[A logo for the Funds representing a Galaxy appears at the top of the page.]
[A photo of two people talking near pillars appears on the cover.]
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS REPORT
- --------------------------------------------------------------------------------
MONEY MARKET FUND . GOVERNMENT FUND
TAX-EXEMPT FUND . U.S. TREASURY FUND
- ---------------------
ANNUAL
REPORT
FOR THE YEAR ENDED
OCTOBER 31, 1995
- ---------------------
<PAGE>
- --------------------
Chairman's
Message
- --------------------
Dear Shareholder:
Enclosed is your performance report for the Galaxy Money Market Funds covering
the 12 months ended October 31, 1995. In the Market Overview and Portfolio
Reviews that follow, you'll learn about the various factors that influenced the
direction of money market yields and the ways Fleet Investment Advisors Inc.
structured investments in the Galaxy Money Market Funds to maximize returns in
this environment. In reading our outlook for the months ahead, you'll see where
money market yields may be headed and how that may affect the Funds' future
investment strategies.
At the end of 1994, concern loomed that rapid economic growth would push
inflation higher, causing interest rates and money market investment yields to
rise. However, towards the end of the first quarter of 1995, economic growth
slowed resulting in declines in money market instrument yields and interest
rates. By making the most of these changes, the Galaxy Money Market Funds
continued to provide returns for their shareholders that were competitive with
returns for other funds having similar objectives.
As the period ended, money market yields were about the same as last
October. A sharp decline in interest rates, however, delivered price gains for
stocks and bonds that were exceptionally strong by historical standards. In the
past year, stocks returned approximately 26%, as measured by the Standard &
Poor's 500 Index, which is the 10th best 12-month return in the last 50 years.
The return for bonds, measured by the Lehman Brothers Long-Term
Government/Corporate Index, was just over 26% for the period, which is the third
best 12-month return in 45 years.
The gains for stocks and bonds more than compensated many investors who
maintained their portfolios through the weak markets of 1994. Although past
results do not guarantee future performance, this experience underscores the
importance of a long-term, diversified approach toward investing that includes
stocks and bonds as well as money market securities. While the investment risks
of stocks and bonds are greater than money market securities, their historical
returns have also been significantly greater.
After reading this report you may have additional questions about the
performance of your money market investments, or wish to discuss other parts of
your portfolio. You can review these subjects with an Investment Specialist, at
any time, by calling 800-628-0414.
Sincerely,
/s/ Dwight E. Vicks, Jr.
Dwight E. Vicks, Jr.
Chairman of the Board of Trustees
- -----------------------------------
Mutual Funds:
. are not bank deposits
. are not FDIC insured
. are not obligations of Fleet Bank
. are not guaranteed by Fleet Bank
. are subject to investment risk
including possible loss of
principal amount invested
- -----------------------------------
<PAGE>
- --------------------
Market Overview
- --------------------
MONEY MARKET OVERVIEW
By Fleet Investment Advisors Inc.
The last year brought dynamic changes for money market funds. Although inflation
was moderate, investors became concerned at the end of 1994 that rapid economic
growth would push inflation higher. As a result, short-term interest rates rose
sharply for several months. Later in the first quarter of 1995, as growth seemed
to slow, short-term rates began to fall. By investing in longer-term securities
in this environment, the Galaxy Money Market Funds produced solid returns for
the 12 months ended October 31, 1995.
The fourth quarter of 1994 saw the economy growing rapidly with the gross
domestic product ("GDP"), a measure of goods and services, rising at an
annualized rate of 5.1%. Concerned that this growth would boost inflation, the
Federal Reserve Board (the "Fed") increased its short-term Fed Funds rate from
4.75% to 6% between November 1994 and February 1995.
Treasury bills, certificates of deposit and other money market yields rose
swiftly in response. Eventually, higher interest rates began to rein in economic
growth. Money market yields improved more slowly and then peaked in February
1995 when three-month Treasury securities were yielding 5.97%.
As GDP growth fell to 1.3% in 1995's second quarter, investors began to
believe the Fed would soon lower interest rates to prevent a recession. This
anticipated rate reduction by the Fed caused money market yields to fall so
quickly that yields for instruments maturing in three months to one year were
nearly the same as the yields for shorter-maturity issues.
On July 6, the Fed cut the Fed Funds rate to 5.75%. For the next few
months, mixed economic news kept money market yields relatively low and
maintained the small yield spread between short- and longer-term money market
securities. Investors struggled to believe that the weak second quarter GDP
figure of 1.3% was an aberration when the Commerce Department announced that the
GDP had advanced at an expectedly strong rate of 4.2% in 1995's third quarter.
Fed authorities said another rate cut was unlikely. After a slight increase in
short-term rates, Three-month Treasury bills had bounced back up to 5.32% by the
end of October 1995. Long-term bond yields also spiked on inflationary concerns,
yielding more than short-term issues once again.
CHOOSING MATURITIES
Throughout the period we sought to maximize yields for the Galaxy Money Market
Funds by adjusting maturities as interest rates fluctuated. As yields rose early
in the period, we focused on issues with shorter maturities so we could invest
more quickly in higher-yielding instruments. Many of these issues were overnight
repurchase agreements ("repos"), in which sellers of securities agree to buy the
securities back at their original prices plus interest. Although repos mature
overnight, their yields were close to those of longer-term securities.
"Eventually higher interest rates began to rein in economic growth. Money market
yields improved more slowly and then peaked in February 1995."
1
<PAGE>
- --------------------
Market Overview
- --------------------
PERFORMANCE AT-A-GLANCE As of October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RETAIL TRUST
SHARES SHARES
------ ------
<S> <C> <C>
GALAXY MONEY MARKET FUND
7-day average yield.................................. 4.94% 5.19%
30-day average yield................................. 4.91% 5.17%
GALAXY GOVERNMENT FUND
7-day average yield.................................. 4.94% 5.21%
30-day average yield................................. 4.92% 5.19%
GALAXY TAX-EXEMPT FUND
7-day average yield.................................. 3.03% 3.18%
30-day average yield................................. 2.95% 3.10%
GALAXY U.S. TREASURY FUND
7-day average yield.................................. 4.74% 4.90%
30-day average yield................................. 4.74% 4.91%
</TABLE>
Investments in the Galaxy money market funds are neither insured nor guaranteed
by the U.S. Government, and there can be no assurance that the Funds will be
able to maintain a stable net asset value of $1.00 per share. Yields are
historical and will vary with market performance. Past performance is no
guarantee of future results. Trust shares were first issued on November 1, 1994.
Retail shares are currently charged a shareholder servicing fee of .10% of
average daily net assets (See Note 3 in the Notes to Financial Statements).
- --------------------------------------------------------------------------------
"Once economic growth picks up and interest rates begin to bottom, we'll look to
shorten maturities once again to enjoy the full benefit of future increases in
yields."
As interest rates fell, we reduced investments in repos and purchased
issues with longer maturities to lock in the higher yields offered by these
securities. Because there was little or no yield advantage in purchasing issues
with the longest maturities, we kept the average maturity of the Funds'
investments near 30 days.
We further improved the Funds' yields by avoiding the purchase of issues
that matured on dates when investors thought the Fed would change interest
rates. This was because stronger demand for such issues boosted their prices and
significantly diminished their yields.
MARKET OUTLOOK
Although the economy accelerated in 1995's third quarter, many signs of weakness
remain. Fleet Investment Advisors Inc. expects modest growth rates for the GDP
of 2% in the fourth quarter of 1995 and 2.5% in 1996. This should keep inflation
near 2.7% and allow interest rates to drift lower in the year to come.
Because of anticipated lower interest rates and the attractiveness of
longer-term yields, we've started to lengthen average maturities for investments
in the Galaxy Money Market Funds. We've also added investments in commercial
paper, whose yields have improved against the yields for government securities.
Once economic growth picks up and interest rates begin to bottom, we'll look to
shorten maturities once again to enjoy the full benefit of future increases in
yields.
2
<PAGE>
- --------------------
Portfolio Reviews
- --------------------
Galaxy Money Market Fund
[A photo of Money Market Funds manager Pat Galuska appears here.]
By Pat Galuska
Portfolio Manager
Careful choice of investment maturities helped the Galaxy Money Market Fund
achieve solid returns for the 12 months ended October 31, 1995. During this
period, the Fund's Retail and Trust shares provided net total returns of 5.23%
and 5.43%, respectively, after deduction of fund expenses. For the same period,
money market funds tracked by Donoghue's Money Fund Average/Taxable returned
5.42%
GALAXY MONEY
MARKET FUND
Distribution of Total Net
Assets as of October 31, 1995
[A pie chart listing Money Market Fund investments by type appears here.]
Commercial Paper 56%
U.S. Gov't. & Agency Obligations 36%
Repurchase Agreements 11%
- -3.00% net other assets and liabilities
ADJUSTING TO CHANGES IN YIELDS
While short-term interest rates were rising, we cut the average maturity of the
Fund's holdings from 43 days to 20 days to invest more quickly in higher-
yielding securities. Towards the end of the first quarter of 1995, as interest
rates fell, and the yields on short- and longer-term issues grew farther apart,
we lengthened the average maturity once again. This provided the Fund with
attractive yields for as long as possible once interest rates began to decline.
At the end of October 1995, the Fund had an average maturity of 39 days.
We further enhanced the Fund's yield during the 12-month period by
staggering investment maturity dates and by avoiding the rollover of securities
on dates when Wall Street believed the Fed would change interest rates. Because
most money managers expected new investment opportunities when rates changed,
there was a strong demand for securities that matured on those days. Since
strong demand brought weaker yields, however, investment opportunities were
actually better once demand had dropped.
Although the Fund remained heavily invested in commercial paper and issues
of U.S. government agencies for most of the period, we increased the weighting
in Treasury bills to 10% early in the period as yields in that sector grew more
attractive. Later, as stronger supplies of new issues improved the yields for
commercial paper, we put greater emphasis on these issues while curbing
investments in Treasuries.
GALAXY MONEY
MARKET FUND
7-Day Average Yield
[A line chart comparing the month end yields for the Money Market Fund's retail
shares and trust shares and the Donoghue's Money Market Funds All Taxable
Average appears here:]
<TABLE>
<CAPTION>
Galaxy-Retail Galaxy-Institutional Donoghue's
<S> <C> <C> <C>
10/31/94 4.49 4.49 4.4
11/30/94 4.62 4.69 4.84
12/31/94 4.98 5.13 5.12
1/31/95 5.3 5.47 5.23
2/28/95 5.35 5.51 5.49
3/31/95 5.39 5.6 5.53
4/30/95 5.46 5.67 5.51
5/31/95 5.32 5.52 5.51
6/30/95 5.28 5.47 5.46
7/31/95 5.13 5.32 5.32
8/31/95 5.01 5.22 5.25
9/30/95 4.99 5.25 5.21
10/31/95 4.94 5.19 5.22
</TABLE>
* Trust shares were first issued on November 1, 1994.
** Donoghue's Money Fund Average/Taxable reflects the average current investment
rate paid by 649 money market funds.
3
<PAGE>
- --------------------
Portfolio Reviews
- --------------------
GALAXY GOVERNMENT
FUND
[A pie chart listing Government Fund investments by type appears here:]
U.S. Gov't. Agency Obligations 90%
Repurchase Agreements 13%
LOOKING AHEAD
If the economy weakens in coming months, as we expect, short-term interest rates
could still edge lower. For this reason, we may continue to lengthen the Fund's
average maturity further and look for other ways to enhance its yield.
Pat Galuska has managed the Galaxy Money Market Fund since September 1994.
GALAXY GOVERNMENT
FUND
7-Day Average Yield
[A line chart comparing the month end yields for the Government Fund's retail
shares and trust shares and the Donoghue's Government Funds All Taxable Average
appears here:]
<TABLE>
<CAPTION>
Galaxy-Retail Galaxy-Institutional Donoghue's
<S> <C> <C> <C>
10/31/94 4.54 4.54 4.21
11/30/94 4.59 4.73 4.67
12/31/94 5.03 5.16 4.9
1/31/95 5.31 5.44 4.99
2/28/95 5.41 5.53 5.3
3/31/95 5.29 5.49 5.35
4/30/95 5.3 5.48 5.32
5/31/95 5.29 5.48 5.35
6/30/95 5.27 5.46 5.3
7/31/95 5.11 5.29 5.16
8/31/95 4.98 5.21 5.08
9/30/95 4.98 5.26 5.05
10/31/95 4.94 5.21 5.06
</TABLE>
* Trust shares were first issued on November 1, 1994.
** The Donoghue's Money Fund Average/Government reflects the average current
investment rate paid by 201 money market funds with government securities
portfolios.
GALAXY GOVERNMENT FUND
By Pat Galuska
Portfolio Manager
In the last year, money market investors watched closely for signs that the Fed
would make changes in interest rates. Many expected special investment
opportunities when those changes occurred. So as consensus grew about the timing
of the changes, demand increased for securities that matured on those dates.
This strengthened the prices of such securities, but lowered their yields.
By choosing investments that matured a week after investors expected a
change in interest rates, the Galaxy Government Fund maximized its yield and
delivered strong returns. For the 12 months ended October 31, 1995, the Fund's
Retail and Trust shares had total returns of 5.20% and 5.39%, respectively. By
comparison, funds tracked by Donoghue's Government Money Fund Average/Government
had an average return of 5.23%.
OTHER STRATEGIES
In the first part of 1995, as short-term rates were peaking, there was also
strong demand for the higher yields of U.S. government agency Galaxy Government
Fund Distribution of Total Net Assets as of October 31, 1995 securities. As
demand raised the prices on these securities, their yields became less
attractive compared to direct obligations of the U.S. Government, such as
Treasury bills. As a result, we increased the Fund's Treasury holdings from 5%
of the portfolio to 15% in the early months of the period.
We also improved the Fund's yield by adjusting the average maturity of its
investments as interest rates fluctuated. While rates were rising, we kept the
average maturity relatively short to invest more quickly in higher-yielding
securities. Once interest rates fell towards the later part of the first quarter
of 1995, and there was greater difference between the yields for short- and
longer-term issues, we lengthened the average maturity to lock in the higher
yields. As the period ended, the Fund had an average maturity of 45 days.
4
<PAGE>
- --------------------
Portfolio Reviews
- --------------------
GALAXY TAX-EXEMPT
FUND
Distribution of Total Net
Assets as of October 31, 1995
[A pie chart listing Tax Exempt Fund investments by region appears here:]
North Central 12%
East 21%
Pacific 7%
South 57%
Mountain 3%
GOING FORWARD
We believe the Fund's average maturity is well-positioned for the months to
come. If the economy weakens further and short-term interest rates continue to
fall, however, we may further increase the Fund's investments in longer-maturity
issues.
Pat Galuska has managed the Galaxy Government Fund since September 1994.
GALAXY TAX-EXEMPT FUND
By Pat Galuska
Portfolio Manager
In the past year, the tax-exempt money market experienced significant changes in
supply and demand. By making the most of these changes, the Galaxy Tax-Exempt
Fund produced attractive returns. For the 12 months ended October 31, 1995, the
Fund's Retail and Trust shares had total returns of 3.16% and 3.29%,
respectively. That compares with an average return of 3.35% for money market
funds tracked by Donoghue's Money Fund Average/Tax-Free.
GALAXY TAX-EXEMPT
FUND
7-Day Average Yield
[A line chart comparing the month end yields for the Tax-Exempt Fund's retail
shares and trust shares and the Donoghue's All Tax Free Funds All Taxable
Average appears here:]
<TABLE>
<CAPTION>
Galaxy-Retail Galaxy-Institutional Donoghue's
<S> <C> <C> <C>
Oct 31, 94 2.76 2.76 2.83
Nov 30, 94 2.77 2.88 3.1
Dec 31, 94 3.22 3.31 3.78
Jan 31, 95 3.3 3.4 3.14
Feb 28, 95 3.41 3.51 3.48
Mar 31, 95 3.43 3.57 3.45
Apr 30, 95 3.55 3.7 3.68
May 31, 95 3.45 3.6 3.61
Jun 30, 95 3.35 3.5 3.59
Jul 31, 95 3.02 3.17 3.19
Aug 31, 95 2.93 3.08 3.21
Sep 30, 95 3.05 3.2 3.41
Oct 31, 95 3.03 3.18 3.32
</TABLE>
* Trust shares were first issued on November 1, 1994.
** Donoghue's Money Fund Average/Tax-Free reflects the current investment rate
paid by 351 money market funds with tax-free portfolios.
TARGETING REVENUE ISSUES
For most of the period, there was strong demand for tax-exempt money market
securities and limited supplies of new issues. This was especially true in the
second and third quarters of 1995, when talk of tax reform drove investors from
long-term tax-exempt issues into shorter-term securities.
These factors put upward pressure on the prices of tax-exempt instruments,
and downward pressure on their yields. The effect was less pronounced for
revenue obligations, however. That's because there were greater supplies of
revenue issues, which pay interest from the proceeds of projects they fund, than
there were of general obligation securities, which pay interest from state and
local taxes. Given this, we enhanced the Fund's yield by investing heavily in
revenue instruments from states with especially strong supplies.
We further improved the Fund's yield by adjusting the average maturity of
its investments. Early in the period, as short-term rates were rising, we
reduced the average maturity to invest in higher-yielding securities more
quickly. Later, as rates began to fall, we increased the Fund's average maturity
to lock in the
5
<PAGE>
- --------------------
Portfolio Reviews
- --------------------
higher yields. After reducing the Fund's average maturity from 52 days to 37
days between October 1994 and April 1995, we extended the average maturity
slightly to 41 days by the end of October 1995.
NEW OPPORTUNITIES
We may extend the Fund's average maturity further in coming months if short-term
rates fall lower and supplies of new issues increase. We may also add
investments in tax-exempt commercial paper with longer maturities, if we find
yields in this sector that are especially attractive.
Pat Galuska has managed the Galaxy Tax-Exempt Fund since the Fund began in June
of 1988.
GALAXY U.S. TREASURY FUND
By Pat Galuska
Portfolio Manager
By making the most of higher money market yields as interest rates rose, and
maximizing yields as rates fell, the Galaxy U.S. Treasury Fund produced solid
returns for the 12 months ended October 31, 1995. During that time, the Fund's
Retail and Trust shares had total returns of 4.99% and 5.18%, respectively. That
compares to 5.25% for Donoghue's Money Fund Average/U.S. Government and
Agencies.
ADJUSTING MATURITIES
As the period began, short-term interest rates were rising sharply. To make
it easier to invest in ever-increasing yields, we reduced the average maturity
of the Fund's investments from 36 days to 20 days. As interest rates started to
fall during the first quarter of 1995, and the spread between yields on
GALAXY U.S. TREASURY FUND
7-Day Average Yield
[A line chart comparing the month end yields for the Tax-Exempt Fund's retail
shares and trust shares and the Donoghue's All Tax Free Funds All Taxable
Average appears here:]
<TABLE>
<CAPTION>
Galaxy-Retail Galaxy-Institutional Donoghue's
<S> <C> <C> <C>
Oct 31, 94 2.76 2.76 2.83
Nov 30, 94 2.77 2.88 3.1
Dec 31, 94 3.22 3.31 3.78
Jan 31, 95 3.3 3.4 3.14
Feb 28, 95 3.41 3.51 3.48
Mar 31, 95 3.43 3.57 3.45
Apr 30, 95 3.55 3.7 3.68
May 31, 95 3.45 3.6 3.61
Jun 30, 95 3.35 3.5 3.59
Jul 31, 95 3.02 3.17 3.19
Aug 31, 95 2.93 3.08 3.21
</TABLE>
* Trust shares were first issued on November 1, 1994.
** The Donoghue's Money Fund Average/U.S. Government & Agencies reflects the
current investment rate paid by 97 money market funds with U.S. Government &
Agencies portfolios.
6
<PAGE>
- --------------------
Portfolio Reviews
- --------------------
GALAXY U.S. TREASURY
FUND
Distribution of Total Net
Assets as of October 31, 1995
[PIE CHART APPEAR HERE]
U.S. Treasury Bills 69%
Federal Farm Credit Bank 25%
Federal Home Loan Bank 10%
- -4.00% net other assets and liabilities
short- and longer-term issues widened, we lengthened the average maturity once
again. This allowed the Fund to enjoy the higher yields that were then available
for a longer amount of time. By the end of the period, the Fund had an average
maturity of 43 days.
During the period we also shifted the Fund's mix of securities to correlate
with the changes in interest rates. Once it was clear interest rates would fall,
there was greater demand for the higher yields of securities issued by U.S.
government agencies. This put upward pressure on the securities' prices and
downward pressure on their yields. As the yields on agency issues became less
attractive, we invested more heavily in U.S. Treasury bills. This increased the
Fund's weighting in U.S. Treasuries from 67% to 69% during the period.
Throughout this time we continued to stagger the dates on which the Fund's
investments matured. This allowed us to react more quickly as interest rates
changed.
FUTURE STRATEGIES
If the economy weakens further and interest rates edge lower, we will probably
continue to focus on issues with longer maturities. Once rates bottom and appear
set to rise, we would emphasize shorter-term issues again to increase the chance
to invest in higher yields. If the yields on government agency issues become
more attractive, we may also increase the Fund's investments there.
Pat Galuska has managed the Galaxy U.S. Treasury Fund since September 1994.
- --------------------------------------------------------------------------------
Investment returns and principal values will vary with market conditions so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. Past performance is no guarantee of future results. Total return
figures in this report include changes in share price, and reinvestment of
dividends and capital gains distributions, if any.
7
<PAGE>
- --------------------
Shareholder
Services
- --------------------
AUTOMATIC INVESTMENT PROGRAM
The Golden Rule of investing is "pay yourself first." That is easy to do with
Galaxy's Automatic Investment Program. For as little as $50 per month deducted
directly from your checking, statement savings, NOW or bank money market
account, you can consistently and conveniently add to your Galaxy investment.
When you establish an Automatic Investment Program, the $2,500 initial
investment requirement for Galaxy is waived. Of course, such a program does not
assure a profit and does not protect against loss in declining markets.
DIVERSIFICATION
A fundamental investment practice is "diversification." A well-balanced asset
allocation plan may help to control your risk while pursuing your goals. Many
mutual funds offer a low-cost way to diversify your investments while you
benefit from professional management. Galaxy's comprehensive array of investment
choices can be used in combination to match the needs of nearly everyone.
EXCHANGE PRIVILEGES
As your investment needs change, you can conveniently exchange your shares in
one fund for shares in another fund.
INFORMATION
Service also means giving you the practical information you need, in language
you can understand, to make smart investment decisions. The quarterly magazine,
Galaxy Observer, brings news, strategies and simple, straight-forward
explanations of investment basics and terminology. Timely, comprehensive mutual
fund account statements offer status reports on your individual account. If you
have a Fleet One or a Fleet Private Banking Account, your Galaxy Fund
information can appear on your regular bank account statement.
INVESTMENT SPECIALISTS
In many Fleet branch offices you can visit one-on-one with an Investment
Specialist* whose main concern is that you select the investments that match
your individual needs. This service is at no cost to you.
24-HOUR ACCESS TO REGISTERED REPRESENTATIVES
24 hours a day, seven days a week, 365 days a year, we are ready and available
to help. Our toll-free telephone lines offer round-the-clock access to Fund
information and service. Call 1-800-628-0414 for information on initial
purchases and current performance.
CUSTOMER SERVICE
Quality customer service is only a phone call away. Call 1-800-628-0413 between
9 a.m. and 5 p.m. to arrange bank wires, or to make telephone exchanges and
redemptions.
- --------------------------------------------------------------------------------
Certain shareholder services may not be available for Trust Share investors.
Please consult your Fund Prospectus.
* Investment Specialists are registered representatives of FIS Securities, Inc.,
member NASD, or 440 Financial Distributors, Inc., member NASD and SIPC.
"A well-balanced asset allocation plan may help to control your risk while
pursuing your goals."
8
<PAGE>
- --------------------
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
COMMERCIAL PAPER (A) - 55.89%
FINANCIAL SERVICES - 28.73%
$ 15,000,000 A I Credit Corp.
5.73%, 01/10/96.............................................................. $ 14,835,208
25,000,000 Associates Corp.
5.81%, 11/06/95.............................................................. 24,980,104
30,000,000 Exxon Asset Management
5.77%, 11/13/95.............................................................. 29,943,100
25,000,000 Ford Motor Credit Corp.
5.81%, 11/06/95.............................................................. 24,980,104
20,000,000 General Electric Capital Corp.
5.80%, 11/07/95.............................................................. 19,980,933
25,000,000 Metlife Funding, Inc.
5.73%, 11/14/95.............................................................. 24,948,993
35,000,000 Morgan Stanley Group, Inc.
5.79%, 01/12/96.............................................................. 34,600,300
10,000,000 Pitney Bowes Credit Corp.
5.76%, 01/17/96.............................................................. 9,878,511
35,000,000 State Street Bank and Trust
5.87%, 01/25/96.............................................................. 35,000,000
24,025,000 USAA Capital Corp.
5.78%, 11/16/95.............................................................. 23,967,941
20,000,000 USAA Capital Corp.
5.75%, 01/26/96.............................................................. 19,729,100
---------------
262,844,294
---------------
CONSUMER STAPLES - 10.03%
13,000,000 Anheuser-Busch Cos., Inc.
5.78%, 11/09/95.............................................................. 12,983,533
22,000,000 Hershey Foods Corp.
5.78%, 11/17/95.............................................................. 21,944,267
12,000,000 Pfizer, Inc.
5.80%, 11/03/95.............................................................. 11,996,187
35,000,000 Procter & Gamble Co.
5.71%, 11/15/95.............................................................. 34,923,369
10,000,000 Procter & Gamble Co.
5.74%, 01/19/96.............................................................. 9,875,795
---------------
91,723,151
---------------
CONSUMER CYCLICALS - 4.60%
20,000,000 Toys `R' Us
5.77%, 11/21/95.............................................................. 19,936,778
11,500,000 McGraw Hill, Inc.
5.76%, 01/30/96.............................................................. 11,336,700
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
- --------------------
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
CONSUMER CYCLICALS (CONTINUED)
$ 10,800,000 Wal-Mart Stores, Inc.
5.78%, 11/07/95.............................................................. $ 10,789,740
---------------
42,063,218
---------------
TELECOMMUNICATIONS - 4.11%
18,000,000 American Telephone & Telegraph Corp.
5.78%, 01/05/96.............................................................. 17,814,750
20,000,000 American Telephone & Telegraph Corp.
5.78%, 01/12/96.............................................................. 19,772,000
---------------
37,586,750
---------------
BASIC MATERIALS - 3.53%
20,000,000 Minnesota Mining & Manufacturing Co.
5.71%, 11/03/95.............................................................. 19,993,744
12,345,000 Minnesota Mining & Manufacturing Co.
5.73%, 12/13/95.............................................................. 12,263,626
---------------
32,257,370
---------------
TECHNOLOGY - 2.71%
25,097,000 Hewlett Packard Co.
5.68%, 01/05/96.............................................................. 24,843,241
---------------
ENERGY - 2.18%
20,000,000 Shell Oil Co.
5.76%, 11/17/95.............................................................. 19,949,511
---------------
TOTAL COMMERCIAL PAPER....................................................... 511,267,535
(Cost $511,267,535) ---------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS (A) - 35.70%
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 17.45%
55,000,000 5.72%, 11/15/95.............................................................. 55,000,000
33,495,000 5.68%, 11/16/95.............................................................. 33,416,862
25,000,000 6.72%, 02/28/96.............................................................. 25,076,291
21,000,000 6.86%, 02/28/96.............................................................. 21,070,994
25,000,000 5.66%, 03/15/96.............................................................. 25,001,449
---------------
159,565,596
---------------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
- --------------------
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
FEDERAL FARM CREDIT BANK - 13.66%
$ 50,000,000 5.73%, 11/01/95.............................................................. $ 50,000,000
50,000,000 5.70%, 12/01/95.............................................................. 50,000,000
25,000,000 5.66%, 02/01/96.............................................................. 25,000,000
---------------
125,000,000
---------------
FEDERAL HOME LOAN BANK - 2.74%
25,000,000 6.85%, 02/28/96.............................................................. 25,083,882
---------------
U.S. TREASURY BILL - 1.85%
17,000,000 5.41%, 11/24/95.............................................................. 16,941,024
---------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS................................. 326,590,502
(Cost $326,590,502) ---------------
REPURCHASE AGREEMENTS - 11.03%
100,000,000 Bear Stearns Securities Corp.
5.90%, 11/01/95, Dated 10/31/95
Repurchase Price $100,016,389
(Collateralized by U.S. Treasury Notes 6.13% to 6.50%, Due 1996 to 1997;
Total Par $100,740,000; Market Value $102,142,300)........................... 100,000,000
928,566 HSBC Securities
5.95%, 11/01/95, Dated 10/31/95
Repurchase Price $928,719
(Collateralized by U.S. Treasury Bill, Due 1996;
Total Par $1,000,000; Market Value $942,800)................................. 928,566
---------------
TOTAL REPURCHASE AGREEMENTS.................................................. 100,928,566
(Cost $100,928,566) ---------------
TOTAL INVESTMENTS - 102.62%.................................................................... 938,786,603
(Cost $938,786,603)** ---------------
NET OTHER ASSETS AND LIABILITIES - (2.62)%..................................................... (23,970,556)
---------------
NET ASSETS - 100.00%........................................................................... $ 914,816,047
===============
</TABLE>
- --------------------------------------------------------------------------------
** Aggregate cost for Federal tax purposes.
(A) Annualized yields at time of purchase
See Notes to Financial Statements.
11
<PAGE>
- --------------------
GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS (A) - 90.27%
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 47.20%
$ 40,000,000 5.66%, 11/03/95.............................................................. $ 39,987,600
35,000,000 5.65%, 11/09/95.............................................................. 34,956,678
55,000,000 5.72%, 11/15/95.............................................................. 55,000,000
50,000,000 5.68%, 11/16/95.............................................................. 49,883,281
40,325,000 5.63%, 11/27/95.............................................................. 40,163,364
48,685,000 5.65%, 11/29/95.............................................................. 48,473,843
35,000,000 5.65%, 01/03/96.............................................................. 34,658,225
35,000,000 5.68%, 01/05/96.............................................................. 34,646,111
35,000,000 5.65%, 01/08/96.............................................................. 34,631,761
25,000,000 5.66%, 01/19/96.............................................................. 24,693,875
25,000,000 5.60%, 02/27/96.............................................................. 24,547,667
25,000,000 6.72%, 02/28/96.............................................................. 25,076,291
25,000,000 5.66%, 03/15/96.............................................................. 25,001,449
----------------
471,720,145
----------------
FEDERAL HOME LOAN BANK - 19.25%
23,585,000 5.71%, 11/07/95.............................................................. 23,562,869
60,000,000 5.60%, 11/27/95.............................................................. 59,760,583
40,000,000 5.63%, 01/17/96.............................................................. 39,525,167
40,000,000 5.64%, 01/24/96.............................................................. 39,481,067
30,000,000 6.85%, 02/28/96.............................................................. 30,101,039
---------------
192,430,725
----------------
FEDERAL FARM CREDIT BANK - 16.80%
37,000,000 5.73%, 11/01/95.............................................................. 37,000,000
22,000,000 5.70%, 11/06/95.............................................................. 21,982,828
50,000,000 5.70%, 12/01/95.............................................................. 50,000,000
25,000,000 5.66%, 02/01/96.............................................................. 25,000,000
13,000,000 7.11%, 02/01/96.............................................................. 13,041,328
20,800,000 6.76%, 02/28/96.............................................................. 20,864,683
----------------
167,888,839
----------------
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
- --------------------
GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
U.S. TREASURY BILLS - 4.02%
$ 10,501,000 5.41%, 11/24/95.............................................................. 10,464,570
10,000,000 5.32%, 12/14/95.............................................................. 9,937,292
20,000,000 5.34%, 01/04/96.............................................................. 19,812,622
----------------
40,214,484
----------------
FEDERAL HOME LOAN MORTGAGE CORP. - 3.00%
30,000,000 5.71%, 11/13/95.............................................................. 29,943,700
----------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS................................. 902,197,893
(Cost $902,197,893) ----------------
REPURCHASE AGREEMENTS - 12.28%
100,000,000 Bear Stearns Securities Corp.
5.90%, 11/01/95, Dated 10/31/95
Repurchase Price $100,016,389
(Collaterized by U.S. Treasury Notes 5.75% to 6.50%, Due 1997;
Total Par $100,885,000; Market Value $102,167,744)........................... 100,000,000
22,797,650 HSBC Securities
5.95%, 11/01/95, Dated 10/31/95
Repurchase Price $22,801,418
(Collaterized by U.S. Treasury Note 6.88%, Due 1997;
Total Par $22,800,000; Market Value $23,438,400)............................. 22,797,650
----------------
TOTAL REPURCHASE AGREEMENTS.................................................. 122,797,650
(Cost $122,797,650) ----------------
TOTAL INVESTMENTS - 102.55%.................................................................... 1,024,995,543
(Cost $1,024,995,543)** ----------------
NET OTHER ASSETS AND LIABILITIES - (2.55)%..................................................... (25,521,209)
----------------
NET ASSETS - 100.00%........................................................................... $ 999,474,334
================
</TABLE>
- --------------------------------------------------------------------------------
** Aggregate cost for Federal tax purposes.
(A) Annualized yields at time of purchase
See Notes to Financial Statements.
