly in arrears. Each participating Master
Portfolio is required to maintain an
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NATIONS MASTER INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
asset coverage ratio of at least 300% under the terms of the arrangement. For
the period ended March 31, 2000, there were no borrowings by the Master
Portfolios under the committed line of credit.
7. SECURITIES LENDING
Under an agreement with BNY, the Master Portfolios 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 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 Master Portfolios. Generally, in the
event of counterparty default, the Master Portfolio has the right to use the
collateral to offset losses incurred. There would be a potential loss to the
Master Portfolio in the event the Master Portfolio is delayed or prevented from
exercising its right to dispose of the collateral. The Master Portfolio bears
the risk of loss with respect to the investment of collateral.
At March 31, 2000, the following Master Portfolios had securities on loan:
<TABLE>
<CAPTION>
MARKET VALUE MARKET
OF LOANED VALUE
SECURITIES OF COLLATERAL
PORTFOLIO (000) (000)
---------------------------------------------------------------
<S> <C> <C>
Growth & Income Master
Portfolio...................... $ 70,147 $ 70,203
Focused Equities Master
Portfolio...................... 226,937 227,705
</TABLE>
8. REORGANIZATION OF MASTER INVESTMENT TRUST, SERIES I
On May 21, 1999, the Blue Chip Master Portfolio, a newly established portfolio,
acquired the assets and liabilities of the Pacific Horizon Blue Chip Master
Portfolio ("Acquired Portfolio"), a series of Master Investment Trust, Series I,
pursuant to a plan of reorganization approved by its interest holders. The
acquisition was accomplished by a tax-free exchange of interests of Blue Chip
Master Portfolio in an amount equal to the outstanding interests of the Acquired
Portfolio. The financial statements of the Blue Chip Master Portfolio reflect
the historical financial results of the Acquired Portfolio prior to the
reorganization. Additionally, the fiscal year end of the Blue Chip Master
Portfolio for financial reporting purposes was changed to coincide with that of
the Trust.
9. SUBSEQUENT EVENT
On April 30, 2000, Chicago Equity Partners Corporation will be merged into a new
entity, Chicago Equity Partners LLC. Bank of America will hold no ownership
interest in the new entity, which will continue to serve as investment
sub-adviser to the Asset Allocation Fund and Blue Chip Master Portfolio after
that date. The investment sub-advisory agreements with the new entity, whose
terms are substantially the same as those of the current agreements with Chicago
Equity Partners LLC, are subject to approval by shareholders of Asset Allocation
Fund and investors of Blue Chip Master Portfolio.
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NATIONS MASTER INVESTMENT TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE INVESTORS AND TRUSTEES OF NATIONS MASTER INVESTMENT TRUST
In our opinion, the accompanying statements of net assets, and the related
statements of operations and of changes in net assets and the supplementary data
present fairly, in all material respects, the financial position of Nations
Marsico Growth & Income Master Portfolio, Nations Blue Chip Master Portfolio and
Nations Marsico Focused Equities Master Portfolio (portfolios of Nations Master
Investment Trust, hereafter referred to as the "Portfolios") at March 31, 2000,
and the results of each of their operations, the changes in each of their net
assets and the supplementary data for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States.
These financial statements and supplementary data (hereafter referred to as
"financial statements") are the responsibility of the Portfolios' management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at March 31, 2000 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
May 19, 2000
198
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P.O. Box 34602
Charlotte, NC 28254-4602
Toll free 1.800.321.7854
NATIONS FUNDS
DOMSTKAR (3/00)