13
<PAGE>
- --------------------
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
MUNICIPAL SECURITIES - 99.73%
ALABAMA - 0.33%
$ 1,000,000 Stevenson Industrial Development Board
Environmental Improvement, Mead Corp. Project
3.90%, 11/01/16 (A)
LOC: Credit Suisse........................................................... $ 1,000,000
------------
ARIZONA - 2.40%
1,500,000 Special Fund of Industrial Commission
Tax Exempt Certificates of Participation
3.70%, 11/20/95
Insured: FGIC................................................................ 1,500,000
1,200,000 Special Fund of Industrial Commission
Certificates of Participation
3.60%, 01/16/96
Insured: FGIC................................................................ 1,200,000
1,000,000 Mesa County Development Corp.
3.65%, 11/15/95
LOC: Union Bank of Switzerland............................................... 1,000,000
3,700,000 Mesa County Development Corp.
3.70%, 12/08/95
LOC: Union Bank of Switzerland............................................... 3,700,000
------------
7,400,000
------------
COLORADO - 0.97%
3,000,000 Platte River Power Authority
3.60%, 12/04/95.............................................................. 3,000,000
------------
CONNECTICUT - 2.27%
2,000,000 Connecticut State Development Authority, PCR
Western Massachusetts Electric Co., Series A
3.80%, 09/01/28 (A)
LOC: Union Bank of Switzerland............................................... 2,000,000
5,000,000 Connecticut State Special Assessment
Unemployment Compensation, Series B
3.95%, 11/01/01 (A)
LOC: Mitsubishi Bank Ltd..................................................... 5,000,000
------------
7,000,000
------------
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
- --------------------
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
DELAWARE - 3.01%
$ 4,750,000 Delaware State Economic Development Authority, IDC
W.L. Gore & Associates Barkdale
3.50%, 12/05/95
LOC: Morgan Guaranty......................................................... $ 4,750,000
4,500,000 Wilmington Hospital Revenue
Franciscan Health System, Series A
3.90%, 07/01/11 (A)
LOC: Societe Generale........................................................ 4,500,000
------------
9,250,000
------------
FLORIDA - 7.02%
4,000,000 Jacksonville
3.70%, 11/15/95
LOC: Credit Suisse........................................................... 4,000,000
5,500,000 Jacksonville
3.60%, 12/06/95
LOC: Morgan Guaranty......................................................... 5,500,000
5,000,000 Jacksonville
3.65%, 12/07/95
LOC: Morgan Guaranty......................................................... 5,000,000
2,000,000 Orange County Health Facilities Authority
3.50%, 11/10/95
Insured: MBIA................................................................ 2,000,000
5,100,000 Orange County Health Facilities Authority
3.60%, 11/29/95.............................................................. 5,100,000
------------
21,600,000
------------
GEORGIA - 6.50%
2,300,000 Burke County Development Authority, PCR
3.60%, 01/16/96
LOC: Credit Suisse........................................................... 2,300,000
4,900,000 Burke County Development Authority, PCR
3.50%, 01/22/96
LOC: Credit Suisse........................................................... 4,900,000
5,100,000 Burke County Development Authority, PCR
Georgia Power Co., Vogtle Plant, Series 5
3.85%, 07/01/24 (A).......................................................... 5,100,000
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
- --------------------
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
GEORGIA (CONTINUED)
$ 2,000,000 Fulco Hospital Authority, RAN
3.50%, 11/10/95
LOC: Trust Co. Bank of Atlanta............................................... $ 2,000,000
2,700,000 Fulco Hospital Authority, RAN
3.80%, 01/08/96
LOC: Trust Co. Bank of Atlanta............................................... 2,700,000
1,000,000 Fulco Hospital Authority, RAN
3.75%, 01/09/96
LOC: Trust Co. Bank of Atlanta............................................... 1,000,000
2,000,000 Georgia Municipal Electric Authority
Project One, Sub Bond, Series 1994D
3.75%, 12/12/95
LOC: Wachovia Bank........................................................... 2,000,000
------------
20,000,000
------------
ILLINOIS - 3.57%
2,350,000 Illinois Health Facilities Authority
3.65%, 11/01/95
Insured: MBIA................................................................ 2,350,000
1,000,000 Illinois Health Facilities Authority
3.65%, 12/05/95
Insured: MBIA................................................................ 1,000,000
5,300,000 Illinois Health Facilities Authority
3.80%, 12/08/95
LOC: Morgan Guaranty......................................................... 5,300,000
2,335,000 Illinois Health Facilities Authority
3.75%, 01/19/96
Insured: MBIA................................................................ 2,335,000
------------
10,985,000
------------
KANSAS - 0.33%
1,000,000 Burlington, PCR
3.70%, 11/20/95
LOC: Deutsche Bank........................................................... 1,000,000
------------
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
- --------------------
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
LOUISIANA - 11.59%
$ 1,800,000 Louisiana Public Facilities Authority, SHCSR
3.65%, 11/02/95
LOC: Toronto Dominion........................................................ $ 1,800,000
2,000,000 Louisiana Public Facilities Authority, SHCSR
3.80%, 11/06/95
LOC: Toronto Dominion........................................................ 2,000,000
3,300,000 Louisiana Public Facilities Authority, SHCSR
3.55%, 11/08/95
LOC: Swiss Bank.............................................................. 3,300,000
1,500,000 Louisiana Public Facilities Authority, SHCSR
3.60%, 11/13/95
LOC: Toronto Dominion........................................................ 1,500,000
5,000,000 Louisiana Public Facilities Authority
3.70%, 11/28/95
LOC: Credit Suisse........................................................... 5,000,000
2,000,000 Louisiana Public Facilities Authority, SHCSR
3.80%, 01/09/96
LOC: Toronto Dominion........................................................ 2,000,000
5,400,000 Louisiana Public Facilities Authority, SHCSR
3.80%, 01/10/96
LOC: Toronto Dominion........................................................ 5,400,000
1,900,000 Louisiana Public Facilities Authority, SHCSR
3.70%, 01/12/96
LOC: Toronto Dominion........................................................ 1,900,000
1,500,000 Louisiana Public Facilities Authority, SHCSR
3.75%, 01/16/96
LOC: Toronto Dominion........................................................ 1,500,000
2,900,000 Louisiana Public Facilities Authority, SHCSR
3.75%, 01/23/96
LOC: Toronto Dominion........................................................ 2,900,000
2,280,000 Louisiana Public Facilities Authority, IDC
Kenner Hotel Ltd
4.10%, 12/01/15 (A)
LOC: Swiss Bank.............................................................. 2,280,000
500,000 Louisiana State Recovery District, TRAN
3.90%, 07/01/97 (A)
Insured: FGIC................................................................ 500,000
5,600,000 Louisiana State Recovery District, TRAN
3.90%, 07/01/98 (A)
Insured: MBIA................................................................ 5,600,000
------------
35,680,000
------------
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
- --------------------
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
MAINE - 1.28%
$ 1,500,000 Cumberland County, GO, TAN
5.25%, 12/29/95.............................................................. $ 1,503,187
2,450,000 Scarborough, GO, TAN
3.90%, 06/28/96.............................................................. 2,450,000
------------
3,953,187
------------
MASSACHUSETTS - 2.60%
6,500,000 Massachusetts State, Series B, GO
3.70%, 12/01/97 (A)
LOC: National Westminster.................................................... 6,500,000
1,490,000 Medford, GO, BAN
3.94%, 05/15/96.............................................................. 1,491,428
------------
7,991,428
------------
MICHIGAN - 2.40%
1,400,000 Cornell Township Economic Development Corp, IDC
3.60%, 11/03/95
LOC: Credit Suisse........................................................... 1,400,000
2,000,000 Cornell Township Economic Development Corp., EIR
Mead-Escana Paper Co.
3.80%, 11/01/16 (A)
LOC: Swiss Bank.............................................................. 2,000,000
3,500,000 Delta County Economic Development Corp., EIR
3.75%, 01/05/96
LOC: Swiss Bank.............................................................. 3,500,000
500,000 Delta County Economic Development Corp., EIR
Mead-Escanaba Paper Co., Series C
4.00%, 12/01/23 (A)
LOC: Bank of Nova Scotia..................................................... 500,000
------------
7,400,000
------------
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
- --------------------
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
MINNESOTA - 5.58%
$ 8,400,000 Rochester Health Care Facilities
3.70%, 11/20/95
LOC: Credit Suisse........................................................... $ 8,400,000
2,700,000 Rochester Health Care Facilities
3.80%, 01/24/96
LOC: Credit Suisse........................................................... 2,700,000
1,835,000 Rochester Health Care Facilities
3.80%, 01/25/96
LOC: Credit Suisse........................................................... 1,835,000
850,000 Rochester Health Care Facilities
3.80%, 02/05/96
LOC: Credit Suisse........................................................... 850,000
2,300,000 Rochester Health Care Facilities
3.80%, 02/05/96
LOC: Credit Suisse........................................................... 2,300,000
1,100,000 Rochester Health Care Facilities
3.75%, 02/07/96
LOC: Credit Suisse........................................................... 1,100,000
------------
17,185,000
------------
MISSOURI - 3.01%
1,800,000 Missouri State Environmental Improvement & Energy Resource Authority, PCR
3.65%, 11/02/95
LOC: Union Bank of Switzerland............................................... 1,800,000
3,300,000 Missouri State Environmental Improvement & Energy Resource Authority, PCR
3.65%, 11/07/95
LOC: Union Bank of Switzerland............................................... 3,300,000
1,000,000 Missouri State Environmental Improvement & Energy Resource Authority, PCR
3.60%, 12/05/95
LOC: Union Bank of Switzerland............................................... 1,000,000
1,000,000 Missouri State Environmental Improvement & Energy Resource Authority, PCR
3.75%, 01/05/96
LOC: Union Bank of Switzerland............................................... 1,000,000
2,150,000 Missouri State Environmental Improvement & Energy Resource Authority, PCR
3.75%, 01/16/96
LOC: Union Bank of Switzerland............................................... 2,150,000
------------
9,250,000
------------
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
- --------------------
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
NEW HAMPSHIRE - 2.46%
$ 2,000,000 Belknap County, TAN
3.98%, 12/27/95.............................................................. $ 2,000,702
1,475,000 Durham, GO, TAN
4.29%, 12/29/95.............................................................. 1,475,340
1,000,000 Durham, GO, TAN
4.34%, 12/29/95.............................................................. 1,000,501
1,000,000 Exeter, GO, TAN
4.19%, 12/29/95.............................................................. 1,000,340
1,100,000 Rockingham County, TAN
5.50%, 12/29/95.............................................................. 1,102,537
1,000,000 Strafford County, TAN
3.99%, 12/28/95.............................................................. 1,000,599
------------
7,580,019
------------
NEW YORK - 3.54%
2,038,000 Byron Bergen Central School District, GO, BAN
3.64%, 12/21/95.............................................................. 2,038,370
1,500,000 New York City, Series B, GO
4.00%, 08/15/03 (A)
Insured: MBIA................................................................ 1,500,000
2,600,000 New York City Municipal Water Finance Authority
Water & Sewer System, Series C
4.00%, 06/15/23 (A)
Insured: FGIC................................................................ 2,600,000
2,000,000 New York State Energy Research & Development Authority, PCR
Orange & Rockland Project, Series A
3.65%, 10/01/14 (A)
Insured: FGIC, LOC: Societe Generale NY...................................... 2,000,000
1,300,000 Tonawanda, GO, BAN
4.34%, 05/09/96.............................................................. 1,302,942
1,442,000 Woodbury, GO, BAN
4.00%, 06/20/96.............................................................. 1,443,384
------------
10,884,696
------------
NORTH CAROLINA - 4.31%
5,700,000 North Carolina Eastern Municipal Power Agency
3.60%, 12/04/95
LOC: Morgan Guaranty......................................................... 5,700,000
4,750,000 North Carolina Eastern Municipal Power Agency
3.55%, 01/18/96
LOC: Morgan Guaranty......................................................... 4,750,000
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
- --------------------
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
NORTH CAROLINA (CONTINUED)
$ 2,800,000 North Carolina Eastern Municipal Power Agency
3.75%, 02/07/96
LOC: Morgan Guaranty......................................................... $ 2,800,000
------------
13,250,000
------------
OHIO - 0.39%
1,200,000 Ohio State Water Development Authority
Environmental Mead Co, Series B
3.80%, 11/01/15 (A)
LOC: Swiss Bank NY........................................................... 1,200,000
------------
OREGON - 2.76%
2,500,000 Port Portland, Reynold Metals, PCR
3.90%, 12/01/09 (A)
LOC: Bank of Nova Scotia..................................................... 2,500,000
3,800,000 Umatilla County Hospital Facilities Authority
Franciscan Health System, Series A
3.90%, 12/01/24 (A)
LOC: Toronto Dominion Bank................................................... 3,800,000
2,200,000 Umatilla County Hospital Facilities Authority
Franciscan Health System, Series B
3.90%, 12/01/24 (A)
LOC: Toronto Dominion Bank................................................... 2,200,000
------------
8,500,000
------------
PENNSYLVANIA - 4.32%
1,600,000 Delaware County Industrial Development Authority, PCR
3.65%, 11/03/95
Insured: FGIC................................................................ 1,600,000
1,200,000 Delaware County Industrial Development Authority, PCR
3.55%, 11/09/95.............................................................. 1,200,000
2,000,000 Delaware County Industrial Development Authority, PCR
3.50%, 11/10/95
Insured: FGIC................................................................ 2,000,000
1,000,000 Delaware County Industrial Development Authority, PCR
3.60%, 11/13/95
Insured: FGIC................................................................ 1,000,000
2,000,000 Delaware County Industrial Development Authority, PCR
3.65%, 01/12/96
Insured: FGIC................................................................ 2,000,000
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
- --------------------
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
PENNSYLVANIA (CONTINUED)
$ 1,000,000 Delaware County Industrial Development Authority, PCR
3.75%, 01/17/96
Insured: FGIC................................................................ $ 1,000,000
4,500,000 Delaware County Industrial Development Authority
Airport Facilities, UTD Parcel Service Project
3.80%, 12/01/15 (A).......................................................... 4,500,000
------------
13,300,000
------------
RHODE ISLAND - 0.98%
2,000,000 Cumberland, GO, BAN
4.25%, 03/07/96.............................................................. 2,003,361
1,000,000 Rhode Island Housing & Mortgage Finance Corp.
Homeownership Opportunity, Series 18-A
3.85%, 06/27/96
Insured: FGIC................................................................ 1,000,000
------------
3,003,361
------------
SOUTH CAROLINA - 7.71%
2,900,000 Charleston County Industrial Revenue
Massey Coal Terminal Corp.
3.95%, 01/01/07 (A)
LOC: Morgan Guaranty Trust................................................... 2,900,000
2,410,000 Spartanburg County, Series B-2, BAN
4.15%, 07/01/96.............................................................. 2,413,881
1,600,000 York County, PCR
3.65%, 11/01/95
LOC: Duke Power.............................................................. 1,600,000
2,000,000 York County, PCR
3.55%, 11/09/95
LOC: Duke Power.............................................................. 2,000,000
2,650,000 York County, PCR
3.65%, 11/21/95
LOC: Duke Power.............................................................. 2,650,000
2,650,000 York County, PCR
3.60%, 11/22/95
LOC: Duke Power.............................................................. 2,650,000
2,500,000 York County, PCR
3.80%, 01/08/96
LOC: Duke Power.............................................................. 2,500,000
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
- --------------------
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
SOUTH CAROLINA (CONTINUED)
$ 4,000,000 York County, PCR
3.75%, 01/17/96
LOC: Duke Power.............................................................. $ 4,000,000
3,000,000 York County, PCR
3.75%, 01/23/96
LOC: Toronto Dominion........................................................ 3,000,000
------------
23,713,881
------------
TEXAS - 13.14%
1,000,000 Harris County Health Facilities Development Corp., SHCSR
3.60%, 11/13/95
LOC: Toronto Dominion........................................................ 1,000,000
4,800,000 Harris County Health Facilities Development Corp.
3.70%, 11/27/95
LOC: Credit Suisse........................................................... 4,800,000
2,250,000 Harris County Health Facilities Development Corp.
Hospital Revenue
3.60%, 11/29/95
LOC: Toronto Dominion........................................................ 2,250,000
200,000 Lower Colorado River Authority
3.70%, 11/06/95.............................................................. 200,000
3,100,000 Lower Colorado River Authority
3.65%, 11/30/95.............................................................. 3,100,000
2,000,000 Lower Colorado River Authority, Series C
3.65%, 11/30/95.............................................................. 2,000,000
2,000,000 Lower Neches Valley Authority, PCR
Chevron USA, Inc. Project
3.75%, 02/15/17 (A).......................................................... 2,000,000
500,000 North Central Texas Health Facilities Development Corp.
Hospital Revenue, Presbyterian Medical Center,
3.90%, 12/01/15 (A)
Insured: MBIA................................................................ 500,000
3,000,000 Nueces River Industrial Development Authority, PCR
San Miguel Electric Coop
3.80%, 12/01/95
LOC: National Rural.......................................................... 3,000,000
1,000,000 San Antonio Electric & Gas System, Series A
3.80%, 01/22/96
LOC: Toronto Dominion........................................................ 1,000,000
4,000,000 Texas A & M University Fund, Series B
3.80%, 11/06/95
LOC: Morgan Guaranty......................................................... 4,000,000
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
- --------------------
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
TEXAS (CONTINUED)
$ 2,300,000 Texas A & M University Fund, Series B
3.75%, 01/09/96
LOC: Morgan Guaranty......................................................... $ 2,300,000
3,200,000 Texas A & M University Fund, Series B
3.75%, 01/16/96.............................................................. 3,200,000
5,000,000 Texas A & M University Fund, Series B
3.70%, 01/18/96
LOC: Morgan Guaranty......................................................... 5,000,000
3,000,000 Texas State
3.75%, 12/07/95.............................................................. 3,000,000
3,100,000 Texas State
3.75%, 01/11/96.............................................................. 3,100,000
------------
40,450,000
------------
VIRGINIA - 3.54%
3,000,000 Peninsula Ports Authority
Coal Terminal, Dominion Terminal Project, Series A
3.60%, 11/08/95
LOC: National Westminster.................................................... 3,000,000
3,900,000 Peninsula Ports Authority
Coal Terminal, Dominion Terminal Project, Series C
3.80%, 07/01/16 (A)
LOC: National Westminster.................................................... 3,900,000
4,000,000 Virginia State Housing Authority
Commonwealth Mortgage, Series D, Sub-series D
3.55%, 01/01/19.............................................................. 4,000,000
------------
10,900,000
------------
WASHINGTON - 1.95%
6,000,000 Seattle Municipal Light & Power
3.45%, 11/07/95
LOC: Morgan Guaranty......................................................... 6,000,000
------------
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
- --------------------
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
WYOMING - 1.77%
$ 1,850,000 Lincoln County, PCR
3.55%, 01/18/96
LOC: Union Bank of Switzerland............................................... $ 1,850,000
700,000 Lincoln County, PCR
Exxon Project, Series A
4.00%, 11/01/14 (A).......................................................... 700,000
900,000 Lincoln County, PCR
Exxon Project, Series B
4.00%, 11/01/14 (A).......................................................... 900,000
100,000 Platte County, PCR
Tri-State G&T, Series A
4.10%, 07/01/14 (A)
LOC: Societe Generale........................................................ 100,000
1,900,000 Uinta County, PCR
Chevron USA, Inc. Project
3.90%, 12/01/22 (A).......................................................... 1,900,000
------------
5,450,000
------------
TOTAL INVESTMENTS - 99.73%..................................................................... 306,926,572
(Cost $306,926,572)** ------------
NET OTHER ASSETS AND LIABILITIES - 0.27%....................................................... 835,401
------------
NET ASSETS - 100.00%........................................................................... $307,761,973
============
</TABLE>
- --------------------------------------------------------------------------------
** Aggregate cost for Federal tax purposes is $326,926,648.
(A) Variable rate demand notes are payable upon not more than one, seven or
thirty business days notice. Put bonds and notes have demand features
which mature within one year. The interest rate shown reflects the rate in
effect.
BAN Bond Anticipation Notes
EIR Environmental Improvement Revenue
FGIC Financial Guaranty Insurance Corp.
GO General Obligation
IDC Industrial Development Corp.
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
SHCRS School Health Care System Revenue
RAN Revenue Anticipation Notes
TAN Tax Anticipation Notes
TRAN Tax & Revenue Anticipation Notes
See Notes to Financial Statements.
25
<PAGE>
- --------------------
U.S. TREASURY FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 104.22%
U.S. TREASURY BILLS (A) - 69.09%
$ 29,566,000 5.49%, 11/02/95.............................................................. $ 29,561,557
50,000,000 5.41%, 11/09/95.............................................................. 49,940,750
31,661,000 5.39%, 11/16/95.............................................................. 31,592,599
50,000,000 5.41%, 11/24/95.............................................................. 49,829,496
50,000,000 5.35%, 12/07/95.............................................................. 49,736,250
48,500,000 5.32%, 12/14/95.............................................................. 48,196,969
50,000,000 5.31%, 12/21/95.............................................................. 49,636,389
25,000,000 5.34%, 01/04/96.............................................................. 24,765,778
50,000,000 5.32%, 01/18/96.............................................................. 49,431,033
25,000,000 5.35%, 01/25/96.............................................................. 24,690,694
-------------
407,381,515
-------------
FEDERAL FARM CREDIT BANK - 25.44%
50,000,000 5.73%, 11/01/95.............................................................. 50,000,000
25,000,000 5.70%, 12/01/95.............................................................. 25,000,000
50,000,000 5.65%, 01/02/96.............................................................. 50,000,000
25,000,000 5.66%, 02/01/96.............................................................. 25,000,000
-------------
150,000,000
-------------
FEDERAL HOME LOAN BANK (A) - 9.69%
2,070,000 5.90%, 11/01/95.............................................................. 2,070,000
25,000,000 5.69%, 11/06/95.............................................................. 24,980,521
5,000,000 7.13%, 02/09/96.............................................................. 5,017,919
25,000,000 6.85%, 02/28/96.............................................................. 25,083,256
-------------
57,151,696
-------------
TOTAL INVESTMENTS - 104.22%.................................................................... 614,533,211
(Cost $614,533,211)** -------------
NET OTHER ASSETS AND LIABILITIES - (4.22)%..................................................... (24,876,040)
-------------
NET ASSETS - 100.00%........................................................................... $ 589,657,171
=============
</TABLE>
- --------------------------------------------------------------------------------
** Aggregate cost for Federal tax purposes.
(A) Annualized yields at time of purchase.
See Notes to Financial Statements.
26
<PAGE>
- --------------------
STATEMENTS OF ASSETS AND LIABILITIES
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
MONEY MARKET GOVERNMENT TAX-EXEMPT U.S. TREASURY
FUND FUND FUND FUND
------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost............................... $ 837,858,037 $ 902,197,893 $ 306,926,572 $ 614,533,211
Repurchase agreements............................. 100,928,566 122,797,650 -- --
------------- -------------- ------------- -------------
Total investments at value...................... 938,786,603 1,024,995,543 306,926,572 614,533,211
Cash................................................ 225,158 76,545 -- 132,393
Interest receivable................................. 2,942,966 3,020,048 1,733,554 1,570,149
Deferred organizational expense (Note 2)............ -- -- -- 893
------------- -------------- ------------- -------------
Total Assets.................................... 941,954,727 1,028,092,136 308,660,126 616,236,646
------------- -------------- ------------- -------------
LIABILITIES:
Dividends payable................................... 1,459,438 2,973,560 478,016 1,110,111
Payable for investments purchased................... 25,000,000 25,000,000 -- 25,000,000
Advisory fee payable (Note 3)....................... 304,814 330,703 102,869 198,134
Payable to Fleet and affiliates (Note 3)............ 140,095 63,369 19,876 53,556
Payable to FDISG (Note 3)........................... 114,129 103,263 31,406 125,456
Trustees' fees and expenses payable (Note 3)........ 7,123 7,615 4,089 5,554
Payable to Custodian................................ -- -- 206,060 --
Accrued expenses and other payables................. 113,081 139,292 55,837 86,664
------------- -------------- ------------- -------------
Total Liabilities............................... 27,138,680 28,617,802 898,153 26,579,475
------------- -------------- ------------- -------------
NET ASSETS............................................ $ 914,816,047 $ 999,474,334 $ 307,761,973 $ 589,657,171
============= ============== ============= =============
NET ASSETS consist of
Par value (Note 6).................................. $ 915,889 $ 1,000,440 $ 307,906 $ 590,248
Paid-in capital in excess of par value.............. 914,971,158 999,439,537 307,598,414 589,658,296
Undistributed (overdistributed)
net investment income............................. 233,872 (45,378) (20,198) 316,530
Accumulated net realized gain (loss) on
investments sold.................................. (1,304,872) (920,265) (124,149) (907,903)
------------- -------------- ------------- -------------
TOTAL NET ASSETS...................................... $ 914,816,047 $ 999,474,334 $ 307,761,973 $ 589,657,171
============= ============== ============= =============
Retail Shares:
Net Assets.......................................... $ 580,761,700 $ 320,795,006 $ 127,055,737 $ 318,620,842
Shares of beneficial interest outstanding........... 581,386,298 320,993,755 127,109,480 318,913,711
NET ASSET VALUE,
offering and redemption price per share........... $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============== ============= =============
Trust Shares:
Net Assets.......................................... $ 334,054,347 $ 678,679,328 $ 180,706,236 $ 271,036,329
Shares of beneficial interest outstanding........... 334,502,751 679,446,222 180,796,839 271,334,830
NET ASSET VALUE,
offering and redemption price per share........... $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============== ============= =============
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
- --------------------
STATEMENTS OF OPERATIONS
THE GALAXY FUND FOR THE YEAR ENDED OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
MONEY MARKET GOVERNMENT TAX-EXEMPT U.S. TREASURY
FUND FUND FUND FUND
------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2)................................... $ 51,154,513 $ 53,122,991 $ 11,148,609 $ 30,104,678
------------- -------------- ------------- -------------
EXPENSES:
Investment advisory fee (Note 3).................... 3,463,347 3,614,491 1,174,796 2,144,205
Administration fee (Note 3)......................... 763,921 799,533 257,052 469,163
Custodian fee....................................... 49,966 53,312 34,304 14,066
Fund accounting fee (Note 3)........................ 96,501 100,149 69,496 97,202
Legal fee (Note 3).................................. 29,788 44,791 17,056 25,765
Audit fee........................................... 10,366 10,366 10,366 10,366
Shareholder servicing fee (Note 3).................. 451,861 269,314 115,812 261,774
Transfer agent fee (Note 3)......................... 780,577 322,905 57,328 234,512
Trustees' fees and expenses (Note 3)................ 9,954 10,446 6,919 8,385
Amortization of organization costs (Note 2)......... -- -- -- 2,741
Reports to shareholders............................. 186,170 62,146 12,639 56,384
Registration fees................................... 87,540 113,847 34,278 66,217
Insurance........................................... 22,371 19,528 8,912 16,108
Miscellaneous....................................... 36,969 31,674 6,646 15,635
------------- -------------- ------------- -------------
Total Expenses before
reimbursement/waiver (Notes 3 & 4)............ 5,989,331 5,452,502 1,805,604 3,422,523
Less: Reimbursement/waiver (Notes 3 & 4)........ (142,311) (63,124) (36,228) (17,558)
------------- -------------- ------------- -------------
Total Expenses net of
reimbursement/waiver.......................... 5,847,020 5,389,378 1,769,376 3,404,965
------------- -------------- ------------- -------------
NET INVESTMENT INCOME................................. 45,307,493 47,733,613 9,379,233 26,699,713
------------- -------------- ------------- -------------
NET REALIZED GAIN (LOSS) ON
INVESTMENTS SOLD (NOTE 2)........................... 37,848 66,217 (3,848) 143,680
------------- -------------- ------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS.......................................... $ 45,345,341 $ 47,799,830 $ 9,375,385 $ 26,843,393
============= ============== ============= =============
</TABLE>
See Notes to Financial Statements.
28
<PAGE>
- --------------------
THE GALAXY FUND STATEMENTS OF CHANGES IN NET ASSETS
- --------------------
<TABLE>
<CAPTION>
MONEY MARKET FUND GOVERNMENT FUND
------------------------------- ------------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
------------------------------- ------------------------------
1995 1994 1995 1994
------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD..................... $ 797,398,959 $ 577,558,195 $ 759,106,251 $ 685,304,118
------------- -------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income............................... 45,307,493 22,736,031 47,733,613 21,789,236
Net realized gain (loss) on investments sold........ 37,848 (2,967,150) 66,217 (3,320,792)
------------- -------------- ------------- -------------
Net increase (decrease) in net
assets resulting from operations................ 45,345,341 19,768,881 47,799,830 18,468,444
------------- -------------- ------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM (NOTE 6):
Net investment income............................... (45,307,493) (22,445,602) (47,688,235) (21,788,653)
Dividends in excess of
net investment income............................. -- -- (45,378) (45,378)
Dividends in excess of
net realized capital gains on investments......... -- (290,429) -- (543,872)
------------- -------------- ------------- -------------
Total Dividends................................... (45,307,493) (22,736,031) (47,733,613) (22,377,903)
------------- -------------- ------------- -------------
NET INCREASE (DECREASE) FROM
SHARE TRANSACTIONS (NOTE 6)......................... 117,379,240 221,183,484 240,301,866 75,377,282
------------- -------------- ------------- -------------
Capital Contribution from Investment
Adviser (Note 5).................................... -- 1,624,430 -- 2,334,310
------------- -------------- ------------- -------------
Net increase (decrease) in net assets............. 117,417,088 219,840,764 240,368,083 73,802,133
------------- -------------- ------------- -------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A)........ $ 914,816,047 $ 797,398,959 $ 999,474,334 $ 759,106,251
============= ============== ============= =============
(A) Accumulated undistributed (overdistributed)
net investment income............................... $ 233,872 $ 233,872 $ (45,378) $ (45,378)
============= ============== ============= =============
</TABLE>
See Notes to Financial Statements.
29
<PAGE>
- --------------------
THE GALAXY FUND STATEMENTS OF CHANGES IN NET ASSETS
- --------------------
<TABLE>
<CAPTION>
TAX-EXEMPT FUND U.S. TREASURY FUND
------------------------------- ------------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
------------------------------- ------------------------------
1995 1994 1995 1994
------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD..................... $ 271,049,871 $ 301,399,377 $ 466,992,827 $ 447,960,079
------------- -------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income............................... 9,379,233 5,741,635 26,699,713 15,320,300
Net realized gain (loss) on investments sold........ (3,848) (120,301) 143,680 (2,043,024)
------------- -------------- ------------- -------------
Net increase (decrease) in net
assets resulting from operations................ 9,375,385 5,621,334 26,843,393 13,277,276
------------- -------------- ------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM (NOTE 6):
Net investment income............................. (9,359,035) (5,741,896) (26,699,713) (15,260,144)
Dividends in excess of
net investment income............................. (20,198) (20,198) -- --
Net realized capital gains on investments......... -- (121,645) -- --
Dividends in excess of
net realized capital gains on investments......... -- (120,301) -- (60,156)
------------- -------------- ------------- -------------
Total Dividends................................. (9,379,233) (6,004,040) (26,699,713) (15,320,300)
------------- -------------- ------------- -------------
NET INCREASE (DECREASE) FROM
SHARE TRANSACTIONS (NOTE 6)......................... 36,715,950 (29,966,800) 122,520,664 20,080,509
------------- -------------- ------------- -------------
Capital Contribution from Investment
Adviser (Note 5).................................. -- -- -- 995,263
------------- -------------- ------------- -------------
Net increase (decrease) in net assets........... 36,712,102 (30,349,506) 122,664,344 19,032,748
------------- -------------- ------------- -------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A)........ $ 307,761,973 $ 271,049,871 $ 589,657,171 $ 466,992,827
============= ============== ============= =============
(A) Accumulated undistributed (overdistributed)
net investment income............................... $ (20,198) $ (20,198) $ 316,530 $ 316,530
============= ============== ============= =============
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
- --------------------
MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
THE GALAXY FUND FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
- --------------------
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
-------------------------------------------------------------------------------
1995 1994/(1)/ 1993/(1)/ 1992/(1)/ 1991/(1)/
----------------------- --------- --------- --------- ---------
RETAIL TRUST
--------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A)................. 0.05 0.05 0.03 0.03 0.04 0.06
Net realized gain (loss) on investments... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total from Investment Operations:....... 0.05 0.05 0.03 0.03 0.04 0.06
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from
net investment income..................... (0.05) (0.05) (0.03) (0.03) (0.04) (0.06)
Dividends from
net realized capital gains (B)............ -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total Dividends:........................ (0.05) (0.05) (0.03) (0.03) (0.04) (0.06)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) net asset value....... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Net Asset Value, end of period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= =========
Total Return (C).............................. 5.23% 5.43% 3.35% 2.78% 4.07% 6.40%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)............. $ 580,762 $ 334,054 $ 797,399 $ 577,558 $ 590,911 $ 415,541
Ratios to average net assets:
Net investment income
including reimbursement/waiver............ 5.12% 5.30% 3.38% 2.74% 3.74% 6.24%
Operating expenses
including reimbursement/waiver............ 0.74% 0.55% 0.64% 0.63% 0.58% 0.59%
Operating expenses
excluding reimbursement/waiver............ 0.76% 0.56% 0.64% 0.63% 0.58% 0.59%
</TABLE>
- --------------------------------------------------------------------------------
(1) Prior to November 1, 1994, the Fund offered a single series of shares. As of
such date, the existing series of shares was designated as Retail Shares and
the Fund began issuing a second series of shares designated as Trust Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or Administrator was as follows:
<TABLE>
<CAPTION>
Years ended October 31,
--------------------------------------------------------------
1995 1994/(1)/ 1993/(1)/ 1992/(1)/ 1991/(1)/
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Retail Shares $ 0.05 $ 0.03 $ 0.03 $ 0.04 $ 0.06
Trust Shares 0.05 0.03 0.03 0.04 0.06
</TABLE>
(B) Represents less than $0.01 per share for year 1992.
(C) Total return for 1994 includes the effect of the voluntary capital
contribution from the Investment Adviser (see Note 5). Without this capital
contribution, the total return would have been 3.35%.
See Notes to Financial Statements.
31
<PAGE>
- --------------------
GOVERNMENT FUND
FINANCIAL HIGHLIGHTS
THE GALAXY FUND FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
- --------------------
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
-------------------------------------------------------------------------------
1995 1994/(1)/ 1993/(1)/ 1992/(1)/ 1991/(1)/
----------------------- --------- --------- --------- ---------
RETAIL TRUST
--------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A)................. 0.05 0.05 0.03 0.03 0.04 0.06
Net realized gain (loss)
on investments.......................... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total from
Investment Operations:............... 0.05 0.05 0.03 0.03 0.04 0.06
--------- --------- --------- --------- --------- ---------
Less Dividends
Dividends from
net investment income................... (0.05) (0.05) (0.03) (0.03) (0.04) (0.06)
Dividends from
net realized capital gains (B).......... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total Dividends....................... (0.05) (0.05) (0.03) (0.03) (0.04) (0.06)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value.... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Net Asset Value, end of period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= =========
Total Return (C).............................. 5.20% 5.39% 3.49% 2.83% 4.19% 6.25%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)............. $ 320,795 $ 678,679 $ 759,106 $ 685,304 $ 636,338 $ 436,232
Ratios to average net assets:
Net investment income
including reimbursement/waiver.......... 5.11% 5.27% 3.36% 2.79% 3.67% 6.05%
Operating expenses
including reimbursement/waiver.......... 0.73% 0.53% 0.54% 0.55% 0.53% 0.56%
Operating expenses
excluding reimbursement/waiver.......... 0.74% 0.54% 0.54% 0.55% 0.53% 0.56%
</TABLE>
- --------------------------------------------------------------------------------
(1) Prior to November 1, 1994, the Fund offered a single series of shares. As of
such date, the existing series of shares was designated as Retail Shares and
the Fund began issuing a second series of shares designated as Trust Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or Administrator was as follows:
<TABLE>
<CAPTION>
Years ended October 31,
--------------------------------------------------------------
1995 1994/(1)/ 1993/(1)/ 1992/(1)/ 1991/(1)/
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Retail Shares $ 0.05 $ 0.03 $ 0.03 $ 0.04 $ 0.06
Trust Shares 0.05 0.03 0.03 0.04 0.06
</TABLE>
(B) Represents less than $0.01 per share for year 1992.
(C) Total return for 1994 includes the effect of the voluntary capital
contribution from the Investment Adviser (see Note 5). Without this capital
contribution, the total return would have been 3.49%.
See Notes to Financial Statements.
32
<PAGE>
- --------------------
TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
THE GALAXY FUND FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
- --------------------
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
-------------------------------------------------------------------------------
1995 1994/(1)/ 1993/(1)/ 1992/(1)/ 1991/(1)/
----------------------- --------- --------- --------- ---------
RETAIL TRUST
--------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A).................. 0.03 0.03 0.02 0.02 0.03 0.04
Net realized gain (loss)
on investments.......................... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total from
Investment Operations:................... 0.03 0.03 0.02 0.02 0.03 0.04
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from
net investment income.................... (0.03) (0.03) (0.02) (0.02) (0.03) (0.04)
Distributions from
net realized capital gains............... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total Dividends:........................ (0.03) (0.03) (0.02) (0.02) (0.03) (0.04)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Net Asset Value, end of period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= =========
Total Return................................... 3.16% 3.29% 2.24% 1.93% 2.71% 4.51%
Ratios/Supplemental Data:
Net Assets, End of Period (000's).............. $ 127,056 $ 180,706 $ 271,050 $ 301,399 $ 223,173 $ 194,098
Ratios to average net assets:
Net investment income
including reimbursement/waiver........... 3.12% 3.24% 2.12% 1.92% 2.64% 4.37%
Operating expenses
including reimbursement/waiver........... 0.68% 0.55% 0.58% 0.59% 0.57% 0.60%
Operating expenses
excluding reimbursement/waiver........... 0.71% 0.56% 0.58% 0.59% 0.57% 0.60%
</TABLE>
- --------------------------------------------------------------------------------
(1) Prior to November 1, 1994, the Fund offered a single series of shares. As of
such date, the existing series of shares was designated as Retail Shares and
the Fund began issuing a second series of shares designated as Trust Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or Administrator was as follows:
<TABLE>
<CAPTION>
Years ended October 31,
--------------------------------------------------------------
1995 1994/(1)/ 1993/(1)/ 1992/(1)/ 1991/(1)/
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Retail Shares $ 0.03 $ 0.02 $ 0.02 $ 0.03 $ 0.04
Trust Shares 0.03 0.02 0.02 0.03 0.04
</TABLE>
See Notes to Financial Statements.
33
<PAGE>
- --------------------
U.S. TREASURY FUND
FINANCIAL HIGHLIGHTS
THE GALAXY FUND FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
- --------------------
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
----------------------------------------------------------------------------------
1995 1994/(1)/ 1993/(1)/ 1992/(1)/ 1991/(1)(2)/
----------------------- --------- --------- --------- ------------
RETAIL TRUST
--------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A)................... 0.05 0.05 0.03 0.03 0.04 0.04
Net realized gain (loss) on investments..... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total from
Investment Operations:.................. 0.05 0.05 0.03 0.03 0.04 0.04
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from
net investment income..................... (0.05) (0.05) (0.03) (0.03) (0.04) (0.04)
Dividends from
net realized capital gains................ -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total Dividends:.......................... (0.05) (0.05) (0.03) (0.03) (0.04) (0.04)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value.... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Net Asset Value, end of period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= =========
Total Return (B).............................. 4.99% 5.18% 3.30% 2.75% 3.69% 4.51%**
Ratios/Supplemental Data:
Net Assets, End of period (000's)............. $ 318,621 $ 271,036 $ 466,993 $ 447,960 $ 482,416 $ 170,177
Ratios to average net assets:
Net investment income
including reimbursement/waiver............ 4.90% 5.06% 3.24% 2.71% 3.51% 4.26%*
Operating expenses
including reimbursement/waiver............ 0.73% 0.55% 0.56% 0.55% 0.49% 0.27%*
Operating expenses
excluding reimbursement/waiver............ 0.73% 0.55% 0.56% 0.55% 0.55% 0.65%*
</TABLE>
- --------------------------------------------------------------------------------
* Annualized
** Not Annualized
(1) Prior to November 1, 1994, the Fund offered a single series of shares.
As of such date, the existing series of shares was designated as Retail
Shares and the Fund began issuing a second series of shares designated as
Trust Shares.
(2) The Fund commenced operations on January 22, 1991.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or Administrator was as follows:
<TABLE>
<CAPTION>
Years ended October 31,
--------------------------------------------------------------
1995 1994/(1)/ 1993/(1)/ 1992/(1)/ 1991/(1)/
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Retail Shares $ 0.05 $ 0.03 $ 0.03 $ 0.04 $ 0.04
Trust Shares 0.05 0.03 0.03 0.04 0.04
</TABLE>
(B) Total return for 1994 includes the effect of the voluntary capital
contribution from the Investment Adviser (see Note 5). Without this capital
contribution, the total return would have been 3.30%.
See Notes to Financial Statements.
34
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS
- --------------------
1. ORGANIZATION
The Galaxy Fund, a Massachusetts business trust (the "Trust"), is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management investment company. As of the date of this report, the Trust
offered twenty managed investment portfolios. The accompanying financial
statements and financial highlights are those of the Money Market, Government,
Tax-Exempt and U.S. Treasury Funds (individually, "Fund," collectively, the
"Funds") only.
Effective November 1, 1994, each Fund is authorized to issue two series of
shares (Trust Shares and Retail Shares). Any shares outstanding prior to
November 1, 1994 were designated as Retail Shares. Trust Shares and Retail
Shares are substantially the same, except that each series bears the following
series specific expenses: shareholder servicing fees and transfer agent charges.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies in conformity
with generally accepted accounting principles consistently followed by the Funds
in the preparation of their financial statements.
PORTFOLIO VALUATION: Securities in the Funds are valued utilizing the
amortized cost valuation method permitted in accordance with Rule 2a-7 under the
1940 Act. This method involves valuing a portfolio security initially at its
cost and thereafter assuming a constant amortization to maturity of any discount
or premium.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
accounted for on a trade date basis. Net realized gains or losses on sales of
securities are determined by the identified cost method. Interest income is
recorded on the accrual basis. Investment income and realized and unrealized
gains and losses are allocated to the separate series based upon the outstanding
shares of each series.
DIVIDENDS TO SHAREHOLDERS: Dividends from net investment income are
determined separately for each series and are declared daily and paid monthly.
Net realized capital gains, if any, are distributed at least annually.
Income dividends and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles.
FEDERAL INCOME TAXES: The Trust treats each Fund as a separate entity for
Federal income tax purposes. Each Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended. By so qualifying, each Fund will not be subject to Federal
income taxes to the extent that it distributes substantially all of its taxable
or tax-exempt income, if any, for its tax year ending October 31. In addition,
by distributing in each calendar year substantially all of its net investment
income, capital gains, and certain other amounts, if any, each Fund will not be
subject to a Federal excise tax. Therefore, no Federal income tax provision is
required.
REPURCHASE AGREEMENTS: Each Fund, except the U.S. Treasury Fund, may engage
in repurchase agreement transactions with institutions that the Trust's
Investment Adviser has determined are creditworthy pursuant to guidelines
established by the Trust's Board of Trustees. Each repurchase agreement
transaction is recorded at cost. Each Fund requires that the securities
purchased in a repurchase agreement transaction be transferred to the Trust's
Custodian (or sub-custodian) in a manner that is intended to enable the Fund to
obtain those securities in the event of a counterparty default. The Investment
Adviser monitors the value of the securi-
35
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
ties, including accrued interest, daily to ensure that the value of the
collateral equals or exceeds amounts due under the repurchase agreement.
Repurchase agreement transactions involve certain risks in the event of default
or insolvency of the counterparty, including possible delays or restrictions
upon a Fund's ability to dispose of the underlying securities, and a possible
decline in the value of the underlying securities during the period while the
Fund seeks to assert its rights.
EXPENSES: The Trust accounts separately for the assets, liabilities and
operations of each Fund. Expenses directly attributable to a Fund are charged
to the Fund, while expenses which are attributable to more than one fund of
the Trust are allocated among the respective funds.
In addition, expenses of a Fund not directly attributable to the operations
of a particular series of shares of the Fund are allocated to the separate
series based upon the outstanding shares of each series. Operating expenses
directly attributable to a series of shares of a Fund are charged to the
operations of that series.
ORGANIZATION COSTS: The U.S. Treasury Fund bears all costs in connection
with its organization, including the fees and expenses of registering and
qualifying its initial shares for distribution under Federal and state
securities laws. All such costs are amortized using the straight-line method
over a period of five years beginning with the Fund's commencement of
operations. In the event that any of the initial shares purchased by any holder
of the U.S. Treasury Fund are redeemed during such period, the Fund will be
reimbursed by the sponsor for any unamortized organization costs in the same
proportion as the number of initial shares being redeemed bears to the number of
initial shares outstanding at the time of redemption.
3. INVESTMENT ADVISORY, ADMINISTRATION, SHAREHOLDER SERVICES AND OTHER FEES
The Trust and Fleet Investment Advisors Inc. (the "Investment Adviser" or
"Fleet"), an indirect wholly-owned subsidiary of Fleet Financial Group, Inc.,
are parties to an investment advisory agreement under which the Investment
Adviser provides services for a fee, computed daily and paid monthly, at the
following annual rates: with respect to the Money Market, Government and Tax-
Exempt Funds, 0.40% of the average daily net assets of the Funds, and with
respect to the U.S. Treasury Fund, 0.40% of the first $750,000,000 of net assets
of the Fund plus 0.35% of net assets of the Fund in excess of $750,000,000. The
Trust has been advised by Fleet that, with respect to the Money Market,
Government and Tax-Exempt Funds, Fleet intends to waive advisory fees payable to
it by each Fund by 0.05% to the extent that a Fund's net assets exceed
$750,000,000.
The Trust and First Data Investor Services Group, Inc. ("FDISG"), (formerly
known as The Shareholder Services Group, Inc. doing business as 440 Financial),
a wholly-owned subsidiary of First Data Corporation, are parties to an
administration agreement under which FGISG (the "Administrator") provides
services for a fee, computed daily and paid monthly, at the annual rate of 0.09%
of the first $2.5 billion of the combined average daily net assets of the Funds
and the other funds offered by the Trust, 0.085% of the next $2.5 billion of
combined average daily net assets and 0.08% of combined average daily net assets
over $5 billion. In addition, FDISG also provides certain fund accounting,
custody administration and transfer agency services pursuant to certain fee
arrangements. Pursuant to these fees arrangements, FDISG compensates the Trust's
custodian bank for its services. Prior to March 31, 1995, the administration,
fund accounting, custody administration and transfer agency services described
above were provided by 440 Financial Group of Worcester, Inc., a wholly-
36
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
owned subsidiary of State Mutual Life Assurance Company of America ("State
Mutual"), for the same annual fees. On that date, FDISG acquired substantially
all of the assets of 440 Financial Group of Worcester, Inc.
Prior to March 1, 1994, 440 Financial Group of Worcester, Inc. was entitled
to receive administration fees, computed daily and paid monthly, at the annual
rate of 0.078% of the first $2.5 billion of the combined average daily net
assets of the Funds and the other funds offered by the Trust plus 0.073% of
combined average daily net assets in excess of $2.5 billion.
Effective November 1, 1994, the Trust implemented a shareholder services
plan (the "Services Plan") with respect to Retail Shares of the Funds.
Currently, the Services Plan has not been implemented with respect to the Funds'
Trust Shares. The Services Plan provides compensation to institutions (including
and currently limited to Fleet Bank and its affiliates) which provide
administrative and support services to their customers who beneficially own
Retail Shares, at an annual rate not to exceed 0.25% of the average daily net
asset value of the outstanding Retail Shares of each Fund beneficially owned by
such customers. The Trust, under the direction of the Board of the Trustees, is
currently limiting fees payable under the Services Plan with respect to each
Fund to an annual rate not to exceed 0.10% of the average daily net asset value
of the outstanding Retail Shares beneficially owned by such customers.
The Retail Shares and Trust Shares of the Funds bear series specific
transfer agent charges based upon the number of shareholder accounts for each
series. Trust Shares of the Funds (except the Tax-Exempt Fund) also bear
additional transfer agency fees in order to compensate FDISG for payments made
to Fleet Trust Company, an affiliate of the Investment Adviser, for performing
certain sub-account and administrative functions on a per account basis with
respect to Trust Shares held by defined contribution plans. For the year ended
October 31, 1995, transfer agent charges for each series were as follows:
<TABLE>
<CAPTION>
FUND RETAIL TRUST
- ---- -------- -------
<S> <C> <C>
Money Market Fund..................... $740,509 $40,068
Government Fund....................... 292,608 30,297
Tax-Exempt Fund....................... 57,266 62
U.S. Treasury Fund.................... 221,125 13,387
</TABLE>
440 Financial Distributors, Inc. (the "Distributor"), a wholly-owned
subsidiary of FDISG and an indirect wholly-owned subsidiary of First Data
Corporation, acts as the exclusive distributor of the Trust's shares. Prior to
March 31, 1995, the Distributor was a wholly-owned subsidiary of 440 Financial
Group of Worcester, Inc. and an indirect wholly-owned subsidiary of State
Mutual. Prior to March 1, 1994, Allmerica Investments, Inc., a wholly-owned
subsidiary of State Mutual, served as the Trust's distributor.
Certain officers of the Trust may be officers of the Administrator and/or
Distributor. Such officers receive no compensation from the Trust for serving in
their respective roles. No officer, director or employee of the Investment
Adviser serves as an officer, Trustee or employee of the Trust. Effective
May 26, 1995, each Trustee is entitled to receive for services as a trustee of
both the Trust and The Galaxy VIP Fund ("VIP") an aggregate fee of $18,000 per
annum plus certain other fees for attending or participating in meetings as well
as reimbursement for expenses incurred in attending meetings. The Chairman of
the Boards of Trustees of the Trust and VIP is entitled to an additional annual
fee of $4,000, and the President and Treasurer of the Trust and VIP is entitled
to an additional annual fee of $2,500, for their services in these capacities.
These fees are allocated among the Funds of the Trust and VIP based on their
relative net assets.
Expenses for the year ended October 31, 1995 include legal fees paid to
Drinker Biddle & Reath. A partner of that firm is Secretary of the Trust.
37
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
The Investment Adviser voluntarily agreed to waive a portion of its fees and
to reimburse the Funds for certain expenses so that total expenses would not
exceed certain expense limitations established for each series. The Investment
Adviser, at its discretion, may revise or discontinue the voluntary fee waivers
and expense reimbursements. For the year ended October 31, 1995, the Investment
Adviser waived fees and/or reimbursed expenses with respect to the Funds in the
following amounts:
<TABLE>
<CAPTION>
FEES WAIVED BY
FUND INVESTMENT ADVISER
---- ------------------
<S> <C>
Money Market Fund............................ $ 33,433
Government Fund.............................. 42,164
<CAPTION>
REIMBURSEMENT BY
FUND INVESTMENT ADVISER
---- ------------------
<S> <C>
Money Market Fund............................ $ 108,878
Government Fund.............................. 20,960
Tax-Exempt Fund.............................. 36,228
U.S. Treasury Fund........................... 17,558
</TABLE>
5. CAPITAL CONTRIBUTION
During the period June 20, 1994 through July 6, 1994, the Investment Adviser
voluntarily contributed capital to the Money Market Fund, Government Fund and
U.S. Treasury Fund in the amounts of approximately $1.6 million, $2.3 million
and $1.0 million, respectively. These amounts were contributed to offset losses
realized on the sale of certain securities held by the Funds. The Investment
Adviser received no shares of beneficial interest or other consideration in
exchange for these contributions which maintained the net asset value of each
Fund at approximately $1.00 per share.
6. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an
unlimited number of shares of beneficial interest in the Funds, each with a par
value of $0.001. The Trust's shares are classified into twenty classes of shares
generally consisting of two series including: Class A and Class A -Special
Series 1- Money Market Fund; Class B and Class B - Special Series 1 -Government
Fund; Class E and Class E - Special Series 1 - Tax-Exempt Fund; and Class F and
Class F - Special Series 1 - U.S. Treasury Fund.
Prior to November 1, 1994, each Fund offered a single series of shares. As
of such date, the existing series of shares of each Fund was designated as
Retail Shares and each Fund began issuing a second series of shares designated
as Trust Shares. At such time, certain eligible holders of Retail Shares of the
Funds exchanged their shares for Trust Shares of the same Funds. Each share
represents an equal proportionate interest in the respective Fund, bears the
same fees and expenses (except that effective November 1, 1994, Retail Shares
bear the expense of payments under the Services Plan and Trust Shares and Retail
Shares bear series specific transfer agent charges), and are entitled to such
dividends and distributions of income earned as are declared at the discretion
of the Trust's Board of Trustees.
Shareholders are entitled to one vote for each full share held and will vote
in the aggregate and not by class or series, except as otherwise expressly
required by law or when the Board of Trustees determines that the matter to be
voted on affects only the interests of shareholders of a particular class or
series.
The following is a summary of transactions in portfolio shares and dividends
to shareholders for each Fund for the year ended October 31, 1995 (by series)
and for the year ended October 31, 1994:
38
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
TRANSACTIONS IN PORTFOLIO SHARES:
<TABLE>
<CAPTION>
MONEY MARKET FUND:
SHARE ACTIVITY DOLLAR AMOUNTS
---------------------------------------------- -------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1995
------------------------------ YEAR ENDED ------------------------------- YEAR ENDED
RETAIL TRUST OCTOBER 31, 1994 RETAIL TRUST OCTOBER 31, 1994
-------------- -------------- ---------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Sold........................... 1,445,098,060 1,570,072,835 2,115,183,836 $ 1,445,098,060 $1,570,072,835 $ 2,115,183,836
Issued to Shareholders in
reinvestment of dividends.... 27,461,273 359,911 11,496,635 27,461,273 359,911 11,496,635
Retail Shares exchanged for
Trust Shares................. (331,747,252) 331,747,252 -- (331,747,252) 331,747,252 --
Repurchased.................... (1,357,935,592) (1,567,677,247) (1,905,496,987) (1,357,935,592) (1,567,677,247) (1,905,496,987)
-------------- -------------- -------------- --------------- -------------- ---------------
Net Increase (Decrease) in
Shares outstanding......... (217,123,511) 334,502,751 221,183,484 $ (217,123,511) $ 334,502,751 $ 221,183,484
============== ============== ============== =============== ============== ===============
<CAPTION>
GOVERNMENT FUND:
SHARE ACTIVITY DOLLAR AMOUNTS
---------------------------------------------- -------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1995
------------------------------ YEAR ENDED ------------------------------- YEAR ENDED
RETAIL TRUST OCTOBER 31, 1994 RETAIL TRUST OCTOBER 31, 1994
-------------- -------------- ---------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Sold........................... 712,147,106 1,848,815,024 1,324,402,235 $ 712,147,106 $1,848,815,024 $ 1,324,402,235
Issued to Shareholders in
reinvestment of dividends.... 12,994,355 698,987 3,889,154 12,994,355 698,987 3,889,154
Retail Shares exchanged for
Trust Shares................. (599,306,852) 599,306,852 -- (599,306,852) 599,306,852 --
Repurchased.................... (564,978,965) (1,769,374,641) (1,252,914,107) (564,978,965) (1,769,374,641) (1,252,914,107)
-------------- -------------- -------------- --------------- -------------- ---------------
Net Increase (Decrease) in
Shares outstanding......... (439,144,356) 679,446,222 75,377,282 $ (439,144,356) $ 679,446,222 $ 75,377,282
============== ============== ============== =============== ============== ===============
<CAPTION>
TAX-EXEMPT FUND:
SHARE ACTIVITY DOLLAR AMOUNTS
---------------------------------------------- -------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1995
------------------------------ YEAR ENDED ------------------------------- YEAR ENDED
RETAIL TRUST OCTOBER 31, 1994 RETAIL TRUST OCTOBER 31, 1994
-------------- -------------- ---------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Sold........................... 253,791,401 231,604,600 453,465,689 $ 253,791,401 $ 231,604,600 $ 453,465,689
Issued to Shareholders in
reinvestment of dividends.... 3,601,508 1,439 2,261,283 3,601,508 1,439 2,261,283
Retail Shares exchanged for
Trust Shares................. (170,424,138) 170,424,138 -- (170,424,138) 170,424,138 --
Repurchased.................... (231,049,660) (221,233,338) (485,693,772) (231,049,660) (221,233,338) (485,693,772)
-------------- -------------- -------------- --------------- -------------- ---------------
Net Increase (Decrease) in
Shares outstanding......... (144,080,889) 180,796,839 (29,966,800) $ (144,080,889) $ 180,796,839 $ (29,966,800)
============== ============== ============== =============== ============== ===============
</TABLE>
39
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
<TABLE>
<CAPTION>
U.S. TREASURY FUND:
SHARE ACTIVITY DOLLAR AMOUNTS
---------------------------------------------- -------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1995
------------------------------ YEAR ENDED ------------------------------- YEAR ENDED
RETAIL TRUST OCTOBER 31, 1994 RETAIL TRUST OCTOBER 31, 1994
-------------- -------------- ---------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Sold............................ 563,677,781 708,739,059 1,301,223,490 $ 563,677,781 $ 708,739,059 $ 1,301,223,490
Issued to Shareholders in
reinvestment of dividends..... 12,770,628 266,550 6,371,439 12,770,628 266,550 6,371,439
Retail Shares exchanged for
Trust Shares.................. (238,429,770) 238,429,770 -- (238,429,770) 238,429,770 --
Repurchased..................... (486,832,805) (676,100,549) (1,287,514,420) (486,832,805) (676,100,549) (1,287,514,420)
-------------- -------------- -------------- -------------- -------------- ---------------
Net Increase (Decrease) in
Shares outstanding.......... (148,814,166) 271,334,830 20,080,509 $ (148,814,166) $ 271,334,830 $ 20,080,509
============== ============== ============== ============== ============== ===============
<CAPTION>
DIVIDENDS TO SHAREHOLDERS:
MONEY MARKET FUND GOVERNMENT FUND
---------------------------------------------- -------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1995
------------------------------ YEAR ENDED ------------------------------- YEAR ENDED
RETAIL TRUST OCTOBER 31, 1994 RETAIL TRUST OCTOBER 31, 1994
-------------- -------------- ---------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income........... $ (27,715,120) $ (17,592,373) $ (22,445,602) $ (13,760,220) $ (33,928,015) $ (21,788,653)
Dividends in excess of
net investment income......... -- -- -- (14,560) (30,818) (45,378)
Dividends in excess of net
realized capital gains
on investments................ -- -- (290,429) -- -- (543,872)
-------------- -------------- -------------- -------------- -------------- ---------------
Total dividends............. $ (27,715,120) $ (17,592,373) $ (22,736,031) $ (13,774,780) $ (33,958,833) $ (22,377,903)
============== ============== ============== ============== ============== ===============
<CAPTION>
TAX-EXEMPT FUND U.S. TREASURY FUND
---------------------------------------------- -------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1995
------------------------------ YEAR ENDED ------------------------------- YEAR ENDED
RETAIL TRUST OCTOBER 31, 1994 RETAIL TRUST OCTOBER 31, 1994
-------------- -------------- ---------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income........... $ (3,605,651) $ (5,753,384) $ (5,741,896) $ (12,819,050) $ (13,880,663) $ (15,260,144)
Dividends in excess of
net investment income......... (8,338) (11,860) (20,198) -- -- --
Net realized capital gains on
investments................... -- -- (121,645) -- -- --
Dividends in excess of net
realized capital gains
on investments................ -- -- (120,301) -- -- (60,156)
-------------- -------------- -------------- -------------- -------------- ---------------
Total dividends............. $ (3,613,989) $ (5,765,244) $ (6,004,040) $ (12,819,050) $ (13,880,663) $ (15,320,300)
============== ============== ============== ============== ============== ===============
</TABLE>
40
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
7. FEDERAL TAX INFORMATION
At October 31, 1995 the following Funds had capital loss carryforwards:
<TABLE>
<CAPTION>
FUND AMOUNT EXPIRATION
- ---- ----------- ----------
<S> <C> <C>
Money Market Fund.......................... $ 1,304,872 2002
Government Fund............................ 920,265 2002
Tax-Exempt Fund............................ 120,301 2002
3,772 2003
U.S. Treasury Fund......................... 907,903 2002
</TABLE>
8. ACQUISITION OF THE SHAWMUT FUNDS
At a meeting held on June 12, 1995, the Board of Trustees of the Trust approved
an Agreement and Plan of Reorganization (the "Agreement") for the acquisition of
The Shawmut Funds ("Shawmut") by the Trust. Under the Agreement, all of the
assets and liabilities of the Shawmut Prime Money Market Fund were transferred
to the Galaxy Money Market Fund in exchange for shares of the Galaxy Money
Market Fund. Accordingly, the net assets attributable to Investment Shares and
Trust Shares of the Shawmut Prime Money Market Fund were exchanged for
267,079,142 Retail Shares and 511,462,955 Trust Shares, respectively, of the
Galaxy Money Market Fund. In related transactions, the assets and liabilities of
the other Shawmut portfolios were transferred to corresponding Galaxy portfolios
in exchange for shares in such Galaxy portfolios. The reorganization, which
qualifies as a tax-free reorganization for Federal income tax purposes, was
completed on December 4, 1995 following the approval of the reorganization by
The Shawmut Fund shareholders. Certain share registration fees incurred in
connection with the reorganization were borne by the Trust. The following is a
summary of the Net Assets, Shares Outstanding and Net Asset Value per share
associated with the transaction:
<TABLE>
<CAPTION>
Before Acquisition After Acquisition
---------------------------------------------------------------- -----------------------------
Galaxy Galaxy Shawmut Shawmut Galaxy Galaxy
Money Market Money Market Prime Money Prime Money Money Market Money Market
Fund Fund Market Fund Market Fund Fund Fund
Retail Shares Trust Shares Investment Shares Trust Shares Retail Shares Trust Shares
------------- ------------- ----------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net Assets.................... $ 614,802,390 $ 318,554,689 $ 267,075,370 $ 511,455,645 $ 881,877,760 $ 830,010,334
Shares outstanding............ 615,427,194 319,003,229 267,079,142 511,462,955 882,506,336 830,466,184
Net Asset Value, per share.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
</TABLE>
TAX INFORMATION (UNAUDITED):
During the fiscal year ended October 31, 1995, the following Funds earned
income from direct obligations of the U.S. Government:
<TABLE>
<CAPTION>
U.S. GOVERNMENT
FUND INCOME
- ---- ---------------
<S> <C>
Money Market Fund.................................... 16.97%
Government Fund...................................... 41.66%
U.S. Treasury Fund................................... 98.18%
</TABLE>
Appropriate tax information detailing government income percentages on a
calendar year basis will accompany your year-end tax statement. As each state's
rules on the exemption of this income differ, please consult your tax advisor
regarding specific tax treatment. 100% of the income earned by the Tax Exempt
Fund will generally qualify as exempt from federal and state taxation.
41
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
The Galaxy Fund:
We have audited the accompanying statements of assets and liabilities of the
Money Market Fund, Government Fund, Tax-Exempt Fund, and U.S. Treasury Fund
(four series of The Galaxy Fund), including the portfolios of investments, as of
October 31, 1995, and the related statements of operations, the statements of
changes in net assets, and financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of The Galaxy Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
aforementioned series of The Galaxy Fund as of October 31, 1995, the results of
their operations, the changes in their net assets, and their financial
highlights for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
Boston, Massachusetts Coopers & Lybrand L.L.P.
December 8, 1995
<PAGE>
This page left blank intentionally.
<PAGE>
This page left blank intentionally.
<PAGE>
- -----------------------------
TRUSTEES
AND OFFICERS
Dwight E. Vicks, Jr.
Chairman and Trustee
John T. O'Neill
President, Treasurer
and Trustee
Louis DeThomasis,
F.S.C., Ph.D.
Trustee
Donald B. Miller
Trustee
James M. Seed
Trustee
Bradford S. Wellman
Trustee
W. Bruce
McConnel, III, Esq.
Secretary
Louis J. Russo
Assistant Treasurer
Neil Forrest
Vice President &
Assistant Treasurer
INVESTMENT ADVISER
Fleet Investment
Advisors Inc.
50 Kennedy Plaza
Providence,
Rhode Island 02903
DISTRIBUTOR
440 Financial
Distributors, Inc.
290 Donald Lynch Boulevard
Marlboro,
Massachusetts 01752
ADMINISTRATOR
First Data Investor
Services Group, Inc.
(formerly The Shareholder
Services Group, Inc.
d/b/a 440 Financial)
4400 Computer Drive
Westboro,
Massachusetts 01581-5108
- -----------------------------
This report is submitted for the general information of shareholders of The
Galaxy Fund. It is not authorized for distribution to prospective investors
unless accompanied or preceded by an effective prospectus for the Fund, which
contains more information concerning the Fund's investment policies, as well as
fees and expenses and other pertinent information. Read the prospectus carefully
before you invest.
Shares of the funds are not deposits or obligations of, or guaranteed or
endorsed by Fleet Financial Group, Inc. or any of its affiliates, Fleet
Investment Advisors Inc., or any Fleet bank. Shares of the funds are not
federally insured by the U.S. government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency. Investment return
and principal value will vary as a result of market conditions or other factors
so that shares of the funds, when redeemed, may be worth more or less than their
original cost. An investment in the funds involves investment risks, including
the possible loss of principal.
[LOGO OF RECYCLED PAPER APPEARS HERE]
This report was printed on recycled paper.
<PAGE>
- -------------------- ----------------
BULK RATE
U. S. POSTAGE
4400 Computer Drive PAID
GALAXY Box 5108 PERMIT NO. 54201
FUNDS Westboro, MA 01581-5108 BOSTON, MA
- -------------------- ----------------
FN-082 (12/95)
<PAGE>
---------------
GALAXY
FUNDS
---------------
[ARTWORK APPEARS HERE]
-----------------------------------------------------------------------
INSTITUTIONAL TREASURY MONEY MARKET FUND REPORT
-----------------------------------------------------------------------
----------------------
ANNUAL
REPORT
FOR THE YEAR ENDED
OCTOBER 31, 1995
----------------------
<PAGE>
- --------------------------------------------------------------------------------
TRUSTEES
AND OFFICERS
Dwight E. Vicks, Jr.
Chairman and Trustee
John T. O'Neill
President, Treasurer
and Trustee
Louis DeThomasis,
F.S.C., Ph.D.
Trustee
Donald B. Miller
Trustee
James M. Seed
Trustee
Bradford S. Wellman
Trustee
W. Bruce
McConnel, III, Esq.
Secretary
Louis J. Russo
Assistant Treasurer
Neil Forrest
Vice President &
Assistant Treasurer
INVESTMENT ADVISER
Fleet Investment
Advisors Inc.
50 Kennedy Plaza
Providence, Rhode Island
02903
DISTRIBUTOR
440 Financial
Distributors, Inc.
290 Donald Lynch Boulevard
Marlboro,
Massachusetts 01752
ADMINISTRATOR
First Data Investor Services Group, Inc.
(formerly The Shareholder Services Group, Inc.
d/b/a 440 Financial)
4400 Computer Drive
Westboro,
Massachusetts 01581-5108
<PAGE>
---------------
INSTITUTIONAL TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
---------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- --------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS - 98.34%
U.S. TREASURY BILLS (A) - 79.71%
$ 39,000,000 5.49%, 11/02/95..................................................................... $ 38,994,256
46,000,000 5.39%, 11/16/95..................................................................... 45,898,033
40,000,000 5.41%, 11/24/95..................................................................... 39,864,172
49,000,000 5.39%, 11/30/95..................................................................... 48,790,338
16,000,000 5.35%, 12/07/95..................................................................... 15,914,880
23,000,000 5.31%, 12/21/95..................................................................... 22,832,451
37,000,000 5.34%, 01/04/96..................................................................... 36,657,956
20,000,000 5.32%, 01/18/96..................................................................... 19,771,850
42,000,000 5.35%, 01/25/96..................................................................... 41,476,542
82,000,000 5.35%, 02/01/96..................................................................... 80,894,607
13,000,000 5.37%, 02/15/96..................................................................... 12,797,319
--------------
403,892,404
--------------
U.S. TREASURY STRIP (A) - 18.63%
40,000,000 5.46%, 11/15/95..................................................................... 39,916,279
25,000,000 5.35%, 11/15/95..................................................................... 24,948,709
10,000,000 5.34%, 02/15/96..................................................................... 9,844,966
20,000,000 5.36%, 02/15/96..................................................................... 19,688,402
--------------
94,398,356
--------------
TOTAL U.S. GOVERNMENT OBLIGATIONS................................................... 498,290,760
(Cost $498,290,760) --------------
<CAPTION>
SHARES
------
<C> <S> <C>
INVESTMENT COMPANIES - 2.08%
10,528,921 AIM Short Term Investment Company Treasury Tax Advantage Portfolio.................. 10,528,921
--------------
TOTAL INVESTMENT COMPANIES.......................................................... 10,528,921
(Cost $10,528,921) --------------
TOTAL INVESTMENTS - 100.42%.............................................................................. 508,819,681
(Cost $508,819,681)** --------------
NET OTHER ASSETS AND LIABILITIES - (0.42%)............................................................... (2,127,817)
--------------
NET ASSETS - 100.00%..................................................................................... $ 506,691,864
==============
</TABLE>
- ------------------------------------------------------------
** Aggregate cost for Federal tax purposes.
(A) Annualized yields at time of purchase.
See Notes to Financial Statements.
1
<PAGE>
---------------
INSTITUTIONAL TREASURY MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
THE GALAXY FUND OCTOBER 31, 1995
---------------
<TABLE>
<S> <C>
ASSETS:
Investments at value (Note 2) (cost $508,819,681)................................... $ 508,819,681
Dividend receivable................................................................. 25,437
Deferred organizational expense (Note 2)............................................ 7,812
--------------
Total Assets..................................................................... 508,852,930
--------------
LIABILITIES:
Dividends payable................................................................... 2,015,888
Advisory fee payable (Note 3)....................................................... 40,801
Payable to FDISG (Note 3)........................................................... 16,895
Trustees' fees and expenses payable (Note 3)........................................ 4,643
Accrued expenses and other payables................................................. 82,839
--------------
Total Liabilities................................................................ 2,161,066
--------------
NET ASSETS............................................................................. $ 506,691,864
==============
NET ASSETS CONSIST OF:
Par value (Note 5).................................................................. $ 506,725
Paid-in capital in excess of par value.............................................. 506,217,814
Undistributed (overdistributed) net investment income............................... 4,970
Accumulated net realized gain (loss) on investments sold............................ (37,645)
--------------
TOTAL NET ASSETS....................................................................... $ 506,691,864
==============
SHARES OF BENEFICIAL INTEREST OUTSTANDING.............................................. 506,724,539
NET ASSET VALUE,
offering and redemption price per share
(Net Assets / Shares Outstanding)................................................... $ 1.00
==============
</TABLE>
See Notes to Financial Statements.
2
<PAGE>
---------------
INSTITUTIONAL TREASURY MONEY MARKET FUND
STATEMENT OF OPERATIONS
THE GALAXY FUND FOR THE YEAR ENDED OCTOBER 31, 1995
---------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (Note 2)................................................................... $ 21,288,101
Dividends (Note 2).................................................................. 241,574
------------
Total investment income........................................................... 21,529,675
------------
EXPENSES:
Investment advisory fee (Note 3).................................................... 774,721
Administration fee (Note 3)......................................................... 339,025
Custodian fee....................................................................... 6,435
Fund accounting fee (Note 3)........................................................ 43,255
Legal fee (Note 3).................................................................. 15,778
Audit fee........................................................................... 10,366
Transfer agent fee (Note 3)......................................................... 5,475
Trustees' fees and expenses (Note 3)................................................ 7,473
Amortization of organization costs (Note 2)......................................... 3,077
Reports to shareholders............................................................. 12,692
Registration fees................................................................... 49,551
Insurance........................................................................... 2,273
Miscellaneous....................................................................... 6,098
------------
Total Expenses.................................................................... 1,276,219
Less: Reimbursement/waiver (Note 4)............................................... (600,937)
------------
Total Expenses net of reimbursement/waiver....................................... 675,282
------------
NET INVESTMENT INCOME.................................................................. 20,854,393
------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS SOLD (NOTE 2).................................. 13,395
------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 20,867,788
============
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
---------------
INSTITUTIONAL TREASURY MONEY MARKET FUND
THE GALAXY FUND STATEMENTS OF CHANGES IN NET ASSETS
---------------
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
--------------------------------------
1995 1994
--------------- ---------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD................................................. $ 326,224,725 $ 158,889,990
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income.......................................................... 20,854,393 9,296,269
Net realized gain (loss) on investments sold................................... 13,395 (50,798)
--------------- ---------------
Net increase (decrease) in net assets resulting from operations............. 20,867,788 9,245,471
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.......................................................... (20,854,393) (9,296,269)
--------------- ---------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares.............................................. 1,683,995,336 1,501,365,180
Issued to shareholders in reinvestment of dividends............................ 2,162,560 1,571,344
Cost of shares repurchased..................................................... (1,505,704,152) (1,335,550,991)
--------------- ---------------
Net increase (decrease) from share transactions............................. 180,453,744 167,385,533
--------------- ---------------
Net increase (decrease) in net assets.................................... 180,467,139 167,334,735
--------------- ---------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A).................................... $ 506,691,864 $ 326,224,725
=============== ===============
(A) Accumulated undistributed (overdistributed) net investment income............. $ 4,970 $ --
=============== ===============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold........................................................................... 1,683,995,336 1,501,365,180
Issued to shareholders in reinvestment of dividends............................ 2,162,560 1,571,344
Repurchased.................................................................... (1,505,704,152) (1,335,550,991)
--------------- ---------------
Net increase (decrease) in shares outstanding............................... 180,453,744 167,385,533
=============== ===============
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
---------------
INSTITUTIONAL TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
THE GALAXY FUND FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
---------------
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
---------------------------------------------
1995 1994 1993/(1)/
---------- ---------- ----------
<S> <C> <C> <C>
Net Asset Value, Beginning of period $ 1.00 $ 1.00 $ 1.00
---------- ---------- ----------
Income from Investment Operations:
Net investment income (A) 0.05 0.04 0.02
Net realized and unrealized gain (loss) on investments -- -- --
---------- ---------- ----------
Total from Investment Operations: 0.05 0.04 0.02
---------- ---------- ----------
Less Dividends:
Dividends from net investment income (0.05) (0.04) (0.02)
Dividends from net realized capital gains -- -- --
---------- ---------- ----------
Total Dividends: (0.05) (0.04) (0.02)
---------- ---------- ----------
Net increase (decrease) in net asset value -- -- --
---------- ---------- ----------
Net Asset Value, End of period $ 1.00 $ 1.00 $ 1.00
========== ========== ==========
Total Return 5.53% 3.56% 1.59%**
Ratios/Supplemental Data:
Net Assets, End of period (000's) $ 506,692 $ 326,225 $ 158,890
Ratios to average net assets:
Net investment income including reimbursement/waiver 5.38% 3.63% 2.85%*
Operating expenses including reimbursement/waiver 0.17% 0.17% 0.14%*
Operating expenses excluding reimbursement/waiver 0.33% 0.39% 0.46%*
</TABLE>
- ------------------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on April 15, 1993.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or Administrator for the years ended October 31, 1995
and 1994 and for the period ended October 31, 1993 were $0.05, $0.04 and
$0.01, respectively.
See Notes to Financial Statements.
5
<PAGE>
---------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS
---------------
1. ORGANIZATION
The Galaxy Fund, a Massachusetts business trust (the "Trust"), is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management investment company. As of the date of this
report, the Trust offered twenty managed investment portfolios. The accompanying
financial statements and financial highlights are those of the Institutional
Treasury Money Market Fund (the "Fund") only.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies in conformity
with generally accepted accounting principles consistently followed by the Fund
in the preparation of its financial statements.
PORTFOLIO VALUATION: Securities in the Fund are valued utilizing the
amortized cost valuation method permitted in accordance with Rule 2a-7 under the
1940 Act. This method involves valuing a portfolio security initially at its
cost and thereafter assuming a constant amortization to maturity of any discount
or premium.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
accounted for on a trade date basis. Net realized gains or losses on sales of
securities are determined by the identified cost method. Interest income is
recorded on the accrual basis.
DIVIDENDS TO SHAREHOLDERS: Dividends from net investment income are
declared daily and paid monthly. Net realized capital gains, if any, are
distributed at least annually.
Income dividends and capital gain dividends are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles.
FEDERAL INCOME TAXES: The Trust treats the Fund as a separate entity for
Federal income tax purposes. The Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended. By so qualifying, the Fund will not be subject to Federal
income taxes to the extent that it distributes substantially all of its taxable
or tax-exempt income, if any, for its tax year ending October 31. In addition,
by distributing in each calendar year substantially all of its net investment
income, capital gains, and certain other amounts, if any, the Fund will not be
subject to a Federal excise tax. Therefore, no Federal income tax provision is
required.
EXPENSES: The Trust accounts separately for the assets, liabilities and
operations of the Fund. Expenses directly attributable to the Fund are charged
to the Fund, while expenses which are attributable to more than one fund of the
Trust are allocated among the respective funds.
ORGANIZATION COSTS: The Fund bears all costs in connection with its
organization, including the fees and expenses of registering and qualifying its
initial shares for distribution under Federal and state securities laws. All
such costs are amortized using the straight-line method over a period of five
years beginning with the Fund's commencement of operation. In the event that any
of the initial shares purchased by the Fund's sponsor are redeemed during such
period, the Fund will be reimbursed by any holder for any unamortized
organization costs in the same proportion as the number of initial shares being
redeemed bears to the number of initial shares outstanding at the time of
redemption.
6
<PAGE>
---------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
---------------
3. INVESTMENT ADVISORY, ADMINISTRATION AND OTHER FEES
The Trust and Fleet Investment Advisors Inc. (the "Investment Adviser"), an
indirect wholly-owned subsidiary of Fleet Financial Group, Inc., are parties to
an investment advisory agreement under which the Investment Adviser provides
services for a fee, computed daily and paid monthly, at the annual rate of 0.20%
of the average daily net assets of the Fund.
The Trust and First Data Investor Services Group, Inc. ("FDISG"), (formerly
known as The Shareholder Services Group, Inc. doing business as 440 Financial),
a wholly-owned subsidiary of First Data Corporation, are parties to an
administration agreement under which FDISG (the "Administrator") provides
services for a fee, computed daily and paid monthly, at the annual rate of 0.09%
of the first $2.5 billion of the combined average daily net assets of the Fund
and the other funds offered by the Trust, 0.085% of the next $2.5 billion of
combined average daily net assets and 0.08% of combined average daily net assets
over $5 billion. In addition, FDISG also provides certain fund accounting,
custody administration and transfer agency services pursuant to certain fee
arrangements. Pursuant to these fee arrangements, FDISG compensates the Trust's
custodian bank for its services. Prior to March 31, 1995, the administration,
fund accounting, custody administration and transfer agency services described
above were provided by 440 Financial Group of Worcester, Inc., a wholly-owned
subsidiary of State Mutual Life Assurance Company of America ("State Mutual"),
for the same annual fees. On that date, FDISG acquired substantially all of the
assets of 440 Financial Group of Worcester, Inc.
Prior to March 1, 1994, 440 Financial Group of Worcester, Inc. was entitled
to receive administration fees, computed daily and paid monthly, at the annual
rate of 0.078% of the first $2.5 billion of the combined average daily net
assets of the Fund and the other funds offered by the Trust, plus 0.073% of
combined average daily net assets in excess of $2.5 billion.
440 Financial Distributors, Inc. (the "Distributor"), a wholly-owned
subsidiary of FDISG and an indirect wholly-owned subsidiary of First Data
Corporation, acts as the exclusive distributor of the Trust's shares. Prior to
March 31, 1995, the Distributor was a wholly-owned subsidiary of 440 Financial
Group of Worcester, Inc. and an indirect wholly-owned subsidiary of State
Mutual. Prior to March 1, 1994, Allmerica Investments, Inc., a wholly-owned
subsidiary of State Mutual, served as the Trust's distributor.
Certain officers of the Trust may be officers of the Administrator and/or
Distributor. Such officers receive no compensation from the Trust for serving in
their respective roles. No officer, director or employee of the Investment
Adviser serves as an officer, Trustee or employee of the Trust. Effective
May 26, 1995, each Trustee is entitled to receive for services as a trustee of
both the Trust and The Galaxy VIP Fund ("VIP") an aggregate fee of $18,000 per
annum plus certain other fees for attending or participating in meetings as well
as reimbursement for expenses incurred in attending meetings. The Chairman of
the Boards of Trustees of the Trust and VIP is entitled to an additional annual
fee of $4,000, and the President and Treasurer of the Trust and VIP is entitled
to an additional annual fee of $2,500, for their services in these capacities.
These fees are allocated among the Funds of the Trust and VIP based on their
relative net assets.
Expenses for the year ended October 31, 1995 include legal fees paid to
Drinker Biddle & Reath. A partner of that firm is Secretary of the Trust.
7
<PAGE>
---------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
---------------
4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
The Investment Adviser and Administrator voluntarily agreed to waive a
portion of their fees and to reimburse the Fund for certain expenses so that
total expenses of the Fund would not exceed certain expense limitations. For the
year ended October 31, 1995, the Investment Adviser and Administrator waived
fees totaling $387,360 and $213,577, respectively, with respect to the Fund. The
Investment Adviser and Administrator, at their discretion, may revise or
discontinue the voluntary fee waivers and expense reimbursements.
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an
unlimited number of shares of beneficial interest in the Fund, each with a par
value of $0.001. The Trust's shares are classified into twenty classes of shares
including: Class S - Institutional Treasury Money Market Fund.
6. CAPITAL LOSS CARRYFORWARD
As of October 31, 1995, the Fund had capital loss carryforwards of $37,645,
expiring in 2002.
------------------------------------------------------------
TAX INFORMATION (UNAUDITED)
During the fiscal year ended October 31,1995, 100% of the income earned by
the Fund was from direct obligations of the U.S. Government. Appropriate tax
information detailing this information on a calendar year basis will accompany
your year-end tax statement. As each state's rules on the exemption of this
income differ, please consult your tax advisor regarding specific tax treatment.
8
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
The Galaxy Fund:
We have audited the accompanying statements of assets and liabilities of
the Institutional Treasury Money Market Fund, including the portfolio of
investments, as of October 31, 1995, and the related statement of operations,
the statements of changes in net assets, and financial highlights for each of
the periods indicated therein. These financial statements and financial
highlights are the responsibility of The Galaxy Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
aforementioned series of The Galaxy Fund as of October 31, 1995, the results of
its operations, the changes in its net assets, and its financial highlights for
each of the periods indicated therein, in conformity with generally accepted
accounting principles.
Boston, Massachusetts Coopers & Lybrand L.L.P.
December 8, 1995
<PAGE>
This page left blank intentionally.
<PAGE>
This page left blank intentionally.
<PAGE>
This page left blank intentionally.
<PAGE>
This report is submitted for the general information of shareholders of The
Galaxy Fund. It is not authorized for distribution to prospective investors
unless accompanied or preceded by an effective prospectus for the Fund, which
contains more information concerning the Fund's investment policies, as well as
fees and expenses and other pertinent information. Read the prospectus carefully
before you invest.
Shares of the funds are not deposits or obligations of, or guaranteed or
endorsed by Fleet Financial Group, Inc. or any of its affiliates, Fleet
Investment Advisors Inc., or any Fleet bank. Shares of the funds are not
federally insured by the U.S. government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency. Investment return
and principal value will vary as a result of market conditions or other factors
so that shares of the funds, when redeemed, may be worth more or less than their
original cost. An investment in the funds involves investment risks, including
the possible loss of principal.
[RECYCLED PAPER LOGO APPEARS HERE]
This report was printed on recycled paper.
<PAGE>
----------------
--------------- BULK RATE
U. S. POSTAGE
GALAXY 4400 Computer Drive PAID
FUNDS Box 5108 PERMIT NO. 54201
--------------- Westboro, MA 01581-5108 BOSTON, MA
----------------
FN-244 (12/95)
<PAGE>
<PAGE>
[LOGO OF GALAXY FUNDS APPEARS HERE]
[A photo of two people walking near a garden appears on the cover.]
- --------------------------------------------------------------------------------
Equity Funds Report
- --------------------------------------------------------------------------------
Asset Allocation Fund . Equity Income Fund . Equity Value Fund
Equity Growth Fund . Small Company Equity Fund . International Equity Fund
- ------------------
Annual
Report
For the Year Ended
October 31, 1995
- ------------------
<PAGE>
- --------------------
CHAIRMAN'S
MESSAGE
- --------------------
Dear Shareholder:
Enclosed is your performance report for the Galaxy Equity Funds, which covers
the 12 months ended October 31, 1995. During this time, the Funds delivered
solid returns that, in most cases, were better than those for other funds with
similar investment objectives.
After languishing last year, stock prices improved soon after the period
began and moved significantly higher in the months that followed. For the
period, the S&P 500 earned a return of 26.44%. This was the 10th highest return
for stocks in the last five decades. Only in 19 of the last 50 years have stocks
returned more than 20%. Even with a lackluster performance in 1994, the average
return from stocks in the last two years was about 15%. This exceeds the average
13.5% return that stocks have earned over the last 50 years.
While recent stock returns have been unusual by historical standards, and
are no guarantee of future performance, they highlight the importance of a long-
term approach toward equity investing. Shareholders who remained fully invested
after the temporary market disappointments of 1994 were in positions to make the
most of the market rally in 1995. Investors who abandon their shares during
short-term market weakness often miss out on such opportunities. When stocks
averaged an annual return of 25.3% during the rally of 1982-87, for example,
investors who were not participating on the 40 days when prices rose the most
during this period averaged an annual return of just 4.3%.
Fluctuations in price are part of normal stock market cycles that typically
smooth out over time. Although stocks are unlikely in the coming year to repeat
the exceptional returns experienced over the last 12 months, Fleet Investment
Advisors Inc. believes there will still be many attractive investment
opportunities. It is these opportunities that make stocks an important part of a
well-diversified investment strategy.
The Market Overview that follows explains the major factors that were
involved in the recent market rally. Also included are individual Portfolio
Reviews that examine the different strategies Fleet Investment Advisors Inc.
used to take advantage of the rally. In addition, the report explores where
stock prices might be headed and considers how this might affect the Funds'
future investment strategies.
If you have additional questions after reading the report, you can contact
a an Investment Specialist, at any time, by calling 800-628-0414.
Sincerely,
/s/ Dwight E. Vicks, Jr.
Dwight E. Vicks, Jr.
Chairman of the Board of Trustees
- --------------------------------------
Mutual Funds:
. are not bank deposits
. are not FDIC insured
. are not obligations of Fleet Bank
. are not guaranteed by Fleet Bank
. are subject to investment risk
including possible loss of principal
amount invested
- --------------------------------------
<PAGE>
- --------------------
MARKET OVERVIEW
- --------------------
EQUITY MARKET OVERVIEW
By Fleet Investment Advisors Inc.
Many factors merged to drive stock prices sharply higher in the last 12 months.
During this time ongoing growth in the economy, moderate inflation and strong
improvements in corporate earnings along with sharp declines in interest rates
combined to make stocks highly attractive. These factors influenced investors to
invest large sums of money into equity mutual funds, which added more fuel to
the rally.
In addition, investors became optimistic that Congress would balance the
federal budget and reduce the tax on capital gains. This propelled stock prices
further, as investors looked for sustained growth in earnings and enhanced
after-tax returns. By targeting high-quality growth stocks, which led the rally,
the Galaxy Equity Funds produced consistently favorable returns for the 12
months ended October 31, 1995.
When the period began, stock prices had been flat for many months. Interest
rates were relatively high, and the economy was growing rapidly. To keep
inflation under control, and provide an economic "soft landing," the Federal
Reserve Board (the "Fed") continued to slow growth by boosting short-term
interest rates.
Between November 1994 and February 1995, the Fed raised its Fed Funds rate
from 4.75% to 6%. As investors grew less worried about inflation, long-term
interest rates and bond yields began to fall - which made stocks more attractive
to investors. Stocks became even more appealing as lower interest rates helped
to improve company profits more than analysts expected.
Stock prices enjoyed further gains in the second quarter of 1995, as
interest rates and bond yields continued to fall. As economic growth slowed,
investors began to believe that the Fed would push interest rates even lower to
reduce the chances of a recession. Lower rates became especially plausible as
Congress showed increased determination to cut the federal budget deficit.
Although the Fed lowered its Fed Funds rate to 5.75%, mixed news on the
economy rekindled inflation fears in July and August. This caused stocks to edge
lower, especially technology issues. By September, however, it was clear that
inflation was under control, and Congress seemed closer to balancing the budget.
Stock prices rose strongly, then stabilized again in October. By the end of
October, the S&P 500 had earned a total return of 26.44%. The Dow had risen from
3,863 to 4,755, a gain, without reinvested dividends, of 23.1%.
Overseas, rising interest rates and fears of inflation caused price
declines in many markets during the first half of the period. Although improving
economies raised prices in the second half, these gains were largely erased for
U.S. investors due to significant strengthening of the dollar.
1
<PAGE>
- --------------------
MARKET OVERVIEW
- --------------------
"Expecting the Fed to
slow the economy,
Fleet Investment
Advisors Inc. had
raised its commitment
to high-quality
growth stocks before
the period began."
INVESTMENT STRATEGIES
Expecting the Fed to slow economic growth, Fleet Investment Advisors Inc. raised
its commitment to high-quality growth stocks before the period began. Investors
have typically favored growth stocks in a slowing economy because their earnings
continue to expand.
Many of the Funds' growth stocks came from the technology sector, which
enjoyed increased demand for computers. For most of the period, technology
stocks far outpaced the rest of the market and provided the Funds with
attractive returns despite their downward turn during July and August.
We also invested heavily in consumer staples stocks, especially
pharmaceutical issues, whose earnings growth generally depends less on a
strengthening economy. Because we purchased many of these stocks when prices
were weak in 1994, they produced especially strong gains as prices rebounded in
1995. The Funds also earned robust returns from holdings in financial and
transportation stocks.
Since stock prices rose so quickly, we felt a price correction was imminent
and wanted to make the best of any new investment opportunities; therefore, we
maintained strong cash reserves for the funds.
PERFORMANCE AT-A-GLANCE
Average Annual Returns as of October 31, 1995
Retail Shares
[Bar charts representing the Average Annual Returns for Retail Shares as of
10/31/95 appear on this page]
<TABLE>
<CAPTION>
Asset Allocation Fund
Inception Date 12/30/91
<S> <C>
1 year 23.42%
3 years 10.76%
life of fund 9.12%
</TABLE>
<TABLE>
<CAPTION>
Equity Income Fund Inception Date 12/14/90
<S> <C>
1 year 22.23%
3 years 12.06%
life of fund 12.60%
</TABLE>
<TABLE>
<CAPTION>
Equity Value Fund Inception Date 9/1/88
<S> <C>
1 year 20.81%
3 years 15.40%
5 years 16.19%
life of fund 12.19%
</TABLE>
<TABLE>
<CAPTION>
Equity Growth Fund Inception Date 12/14/90
<S> <C>
1 year 24.54%
3 years 12.30%
life of fund 13.75%
</TABLE>
<TABLE>
<CAPTION>
Small Company Equity Fund
Inception Date 12/30/91
<S> <C>
1 year 34.01%
3 years 23.66%
life of fund 14.16%
</TABLE>
<TABLE>
<CAPTION>
International Equity Fund
Inception Date 12/30/91
<S> <C>
1 year -0.64%
3 years 10.99%
life of fund 7.52%
</TABLE>
2
<PAGE>
- --------------------
MARKET OVERVIEW
- --------------------
"If Congress
reduces the budget
deficit, moderate
growth and inflation
could encourage the Fed to cut
interest rates
again."
MARKET OUTLOOK
Fleet Investment Advisors Inc. believes that the gross domestic product ("GDP"),
which measures goods and services, will grow by about 2.5% in 1996 - up slightly
from an estimated 2.3% in 1995. With virtually no price gains for commodities,
such moderate growth should keep inflation near the current rate of 2.7%.
Moderate growth and inflation could encourage the Fed to cut interest rates
again. Lower interest rates tend to improve profits for many companies, making
stocks more attractive. Since a large part of recent profit gains came from
cutting costs, corporate profits may not rise as much in the year to come. With
ongoing growth, low interest rates and moderate inflation, however, we believe
the Dow could continue to rise modestly.
Although stocks remain reasonably priced compared to their earnings
potential, they've been quite expensive relative to dividend yields for some
time. If rapid economic growth raises new worry about inflation, or slower
growth causes major disappointment in earnings, there could still be a price
correction that might push the Dow back to the 4250 range.
For this reason, we expect to maintain a portion of the Galaxy Equity Funds
as cash reserves. If prices correct, or start to weaken, we would probably
invest this money in stocks that have lagged in the recent rally. These could
include stocks from cyclical sectors like retail, machinery and autos, which
should see increased earnings growth as the economy improves.
PERFORMANCE AT-A-GLANCE
Average Annual Returns as of October 31, 1995
Trust Shares
[Bar charts representing the Average Annual Returns for Trust Shares as of
10/31/95 appear on this page]
<TABLE>
<CAPTION>
Asset Allocation Fund
Inception Date 12/30/91
<S> <C>
1 year 23.68%
3 years 10.88%
life of fund 9.21%
</TABLE>
<TABLE>
<CAPTION>
Equity Income Fund Inception Date 12/14/90
<S> <C>
1 year 22.81%
3 years 12.27%
life of fund 12.73%
</TABLE>
<TABLE>
<CAPTION>
Equity Value Fund Inception date 9/1/88
<S> <C>
1 year 21.31%
3 years 15.59%
5 years 16.30%
life of fund 12.27%
</TABLE>
<TABLE>
<CAPTION>
Equity Growth Fund Inception Date 12/14/90
<S> <C>
1 year 25.08%
3 years 12.48%
life of fund 13.86%
</TABLE>
<TABLE>
<CAPTION>
Small Company Equity Fund
Inception Date 12/30/91
<S> <C>
1 year 34.73%
3 years 23.91%
life of fund 14.35%
</TABLE>
<TABLE>
<CAPTION>
International Equity Fund
Inception Date 12/30/91
<S> <C>
1 year -0.02%
3 years 11.22%
life of fund 7.70%
</TABLE>
3
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
GALAXY ASSET
ALLOCATION FUND
[A PHOTO OF ASSET ALLOCATION MANAGER DON JONES APPEARS HERE.]
By Don Jones
Portfolio Manager
As stock prices rallied in the last 12 months, the Galaxy Asset Allocation Fund
was heavily invested in many top-performing market sectors - such as technology,
consumer staples and finance. The Fund also enjoyed especially strong gains from
its investments in bonds as bond prices rose. Because of these strategies, the
Fund produced exceptional returns for the 12 months ended October 31, 1995 that
exceeded returns for other funds in its class.
During the period, the Fund's blend of equity and fixed income investments
produced total returns for Retail and Trust Shares of 23.42% and 23.68%,
respectively. That compares to a return of 17.87% for the average flexible fund
with similar investments tracked by Lipper Analytical Services. Over the same
period, the S&P 500, which tracks the performance of stocks only returned
26.44%.
REBALANCING THE PORTFOLIO
For most of the period, technology stocks were the clear market leaders. In the
first half of the period, as stocks began to strengthen, we increased the Fund's
allocation in technology. As expectations for slower economic growth increased
the popularity of consumer staples stocks, we increased holdings in this sector
from 15% to 19% during the first half of the year.
At the same time, we kept the Fund's commitment to bonds maturing in 10
years at approximately 40% of its fixed-income portfolio. In addition to
enhancing the Fund's yield, this increased its potential for capital gains. When
bond prices rise, prices of bonds with longer maturities tend to outpace prices
of shorter-maturity issues.
In the second quarter of 1995, after stock and bond prices had risen
sharply, we began to take profits in the technology and consumer staples stocks
that had done especially well. We used the proceeds from these sales to add new
consumer staples stocks, invest in additional consumer cyclical and financial
stocks, and raise the Fund's cash reserves. We felt the stronger cash position
would help us make the most of
GALAXY ASSET
ALLOCATION FUND
Distribution of Total Net Assets as of October 31, 1995
[A PIE CHART LISTING ASSET ALLOCATION FUND INVESTMENTS BY TYPE APPEARS HERE:]
<TABLE>
<S> <C>
Corporate & Convertible Bonds 2%
US Government & Agency Obligations 30%
Common Stocks 59%
Cash Equivalents & Other Net Assets and
Liabilities 9%
</TABLE>
GALAXY ASSET
ALLOCATION FUND
Growth of $10,000 investment*
[A MOUNTAIN CHART COMPARING THE GROWTH OF $10,000 INVESTED IN RETAIL SHARES AND
TRUST SHARES OF THE ASSET ALLOCATION FUND AND THE S&P 500 INDEX APPEARS HERE:]
<TABLE>
<CAPTION>
Start End
<S> <C> <C>
Retail Shares $10,000 $13,977
Trust Shares $10,000 14,019
Index $10,000 15,532
</TABLE>
* Since inception on 12/30/91. The S&P 500 is an unmanaged index in which
investors cannot invest. Results for the index do not reflect the expenses and
investment management fees incurred by the Fund.
4
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
any new opportunities that might result from a correction in stock prices.
To protect the Fund against a reversal in bond prices, we reduced the
weighting for longer-maturity issues. As before, we kept more than 90% of the
Fund's bond investments in securities issued by the U.S. Treasury and its
agencies. Because of strong gains in the prices of corporate bonds, corporate
yields had become less attractive.
In the final months of the period, as economic growth slowed and bond
prices headed higher, we increased investments in 30-year U.S. Treasury bonds.
With further gains in technology and consumer staples stocks, we continued to
take profits there. We began to add investments in capital goods stocks, as well
as investments in several regional banks. We believed continued consolidation in
the banking industry had created attractive opportunities in this group.
FUTURE STRATEGIES
We feel the Fund's fixed-income portfolio is well positioned to benefit from any
further drops in interest rates that might occur. If it seems that rates might
be bottoming, we would probably start to emphasize shorter-term securities,
which tend to hold up better than longer-maturity issues when rates rise and
bond prices fall.
With its current stock weightings, we believe the Fund should benefit
further from low levels of interest rates and continued growth in the economy.
To stay prepared for new opportunities that may occur, we expect to maintain the
current cash reserves in the months ahead.
Don Jones became manager of the Galaxy Asset Allocation Fund in April 1995. He
has had responsibility for the Galaxy New York Municipal Bond Fund since
September 1994 and has managed investment portfolios for Fleet Investment
Advisors Inc., and its predecessors, since 1988.
GALAXY EQUITY INCOME FUND
By Ed Klisiewicz
Portfolio Manager
Heavy demand for large, high-quality stocks, as well as for stocks with strong
dividends helped the Galaxy Equity Income Fund deliver strong returns for the 12
months ended October 31, 1995, that far exceeded those for other funds in its
class. During that time the Fund's Retail and Trust Shares had total returns of
22.23% and 22.81%, respectively, versus 17.88% for the average equity
GALAXY EQUITY INCOME FUND
Growth of $10,000 investment*
[A mountain chart comparing the growth of $10,000 invested in retail shares and
trust shares of the Equity Income Fund and the S&P 500 Index appears here:]
<TABLE>
<CAPTION>
Start End
<S> <C> <C>
Retail Shares $10,000 $17,849
Trust Shares $10,000 17,948
Index $10,000 20,502
</TABLE>
* Since inception on 12/14/90. The S&P 500 is an unmanaged index in which
investors cannot invest. Results for the index do not reflect the expenses and
investment management fees incurred by the Fund.
5
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
[A PHOTO OF EQUITY INCOME FUND MANAGER ED KLISIEWICZ APPEARS HERE]
Ed Klisiewicz
[CAPTION APPEARS HERE]
income fund tracked by Lipper Analytical Services. For the same period, the S&P
500 returned 26.44%.
MAXIMIZING RETURNS
As interest rates fell during the period, many investors were drawn to stocks
with high dividends. Meanwhile, the expectations for slower growth that drove
interest rates lower boosted demand for stocks issued by large, high-quality
companies whose earnings might prove more consistent in a weaker economy.
This was especially true in the economically defensive consumer staples
sector, where the Galaxy Equity Income Fund kept more than 20% of its
investments. Among the sector's top performers were drug and health care stocks,
which had lagged the market during the debate on health care reform. The Fund
also enjoyed strong performances from holdings in the financial services and
utilities sectors, which benefited from lower interest rates, as well as from
holdings in transportation and technology stocks. These gains more than offset
disappointing returns from stocks in the lagging retail and energy sectors.
During the period we took several steps to help the Fund make the most of
the rally in stock prices. In the first quarter of 1995, after prices had risen
quite sharply, we increased the Fund's cash reserves so we could take advantage
of any weakness in prices that might subsequently occur. We increased reserves
again in the final months of the period, as a price correction became a greater
possibility.
As stock prices retreated in the summer of 1995, we sold some of the Fund's
top-performing consumer staples stocks and added investments in technology,
financial and utility stocks. Among the new stocks we introduced during the
period were Banc One, Norwest, PPG Industries, SunTrust Banks and Thermo
Electron.
NEW OPPORTUNITIES
We expect to maintain a strong cash reserve in the months to come. While low
interest rates should support continued demand for high-dividend stocks, further
slowing in the economy could cause substantial disappointments in earnings. With
stock yields at historic lows, such disappointments in earnings might still
produce a correction in prices that could provide many opportunities for new
investments. As investors continue to look for defensive plays, we believe many
of these opportunities could come from the consumer staples sector. They may
also come from technology stocks, where the long-term potential for earnings
remains quite strong.
Ed Klisiewicz has been portfolio manager of the Galaxy Equity Income Fund since
its inception in December of 1990. He has managed portfolios for Fleet
Investment Advisors Inc. and its predecessors since 1970.
GALAXY EQUITY
INCOME FUND
Distribution of Total Net Assets
as of October 31, 1995
[A pie chart listing Equity Income Fund investments by type appears here:]
<TABLE>
<S> <C>
Other Common Stocks 14%
US Government & Agency Obligations 4%
Consumer Staples 22%
Utilities 11%
Capital Goods 8%
Energy 10%
Financial 9%
Technology 10%
Cash Equivalents & Other Net Assets and
Liabilities 12%
</TABLE>
6
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
GALAXY EQUITY VALUE FUND
By G. Jay Evans
Portfolio Manager
[A photo of Equity Value Fund manager G. Jay Evans appears here.]
G. Jay Evans
[CAPTION APPEARS HERE]
The Galaxy Equity Value Fund posted solid returns in the last 12 months, helped
by a significant weighting in financial stocks and favorable performances from
holdings in the technology sector. During the 12 months ended October 31, 1995,
the Fund's Retail and Trust Shares earned total returns of 20.81% and 21.31%,
respectively. That compares with a return of 20.23% for the average growth and
income fund tracked by Lipper Analytical Services. So while the Fund performed
well in the last 12 months, when compared to other funds in its class, it
lagged the 26.44% return of the S&P 500, which has a large percentage of growth
stocks.
The Fund invests in a diversified portfolio of stocks that appear to be
underpriced compared to their potential for capital appreciation. Often, these
stocks come from "cyclical" sectors of the market, where earnings tend to be
strongest when the economy is robust. Because investors believed the economy
would slow in the past year, they often favored "growth" companies whose
earnings could improve even if the economy was weak. Economic uncertainty also
favored stocks of large companies over the smaller firms that make up a large
part of the Fund's portfolio.
BENEFITING FROM LONG-TERM GROWTH
By controlling the rate of economic expansion, the Fed has curbed inflation and
set the stage for a long period of economic growth and an extended cycle of
capital investment. This has increased interest in technology stocks, whose
returns in the past year were nearly double those for the market as a whole.
Financial stocks have also benefited due to increased demand for loans, lower
interest rates and potential cost savings from industry consolidation.
The Galaxy Equity Value Fund benefited from both trends in the past year.
During the period, we raised the Fund's weighting in financial stocks from 13%
to 16%. Within that sector, the Fund enjoyed particularly strong performances
from investments in Citicorp, NationsBank, Bank of Boston, Firstar, and Merrill
Lynch. By the end of the period, we had also increased holdings in technology
stocks from 13% of the portfolio to 15%. During the year, we took profits in
issues with especially
GALAXY EQUITY
VALUE FUND
Distribution of Total Net Assets
as of October 31, 1995
[A pie chart listing Equity Value Fund investments by type appears here:]
<TABLE>
<S> <C>
Financial 16%
Transportation 6%
Capital Goods 8%
Technology 15%
Basic Materials 7%
Consumer Staples 15%
Utilities 9%
Other Common Stocks 10%
Cash Equivalents & Other Net Assets
and Liabilities 14%
</TABLE>
GALAXY EQUITY
VALUE FUND
Growth of $10,000 investment*
[A mountain chart comparing the growth of $10,000 invested in retail shares and
trust shares of the Equity Value Fund and the S&P 500 Index appears here:]
<TABLE>
<CAPTION>
Start End
<S> <C> <C>
Retail Shares $10,000 $22,803
Trust Shares $10,000 22,915
Index $10,000 27,766
</TABLE>
* Since inception on 9/1/88. The S&P 500 is an unmanaged index in which
investors cannot invest. Results for the index do not reflect the expenses and
investment management fees incurred by the Fund.
7
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
strong gains and added selected issues that offered better value. Among the
Fund's strongest technology investments over the course of the period were Dell
Computer, Cabletron, and Intel. There were also strong gains from selected
consumer cyclical stocks such as Family Dollar Stores and Circuit City, as well
as many investments in the health care and utilities groups.
GOING FORWARD
Throughout the period we added cyclical issues that have fallen from favor and
represent good value in an economic "soft landing." Stocks may be vulnerable to
earnings disappointments as the economy slows in upcoming months. But investors
should realize that, with a lack of inflation or other constraints on the
economy, the Fed should be able to keep interest rates low enough to fuel an
economic expansion that could continue through the late 1990s. With an
overweighting, as compared to the S&P 500 Index, in financial, consumer
cyclical, capital goods and technology stocks - balanced by an appropriate
underweighting in defensive sectors such as consumer nondurables, energy and
utilities - we believe the Galaxy Equity Value Fund is well-positioned to
benefit from such a long-term expansion.
G. Jay Evans has managed the Galaxy Equity Value Fund since April 1992. He has
managed value-oriented portfolios for Fleet Investment Advisors Inc. and its
predecessors since 1981.
GALAXY EQUITY GROWTH FUND
By Bob Armknecht
Portfolio Manager
Believing that the economy would slow, many investors favored stocks of growth
companies in the past year. This was because the potential earnings for these
companies tend to remain strong even when the economy is weak. Because investor
preference for growth stocks especially favored technology stocks, the Galaxy
Equity Growth Fund benefitted because it had invested a large part of its
portfolio in these stocks. With favorable performances by investments in
technology, and strong gains from financial and health care stocks, the Fund's
returns for the 12 months ended October 31, 1995 outpaced other funds in its
class.
During the period, the Fund's Retail and Trust Shares had total returns of
24.54% and 25.08%, respectively, versus an average return of 22.14% for
GALAXY EQUITY
GROWTH FUND
Growth of $10,000 investment*
[A mountain chart comparing the growth of $10,000 invested in retail shares and
trust shares of the Equity Growth Fund and the S&P 500 Index appears here:]
<TABLE>
<CAPTION>
Start End
<S> <C> <C>
Retail Shares $10,000 $18,755
Trust Shares $10,000 18,849
Index $10,000 20,502
</TABLE>
* Since inception on 12/14/90. The S&P 500 is an unmanaged index in which
investors cannot invest. Results for the index do not reflect the expenses and
investment management fees incurred by the Fund.
8
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
[A photo of Equity Growth Fund manager Bob Armknecht appears here.]
Bob Armknecht
[CAPTION APPEARS HERE]
growth funds tracked by Lipper Analytical Services. The return for the S&P 500
during the period was 26.44%.
INVESTMENT STRATEGIES
Late in 1994, about 14% of the Fund was invested in technology. As the dollar
weakened, making U.S. exports more attractive to overseas markets, we increased
the Fund's investments in technology - reaching a weighting of 23% by the end of
April. We also emphasized multinational firms in the consumer staples, equipment
manufacturing and drug sectors that would benefit from a weaker dollar. In
addition, we purchased select issues from the financial sector, which benefited
from falling interest rates, as well as from the energy sector, which enjoyed
increased potential for earnings due to higher prices for oil.
As technology prices soared in the second quarter, we began to take profits
from top-performing issues like Microsoft and Hewlett-Packard. At the same time,
we raised the Fund's weighting in basic materials stocks - adding shares of
Georgia Pacific and PPG. In addition, we increased the Fund's cash reserves,
believing a correction in stock prices was possible. We felt a strong reserve
could help us make the most of any investment opportunities that might arise.
In the third quarter, we added several regional banks to the Fund's
portfolio. In addition to benefiting from lower interest rates, we believed
these companies could enjoy significant price gains due to ongoing consolidation
in the banking industry. We continued to take profits in strongly performing
technology stocks during this time. With further gains in the prices of
technology stocks, however, the sector weighting remained greater than 20%.
During the year we also maintained a strong position in consumer staples
issues, raising the weighting for that group.
LOOKING AHEAD
Many investors now believe that the rate of growth in corporate earnings has
probably peaked. As earnings fall short of investors' expectations, there could
still be a temporary correction in prices. With interest rates low and U.S.
companies in a strong competitive position, however, we believe the earnings of
growth companies should remain relatively solid. As a result, we would view any
correction as an important buying opportunity. We thus expect to maintain
sizable cash reserves for the Galaxy Equity Growth Fund in the near term so we
could take advantage of such an event.
Bob Armknecht has been managing the Galaxy Equity Growth Fund since its
inception in December 1990. He has managed equity portfolios for Fleet
Investment Advisors Inc. since 1988.
GALAXY EQUITY
GROWTH FUND
Distribution of Total Net Assets
as of October 31, 1995
[A pie chart listing Equity Growth Fund investments by type appears here:]
<TABLE>
<S> <C>
Financial 9%
Energy 7%
Consumer Cyclicals 8%
Capital Goods 9%
Technology 20%
Consumer Staples 24%
Other Common Stocks 7%
Cash Equivalents & Other Net Assets
and Liabilities 16%
</TABLE>
9
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
GALAXY SMALL COMPANY EQUITY FUND
[A PHOTO OF SMALL COMPANY EQUITY FUND MANAGER STEVE BARBARO APPEARS HERE]
Steve Barbaro
[CAPTION APPEARS HERE]
By Steve Barbaro
Portfolio Manager
As a slowing economy made growth stocks more attractive to investors in the last
year, demand for stocks of small companies gradually increased. This was
particularly true for stocks in the technology sector, whose long-term prospects
for growth are especially strong, and for stocks in the consumer staples group,
whose earnings tend to grow even when the economy is weak. By investing heavily
in these areas, the Galaxy Small Company Equity Fund enjoyed extraordinary
returns for the 12 months ended October 31, 1995.
During the period, the Fund's Retail and Trust shares had total returns of
34.01% and 34.73%, respectively. These returns far outdistanced the average
return of 22.72% for small-company growth funds tracked by Lipper Analytical
Services and the return of 18.33% for the Russell 2000 Index.
PREPARING FOR A SLOWER ECONOMY
As the period began, many investors were drawn to stocks of large multinational
companies, whose earnings improved as weakness in the dollar made U.S. exports
more attractive overseas. Although many technology companies are relatively
small, they benefited from stronger exports, too, as well as from increased
sales to U.S. businesses seeking to improve productivity.
By the middle of 1995, the dollar began to strengthen. This reduced the
earnings potential for larger multinational firms, making the earnings for
smaller companies seem more attractive. With increased emphasis on earnings
growth in a slowing economy, small-company stocks rallied strongly in the
period's second half. During this time small-company consumer staples and
technology stocks performed particularly well.
Strong price appreciation, combined with new investments, raised the Fund's
weighting in technology from 29% to 45% during the period. By comparison, the
Russell 2000 Index had a weighting in technology of 17% when the period closed.
Throughout the year, we locked in profits in this sector by reducing holdings
that had performed as well as or better than we'd expected, and added new
positions that offered strong potential for growth. Many of these new
investments, like Cascade Communications and Cree Research, made immediate
contributions to the Fund's return. While decreasing the Fund's focus on
economically sensitive consumer cyclical stocks, we kept a position in consumer
staples stocks of 12% to 15%. During the period there were many individual
issues that also added significantly to the Fund's return. Among the top
performers were Wolverine Worldwide, Steris Corp., and Lunar Corp.
GALAXY SMALL COMPANY
EQUITY FUND
Growth of $10,000 investment*
[A mountain chart comparing the growth of $10,000 invested in retail shares of
the Small Company Equity Fund and Russell 2000 Index appears here:]
<TABLE>
Start End
<S> <C> <C>
Retail Shares $10,000 $16,621
Trust Shares $10,000 16,723
Index $10,000 16,635
</TABLE>
* Since inception on 12/30/91. The Russell 2000 is an unmanaged index in which
investors cannot invest. Results for the index do not reflect the expenses and
investment management fees incurred by the Fund.
10
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
NEW OPPORTUNITIES
We believe the stocks of small companies should continue to perform well in the
months ahead. Historically, these issues have tended to produce above-average
earnings growth in the late stages of an economic cycle - which is where we
probably are today. In addition, small company stocks remain reasonably valued
compared with their potential for earnings and have only moved through half of
the average upside of their historic market cycle.
We have recently added investments in energy stocks. These stocks have
become quite attractively priced and we believe should benefit from increased
energy demand.
Steve Barbaro has managed the Galaxy Small Company Equity Fund since its
inception in December 1991. He has managed small company portfolios for Fleet
Investment Advisors Inc. and its predecessors since 1977.
GALAXY INTERNATIONAL EQUITY FUND
By David von Hemert
Portfolio Manager, Fleet Investment Advisors Inc. and
Trond Skramstad
Portfolio Manager, Wellington Management Co.
The past year has been a difficult one for foreign stocks. After facing a
variety of economic and market hurdles at the end of 1994, U.S. investors who
ventured overseas met additional setbacks in 1995. These included devaluation of
the Mexican peso, strengthening in the U.S. dollar and an earthquake and a
banking crisis in Japan. Although many of the world's economies have
strengthened, offering a positive long-term outlook for foreign stocks, returns
have been disappointing in the near-term for the Galaxy International Equity
Fund and other funds in its class.
For the 12 months ended October 31, 1995, Retail and Trust Shares of the
Galaxy International Equity Fund delivered returns of -0.64% and -0.02%,
respectively. That compares with -1.09% for the average international fund
tracked by Lipper Analytical Services. For the same period, the Morgan Stanley
Europe, Australia & Far East Index (EAFE) returned -0.06%.
TARGETING MAJOR MARKETS
In the first part of 1995, a weak dollar buffered U.S. investors from sharp
declines in stock prices overseas. By the second and third quarters, however,
improvements in overseas stocks were
GALAXY SMALL COMPANY
EQUITY FUND
Distribution of Total Net Assets
as of October 31, 1995
[A pie chart listing Small Company Equity Fund investments by type appear here:]
<TABLE>
<S> <C>
Financial 5%
Basic Materials 8%
Energy 5%
Consumer Cyclicals 6%
Capital Goods 6%
Technology 45%
Consumer Staples 14%
Other Common Stocks 7%
Cash Equivalents & Other Net Assets
and Liabilities 4%
</TABLE>
GALAXY INTERNATIONAL EQUITY FUND
Growth of $10,000 investment*
[A mountain chart comparing the growth of $10,000 invested in retail shares of
the International Equity Fund and the Margan Stanley EAFE Index appears here:]
<TABLE>
<CAPTION>
Start End
<S> <C> <C>
Retail Shares $10,000 $13,208
Trust Shares $10,000 13,291
Index $10,000 13,126
</TABLE>
* Since inception on 12/30/91. The Morgan Stanley Europe, Australia & Far East
Index (EAFE) is an unmanaged index in which investors cannot invest. Results
for the index do not reflect the expenses and investment management fees
incurred by the Fund.
11
<PAGE>
- --------------------
MARKET OVERVIEW
- --------------------
largely mitigated by a strengthening in the dollar that made foreign returns
worth less to U.S. investors.
[A photo of International Equity Fund manager David Hemert appears here:]
David von Hemert
[CAPTION APPEARS HERE]
For most of the year, we concentrated the Fund's investments in the larger
markets of Europe and Japan. With improvements in the economies of Europe, we
increased investments there from 39% of the Fund's portfolio to 50%. The Fund's
commitment to Japan remained near 25% throughout this time.
Many of these investments are stocks of companies that we believe should
enjoy attractive earnings growth from expanding economies. We've also emphasized
companies that we believe can benefit from corporate restructuring. Among the
Fund's new investments in the past year were Sumitomo Trust and Banking, Sekisui
House, and Keio Teito Electric Railway in Japan; Bank National de Paris, a
French bank, and Tele Denmark, a Danish telephone company.
We took a more cautious approach toward Mexico and Latin America. Continued
weakening in the peso kept stock prices there somewhat volatile, in spite of
signs of an improving economy.
THE MONTHS TO COME
We expect to maintain these strategies in the months to come. Although Europe
showed signs of temporary economic weakness in 1995's third quarter, the
economies there seem committed to a longer-term expansion. We have used
momentary slides in prices, therefore, to purchase shares of high-quality stocks
with strong potential for growth. These include Rhone-Poulenc, a French chemical
company, and Degussa, a German manufacturer of specialty materials.
As the Japanese government implements measures to launch an economic
recovery there, we expect to add positions in companies that can benefit most
from a growing economy. In the rest of the Pacific Basin we will continue to
look for attractive opportunities that do not involve undue risk. We expect to
remain more cautious in the emerging markets in Latin America, however, until
the devaluation of the peso is no longer a threat to the health of economies
there.
David von Hemert became manager of the Galaxy International Fund in August 1994
and has managed money for Fleet Investment Advisors since 1980. Trond Skramstad
became co-manager of the Fund in January 1995. He has managed money for
Wellington Management since 1993.
- --------------------------------------------------------------------------------
Investment returns and principal values will vary with market conditions so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. The Investment Adviser is presently waiving fees and/or
reimbursing expenses. Without such waivers or reimbursements, performance would
be lower. Past performance is no guarantee of future results. Total return
figures in this report include changes in share price, and reinvestment of
dividends and capital gains distributions, if any.
GALAXY INTERNATIONAL
EQUITY FUND
Distribution of Total Net Assets
as of October 31, 1995
[A pie chart listing International Equity Fund investments by region appears
here:]
<TABLE>
<S> <C>
Europe 50%
Australia and Far East 41%
Canada 2%
South America 2%
Cash Equivalents & Other Net Assets
and Liabilities 5%
</TABLE>
12
<PAGE>
- --------------------
ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
COMMON STOCKS - 59.40%
CONSUMER STAPLES - 14.65%
20,000 American Home Products Corp.................................................. $ 1,772,500
40,000 Bristol-Myers Squibb Co...................................................... 3,050,000
40,000 Coca-Cola Co................................................................. 2,875,000
60,000 Gillette Co.................................................................. 2,902,500
50,000 Johnson & Johnson............................................................ 4,075,000
80,000 McDonald's Corp.............................................................. 3,280,000
30,000 Merck & Co., Inc............................................................. 1,725,000
30,000 PepsiCo, Inc................................................................. 1,582,500
40,000 Sara Lee Corp................................................................ 1,175,000
-------------
22,437,500
-------------
TECHNOLOGY - 11.86%
40,000 American Telephone & Telegraph Corp.......................................... 2,560,000
30,000 Automatic Data Processing, Inc............................................... 2,145,000
30,000 CISCO Systems, Inc.*......................................................... 2,325,000
20,000 Dow Chemical Co.............................................................. 1,372,500
20,000 Intel Corp................................................................... 1,397,500
25,000 Microsoft Corp.*............................................................. 2,500,000
30,000 Motorola, Inc................................................................ 1,968,750
30,000 Xerox Corp................................................................... 3,892,500
-------------
18,161,250
-------------
FINANCIAL - 7.75%
31,500 American International Group, Inc............................................ 2,657,812
12,000 Barnett Banks, Inc........................................................... 663,000
40,000 Citicorp..................................................................... 2,595,000
12,000 Crestar Financial Corp....................................................... 684,000
25,000 Federal National Mortgage Association........................................ 2,621,875
60,000 Hibernia Corp., Class A...................................................... 592,500
20,000 Old Kent Financial Corp...................................................... 765,000
20,000 SunTrust Banks, Inc.......................................................... 1,290,000
-------------
11,869,187
-------------
CAPITAL GOODS - 6.51%
30,000 Boeing Co.................................................................... 1,968,750
54,000 General Electric Co.......................................................... 3,415,500
35,000 Ingersoll-Rand Co............................................................ 1,238,125
24,000 Raytheon Co.................................................................. 1,047,000
50,000 Thermo Electron Corp.*....................................................... 2,300,000
-------------
9,969,375
-------------
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
- --------------------
ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
ENERGY - 5.21%
42,000 Amoco Corp................................................................... $ 2,682,750
50,000 Halliburton Co............................................................... 2,075,000
32,000 Mobil Corp................................................................... 3,224,000
-------------
7,981,750
-------------
CONSUMER CYCLICAL - 5.07%
34,400 Armstrong World Industries, Inc.............................................. 2,042,500
50,000 Home Depot, Inc.............................................................. 1,862,500
125,000 Wal-Mart Stores, Inc......................................................... 2,703,125
20,000 Walt Disney Co............................................................... 1,152,500
-------------
7,760,625
-------------
UTILITIES - 3.05%
25,000 GTE Corp..................................................................... 1,031,250
20,000 LG & E Energy Corp........................................................... 830,000
95,000 Wisconsin Energy Corp........................................................ 2,802,500
-------------
4,663,750
-------------
TRANSPORTATION - 2.84%
84,000 Ford Motor Co................................................................ 2,415,000
25,000 Norfolk Southern Corp........................................................ 1,931,250
-------------
4,346,250
-------------
BASIC MATERIALS - 2.46%
25,000 Georgia-Pacific Corp......................................................... 2,062,500
40,000 PPG Industries, Inc.......................................................... 1,700,000
-------------
3,762,500
-------------
TOTAL COMMON STOCKS.......................................................... 90,952,187
(Cost $72,074,782) -------------
<CAPTION>
PAR VALUE
---------
<C> <S> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 29.65%
U.S. TREASURY NOTES - 12.88%
$ 2,000,000 7.38%, 05/15/96.............................................................. 2,019,040
2,500,000 6.13%, 12/31/96.............................................................. 2,516,897
2,000,000 7.88%, 04/15/98.............................................................. 2,100,138
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
- --------------------
ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
U.S. TREASURY NOTES (CONTINUED)
$ 1,500,000 7.00%, 04/15/99.............................................................. $ 1,557,944
2,000,000 6.00%, 10/15/99.............................................................. 2,017,378
2,000,000 6.25%, 05/31/00.............................................................. 2,035,640
2,000,000 7.50%, 11/15/01.............................................................. 2,163,678
3,000,000 7.50%, 05/15/02.............................................................. 3,260,577
2,000,000 6.38%, 08/15/02.............................................................. 2,053,400
-------------
19,724,692
-------------
U.S. TREASURY BONDS - 7.51%
5,000,000 7.63%, 02/15/07.............................................................. 5,389,950
2,500,000 7.88%, 11/15/07.............................................................. 2,761,300
1,000,000 8.13%, 08/15/19.............................................................. 1,203,559
2,000,000 6.88%, 08/15/25.............................................................. 2,147,840
-------------
11,502,649
-------------
FEDERAL HOME LOAN BANK - 4.78%
500,000 6.00%, 04/25/97.............................................................. 499,950
1,000,000 6.00%, 10/30/97.............................................................. 1,000,000
300,000 7.05%, 05/22/98.............................................................. 300,126
1,000,000 7.00%, 06/12/00.............................................................. 1,006,379
2,000,000 7.00%, 09/21/00.............................................................. 2,000,198
1,500,000 7.00%, 06/27/02.............................................................. 1,502,893
1,000,000 7.56%, 06/14/05.............................................................. 1,005,739
-------------
7,315,285
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.74%
2,000,000 8.18%, 04/15/24.............................................................. 2,083,898
2,000,000 8.50%, 05/20/24.............................................................. 2,115,900
-------------
4,199,798
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 1.34%
1,000,000 7.74%, 06/01/04.............................................................. 1,040,280
1,000,000 7.05%, 06/08/05.............................................................. 1,022,269
-------------
2,062,549
-------------
FEDERAL FARM CREDIT BANK - 0.40%
500,000 6.75%, 05/26/98.............................................................. 502,425
100,000 8.25%, 05/01/07.............................................................. 105,239
-------------
607,664
-------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS................................. 45,412,637
(Cost $44,192,726) -------------
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
- --------------------
ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
CORPORATE NOTES AND BONDS - 1.71%
$ 200,000 American Telephone & Telegraph Corp.
7.00%, 05/15/05.............................................................. $ 208,250
1,200,000 Citicorp, MTN
8.63%, 11/01/04.............................................................. 1,281,000
1,000,000 Southwestern Bell
7.75%, 09/01/09.............................................................. 1,021,250
100,000 Xerox Corp.
8.13%, 04/15/02.............................................................. 109,125
-------------
TOTAL CORPORATE NOTES AND BONDS.............................................. 2,619,625
(Cost $2,467,754) -------------
REPURCHASE AGREEMENT - 9.07%
13,893,939 Chase Securities, Inc.
5.75%, 11/01/95, Dated 10/31/95
Repurchase Price $13,896,159
(Collateralized by U.S. Treasury Note 5.88%, Due 1997;
Total Par Value $13,930,000; Market Value $14,173,775)....................... 13,893,939
-------------
TOTAL REPURCHASE AGREEMENT................................................... 13,893,939
(Cost $13,893,939) -------------
TOTAL INVESTMENTS - 99.83%..................................................................... 152,878,388
(Cost $132,629,201) -------------
NET OTHER ASSETS AND LIABILITIES - 0.17%....................................................... 260,217
-------------
NET ASSETS - 100.00%........................................................................... $ 153,138,605
=============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security
MTN Medium Term Note
See Notes to Financial Statements.
16
<PAGE>
- --------------------
EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
COMMON STOCKS - 83.91%
CONSUMER STAPLES - 21.51%
15,000 Abbott Laboratories.......................................................... $ 596,250
12,000 Anheuser-Busch Cos., Inc..................................................... 792,000
52,000 Bristol-Myers Squibb Co...................................................... 3,965,000
50,000 General Mills, Inc........................................................... 2,868,750
50,000 Johnson & Johnson............................................................ 4,075,000
93,000 McDonald's Corp.............................................................. 3,813,000
40,000 Merck & Co., Inc............................................................. 2,300,000
80,000 PepsiCo, Inc................................................................. 4,220,000
45,000 Pfizer, Inc.................................................................. 2,581,875
55,000 Procter & Gamble Co.......................................................... 4,455,000
80,000 Rite Aid Corp................................................................ 2,160,000
138,000 Sara Lee Corp................................................................ 4,053,750
20,000 Sysco Corp................................................................... 607,500
-------------
36,488,125
-------------
UTILITIES - 11.37%
125,000 Allegheny Power Systems, Inc................................................. 3,296,875
62,000 Bell Atlantic Corp........................................................... 3,944,750
125,000 GTE Corp..................................................................... 5,156,250
160,000 Washington Gas Light Co...................................................... 3,060,000
130,000 Wisconsin Energy Corp........................................................ 3,835,000
-------------
19,292,875
-------------
ENERGY - 10.08%
30,000 Amoco Corp................................................................... 1,916,250
35,000 Atlantic Richfield Co........................................................ 3,736,250
26,000 Chevron Corp................................................................. 1,215,500
50,000 Exxon Corp................................................................... 3,818,750
100,000 Halliburton Co............................................................... 4,150,000
9,000 Mobil Corp................................................................... 906,750
20,000 Texaco, Inc.................................................................. 1,362,500
-------------
17,106,000
-------------
TECHNOLOGY - 9.93%
70,000 American Telephone & Telegraph Corp.......................................... 4,480,000
110,000 AMP, Inc..................................................................... 4,317,500
36,000 Automatic Data Processing, Inc............................................... 2,574,000
40,000 Dow Chemical Co.............................................................. 2,745,000
21,000 Xerox Corp................................................................... 2,724,750
-------------
16,841,250
-------------
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
- --------------------
EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
FINANCIAL - 9.15%
61,000 Aetna Life & Casualty Co..................................................... $ 4,292,875
15,000 American International Group, Inc............................................ 1,265,625
25,000 Banc One Corp................................................................ 843,750
20,000 Chase Manhattan Corp......................................................... 1,140,000
22,000 Federal National Mortgage Association........................................ 2,307,250
17,000 Morgan (J.P.) & Co., Inc..................................................... 1,311,125
82,000 Norwest Corp................................................................. 2,419,000
30,000 SunTrust Banks, Inc.......................................................... 1,935,000
-------------
15,514,625
-------------
CAPITAL GOODS - 7.58%
30,000 Boeing Co.................................................................... 1,968,750
50,000 Deere & Co................................................................... 4,468,750
42,000 General Electric Co.......................................................... 2,656,500
25,000 Hubbell, Inc., Class B....................................................... 1,506,250
20,000 Thermo Electron Corp.*....................................................... 920,000
15,000 United Technologies Corp..................................................... 1,331,250
-------------
12,851,500
-------------
TRANSPORTATION - 5.36%
175,000 Ford Motor Co................................................................ 5,031,250
12,000 Norfolk Southern Corp........................................................ 927,000
48,000 Union Pacific Corp........................................................... 3,138,000
-------------
9,096,250
-------------
CONSUMER CYCLICAL - 4.80%
45,000 Armstrong World Industries, Inc.............................................. 2,671,875
35,000 Dayton Hudson Corp........................................................... 2,406,250
37,000 General Motors Corp., Class E................................................ 1,743,625
15,000 Sherwin-Williams Co.......................................................... 564,375
35,000 Wal-Mart Stores, Inc......................................................... 756,875
-------------
8,143,000
-------------
BASIC MATERIALS - 4.13%
15,000 Consolidated Papers, Inc..................................................... 858,750
15,000 Georgia-Pacific Corp......................................................... 1,237,500
40,000 Minnesota Mining & Manufacturing Co.......................................... 2,275,000
10,000 PPG Industries, Inc.......................................................... 425,000
50,000 Weyerhaeuser Co.............................................................. 2,206,250
-------------
7,002,500
-------------
TOTAL COMMON STOCKS.......................................................... 142,336,125
(Cost $113,463,885) -------------
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
- --------------------
EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS - 3.61%
U.S. TREASURY NOTES - 2.48%
$ 250,000 5.13%, 11/15/95.............................................................. $ 249,960
2,000,000 5.13%, 03/31/98.............................................................. 1,976,478
2,000,000 5.50%, 04/15/00.............................................................. 1,980,518
-------------
4,206,956
-------------
U.S. TREASURY BOND - 1.13%
1,700,000 7.50%, 11/15/16.............................................................. 1,914,472
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS............................................ 6,121,428
(Cost $5,912,039) -------------
REPURCHASE AGREEMENT - 12.09%
20,502,040 Chase Securities, Inc.
5.75%, 11/01/95, Dated 10/31/95
Repurchase Price $20,505,315
(Collateralized by U.S. Treasury Note 5.88%, Due 1997;
Total Par Value $20,555,000; Market Value $20,914,713)....................... 20,502,040
-------------
TOTAL REPURCHASE AGREEMENT................................................... 20,502,040
(Cost $20,502,040) -------------
TOTAL INVESTMENTS - 99.61%..................................................................... 168,959,593
(Cost $139,877,964) -------------
NET OTHER ASSETS AND LIABILITIES - 0.39%....................................................... 661,183
-------------
TOTAL NET ASSETS - 100.00%..................................................................... $ 169,620,776
=============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security
See Notes to Financial Statements.
19
<PAGE>
- --------------------
EQUITY VALUE FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
COMMON STOCKS - 86.57%
FINANCIAL - 15.75%
61,400 AFLAC, Inc................................................................... $ 2,502,050
28,600 American International Group, Inc............................................ 2,413,125
49,900 Bank of Boston Corp.......................................................... 2,220,550
39,400 Citicorp..................................................................... 2,556,075
136,800 Edwards (A.G.), Inc.......................................................... 3,488,400
56,600 Federal National Mortgage Association........................................ 5,935,925
86,300 First Union Corp............................................................. 4,282,638
120,600 Firstar Corp................................................................. 4,266,225
16,000 MBIA, Inc.................................................................... 1,114,000
57,800 Mellon Bank Corp............................................................. 2,897,225
38,500 Merrill Lynch & Co........................................................... 2,136,750
44,900 NationsBank Corp............................................................. 2,952,175
64,500 Standard Federal Bancorp., Inc............................................... 2,289,750
84,600 Washington Mutual, Inc....................................................... 2,178,450
-------------
41,233,338
-------------
CONSUMER STAPLES - 15.32%
30,300 Abbott Laboratories.......................................................... 1,204,425
96,300 Anheuser-Busch Cos., Inc..................................................... 6,355,800
35,500 Becton Dickinson & Co........................................................ 2,307,500
186,800 Bergen Brunswig Corp., Class A............................................... 3,876,100
115,900 Family Dollar Stores, Inc.................................................... 1,767,475
123,100 FHP International Corp.*..................................................... 2,985,175
44,600 IBP, Inc..................................................................... 2,670,425
92,000 IVAX Corp.................................................................... 2,093,000
46,400 PepsiCo, Inc................................................................. 2,447,600
70,400 Philip Morris Cos., Inc...................................................... 5,948,800
94,500 Schering-Plough Corp......................................................... 5,067,562
110,800 Supervalu, Inc............................................................... 3,407,100
-------------
40,130,962
-------------
TECHNOLOGY - 15.03%
41,900 AMP, Inc..................................................................... 1,644,575
70,700 Applied Materials, Inc.*..................................................... 3,543,838
42,700 Arrow Electronics, Inc.*..................................................... 2,167,025
48,300 Cabletron Systems, Inc.*..................................................... 3,797,587
91,000 Compaq Computer Corp.*....................................................... 5,073,250
46,000 Computer Associates International, Inc....................................... 2,530,000
196,200 EMC Corp.*................................................................... 3,041,100
50,200 Intel Corp................................................................... 3,507,725
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
- --------------------
EQUITY VALUE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
TECHNOLOGY (CONTINUED)
186,600 Loral Corp................................................................... $ 5,528,025
29,400 Motorola, Inc................................................................ 1,929,375
100,600 Quantum Corp.*............................................................... 1,747,925
155,600 Stratus Computer, Inc.*...................................................... 4,843,050
-------------
39,353,475
-------------
UTILITIES - 9.16%
68,600 New England Electric System.................................................. 2,675,400
47,800 NYNEX Corp................................................................... 2,246,600
201,700 Pacific Gas & Electric Co.................................................... 5,924,937
110,900 Potomac Electric Power Co.................................................... 2,772,500
177,300 Public Service Enterprise Group, Inc......................................... 5,208,188
140,600 Texas Utilities Co........................................................... 5,167,050
-------------
23,994,675
-------------
CAPITAL GOODS - 7.78%
71,900 Emerson Electric Co.......................................................... 5,122,875
62,400 General Electric Co.......................................................... 3,946,800
76,300 Ingersoll-Rand Co............................................................ 2,699,113
68,900 Johnson Controls, Inc........................................................ 4,013,425
66,950 Textron, Inc................................................................. 4,602,813
-------------
20,385,026
-------------
BASIC MATERIALS - 6.68%
62,400 Boise Cascade Corp........................................................... 2,262,000
94,800 Crown Cork & Seal Co., Inc.*................................................. 3,306,150
99,200 Federal Paper Board, Inc..................................................... 4,166,400
89,350 Nalco Chemical Co............................................................ 2,680,500
47,500 Union Camp Corp.............................................................. 2,416,562
113,100 Wellman, Inc................................................................. 2,657,850
-------------
17,489,462
-------------
TRANSPORTATION - 6.42%
31,700 British Airways Plc, ADR..................................................... 2,266,550
152,900 Carnival Corp., Class A...................................................... 3,554,925
50,394 Chrysler Corp................................................................ 2,601,590
113,600 Ford Motor Co................................................................ 3,266,000
30,250 General Motors Corp.......................................................... 1,323,438
55,700 Lockheed Martin Corp......................................................... 3,794,562
-------------
16,807,065
-------------
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
- --------------------
EQUITY VALUE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
CONSUMER CYCLICAL - 5.97%
128,800 Circuit City Stores, Inc..................................................... $ 4,298,700
75,000 Dillard Department Stores, Inc., Class A..................................... 2,034,375
118,600 Echlin, Inc.................................................................. 4,239,950
74,600 Gap, Inc..................................................................... 2,937,375
134,650 Ross Stores, Inc............................................................. 2,112,322
-------------
15,622,722
-------------
ENERGY - 3.26%
58,400 Amoco Corp................................................................... 3,730,300
32,800 Atlantic Richfield Co........................................................ 3,501,400
14,816 British Petroleum Co. Plc, ADR............................................... 1,307,512
-------------
8,539,212
-------------
DRUGS AND HEALTHCARE - 1.20%
78,600 Elan Corp. Plc, ADR*......................................................... 3,153,825
-------------
TOTAL COMMON STOCKS.......................................................... 226,709,762
(Cost $196,015,741) -------------
<CAPTION>
PAR VALUE
---------
<C> <S> <C>
REPURCHASE AGREEMENT - 13.47%
$ 35,269,896 Chase Securities, Inc.
5.75%, 11/01/95, Dated 10/31/95
Repurchase Price $35,275,530
(Collateralized by U.S. Treasury Note 5.88%, Due 1997;
Total Par Value $35,360,000; Market Value $35,978,800)....................... 35,269,896
-------------
TOTAL REPURCHASE AGREEMENT................................................... 35,269,896
(Cost $35,269,896) -------------
TOTAL INVESTMENTS - 100.04%.................................................................... 261,979,658
(Cost $231,285,637) -------------
NET OTHER ASSETS AND LIABILITIES - (0.04)%..................................................... (94,781)
-------------
NET ASSETS - 100.00%........................................................................... $ 261,884,877
=============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security
ADR American Depository Receipt
See Notes to Financial Statements.
22
<PAGE>
- --------------------
EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
COMMON STOCKS - 84.37%
CONSUMER STAPLES - 23.65%
225,000 Abbott Laboratories.......................................................... $ 8,943,750
130,000 Bristol-Myers Squibb Co...................................................... 9,912,499
270,000 Gillette Co.................................................................. 13,061,250
160,000 Johnson & Johnson............................................................ 13,040,000
300,000 McDonald's Corp.............................................................. 12,300,000
235,000 Merck & Co., Inc............................................................. 13,512,500
210,000 PepsiCo, Inc................................................................. 11,077,500
250,000 Pfizer, Inc.................................................................. 14,343,750
135,000 Procter & Gamble Co.......................................................... 10,935,000
350,000 Sara Lee Corp................................................................ 10,281,250
100,000 United Healthcare Corp....................................................... 5,312,500
-------------
122,719,999
-------------
TECHNOLOGY - 20.49%
165,000 American Telephone & Telegraph Corp.......................................... 10,560,000
150,000 AMP, Inc..................................................................... 5,887,500
175,000 Automatic Data Processing, Inc............................................... 12,512,500
200,000 CISCO Systems, Inc.*......................................................... 15,500,000
125,000 Dow Chemical Co.............................................................. 8,578,125
160,000 Hewlett-Packard Co........................................................... 14,820,000
180,000 Intel Corp................................................................... 12,577,500
115,000 Microsoft Corp.*............................................................. 11,500,000
140,000 Motorola, Inc................................................................ 9,187,500
40,000 Xerox Corp................................................................... 5,190,000
-------------
106,313,125
-------------
CAPITAL GOODS - 9.43%
155,000 Boeing Co.................................................................... 10,171,875
152,000 Caterpillar, Inc............................................................. 8,531,000
157,200 General Electric Co.......................................................... 9,942,900
150,000 Ingersoll-Rand Co............................................................ 5,306,250
325,650 Thermo Electron Corp.*....................................................... 14,979,900
-------------
48,931,925
-------------
FINANCIAL - 8.86%
157,500 American International Group, Inc............................................ 13,289,063
50,000 Barnett Banks, Inc........................................................... 2,762,500
200,000 Citicorp..................................................................... 12,975,000
50,000 Crestar Financial Corp....................................................... 2,850,000
125,000 Federal National Mortgage Association........................................ 13,109,375
100,000 Hibernia Corp., Class A...................................................... 987,500
-------------
45,973,438
-------------
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
- --------------------
EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
CONSUMER CYCLICAL - 8.46%
130,000 Armstrong World Industries, Inc.............................................. $ 7,718,750
100,000 Cooper Tire & Rubber Co...................................................... 2,312,500
250,000 Home Depot, Inc.............................................................. 9,312,500
125,000 Sherwin-Williams Co.......................................................... 4,703,125
100,000 U.S. Healthcare, Inc......................................................... 3,850,000
300,000 Wal-Mart Stores, Inc......................................................... 6,487,500
165,000 Walt Disney Co............................................................... 9,508,125
-------------
43,892,500
-------------
ENERGY - 6.76%
150,000 Amoco Corp................................................................... 9,581,250
123,000 Anadarko Petroleum Corp...................................................... 5,335,125
120,000 Mobil Corp................................................................... 12,090,000
130,000 Schlumberger, Ltd............................................................ 8,092,500
-------------
35,098,875
-------------
BASIC MATERIALS - 3.79%
125,000 Georgia-Pacific Corp......................................................... 10,312,500
220,000 PPG Industries, Inc.......................................................... 9,350,000
-------------
19,662,500
-------------
TRANSPORTATION - 2.93%
100,000 AMR Corp.*................................................................... 6,600,000
300,000 Ford Motor Co................................................................ 8,625,000
-------------
15,225,000
-------------
TOTAL COMMON STOCKS.......................................................... 437,817,362
(Cost $290,695,914) -------------
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
- --------------------
EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
REPURCHASE AGREEMENT - 15.80%
$ 82,007,104 Chase Securities, Inc.
5.75%, 11/01/95, Dated 10/31/95
Repurchase Price $82,020,202
(Collateralized by U.S. Treasury Note 5.88%, Due 1997;
Total Par Value $82,210,000; Market Value $83,648,675)....................... $ 82,007,104
-------------
TOTAL REPURCHASE AGREEMENT................................................... 82,007,104
(Cost $82,007,104) -------------
TOTAL INVESTMENTS - 100.17%.................................................................... 519,824,466
(Cost $372,703,018) -------------
NET OTHER ASSETS AND LIABILITIES - (0.17)%..................................................... (897,333)
-------------
NET ASSETS - 100.00%........................................................................... $ 518,927,133
=============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security
See Notes to Financial Statements.
25
<PAGE>
- --------------------
SMALL COMPANY EQUITY FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
COMMON STOCKS - 95.42%
TECHNOLOGY - 45.39%
2,500 Accom, Inc.*................................................................. $ 21,563
54,527 ACT Manufacturing, Inc.*..................................................... 777,010
32,003 Alliance Semiconductor Corp.*................................................ 984,092
37,406 Alternative Resources Corp.*................................................. 1,159,586
27,933 Applied Digital Access, Inc.*................................................ 335,196
14,879 Applix, Inc.*................................................................ 412,892
48,322 Ascend Communications, Inc.*................................................. 3,140,930
83,045 Aseco Corp.*................................................................. 1,515,571
15,629 Aspen Technology, Inc.*...................................................... 429,798
33,130 Asyst Technologies, Inc.*.................................................... 1,391,460
10,650 Avid Technology, Inc.*....................................................... 465,938
15,600 Bell & Howell Holdings Co.*.................................................. 390,000
30,243 Bell Microproducts, Inc.*.................................................... 311,881
48,550 Bisys Group, Inc.*........................................................... 1,359,400
10,703 Boca Research, Inc.*......................................................... 270,251
14,591 Broadband Technologies, Inc.*................................................ 255,343
22,242 Brooks Automation, Inc.*..................................................... 400,356
78,737 CAI Wireless Systems, Inc.*.................................................. 649,580
14,614 California Microwave, Inc.*.................................................. 321,508
26,285 Cambridge Technology Partners, Inc.*......................................... 1,491,674
21,406 Cascade Communications Corp.*................................................ 1,525,178
20,878 CDW Computer Centers, Inc.*.................................................. 1,012,583
27,995 Cheyenne Software, Inc.*..................................................... 584,396
21,800 CMG Information Services, Inc.*.............................................. 757,550
29,478 Cognex Corp.*................................................................ 1,761,311
55,281 Coherent Communications Systems Corp.*....................................... 1,134,124
15,836 Comverse Technology, Inc.*................................................... 360,269
36,195 Concord EFS, Inc.*........................................................... 1,248,728
39,190 Credence Systems Corp.*...................................................... 1,464,726
35,288 Cree Research, Inc.*......................................................... 866,762
33,426 Dawson Geophysical Co.*...................................................... 334,260
21,465 DSP Communications, Inc.*.................................................... 778,106
26,466 DSP Group, Inc.*............................................................. 430,071
350 ESS Technology, Inc.*........................................................ 10,500
3,000 Expert Software, Inc.*....................................................... 62,250
12,500 FORE Systems, Inc.*.......................................................... 662,500
21,780 Franklin Electronic Publishers, Inc.*........................................ 901,148
37,800 General Scanning, Inc.*...................................................... 453,600
1,550 Harmonic Lightwaves, Inc.*................................................... 19,763
16,000 Holophane Corp.*............................................................. 432,000
31,223 ICC Technologies, Inc.*...................................................... 370,773
41,811 INSO Corp.*.................................................................. 1,494,743
3,000 Integrated Measurement Systems, Inc.*........................................ 40,500
22,266 Ionics, Inc.*................................................................ 907,340
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
- --------------------
SMALL COMPANY EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
TECHNOLOGY (CONTINUED)
26,911 J. Ray McDermott, S.A.*...................................................... $ 407,029
23,644 Kent Electronics Corp.*...................................................... 1,152,642
34,223 Linear Technology Corp....................................................... 1,497,256
13,200 Macromedia, Inc.*............................................................ 488,400
23,577 Marshall Industries, Inc.*................................................... 831,089
27,954 Maxim Integrated Products, Inc.*............................................. 2,089,558
11,414 McAfee Associates, Inc.*..................................................... 664,866
18,025 Merix Corp.*................................................................. 666,925
19,269 Metricom, Inc.*.............................................................. 320,347
37,030 Micrion Corp.*............................................................... 472,133
37,283 Microcom, Inc.*.............................................................. 815,566
24,300 Microtouch Systems, Inc.*.................................................... 352,350
35,530 Minntech Corp................................................................ 719,483
16,659 Mobile Telecommunications Technologies*...................................... 472,699
31,200 Novadigm, Inc.*.............................................................. 639,600
2,500 Oak Technology, Inc.*........................................................ 136,875
11,479 Parametric Technology Corp.*................................................. 767,658
49,940 Quad Systems Corp.*.......................................................... 412,005
29,205 Rational Software Corp.*..................................................... 456,328
2,500 Renaissance Solutions, Inc.*................................................. 51,250
27,170 SDL, Inc.*................................................................... 692,835
27,720 Softdesk, Inc.*.............................................................. 644,490
31,200 Speedfam International, Inc.*................................................ 510,900
25,014 StrataCom, Inc.*............................................................. 1,538,361
15,525 Summa Four, Inc.*............................................................ 213,469
16,995 SunGard Data Systems, Inc.*.................................................. 467,363
18,186 Sybase, Inc.*................................................................ 713,801
17,495 Synopsys, Inc.*.............................................................. 656,063
36,853 Systemsoft Corp.*............................................................ 529,762
46,800 Tegal Corp.*................................................................. 596,700
34,577 Tellabs, Inc.*............................................................... 1,175,618
36,910 Tessco Technologies, Inc.*................................................... 968,888
48,108 Tetra Technologies, Inc.*.................................................... 637,431
1 3COM Corp.*.................................................................. 33
21,796 Triquint Semiconductor, Inc.*................................................ 495,859
65,648 Tylan General, Inc.*......................................................... 1,050,368
35,218 Video Sentry Corp.*.......................................................... 352,180
8,294 Vmark Software, Inc.*........................................................ 57,021
32,643 Wonderware Corp.*............................................................ 1,036,415
45,364 Xilinx, Inc.*................................................................ 2,086,744
28,820 X-Rite, Inc.................................................................. 450,313
25,754 Xylogics, Inc.*.............................................................. 1,780,245
-------------
63,766,128
-------------
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
- --------------------
SMALL COMPANY EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
CONSUMER STAPLES - 13.84%
22,376 Books-A-Million, Inc.*....................................................... $ 282,497
17,644 Brown (Tom), Inc.*........................................................... 196,290
74,700 Chad Therapeutics, Inc.*..................................................... 1,101,825
28,228 Clintrials Research, Inc.*................................................... 571,617
29,990 Community Health Systems, Inc.*.............................................. 952,182
30,595 Coventry Corp.*.............................................................. 600,427
29,800 Dataworks Corp.*............................................................. 413,475
10,346 Davidson & Associates, Inc.*................................................. 367,283
18,542 Duracraft Corp.*............................................................. 403,289
18,818 Genesis Health Ventures, Inc.*............................................... 543,370
42,570 Grist Mill Co.*.............................................................. 388,451
28,100 Gymboree Corp.*.............................................................. 635,762
18,227 HBO & Co..................................................................... 1,289,560
12,555 Healthsource, Inc.*.......................................................... 665,415
33,298 Hologic, Inc.*............................................................... 865,748
22,321 Horizon/CMS Healthcare Corp.*................................................ 452,000
43,602 Horizon Mental Health Management, Inc.*...................................... 681,281
23,253 Leslie's Poolmart*........................................................... 337,168
22,441 Lunar Corp.*................................................................. 835,927
38,052 Mid Atlantic Medical Services, Inc.*......................................... 756,284
13,900 Quest Medical, Inc.*......................................................... 152,900
46,700 Rexall Sundown, Inc.*........................................................ 700,500
19,941 Richfood Holdings, Inc....................................................... 498,525
43,720 Sofamor/Danek Group, Inc.*................................................... 1,071,140
69,245 Spaghetti Warehouse, Inc.*................................................... 328,914
15,090 Steris Corp.*................................................................ 509,288
37,030 Sunglass Hut International, Inc.*............................................ 1,009,068
27,564 Theratech, Inc.*............................................................. 516,825
22,166 Thermedics, Inc.*............................................................ 407,300
10,673 Value Health, Inc.*.......................................................... 244,145
9,350 Vencor, Inc.*................................................................ 259,462
52,030 Wholesome & Hearty Foods, Inc.*.............................................. 513,796
29,623 Wolverine World Wide, Inc.................................................... 888,690
-------------
19,440,404
-------------
BASIC MATERIALS - 7.56%
36,900 Actel Corp.*................................................................. 433,575
3,400 AG Associates, Inc.*......................................................... 75,225
23,588 BHA Group, Inc., Class A..................................................... 330,232
43,450 Borden Chemical & Plastics................................................... 706,063
18,165 Chesapeake Corp.............................................................. 556,303
76,338 Gaylord Container Corp., Class A*............................................ 582,077
48,884 General Acceptance Corp.*.................................................... 1,295,426
29,067 Growth Environmental, Inc.*.................................................. 9,083
35,995 OM Group, Inc................................................................ 1,043,855
</TABLE>
See Notes to Financial Statements.
28
<PAGE>
- --------------------
SMALL COMPANY EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
BASIC MATERIALS (CONTINUED)
18,227 PRI Automation, Inc.*........................................................ $ 674,399
41,671 QLT Phototherapeutics, Inc.*................................................. 250,026
78,210 Repap Enterprises, Inc.*..................................................... 493,701
13,310 Romac International, Inc.*................................................... 246,235
45,830 RTW, Inc.*................................................................... 1,111,377
46,424 Sealed Air Corp.*............................................................ 1,224,433
8,640 Techne Corp.*................................................................ 184,680
2,000 Tencor Instruments*.......................................................... 85,250
14,911 Whitehall Corp.*............................................................. 557,299
25,553 Zygo Corp.*.................................................................. 766,590
-------------
10,625,829
-------------
CONSUMER CYCLICAL - 5.99%
18,319 Breed Technologies, Inc...................................................... 341,191
6,200 Cannondale Corp.*............................................................ 99,200
40,718 Career Horizons, Inc.*....................................................... 1,089,207
38,525 Casey's General Stores, Inc.................................................. 886,075
55,321 Cima Laboratories, Inc.*..................................................... 394,162
33,332 Durakon Industries, Inc.*.................................................... 416,650
26,188 Excel Industries, Inc........................................................ 314,256
29,888 International Imaging Materials, Inc.*....................................... 754,672
12,760 Mecklermedia Corp.*.......................................................... 149,930
23,677 Men's Wearhouse, Inc.*....................................................... 923,403
24,090 Modine Manufacturing Co...................................................... 662,475
28,799 National Auto Credit, Inc.*.................................................. 467,984
26,846 Robert Half International, Inc.*............................................. 979,879
30,800 Sharper Image Corp.*......................................................... 169,400
20,329 Smith (A.O.) Corp............................................................ 421,827
21,120 Thomas Nelson, Inc........................................................... 351,120
-------------
8,421,431
-------------
CAPITAL GOODS - 5.83%
22,000 ADC Telecommunications, Inc.*................................................ 880,000
35,309 AFC Cable Systems, Inc.*..................................................... 414,881
53,783 Continental Waste Industries, Inc.*.......................................... 927,757
38,466 Helix Technology Corp........................................................ 1,442,475
22,760 Molten Metal Technology, Inc.*............................................... 876,260
11,188 On Assignment, Inc.*......................................................... 302,076
1,550 Opal, Inc.*.................................................................. 23,444
59,553 Recovery Engineering, Inc.*.................................................. 863,518
24,007 Safeguard Scientifics, Inc.*................................................. 1,080,315
8,354 Sturm Ruger & Co., Inc....................................................... 225,558
48,218 Veeco Instruments, Inc.*..................................................... 1,157,232
-------------
8,193,516
-------------
</TABLE>
See Notes to Financial Statements.
29
<PAGE>
- --------------------
SMALL COMPANY EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
ENERGY - 5.11%
74,875 Bellwether Exploration Co.*.................................................. $ 402,453
21,747 BJ Services Co.*............................................................. 511,054
84,657 Coda Energy, Inc.*........................................................... 634,928
14,222 Devon Energy Corp............................................................ 309,329
33,440 Dreco Energy Services, Ltd, Class A*......................................... 459,800
86,240 Global Natural Resources, Inc.*.............................................. 862,400
34,116 Hornbeck Offshore Services, Inc.*............................................ 498,946
61,108 Marine Drilling Co., Inc.*................................................... 229,155
12,400 Nuevo Energy Co.*............................................................ 274,350
61,338 PetroCorp, Inc.*............................................................. 475,370
52,785 Pride Petroleum Services, Inc.*.............................................. 461,869
23,967 Seagull Energy Corp.*........................................................ 410,435
39,270 Swift Energy Co.*............................................................ 348,521
8,368 Tejas Gas Corp.*............................................................. 392,250
83,306 Texas Meridian Resources Corp.*.............................................. 905,953
-------------
7,176,813
-------------
FINANCIAL - 4.55%
63,251 ABR Information Services, Inc.*.............................................. 1,865,904
38,709 City National Corp........................................................... 512,894
37,657 Credit Acceptance Corp.*..................................................... 884,940
25,807 DS Bancor, Inc.*............................................................. 632,271
26,104 HCC Insurance Holdings, Inc.*................................................ 907,114
62,340 Insurance Auto Auctions, Inc.*............................................... 420,795
22,387 Mercury Finance Co........................................................... 430,950
21,285 North American Mortgage Co................................................... 439,003
12,445 Poe & Brown, Inc............................................................. 303,347
-------------
6,397,218
-------------
TRANSPORTATION - 2.23%
29,040 Business Resource Group*..................................................... 137,940
36,790 Lo-Jack Corp.*............................................................... 570,245
21,671 Monaco Coach Corp.*.......................................................... 197,748
16,830 Pet Practice*................................................................ 210,375
30,373 Rural/Metro Corp.*........................................................... 728,952
36,440 Transport Corp. of America, Inc.*............................................ 423,615
29,150 Wiley (John) & Sons, Inc., Class A........................................... 867,212
-------------
3,136,087
-------------
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
- --------------------
SMALL COMPANY EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
COMPUTER SERVICES - 1.35%
40,536 Softkey International, Inc.*................................................. $ 1,276,884
36,450 SPSS, Inc.*.................................................................. 615,094
-------------
1,891,978
-------------
DURABLE GOODS - 1.26%
66,475 Alamco, Inc.*................................................................ 531,800
24,442 Danka Business Systems Plc, ADR.............................................. 818,807
32,725 Payco American Corp.*........................................................ 278,162
27,199 ValueVision International, Inc., Class A*.................................... 142,795
-------------
1,771,564
-------------
UTILITIES - 0.99%
31,285 A-Plus Network, Inc.*........................................................ 437,990
17,787 Gilat Satellite Networks, Ltd*............................................... 395,761
11,598 People's Choice TV Corp.*.................................................... 240,658
19,900 Western Gas Resources, Inc................................................... 310,938
-------------
1,385,347
-------------
MISCELLANEOUS - 0.49%
2,350 Open Environment Corp.*...................................................... 22,913
21,010 Pinnacle Systems, Inc.*...................................................... 659,188
-------------
682,101
-------------
METALS AND MINING - 0.47%
24,770 Varlen Corp.................................................................. 662,598
-------------
TELEPHONE - 0.36%
11,290 Accustaff, Inc.*............................................................. 502,405
-------------
TOTAL COMMON STOCKS.......................................................... 134,053,419
(Cost $90,950,647) -------------
</TABLE>
See Notes to Financial Statements.
31
<PAGE>
- --------------------
SMALL COMPANY EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
REPURCHASE AGREEMENT - 5.84%
$ 8,211,404 Chase Securities, Inc.
5.75%, 11/01/95, Dated 10/31/95
Repurchase Price $8,212,716
(Collateralized by U.S. Treasury Note 5.88%, Due 1997;
Total Par Value $8,235,000; Market Value $8,379,113)......................... $ 8,211,404
-------------
TOTAL REPURCHASE AGREEMENT................................................... 8,211,404
(Cost $8,211,404) -------------
TOTAL INVESTMENTS - 101.26%.................................................................... 142,264,823
(Cost $99,162,051) -------------
NET OTHER ASSETS AND LIABILITIES - (1.26)%..................................................... (1,765,810)
-------------
NET ASSETS - 100.00%........................................................................... $ 140,499,013
=============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security
ADR American Depository Receipt
See Notes to Financial Statements.
32
<PAGE>
- --------------------
INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
COMMON STOCKS - 94.54%
ARGENTINA - 0.29%
15,000 Buenos Aires Embotelladora SA, ADR........................................... $ 343,125
-------------
AUSTRIA - 0.70%
6,900 Energie-Versorgung Niederoesterr............................................. 842,474
-------------
AUSTRALIA - 4.68%
106,025 Advance Bank of Australia.................................................... 782,323
177,232 Amcor, Ltd................................................................... 1,325,263
116,852 Australia & New Zealand Banking.............................................. 488,883
133,569 Broken Hill Proprietary Co., Ltd............................................. 1,806,524
71,212 National Australia Bank, Ltd................................................. 605,622
10,600 Qantas Air, ADR (A)*......................................................... 185,500
100,000 Westpac Banking Corp......................................................... 410,011
-------------
5,604,126
-------------
BELGIUM - 0.52%
16,000 Delhaize Le Lion............................................................. 621,758
-------------
BRAZIL - 0.34%
29,000 Centrais Electrobras, ADR.................................................... 405,420
-------------
CANADA - 1.96%
22,000 Bank of Nova Scotia.......................................................... 472,340
117,000 Canadian Pacific, Ltd........................................................ 1,872,000
-------------
2,344,340
-------------
CHILE - 0.47%
4,000 CIA Telecommunications of Chile, ADR......................................... 288,000
11,000 Enersis SA, ADR.............................................................. 276,375
-------------
564,375
-------------
DENMARK - 2.32%
74,000 Tele Danmark A/S, Class B, ADR............................................... 1,933,250
18,500 Unidanmark A, Registered..................................................... 849,447
-------------
2,782,697
-------------
</TABLE>
See Notes to Financial Statements.
33
<PAGE>
- --------------------
INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
FINLAND - 0.46%
225,000 Unitas Bank Ltd, Class A*.................................................... $ 545,679
-------------
FRANCE - 9.39%
36,000 Banque National de Paris..................................................... 1,481,115
5,700 Canal Plus SA................................................................ 984,406
15,728 Compagnie de Saint-Gobain.................................................... 1,874,065
21,515 Compagnie Francaise de Petroleum Total SA.................................... 1,328,857
1,700 Peugeot Citroen SA........................................................... 221,325
38,000 Renault...................................................................... 1,188,276
44,500 Rhone-Poulenc SA, Class A.................................................... 969,527
17,019 Societe Generale de Paris.................................................... 1,947,891
4,000 Societe National ELF Aquitaine SA............................................ 272,237
15,000 Technip SA................................................................... 974,902
-------------
11,242,601
-------------
GERMANY - 4.73%
3,000 Bayer AG..................................................................... 797,614
400 Beiersdorf AG................................................................ 268,428
2,400 Degussa AG................................................................... 772,050
6,500 Mannesmann AG................................................................ 2,136,202
41,000 Veba AG...................................................................... 1,682,566
-------------
5,656,860
-------------
HONG KONG - 3.94%
90,000 China Light and Power Co., Ltd............................................... 479,584
850,000 Hong Kong Telecommunications, Ltd............................................ 1,484,149
150,000 Hutchison Whampoa............................................................ 826,468
30,000 Sun Hung Kai Properties, Ltd................................................. 239,598
225,000 Swire Pacific, Ltd, Class A.................................................. 1,687,857
-------------
4,717,656
-------------
ITALY - 2.26%
1,200 De Rigo SPA, ADR*............................................................ 24,750
7,900 Gucci Group, ADR*............................................................ 237,000
1,500,000 Montedison SPA*.............................................................. 1,033,159
500,000 Stet - Societa Finanziaria Telefonica SPA.................................... 1,416,124
-------------
2,711,033
-------------
</TABLE>
See Notes to Financial Statements.
34
<PAGE>
- --------------------
INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
JAPAN - 24.43%
150,000 Chichibu Onoda Cement Corp................................................... $ 755,575
69,000 Chugai Pharmaceutical Co., Ltd............................................... 630,340
61 DDI Corp..................................................................... 494,611
80,000 Hitachi, Ltd................................................................. 821,596
31,000 Home Wide Corp............................................................... 366,882
25,000 Ito-Yokado Co., Ltd.......................................................... 1,366,882
300,000 Kawasaki Heavy Industries.................................................... 1,255,868
300,000 Kawasaki Steel Corp.......................................................... 997,653
89,000 Keio Teito Electric Railway Co., Ltd......................................... 499,667
9,000 Kyocera Corp................................................................. 737,676
14,000 Kyoritsu Air Tech Corp....................................................... 150,626
116,000 Minebea Co., Ltd............................................................. 941,706
11,000 Mitsubishi Bank, Ltd......................................................... 215,180
90,000 Mitsubishi Corp.............................................................. 994,718
50,000 Mitsui Petrochemical Industries.............................................. 396,616
15,000 Murata Manufacturing Co., Ltd................................................ 526,702
13,000 Nihon Jumbo Co., Ltd......................................................... 364,926
78,000 Nippon Express Co., Ltd...................................................... 633,216
178 Nippon Telegraph & Telephone Corp............................................ 1,460,700
500,000 NKK Corp.*................................................................... 1,207,942
42,000 Nomura Securities Co., Ltd................................................... 768,192
4,000 Riso Kagaku Corp............................................................. 322,379
107,000 Sakura Bank, Ltd............................................................. 1,036,092
66,000 Sankyo Co., Ltd.............................................................. 1,452,465
13,000 Sanwa Bank, Ltd.............................................................. 221,244
7,500 Sanyo Shinpan Finance Co..................................................... 535,505
20,000 Secom Co., Ltd............................................................... 1,302,817
10,000 Sekisui Chemical Co.......................................................... 130,086
10,000 Sekisui House, Ltd........................................................... 115,415
10,000 Seven-Eleven Japan Co., Ltd.................................................. 667,058
6,000 Shohkoh Fund................................................................. 1,044,601
100,000 Showa Corp................................................................... 758,020
16,000 Sony Corp.................................................................... 719,875
7,000 Square Co., Ltd.............................................................. 245,110
250,000 Sumitomo Chemical Co......................................................... 1,161,483
125,000 Sumitomo Realty & Development Co., Ltd....................................... 821,596
36,000 Sumitomo Trust & Banking Co., Ltd............................................ 415,493
11,000 TDK Corp..................................................................... 566,999
84,000 Toda Construction Co......................................................... 686,854
15,150 Tohoku Electric Power Co., Inc............................................... 355,634
75,000 Tokio Marine & Fire Insurance Co............................................. 770,246
17,000 Toto, Ltd.................................................................... 229,460
2,000 Tsutsumi Jewelry Co., Ltd.................................................... 98,787
-------------
29,244,493
-------------
</TABLE>
See Notes to Financial Statements.
35
<PAGE>
- --------------------
INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
LUXEMBOURG - 0.47%
150,000 Indo Gulf Fertilisers & Chemicals Corp., GDR................................. $ 195,000
25,000 Reliance Industries, GDR (A)................................................. 368,750
-------------
563,750
-------------
MALAYSIA - 1.94%
135,000 Resorts World Berhad......................................................... 658,303
600,000 Sime Darby Berhad............................................................ 1,498,289
44,000 Tenaga Nasional Berhad....................................................... 166,110
-------------
2,322,702
-------------
MEXICO - 1.01%
30,000 Cemex SA de CV, Class A...................................................... 88,236
44,000 Fomento Economico Mexicano, SA de CV, Class B................................ 90,959
28,000 Grupo Carso, SA, Series A1*.................................................. 146,277
50,000 Kimberly-Clark de Mexico, Class A............................................ 651,270
5,200 Telefonos de Mexico, Class L, ADR............................................ 143,000
14,000 Transport Maritima, Class A, ADR*............................................ 87,500
-------------
1,207,242
-------------
NETHERLANDS - 5.05%
80,000 Elsevier, NV................................................................. 1,032,911
36,515 Internationale Nederlanden Groep, NV......................................... 2,174,722
10,000 Unilever, NV................................................................. 1,308,228
29,000 Vendex International, NV..................................................... 835,127
5,000 Verenigde Nederlendse Uitgevsbed Verigd Bezit................................ 700,000
-------------
6,050,988
-------------
NEW ZEALAND - 2.06%
61,291 Air New Zealand, Ltd, Class B................................................ 211,181
1,870,000 Brierley Investments, Ltd.................................................... 1,456,502
335,000 Carter Holt Harvey, Ltd...................................................... 800,462
-------------
2,468,145
-------------
</TABLE>
See Notes to Financial Statements.
36
<PAGE>
- --------------------
INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
NORWAY - 4.13%
120,000 Christiania Bank Og Kreditkasse.............................................. $ 279,343
38,525 Hafslund Nycomed AS A........................................................ 1,100,909
28,000 Kvaerner AS A................................................................ 1,177,736
27,000 Orkla AS A................................................................... 1,395,752
79,000 Saga Petroleum AS A.......................................................... 989,260
-------------
4,943,000
-------------
PORTUGAL - 0.56%
35,800 Portugal Telecom SA, ADR*.................................................... 671,250
-------------
SINGAPORE - 3.25%
100,000 City Developments, Ltd....................................................... 618,593
128,750 Development Bank of Singapore, Ltd........................................... 1,474,549
175,000 Keppel Corp., Ltd............................................................ 1,435,136
720 Singapore Press Holdings, Ltd................................................ 11,249
40,000 United Overseas Bank......................................................... 350,654
-------------
3,890,181
-------------
SPAIN - 4.86%
7,000 Acerinox SA.................................................................. 735,787
38,500 Banco Bilbao Vizcaya......................................................... 1,174,683
20,300 Corporacion Bancaria de Espana SA............................................ 715,689
150,000 Iberdrola SA................................................................. 1,128,835
50,000 Repsol SA.................................................................... 1,490,798
45,000 Telefonica de Espana SA...................................................... 566,871
-------------
5,812,663
-------------
SWEDEN - 1.06%
15,000 Astra AB, Class A............................................................ 550,915
72,800 Avesta-Sheffield............................................................. 717,754
-------------
1,268,669
-------------
SWITZERLAND - 3.81%
1,800 Ciba-Geigy AG, Registered.................................................... 1,557,022
2,090 Nestle SA, Registered........................................................ 2,186,739
2,000 Schweizerischer Bankverein................................................... 820,134
-------------
4,563,895
-------------
</TABLE>
See Notes to Financial Statements.
37
<PAGE>
- --------------------
INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -------------
<C> <S> <C>
THAILAND - 0.76%
20,000 Bangkok Bank................................................................. $ 206,678
373,000 Bangkok Metropolitan Bank.................................................... 355,804
30,000 Siam Commercial Bank......................................................... 350,558
-------------
913,040
-------------
UNITED KINGDOM - 9.09%
24,000 Associated British Foods, Plc................................................ 266,435
50,000 Bass, Plc.................................................................... 523,118
825,000 BET, Plc..................................................................... 1,640,366
131,500 Body Shop International, Plc................................................. 323,718
300,000 British Telecommunications, Plc.............................................. 1,782,389
256,944 General Electric Co., Plc.................................................... 1,273,164
151,000 Northern Foods, Plc.......................................................... 440,824
175,000 Rank Organisation, Plc....................................................... 1,162,616
109,000 Royal Insurance Holdings, Plc................................................ 672,542
77,248 Severn Trent, Plc............................................................ 783,817
214,000 Smith (W.H.) & Sons Group, Plc............................................... 1,283,257
185,000 Tomkins, Plc................................................................. 728,381
-------------
10,880,627
-------------
TOTAL COMMON STOCKS.......................................................... 113,182,789
(Cost $108,329,786) -------------
PREFERRED STOCK - 0.62%
AUSTRIA - 0.62%
15,000 Creditanstalt-Bankverein Vorzug.............................................. 747,722
-------------
TOTAL PREFERRED STOCK........................................................ 747,722
(Cost $919,988) -------------
</TABLE>
See Notes to Financial Statements.
38
<PAGE>
- --------------------
INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
REPURCHASE AGREEMENT - 6.42%
$ 7,683,000 Lehman Brothers, Inc.
5.86%, 11/1/1995, Dated 10/31/95
Repurchase Price $7,684,251
(Collateralized by U.S. Treasury Bond 13.13%, Due 2001;
Total Par Value $5,595,000; Market Value $7,833,038)......................... $ 7,683,000
-------------
TOTAL REPURCHASE AGREEMENT................................................... 7,683,000
(Cost $7,683,000) -------------
TOTAL INVESTMENTS - 101.58%.................................................................... 121,613,511
(Cost $116,932,774) -------------
NET OTHER ASSETS AND LIABILITIES - (1.58)%..................................................... (1,895,674)
-------------
NET ASSETS - 100.00%........................................................................... $ 119,717,837
=============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security
ADR American Depository Receipt
GDR Global Depository Receipt
(A) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold, in transactions exempt from
registration, to qualified institutional buyers. At 10/31/95, these
securities amounted to $554,250, or 0.46% of net assets.
FORWARD FOREIGN CURRENCY CONTRACTS SOLD:
<TABLE>
<CAPTION>
CONTRACTS TO SETTLEMENT CONTRACTS AT IN EXCHANGE APPRECIATION
PAR VALUE DELIVER DATES VALUE FOR U.S. $ (DEPRECIATION)
------------ ------------ ---------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
$ (2,184,000) DEM 12/07/95 $ (1,554,217) $ (1,500,000) $ (54,217)
(1,981,000) NLG 12/27/95 (1,259,962) (1,250,000) (9,962)
(1,978,900) CHF 12/27/95 (1,754,532) (1,750,000) (4,532)
------------ ------------ ----------
$ (4,568,711) $ (4,500,000) $ (68,711)
============ ============ ==========
</TABLE>
- --------------------------------------------------------------------------------
DEM German Deutsche Mark
NLG Netherland Guilder
CHF Swiss Frank
See Notes to Financial Statements.
39
<PAGE>
- --------------------
STATEMENTS OF ASSETS AND LIABILITIES
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION EQUITY INCOME
FUND FUND
---------------- -------------
<S> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost................................................... $118,735,262 $119,375,924
Repurchase agreements................................................. 13,893,939 20,502,040
Net unrealized appreciation (depreciation)............................ 20,249,187 29,081,629
------------ ------------
Total investments at value......................................... 152,878,388 168,959,593
Cash..................................................................... 21,944 144,042
Foreign currency at value (Cost $1,006,557)............................. -- --
Receivable for forward foreign currency contracts sold................... -- --
Receivable for investments sold.......................................... 1,077,039 --
Receivable for shares sold............................................... 469,206 585,447
Interest and dividend receivable......................................... 1,078,231 459,344
Tax reclaim receivable................................................... -- --
Receivable from investment adviser (Note 4).............................. 2,904 2,315
Deferred organizational expenses and other assets (Note 2)............... 4,225 776
------------ ------------
Total Assets......................................................... 155,531,937 170,151,517
------------ ------------
LIABILITIES:
Forward foreign currency contracts sold at value (cost $4,500,000)....... -- --
Payable for foreign currency purchased................................... -- --
Payable for investments purchased........................................ 1,349,560 --
Payable for shares repurchased........................................... 753,526 271,357
Advisory fee payable (Note 3)............................................ 95,810 107,151
Payable to Fleet and affiliates (Note 3)................................. 77,729 39,527
Payable to FDISG (Note 3)................................................ 43,923 57,230
Trustees' fees and expenses payable (Note 3)............................. 3,086 3,370
Accrued expenses and other payables...................................... 69,698 52,106
------------ ------------
Total Liabilities................................................... 2,393,332 530,741
------------ ------------
NET ASSETS.................................................................. $153,138,605 $169,620,776
============ ============
NET ASSETS CONSISTS OF:
Par value (Note 5)....................................................... $ 11,937 $ 11,316
Paid in capital in excess of par value................................... 130,973,105 133,911,154
Undistributed (overdistributed) net investment income (loss)............. 406,096 384,596
Accumulated net realized gain (loss) on investments sold................. 1,498,280 6,232,081
Net unrealized appreciation (depreciation) of investments,
foreign currency and forward foreign currency contracts............... 20,249,187 29,081,629
------------ ------------
TOTAL NET ASSETS............................................................ $153,138,605 $169,620,776
============ ============
Retail Shares:
Net Assets............................................................... $ 76,367,475 $ 81,801,730
Shares of beneficial interest outstanding................................ 5,954,778 5,459,241
NET ASSET VALUE and redemption price per share........................... $ 12.82 $ 14.98
============ ============
Trust Shares:
Net Assets............................................................... $ 76,771,130 $ 87,819,046
Shares of beneficial interest outstanding................................ 5,982,307 5,856,577
NET ASSET VALUE and redemption price per share........................... $ 12.83 $ 14.99
============ ============
</TABLE>
See Notes to Financial Statements.
40
<PAGE>
<TABLE>
<CAPTION>
Equity Value Equity Growth Small Company International
Fund Fund Equity Fund Equity Fund
------------ ------------- ------------- -------------
<S> <C> <C> <C>
$196,015,741 $290,695,914 $ 90,950,647 $109,249,774
35,269,896 82,007,104 8,211,404 7,683,000
30,694,021 147,121,448 43,102,772 4,680,737
------------ ------------ ------------ ------------
261,979,658 519,824,466 142,264,823 121,613,511
130,391 113,080 248,013 60,828
-- -- -- 1,005,327
-- -- -- 4,500,000
-- -- 2,165,468 --
399,600 704,718 444,970 110,286
260,655 637,748 24,388 112,963
-- -- -- 83,067
686 477 3,093 328
-- 762 4,106 4,275
------------ ------------ ------------ ------------
262,770,990 521,281,251 145,154,861 127,490,585
------------ ------------ ------------ ------------
-- -- -- 4,568,711
-- -- -- 1,006,557
385,416 -- 613,710 1,650,976
113,314 1,767,315 3,812,418 190,337
165,717 325,094 86,664 177,965
72,546 119,403 47,656 49,939
59,259 72,909 40,398 30,854
3,841 2,945 3,167 3,154
86,020 66,452 51,835 94,255
------------ ------------ ------------ ------------
886,113 2,354,118 4,655,848 7,772,748
------------ ------------ ------------ ------------
$261,884,877 $518,927,133 $140,499,013 $119,717,837
============ ============ ============ ============
$ 18,274 $ 29,995 $ 8,596 $ 9,237
210,558,428 364,522,612 95,871,997 111,593,356
219,961 665,685 -- 1,200,199
20,394,193 6,587,393 1,515,648 2,304,281
30,694,021 147,121,448 43,102,772 4,610,764
------------ ------------ ------------ ------------
$261,884,877 $518,927,133 $140,499,013 $119,717,837
============ ============ ============ ============
$ 96,554,645 $ 98,910,921 $ 45,667,587 $ 30,104,247
6,739,100 5,720,754 2,805,047 2,330,961
$ 14.33 $ 17.29 $ 16.28 $ 12.92
============ ============ ============ ============
$165,330,232 $420,016,212 $ 94,831,426 $ 89,613,590
11,534,519 24,274,434 5,791,017 6,905,615
$ 14.33 $ 17.30 $ 16.38 $ 12.98
============ ============ ============ ============
</TABLE>
41
<PAGE>
- --------------------
STATEMENTS OF OPERATIONS
THE GALAXY FUND FOR THE YEAR ENDED OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION EQUITY INCOME
FUND FUND
---------------- -------------
<S> <C> <C>
INVESTMENT INCOME
Dividend (Note 2).............................................. $ 2,130,489 $ 4,300,253
Interest (Note 2).............................................. 3,313,164 1,058,491
Less: net foreign taxes withheld (Note 2)...................... -- --
----------- -----------
Total investment income..................................... 5,443,653 5,358,744
----------- -----------
EXPENSES:
Investment advisory fee (Note 3)............................... 1,019,471 1,122,514
Administration fee (Note 3).................................... 118,968 130,993
Custodian fee.................................................. 13,496 10,952
Fund accounting fee (Note 3)................................... 51,246 49,056
Legal fee (Note 3)............................................. 9,030 9,427
Audit fee...................................................... 11,870 12,366
Transfer agent fee (Note 3).................................... 370,809 165,508
Shareholder servicing fee (Note 3)............................. 205,546 203,471
Trustees' fees and expenses (Note 3)........................... 6,125 6,201
Amortization of organization cost (Note 2)..................... 3,639 6,763
Reports to shareholders........................................ 74,186 72,655
Registration fees.............................................. 8,858 33,469
Insurance...................................................... 3,956 8,396
Miscellaneous.................................................. 5,991 7,048
----------- -----------
Total Expenses before reimbursement/waiver.................. 1,903,191 1,838,819
Less: reimbursement/waiver (Note 4)......................... (37,161) (24,627)
----------- -----------
Total Expenses net of reimbursement/waiver.................. 1,866,030 1,814,192
----------- -----------
NET INVESTMENT INCOME (LOSS)...................................... 3,577,623 3,544,552
----------- -----------
REALIZED AND UNREALIZED
GAIN(LOSS) ON INVESTMENTS (NOTES 2 & 6):
Net realized gain (loss) on investments sold................... 4,918,260 6,248,042
Net realized gain (loss) on forward foreign currency
contracts and foreign currency.............................. -- --
Net change in unrealized appreciation (depreciation) on
investments, foreign currency and forward foreign
currency contracts.......................................... 19,892,751 20,830,652
----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS........................................ 24,811,011 27,078,694
----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS.................................. $28,388,634 $30,623,246
=========== ===========
</TABLE>
See Notes to Financial Statements.
42
<PAGE>
<TABLE>
<CAPTION>
Equity Value Equity Growth Small Company International
Fund Fund Equity Fund Equity Fund
------------ ------------- ------------- -------------
<S> <C> <C> <C>
$ 5,942,225 $ 7,807,880 $ 432,656 $ 2,644,369
1,537,634 2,711,375 385,100 613,578
-- -- -- (389,530)
----------- ------------ ----------- -----------
7,479,859 10,519,255 817,756 2,868,417
----------- ------------ ----------- -----------
1,799,970 3,415,911 819,070 1,142,189
210,049 398,623 95,582 97,015
19,113 15,174 16,267 110,902
62,603 63,291 55,964 74,571
11,866 22,692 6,075 6,445
12,366 12,366 12,366 15,202
333,447 562,543 191,335 189,133
245,304 237,326 102,102 93,434
6,671 7,778 5,998 5,985
-- 6,763 3,639 3,679
87,904 117,368 55,981 53,236
28,410 21,337 23,849 9,667
5,795 16,877 2,304 2,584
9,329 19,580 4,768 5,482
----------- ------------ ----------- -----------
2,832,827 4,917,629 1,395,300 1,809,524
(2,347) (9,296) (11,087) (291,265)
----------- ------------ ----------- -----------
2,830,480 4,908,333 1,384,213 1,518,259
----------- ------------ ----------- -----------
4,649,379 5,610,922 (566,457) 1,350,158
----------- ------------ ----------- -----------
21,838,283 6,701,851 2,082,179 2,395,864
-- -- -- (4,537)
19,810,450 89,989,658 32,453,750 (4,508,285)
----------- ------------ ----------- -----------
41,648,733 96,691,509 34,535,929 (2,116,958)
----------- ------------ ----------- -----------
$46,298,112 $102,302,431 $33,969,472 $ (766,800)
=========== ============ =========== ===========
</TABLE>
43
<PAGE>
- --------------------
THE GALAXY FUND STATEMENTS OF CHANGES IN NET ASSETS
- --------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
----------------------------
YEARS ENDED OCTOBER 31,
----------------------------
1995 1994
------------ ------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF THE PERIOD...................................... $139,037,560 $ 92,348,366
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income.................................................. 3,577,623 3,514,658
Net realized gain (loss) on investments sold........................... 4,918,260 (3,111,182)
Net change in unrealized appreciation (depreciation) on investments.... 19,892,751 (3,275,367)
------------ ------------
Net increase (decrease) in net assets resulting from operations..... 28,388,634 (2,871,891)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 5):
Net investment income.................................................. (3,780,296) (3,129,257)
Net realized capital gains (losses).................................... -- --
------------ ------------
Total distributions................................................ (3,780,296) (3,129,257)
------------ ------------
NET INCREASE (DECREASE) FROM SHARE TRANSACTIONS (NOTE 5)................... (10,507,293) 52,690,342
------------ ------------
Net increase (decrease) in net assets.................................. 14,101,045 46,689,194
------------ ------------
NET ASSETS AT END OF THE PERIOD (INCLUDING LINE A)........................ $153,138,605 $139,037,560
============ ============
(A) Accumulated undistributed net investment income (loss)................. $ 406,096 $ 608,769
============ ============
</TABLE>
See Notes to Financial Statements.
44
<PAGE>
<TABLE>
<CAPTION>
EQUITY INCOME FUND EQUITY VALUE FUND
-------------------------- --------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
-------------------------- --------------------------
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C>
$142,412,226 $123,970,024 $228,403,407 $176,107,038
------------ ------------ ------------ ------------
3,544,552 3,340,617 4,649,379 3,028,602
6,248,042 2,290,141 21,838,283 20,341,807
20,830,652 (1,401,432) 19,810,450 (12,587,861)
------------ ------------ ------------ ------------
30,623,246 4,229,326 46,298,112 10,782,548
------------ ------------ ------------ ------------
(3,657,116) (3,071,108) (4,903,811) (2,670,131)
(2,290,141) (1,908,425) (20,293,613) (3,937,109)
------------ ------------ ------------ ------------
(5,947,257) (4,979,533) (25,197,424) (6,607,240)
------------ ------------ ------------ ------------
2,532,561 19,192,409 12,380,782 48,121,061
------------ ------------ ------------ ------------
27,208,550 18,442,202 33,481,470 52,296,369
------------ ------------ ------------ ------------
$169,620,776 $142,412,226 $261,884,877 $228,403,407
============ ============ ============ ============
$ 384,596 $ 497,160 $ 219,961 $ 474,393
============ ============ ============ ============
</TABLE>
45
<PAGE>
- --------------------
THE GALAXY FUND STATEMENTS OF CHANGES IN NET ASSETS
- --------------------
<TABLE>
<CAPTION>
EQUITY GROWTH FUND
----------------------------
YEARS ENDED OCTOBER 31,
----------------------------
1995 1994
------------ ------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF THE PERIOD..................................... $432,431,952 $427,297,851
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income.................................................. 5,610,922 5,378,306
Net realized gain (loss) on investments sold........................... 6,701,851 4,894,317
Net realized gain (loss) on forward foreign currency
contracts and foreign currency...................................... -- --
Net change in unrealized appreciation (depreciation) on investments,
foreign currency and forward foreign currency contracts............ 89,989,658 9,507,399
------------ ------------
Net increase (decrease) in net assets resulting from operations........ 102,302,431 19,780,022
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTE 5):
Net investment income................................................. (5,736,221) (4,990,137)
Net realized capital gains (losses)................................... (5,008,702) (1,959,834)
------------ ------------
Total distributions................................................. (10,744,923) (6,949,971)
------------ ------------
NET INCREASE (DECREASE) FROM SHARE TRANSACTIONS (NOTE 5).................. (5,062,327) (7,695,950)
------------ ------------
Net increase (decrease) in net assets................................. 86,495,181 5,134,101
------------ ------------
NET ASSETS AT END OF THE PERIOD (INCLUDING LINE A)........................ $518,927,133 $432,431,952
============ ============
(A) Undistributed (overdistributed) net investment income (loss).......... $ 665,685 $ 790,985
============ ============
</TABLE>
See Notes to Financial Statements.
46
<PAGE>
<TABLE>
<CAPTION>
SMALL COMPANY EQUITY FUND INTERNATIONAL EQUITY FUND
------------------------- --------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
------------------------- --------------------------
1995 1994 1995 1994
------------ ----------- ------------ ------------
<S> <C> <C> <C>
$ 97,306,732 $55,683,460 $115,237,460 $ 39,245,578
------------ ----------- ------------ ------------
(566,457) (285,977) 1,350,158 597,176
2,082,179 2,196,491 2,395,864 1,599,743
-- -- (4,537) (529,164)
32,453,750 (1,090,948) (4,508,285) 4,113,589
------------ ----------- ------------ ------------
33,969,472 819,566 (766,800) 5,781,344
------------ ----------- ------------ ------------
-- -- (338,828) (39,335)
(1,532,320) (257,026) (1,421,367) --
------------ ----------- ------------ ------------
(1,532,320) (257,026) (1,760,195) (39,335)
------------ ----------- ------------ ------------
10,755,129 41,060,732 7,007,372 70,249,873
------------ ----------- ------------ ------------
43,192,281 41,623,272 4,480,377 75,991,882
------------ ----------- ------------ ------------
$140,499,013 $97,306,732 $119,717,837 $115,237,460
============ =========== ============ ============
$ -- $ -- $ 1,200,199 $ 84,018
============ =========== ============ ============
</TABLE>
47
<PAGE>
- --------------------
ASSET ALLOCATION FUND
FINANCIAL HIGHLIGHTS
FOR A RETAIL AND TRUST SHARE OUTSTANDING
THE GALAXY FUND THROUGHOUT EACH PERIOD.
- --------------------
RETAIL SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
--------------------------------------------------------
1995 1994 1993/(2)/ 1992/(1)//(2)/
------- ------- --------- --------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of period............................... $ 10.67 $ 11.15 $ 10.16 $ 10.00
------- ------- ------- --------
Income from Investment Operations:
Net investment income (A)....................................... 0.30 0.27 0.25 0.15
Net realized and unrealized gain (loss) on investments.......... 2.16 (0.49) 0.99 0.13
------- ------- ------- --------
Total from Investment Operations:............................ 2.46 (0.22) 1.24 0.28
------- ------- ------- --------
Less Dividends:
Dividends from net investment income............................ (0.31) (0.26) (0.25) (0.12)
Dividends from net realized capital gains....................... -- -- -- --
------- ------- ------- --------
Total Dividends:............................................. (0.31) (0.26) (0.25) (0.12)
------- ------- ------- --------
Net increase (decrease) in net asset value......................... 2.15 (0.48) 0.99 0.16
------- ------- ------- --------
Net Asset Value, End of period..................................... $ 12.82 $ 10.67 $ 11.15 $ 10.16
======= ======= ======= ========
Total Return....................................................... 23.42% (2.02)% 12.37% 2.85%**
Ratios/Supplemental Data:
Net Assets, End of period (000's).................................. $ 76,368 $ 73,574 $ 92,348 $ 11,555
Ratios to average net assets:
Net investment income including reimbursement/waiver............ 2.52% 2.66% 2.59% 2.80%*
Operating expenses including reimbursement/waiver............... 1.48% 1.21% 1.14% 1.11%*
Operating expenses excluding reimbursement/waiver............... 1.50% 1.22% 1.25% 2.39%*
Portfolio Turnover Rate............................................ 41% 23% 7% 2%**
</TABLE>
- --------------------------------------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on December 30, 1991.
(2) For periods prior to the year ended October 31, 1994, the per share
amounts and selected ratios reflect the financial results of both Retail
and Trust Shares (See Note 5).
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or Administrator was as follows:
<TABLE>
<CAPTION>
Years ended October 31,
----------------------------------------------------------------------
1995 1994 1993/(2)/ 1992/(2)/
------ ------ --------- ---------
<S> <C> <C> <C> <C>
Retail Shares $ 0.30 $ 0.27 $ 0.24 $ 0.08
Trust Shares 0.32 0.28 0.24 0.08
</TABLE>
See Notes to Financial Statements.
48
<PAGE>
TRUST SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
---------------------------------------------------
1995 1994 1993/(2)/ 1992/(1)//(2)/
------- ------- --------- --------------
<S> <C> <C> <C>
$ 10.68 $ 11.15 $ 10.16 $ 10.00
------- ------- ------- -------
0.32 0.28 0.25 0.15
2.16 (0.49) 0.99 0.13
------- ------- ------- -------
2.48 (0.21) 1.24 0.28
------- ------- ------- -------
(0.33) (0.26) (0.25) (0.12)
-- -- -- --
------- ------- ------- -------
(0.33) (0.26) (0.25) (0.12)
------- ------- ------- -------
2.15 (0.47) 0.99 0.16
------- ------- ------- -------
$ 12.83 $ 10.68 $ 11.15 $ 10.16
======= ======= ======= =======
23.68% (1.93)% 12.37% 2.85%**
$76,771 $65,464 $92,348 $11,555
2.74% 2.70% 2.59% 2.80%*
1.26% 1.18% 1.14% 1.11%*
1.30% 1.18% 1.25% 2.39%*
41% 23% 7% 2%**
</TABLE>
49
<PAGE>
- --------------------
EQUITY INCOME FUND
FINANCIAL HIGHLIGHTS
FOR A RETAIL AND TRUST SHARE OUTSTANDING
THE GALAXY FUND THROUGHOUT EACH PERIOD.
- --------------------
RETAIL SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
---------------------------------------------------------------------
1995 1994 1993/(2)/ 1992/(2)/ 1991/(1)//(2)/
------- ------- -------- --------- --------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period.................... $ 12.74 $ 12.85 $ 11.85 $ 11.29 $ 10.00
------- ------- -------- ------- -------
Income from Investment Operations:
Net investment income (A)............................ 0.28 0.30 0.30 0.30 0.29
Net realized and unrealized gain (loss)
on investments.................................... 2.47 0.07 1.09 0.76 1.26
------- ------- -------- ------- -------
Total from Investment Operations:.............. 2.75 0.37 1.39 1.06 1.55
------- ------- -------- ------- -------
Less Dividends:
Dividends from net investment income................. (0.30) (0.29) (0.28) (0.30) (0.26)
Dividends from net realized capital gains............ (0.21) (0.19) (0.11) (0.20) --
------- ------- -------- ------- -------
Total Dividends:............................... (0.51) (0.48) (0.39) (0.50) (0.26)
------- ------- -------- ------- -------
Net increase (decrease) in net asset value.............. 2.24 (0.11) 1.00 0.56 1.29
------- ------- -------- ------- -------
Net Asset Value, End of period.......................... $ 14.98 $ 12.74 $ 12.85 $ 11.85 11.29
======= ======= ======== ======= =======
Total Return............................................ 22.23% 2.94% 11.85% 9.71% $ 15.61%**
Ratios/Supplemental Data:
Net Assets, End of period (000's)....................... $81,802 $63,532 $123,970 $21,778 $ 7,096
Ratios to average net assets:
Net investment income
including reimbursement/waiver.................... 2.08% 2.45% 2.34% 2.84% 2.72%*
Operating expenses including reimbursement/waiver.... 1.49% 1.11% 1.16% 1.03% 0.85%*
Operating expenses excluding reimbursement/waiver.... 1.51% 1.12% 1.22% 1.54% 1.39%*
Portfolio Turnover Rate................................. 21% 31% 27% 18% 77%**
</TABLE>
- --------------------------------------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on December 14, 1990.
(2) For the periods prior to the year ended October 31, 1994, the per share
amounts and selected ratios reflect the financial results of both Retail
and Trust Shares (See Note 5).
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or Administrator was as follows:
<TABLE>
<CAPTION>
Years ended October 31,
----------------------------------------------------------------
1995 1994 1993/(2)/ 1992/(2)/ 1991/(2)/
------ ------ --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Retail Shares $ 0.28 $ 0.30 $ 0.29 $ 0.25 $ 0.23
Trust Shares 0.36 0.31 0.29 0.25 0.23
</TABLE>
See Notes to Financial Statements.
50
<PAGE>
TRUST SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
-------------------------------------------------------------
1995 1994 1993/(2)/ 1992/(2)/ 1991/(1)(2)/
------- ------- --------- --------- ------------
<S> <C> <C> <C> <C>
$ 12.75 $ 12.85 $ 11.85 $ 11.29 $ 10.00
------- ------- -------- ------- -------
0.36 0.31 0.30 0.30 0.29
2.45 0.07 1.09 0.76 1.26
------- ------- -------- ------- -------
2.81 0.38 1.39 1.06 1.55
------- ------- -------- ------- -------
(0.36) (0.29) (0.28) (0.30) (0.26)
(0.21) (0.19) (0.11) (0.20) --
------- ------- -------- ------- -------
(0.57) (0.48) (0.39) (0.50) (0.26)
------- ------- -------- ------- -------
2.24 (0.10) 1.00 0.56 1.29
------- ------- -------- ------- -------
$ 14.99 $ 12.75 $ 12.85 $ 11.85 $ 11.29
======= ======= ======== ======= =======
22.81% 3.02% 11.85% 9.71% 15.61%**
$87,819 $78,880 $123,970 $21,778 $ 7,096
2.60% 2.49% 2.34% 2.84% 2.72%*
0.98% 1.07% 1.16% 1.03% 0.85%*
1.00% 1.07% 1.22% 1.54% 1.39%*
21% 31% 27% 18% 77%**
</TABLE>
51
<PAGE>
- --------------------
EQUITY VALUE FUND
FINANCIAL HIGHLIGHTS
FOR A RETAIL AND TRUST SHARE OUTSTANDING
THE GALAXY FUND THROUGHOUT EACH PERIOD.
- --------------------
RETAIL SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
----------------------------------------------------------
1995 1994 1993/(1)/ 1992/(1)/ 1991/(1)/
-------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period ................ $ 13.31 $ 13.12 $ 11.41 $ 11.52 $ 9.45
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income (A)........................ 0.22 0.18 0.19 0.26 0.37
Net realized and unrealized gain (loss)
on investments................................. 2.24 0.45 2.14 0.33 2.41
-------- -------- -------- -------- --------
Total from Investment Operations:.......... 2.46 0.63 2.33 0.59 2.78
-------- -------- -------- -------- --------
Less Dividends:
Dividends from net investment income........... (0.23) (0.16) (0.20) (0.27) (0.37)
Dividends from net realized capital gains...... (1.21) (0.28) (0.42) (0.43) (0.34)
-------- -------- -------- -------- --------
Total Dividends:........................... (1.44) (0.44) (0.62) (0.70) (0.71)
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value......... 1.02 0.19 1.71 (0.11) 2.07
-------- -------- -------- -------- --------
Net Asset Value, End of period .................... $ 14.33 $ 13.31 $ 13.12 $ 11.41 $ 11.52
======== ======== ======== ======== ========
Total Return ...................................... 20.81% 4.97% 21.18% 5.66% 30.45%
Ratios/Supplemental Data:
Net Assets, End of period (000's).................. $ 96,555 $ 74,001 $ 176,107 $133,578 $ 99,601
Ratios to average net assets:
Net investment income
including reimbursement/waiver ............ 1.62% 1.45% 1.52% 2.24% 3.25%
Operating expenses
including reimbursement/waiver............. 1.49% 1.08% 0.97% 0.94% 0.94%
Operating expenses
excluding reimbursement/waiver............. 1.50% 1.11% 0.97% 0.94% 0.94%
Portfolio Turnover Rate ........................... 76% 71% 50% 136% 40%
</TABLE>
- --------------------------------------------------------------------------------
(1) For periods prior to the year ended October 31, 1994, the per share
amounts and selected ratios reflect the financial results of both Retail
and Trust Shares (See Note 5).
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or Administrator was as follows:
<TABLE>
<CAPTION>
Years ended October 31,
-------------------------------------------------------------
1995 1994 1993/(1)/ 1992/(1)/ 1991/(1)/
------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Retail Shares $ 0.22 $ 0.18 $ 0.19 $ 0.26 $ 0.37
Trust Shares 0.28 0.19 0.19 0.26 0.37
</TABLE>
See Notes to Financial Statements.
52
<PAGE>
TRUST SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
--------------------------------------------------------------------------
1995 1994 1993/(1)/ 1992/(1)/ 1991/(1)/
--------- --------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
$ 13.32 $ 13.12 $ 11.41 $ 11.52 $ 9.45
--------- --------- ------------- ------------- -------------
0.28 0.19 0.19 0.26 0.37
2.24 0.45 2.14 0.33 2.41
--------- --------- ------------- ------------- -------------
2.52 0.64 2.33 0.59 2.78
--------- --------- ------------- ------------- -------------
(0.30) (0.16) (0.20) (0.27) (0.37)
(1.21) (0.28) (0.42) (0.43) (0.34)
--------- --------- ------------- ------------- -------------
(1.51) (0.44) (0.62) (0.70) (0.71)
--------- --------- ------------- ------------- -------------
1.01 0.20 1.71 (0.11) 2.07
--------- --------- ------------- ------------- -------------
$ 14.33 $ 13.32 $ 13.12 $ 11.41 $ 11.52
========= ========= ============= ============= =============
21.31% 5.05% 21.18% 5.66% 30.45%
$ 165,330 $ 154,403 $ 176,107 $ 133,578 $ 99,601
2.10% 1.46% 1.52% 2.24% 3.25%
1.02% 1.06% 0.97% 0.94% 0.94%
1.02% 1.06% 0.97% 0.94% 0.94%
76% 71% 50% 136% 40%
</TABLE>
53
<PAGE>
- ----------------
EQUITY GROWTH FUND
FINANCIAL HIGHLIGHTS
FOR A RETAIL AND TRUST SHARE OUTSTANDING
THE GALAXY FUND THROUGHOUT EACH PERIOD.
- ----------------
RETAIL SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
-------------------------------------------------------------------------
1995 1994 1993/(2)/ 1992/(2)/ 1991/(1)//(2)/
-------- -------- ------------- ------------- ------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of period.................... $ 14.18 $ 13.76 $ 12.90 $ 11.99 $ 10.00
-------- -------- ------------- ------------- -----------
Income from Investment Operations:
Net investment income (A)............................ 0.14 0.17 0.15 0.17 0.16
Net realized and unrealized gain (loss)
on investments..................................... 3.28 0.47 0.95 0.91 1.97
-------- -------- ------------- ------------- -----------
Total from Investment Operations:............ 3.42 0.64 1.10 1.08 2.13
-------- -------- ------------- ------------- -----------
Less Dividends:
Dividends from net investment income................. (0.14) (0.16) (0.15) (0.17) (0.14)
Dividends from net realized capital gains............ (0.17) (0.06) (0.09) -- --
-------- -------- ------------- ------------- -----------
Total Dividends:............................. (0.31) (0.22) (0.24) (0.17) (0.14)
-------- -------- ------------- ------------- -----------
Net increase (decrease) in net asset value... 3.11 0.42 0.86 0.91 1.99
-------- -------- ------------- ------------- -----------
Net Asset Value, End of period.......................... $ 17.29 $ 14.18 $ 13.76 $ 12.90 $ 11.99
======== ======== ============= ============= ===========
Total Return............................................ 24.54% 4.72% 8.58% 9.10% 21.39%**
Ratios/Supplemental Data:
Net Assets, End of period (000's)....................... $ 98,911 $ 70,338 $ 427,298 $ 224,630 $ 92,224
Ratios to average net assets:
Net investment income
including reimbursement/waiver..................... 0.85% 1.22% 1.20% 1.37% 1.46%*
Operating expenses
including reimbursement/waiver..................... 1.45% 0.98% 0.97% 0.95% 0.83%*
Operating expenses
excluding reimbursement/waiver..................... 1.47% 0.99% 0.97% 0.95% 0.83%*
Portfolio Turnover Rate................................. 14% 18% 16% 22% 16%**
</TABLE>
- -----------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on December 14, 1990.
(2) For periods prior to the year ended October 31, 1994, the per share
amounts and selected ratios reflect the financial results of both Retail
and Trust Shares (See Note 5).
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or Administrator was as follows:
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
--------------------------------------------------
1995 1994 1993/(2)/ 1992/(2)/ 1991/(2)/
------ ------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Retail Shares $ 0.13 $ 0.17 $ 0.15 $ 0.17 $ 0.16
Trust Shares 0.20 0.18 0.15 0.17 0.16
</TABLE>
See Notes to Financial Statements.
54
<PAGE>
TRUST SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
----------------------------------------------------------------------
1995 1994 1993/(2)/ 1992/(2)/ 1991/(1)/(2)/
--------- -------- ------------- ------------- ----------------
<S> <C> <C> <C> <C>
$ 14.19 $ 13.76 $ 12.90 $ 11.99 $ 10.00
--------- -------- ------------- ------------- ----------------
0.20 0.18 0.15 0.17 0.16
3.28 0.47 0.95 0.91 1.97
--------- -------- ------------- ------------- ----------------
3.48 0.65 1.10 1.08 2.13
--------- -------- ------------- ------------- ----------------
(0.20) (0.16) (0.15) (0.17) (0.14)
(0.17) (0.06) (0.09) -- --
--------- -------- ------------- ------------- ----------------
(0.37) (0.22) (0.24) (0.17) (0.14)
--------- -------- ------------- ------------- ----------------
3.11 0.43 0.86 0.91 1.99
--------- -------- ------------- ------------- ----------------
$ 17.30 $ 14.19 $ 13.76 $ 12.90 $ 11.99
========= ======== ============= ============= ================
25.08% 4.80% 8.58% 9.10% 21.39%**
$ 420,016 $362,094 $ 427,298 $ 224,630 $ 92,224
1.31% 1.27% 1.20% 1.37% 1.46%*
1.00% 0.93% 0.97% 0.95% 0.83%*
1.00% 0.93% 0.97% 0.95% 0.83%*
14% 18% 16% 22% 16%**
</TABLE>
55
<PAGE>
- --------------------
SMALL COMPANY EQUITY FUND
FINANCIAL HIGHLIGHTS
FOR A RETAIL AND TRUST SHARE OUTSTANDING
THE GALAXY FUND THROUGHOUT EACH PERIOD.
- --------------------
RETAIL SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
------------------------------------------------------------
1995 1994 1993/(2)/ 1992/(1)//(2)/
-------- -------- ----------- --------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of period....................... $ 12.35 $ 12.41 $ 8.79 $ 10.00
-------- -------- ----------- --------------
Income from Investment Operations:
Net investment income (loss) (A)........................ (0.09) (0.01) (0.04) (0.03)
Net realized and unrealized gain (loss)
on investments....................................... 4.21 -- 3.66 (1.18)
-------- -------- ----------- --------------
Total from Investment Operations:................. 4.12 (0.01) 3.62 (1.21)
-------- -------- ----------- --------------
Less Dividends:
Dividends from net investment income.................... -- -- -- --
Dividends from net realized capital gains............... (0.19) (0.05) -- --
-------- -------- ----------- --------------
Total Dividends:.................................. (0.19) (0.05) -- --
-------- -------- ----------- --------------
Net Increase (decrease) in net asset value................. 3.93 (0.06) 3.62 (1.21)
-------- -------- ----------- --------------
Net Asset Value, End of period............................. $ 16.28 $ 12.35 $ 12.41 $ 8.79
======== ======== ============ =============
Total Return............................................... 34.01% (0.06)% 41.18% (12.10)%**
Ratios/Supplemental Data:
Net Assets, End of period (000's).......................... $ 45,668 $ 30,845 $ 55,683 $ 29,072
Ratios to average net assets:
Net investment income (loss)
including reimbursement/waiver....................... (0.85)% (0.40)% (0.66)% (0.63)%*
Operating expenses
including reimbursement/waiver....................... 1.60% 1.31% 1.18% 1.06%*
Operating expenses
excluding reimbursement/waiver....................... 1.64% 1.34% 1.22% 1.33%*
Portfolio Turnover Rate.................................... 54% 35% 57% 87%**
</TABLE>
- --------------------------------------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on December 30, 1991.
(2) For periods prior to the year ended October 31, 1994, the per share amounts
and the selected ratios reflect the financial results of both Retail and
Trust Shares (See Note 5).
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or Administrator was as follows:
<TABLE>
<CAPTION>
Years ended October 31,
-----------------------------------------------------------
1995 1994 1993(2) 1992(2)
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Retail Shares $ (0.09) $ (0.01) $ (0.04) $ (0.05)
Trust Shares (0.04) -- (0.04) (0.05)
</TABLE>
See Notes to Financial Statements.
56
<PAGE>
TRUST SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
-------------------------------------------------------------------
1995 1994 1993/(2)/ 1992/(1)//(2)/
-------- -------- ----------- ----------------
<S> <C> <C> <C>
$ 12.36 $ 12.41 $ 8.79 $ 10.00
-------- -------- ----------- ----------------
(0.04) -- (0.04) (0.03)
4.25 -- 3.66 (1.18)
-------- -------- ----------- ----------------
4.21 -- 3.62 (1.21)
-------- -------- ----------- ----------------
-- -- -- --
(0.19) (0.05) -- --
-------- -------- ----------- ----------------
(0.19) (0.05) -- --
-------- -------- ----------- ----------------
4.02 (0.05) 3.62 (1.21)
-------- -------- ----------- ----------------
$ 16.38 $ 12.36 $ 12.41 $ 8.79
======== ======== =========== ================
34.73% 0.02% 41.18% (12.10)%**
$ 94,831 $ 66,462 $ 55,683 $ 29,072
(0.37)% (0.35)% (0.66)% (0.63)%*
1.12% 1.27% 1.18% 1.06%*
1.12% 1.27% 1.22% 1.33%*
54% 35% 57% 87%**
</TABLE>
57
<PAGE>
- --------------------
INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
FOR A RETAIL AND TRUST SHARE OUTSTANDING
THE GALAXY FUND THROUGHOUT EACH PERIOD.
- --------------------
RETAIL SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
--------------------------------------------------------------
1995 1994 1993/(2)/ 1992/(1)//(2)/
-------- -------- ----------- ----------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of period....................... $ 13.20 $ 12.13 $ 9.66 $ 10.00
-------- -------- ----------- ----------------
Income from Investment Operations:
Net investment income (A)............................... 0.11 0.06 0.02 0.06
Net realized and unrealized gain (loss)
on investments....................................... (0.21) 1.02 2.51 (0.40)
-------- -------- ----------- ----------------
Total from Investment Operations:................. (0.10) 1.08 2.53 (0.34)
-------- -------- ----------- ----------------
Less Dividends:
Dividends from net investment income.................... (0.02) (0.01) (0.06) --
Dividends from net realized capital gains............... (0.16) -- -- --
-------- -------- ----------- ----------------
Total Dividends:.................................. (0.18) (0.01) (0.06) --
-------- -------- ----------- ----------------
Net increase (decrease) in net asset value................. (0.28) 1.07 2.47 (0.34)
-------- -------- ----------- ----------------
Net Asset Value, End of period............................. $ 12.92 $ 13.20 $ 12.13 $ 9.66
======== ======== =========== ================
Total Return............................................... (0.64)% 8.91% 26.36% (3.40)%**
Ratios/Supplemental Data:
Net Assets, End of period (000's).......................... $ 30,104 $ 32,887 $ 39,246 $ 12,584
Ratios to average net assets:
Net investment income including reimbursement/waiver.... 0.84% 0.69% 0.37% 1.19%*
Operating expenses including reimbursement/waiver....... 1.76% 1.49% 1.57% 1.61%*
Operating expenses excluding reimbursement/waiver....... 2.03% 1.79% 2.04% 2.79%*
Portfolio Turnover Rate.................................... 48% 39% 29% 21%**
</TABLE>
- --------------------------------------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on December 30, 1991.
(2) For periods prior to the year ended October 31, 1994, the per share amounts
and selected ratios reflect the financial results of both Retail and Trust
Shares (See Note 5).
(A) Net investment income per share before reimbursement/waiver of fees by
the Investment Adviser and/or Administrator was as follows:
<TABLE>
<CAPTION>
Years ended October 31,
-----------------------------------------------------------------------
1995 1994 1993(2) 1992(2)
------ ------- -------- --------
<S> <C> <C> <C> <C>
Retail Shares $ 0.08 $ 0.03 $ __ $ __
Trust Shares 0.13 0.04 __ __
</TABLE>
See Notes to Financial Statements.
58
<PAGE>
TRUST SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
------------------------------------------------------------------
1995 1994 1993/(2)/ 1992/(1)//(2)/
-------- -------- ----------- -----------------
<S> <C> <C> <C>
$ 13.20 $ 12.13 $ 9.66 $ 10.00
-------- -------- ----------- -----------------
0.16 0.06 0.02 0.06
(0.18) 1.02 2.51 (0.40)
-------- -------- ----------- -----------------
(0.02) 1.08 2.53 (0.34)
-------- -------- ----------- -----------------
(0.04) (0.01) (0.06) --
(0.16) -- -- --
-------- -------- ----------- -----------------
(0.20) (0.01) (0.06) --
-------- -------- ----------- -----------------
(0.22) 1.07 2.47 (0.34)
-------- -------- ----------- -----------------
$ 12.98 $ 13.20 $ 12.13 $ 9.66
======== ======== =========== =================
(0.02)% 8.91% 26.36% (3.40)%**
$ 89,614 $ 82,350 $ 39,246 $ 12,584
1.36% 0.74% 0.37% 1.19%*
1.22% 1.43% 1.57% 1.61%*
1.48% 1.72% 2.04% 2.79%*
48% 39% 29% 21%**
</TABLE>
59
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS
- --------------------
1. ORGANIZATION
The Galaxy Fund, a Massachusetts business trust (the "Trust"), is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company. As of the date of this report, the Trust offered twenty
managed investment portfolios. The accompanying financial statements and
financial highlights are those of the Asset Allocation, Equity Income, Equity
Value, Equity Growth, Small Company Equity and International Equity Funds
(individually, a "Fund", collectively, the "Funds") only.
Each Fund is authorized to issue two series of shares (Trust Shares and
Retail Shares). Trust Shares and Retail Shares are substantially the same,
except that, effective as of October 1, 1994, each series bears the following
series specific expenses: shareholder servicing fees and transfer agent charges.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies in conformity with
generally accepted accounting principles consistently followed by the Funds in
the preparation of their financial statements.
PORTFOLIO VALUATION: Investments in securities which are traded on a
recognized stock exchange are valued at the last sale price on the securities
exchange on which such securities are primarily traded, or at the last sale
price on the national securities market. Securities traded on over-the-counter
markets are valued at the last bid price. Short-term obligations that mature in
60 days or less are valued at amortized cost, which constitutes fair value. All
other securities and other assets are appraised at their fair value as
determined in good faith under consistently applied procedures established by
and under the general supervision of the Board of Trustees.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
accounted for on a trade date basis. Net realized gains or losses on sales of
securities are determined by the identified cost method. Interest income is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date. Investment income and realized and unrealized gains and losses are
allocated to the separate series based upon the relative net assets of each
series.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The International Equity Fund
may enter into forward foreign currency exchange contracts whereby the Fund
agrees to sell a specific currency at a specified price at a future date in an
attempt to hedge against fluctuations in the value of the underlying currency of
certain portfolio instruments. Forward foreign currency exchange contracts are
valued at the daily exchange rate of the underlying currency. Purchases and
sales of forward foreign currency exchange contracts having the same settlement
date and broker are offset and presented on a net basis in the Statement of
Assets and Liabilities. Gains or losses on the purchase or sale of forward
foreign currency exchange contracts having the same settlement date and broker
are recognized on the date of offset, otherwise gains or losses are recognized
on the settlement date.
FOREIGN CURRENCY TRANSLATION: The books and records of the International
Equity Fund are maintained in U.S. dollars. Investment valuations and other
assets and liabilities initially expressed in foreign currencies are converted
each business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investments and income and expenses are converted into U.S.
dollars based upon exchange rates prevailing on the respective dates of such
transactions. That portion of unrealized gains or losses on investments due to
fluctuations in foreign currency exchange rates is not separately disclosed.
60
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
DIVIDENDS TO SHAREHOLDERS: Dividends from net investment income are
determined separately for each series and, with the exception of the
International Equity Fund which declares and pays dividends annually, are
declared and paid quarterly. Net realized capital gains, if any, are distributed
at least annually.
Income dividends and capital gain dividends are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles.
FEDERAL INCOME TAXES: The Trust treats each Fund as a separate entity for
Federal income tax purposes. Each Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended. By so qualifying, each Fund will not be subject to Federal
income taxes to the extent that it distributes substantially all of its taxable
or tax-exempt income, if any, for its tax year ending October 31. In addition,
by distributing in each calendar year substantially all of its net investment
income, capital gains and certain other amounts, if any, each Fund will not be
subject to a Federal excise tax. Therefore, no Federal income tax provision is
required. Withholding taxes on foreign dividends have been paid or provided for
in accordance with the applicable country's tax rules and rates.
EXPENSES: The Trust accounts separately for the assets, liabilities and
operations of each Fund. Expenses directly attributable to a Fund are charged to
the Fund, while the expenses which are attributable to more than one fund of the
Trust are allocated among the respective funds.
In addition, expenses of a Fund not directly attributable to the operations
of a particular series of shares of the Fund are allocated to the separate
series based upon the relative net assets of each series. Operating expenses
directly attributable to a series of shares of a Fund are charged to the
operations of that series.
REPURCHASE AGREEMENTS: Each Fund may engage in repurchase agreement
transactions with institutions that the Trust's investment adviser or sub-
adviser has determined are creditworthy pursuant to guidelines established by
the Trust's Board of Trustees. Each repurchase agreement transaction is recorded
at cost. Each Fund requires that the securities purchased in a repurchase
agreement transaction be transferred to the Trust's Custodian (or sub-custodian)
in a manner that is intended to enable the Fund to obtain those securities in
the event of a counterparty default. The investment adviser or sub-adviser
monitors the value of the securities, including accrued interest, daily to
ensure that the value of the collateral equals or exceeds amounts due under the
repurchase agreement. Repurchase agreement transactions involve certain risks in
the event of default or insolvency of the counterparty, including possible
delays or restrictions upon a Fund's ability to dispose of the underlying
securities, and a possible decline in the value of the underlying securities
during the period while the Fund seeks to assert its rights.
ORGANIZATION COSTS: Each Fund bears all costs in connection with its
organization, including the fees and expenses of registering and qualifying its
initial shares for distribution under Federal and state securities laws. All
such costs are amortized using the straight-line method over a period of five
years beginning with the Fund's commencement of operations. In the event that
any of the initial shares purchased by a Fund's sponsor are redeemed during such
period by any holder thereof, the Fund involved will be reimbursed by such
holder for any unamortized organization costs in the same proportion as the
number of initial shares being redeemed bears to the number of initial shares
outstanding at the time of redemption.
61
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
3. INVESTMENT ADVISORY, ADMINISTRATION, SHAREHOLDER SERVICES AND OTHER FEES
The Trust and Fleet Investment Advisors Inc. (the "Investment Adviser"), an
indirect wholly-owned subsidiary of Fleet Financial Group, Inc., are parties to
an investment advisory agreement under which the Investment Adviser provides
services for a fee, computed daily and paid monthly, at the annual rate of 0.75%
of the average daily net assets of the Asset Allocation, Equity Income, Equity
Value, Equity Growth and Small Company Equity Funds.
The Trust pays the Investment Adviser a fee, computed daily and paid
monthly, with respect to the International Equity Fund at the annual rate of
1.15% of the first $50 million of the Fund's average daily net assets, plus
0.95% of the next $50 million of such net assets, plus 0.85% of net assets in
excess of $100 million.
The Investment Adviser has entered into a sub-advisory agreement with
Wellington Management Company ("Wellington Management") with respect to the
International Equity Fund pursuant to which the Investment Adviser pays fees to
Wellington Management, computed daily and paid quarterly, at the annual rate of
0.50% of the first $50 million of the Fund's average daily net assets, plus
0.30% of the next $50 million of such assets, plus 0.20% of net assets in excess
of $100 million.
The Trust and First Data Investor Services Group, Inc. ("FDISG"), (formerly
known as The Shareholders Services Group, Inc. doing business as 440 Financial),
a wholly-owned subsidiary of First Data Corporation, are parties to an
administration agreement under which FDISG (the "Administrator") provides
services for a fee, computed daily and paid monthly, at the annual rate of 0.09%
of the first $2.5 billion of the combined average daily net assets of the Funds
and the other funds offered by the Trust, 0.085% of the next $2.5 billion of
combined average daily net assets and 0.08% of combined average daily net assets
over $5 billion. In addition, FDISG also provides certain fund accounting,
custody administration and transfer agency services pursuant to certain fee
arrangements. Pursuant to these fee arrangements, FDISG compensates the Trust's
custodian bank for its services. Prior to March 31, 1995, the administration,
fund accounting, custody administration and transfer agency services described
above were provided by 440 Financial Group of Worcester, Inc., a wholly-owned
subsidiary of State Mutual Life Assurance Company of America ("State Mutual"),
for the same annual fees. On that date, FDISG acquired substantially all of the
assets of 440 Financial Group of Worcester, Inc.
Prior to March 1, 1994, 440 Financial Group of Worcester, Inc. was entitled
to receive administration fees, computed daily and paid monthly, at the annual
rate of 0.078% of the first $2.5 billion of the combined average daily net
assets of the Funds and the other funds offered by the Trust, plus 0.073% of the
combined average daily net assets in excess of $2.5 billion.
Effective October 1, 1994, the Trust implemented a shareholder services plan
(the "Services Plan") with respect to Retail Shares of the Funds. Currently, the
Services Plan has not been implemented with respect to the Funds' Trust Shares.
The Services Plan provides compensation to institutions (including and currently
limited to Fleet Bank and its affiliates) which provide administrative and
support services to their customers who beneficially own Retail Shares, at an
annual rate not to exceed 0.50% of the average daily net asset value of the
outstanding Retail Shares of each Fund beneficially owned by such customers. The
Trust, under the direction of the Board of Trustees, is currently limiting fees
payable under the Services Plan with respect to each Fund to an
62
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
annual rate not to exceed 0.30% of the average daily net asset value of the
outstanding Retail Shares beneficially owned by such customers.
Effective October 1, 1994, the Retail Shares and Trust Shares of the Funds
bear series specific transfer agent charges based upon the number of shareholder
accounts for each series. In addition, effective November 1, 1994, Trust Shares
also bear additional transfer agency fees in order to compensate FDISG for
payments made to Fleet Trust Company, an affiliate of the Investment Adviser,
for performing certain sub-account and administrative functions on a per account
basis with respect to Trust Shares held by defined contribution plans. For the
year ended October 31, 1995, transfer agent charges for each series were as
follows:
<TABLE>
RETAIL TRUST
-------- -------
<S> <C> <C>
Asset Allocation $ 152,339 $ 218,470
Equity Income 154,459 11,049
Equity Value 209,970 123,477
Equity Growth 205,786 356,757
Small Company Equity 111,541 79,794
International Equity 107,224 81,909
</TABLE>
440 Financial Distributors, Inc. (the "Distributor"), a wholly-owned
subsidiary of FDISG, and an indirect wholly-owned subsidiary of First Data
Corporation, acts as the exclusive distributor of the Trust's Shares. Prior to
March 31, 1995, the Distributor was a wholly-owned subsidiary of 440 Financial
Group of Worcester, Inc. and an indirect wholly-owned subsidiary of State
Mutual. Prior to March 1, 1994, Allmerica Investments, Inc., a wholly-owned
subsidiary of State Mutual, served as the Trust's distributor.
Certain officers of the Trust may be officers of the Administrator and/or
Distributor. Such officers receive no compensation from the Trust for serving in
their respective roles. No officer, director or employee of the Investment
Adviser serves as an officer, Trustee or employee of the Trust. Effective May
26, 1995, each Trustee is entitled to receive for services as a trustee of both
the Trust and The Galaxy VIP Fund ("VIP") an aggregate fee of $18,000 per annum
plus certain other fees for attending or participating in meetings as well as
reimbursement for expenses incurred in attending meetings. The Chairman of the
Boards of Trustees of the Trust and VIP is entitled to an additional annual fee
of $4,000 and the President and Treasurer of the Trust and VIP is entitled to an
additional annual fee of $2,500 for their services in these capacities. These
fees are allocated among the Funds of the Trust and VIP based on their relative
net assets.
Expenses for the year ended October 31, 1995 include legal fees paid to
Drinker Biddle & Reath. A partner of that firm is Secretary to the Trust.
4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
The Investment Adviser voluntarily agreed to waive a portion of its fees and
to reimburse the Funds for certain expenses so that total expenses would not
exceed certain expense limitations established for each series. The Investment
Adviser, at its discretion, may revise or discontinue the voluntary fee waivers
and expense reimbursements. For the year ended October 31, 1995, the Investment
Adviser waived fees and/or reimbursed expenses with respect to the Funds in the
following amounts:
<TABLE>
FEES WAIVED BY REIMBURSEMENT BY
INVESTMENT INVESTMENT
FUND ADVISER ADVISER
- ---- ----------- -----------
<S> <C> <C>
Asset Allocation $ -- $ 37,161
Equity Income -- 24,627
Equity Value -- 2,347
Equity Growth -- 9,296
Small Company Equity -- 11,087
International Equity 291,265 --
</TABLE>
63
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an
unlimited number of shares of beneficial interest, each with a par value of
$0.001. Shares of the Trust are currently classified into twenty classes of
shares generally consisting of two series including: Class C and Class C -
Special Series 1 - Equity Value Fund; Class H - Series 1 and Class H -
Series 2 - Equity Growth Fund; Class I - Series 1 and Class I - Series 2 -
Equity Income Fund; Class N - Series 1 and Class N - Series 2 - Asset
Allocation Fund; Class K - Series 1 and Class K - Series 2 - Small Company
Equity Fund; and Class G - Series 1 and Class G - Series 2 - International
Equity Fund. Each share represents an equal proportionate interest in the
respective Fund, bears the same fees and expenses (except that effective October
1, 1994, Retail Shares bear the expense of payments under the Services Plan and
Trust Shares and Retail Shares bear series specific transfer agent charges), and
are entitled to such dividends and distributions of income earned as are
declared at the discretion of the Trust's Board of Trustees.
Shareholders are entitled to one vote for each full share held and will vote
in the aggregate and not by class or series, except as otherwise expressly
required by law or when the Board of Trustees determines that the matter to be
voted on affects only the interests of shareholders of a particular class or
series.
The following is a summary of transactions in portfolio shares and dividends
to shareholders for the year ended October 31, 1995 (by series for each Fund)
and for the year ended October 31, 1994 (in the aggregate):
TRANSACTIONS IN PORTFOLIO SHARES:
<TABLE>
<CAPTION>
ASSET ALLOCATION
SHARE ACTIVITY
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Sold............................... 892,958 2,366,202 8,936,277
Issued to shareholders in
reinvestment of dividends....... 153,524 123,395 241,653
Repurchased........................ (1,983,918) (2,637,556) (4,438,370)
------------ ------------ -------------
Net increase (decrease)
from share transactions......... (937,436) (147,959) 4,739,560
============ ============= =============
<CAPTION>
DOLLAR AMOUNTS
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Sold............................... $ 10,902,135 $ 27,929,468 $ 97,633,883
Issued to shareholders in
reinvestment of dividends....... 1,750,071 1,416,611 2,615,486
Repurchased........................ (22,106,650) (30,398,928) (47,559,027)
------------ ------------ -------------
Net increase (decrease)
from share transactions......... $ (9,454,444) $ (1,052,849) $ 52,690,342
============ ============= =============
<CAPTION>
EQUITY INCOME
SHARE ACTIVITY
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Sold............................... 1,541,985 680,800 3,428,636
Issued to shareholders in
reinvestment of dividends....... 182,704 97,608 241,251
Repurchased........................ (1,251,098) (1,109,312) (2,144,268)
------------ ------------ -------------
Net increase (decrease)
from share transactions......... 473,591 (330,904) 1,525,619
============ ============= =============
<CAPTION>
DOLLAR AMOUNTS
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
---------- --------- -----------
<S> <C> <C> <C>
Sold............................... $ 21,450,453 $ 9,236,146 $ 43,324,715
Issued to shareholders in
reinvestment of dividends....... 2,352,531 1,218,932 2,727,363
Repurchased........................ (16,699,932) (15,025,569) (26,859,669)
------------ ------------ -------------
Net increase (decrease)
from share transactions......... $ 7,103,052 $ (4,570,491) $ 19,192,409
============ ============= =============
</TABLE>
64
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------
<TABLE>
<CAPTION>
EQUITY VALUE
SHARE ACTIVITY
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Sold............................... 1,833,878 3,593,154 8,614,394
Issued to shareholders in
reinvestment of dividends....... 672,772 1,147,783 455,698
Repurchased........................ (1,327,538) (4,802,094) (5,339,762)
------------ ------------ -------------
Net increase (decrease)
from share transactions......... 1,179,112 (61,157) 3,730,330
============ ============ =============
<CAPTION>
DOLLAR AMOUNTS
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Sold............................... $ 24,372,234 $ 47,132,201 $ 111,498,768
Issued to shareholders in
reinvestment of dividends....... 8,063,657 13,789,856 5,886,258
Repurchased........................ (17,257,086) (63,720,080) (69,263,965)
------------ ------------ -------------
Net increase (decrease)
from share transactions......... $ 15,178,805 $ (2,798,023) $ 48,121,061
============ ============ =============
<CAPTION>
EQUITY GROWTH
SHARE ACTIVITY
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Sold............................... 1,650,493 5,231,552 9,252,520
Issued to shareholders in
reinvestment of dividends....... 105,064 430,902 360,849
Repurchased........................ (993,540) (6,902,825) (10,186,951)
------------ ------------ -------------
Net increase (decrease)
from share transactions......... 762,017 (1,240,371) (573,582)
============ ============ =============
<CAPTION>
DOLLAR AMOUNTS
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Sold............................... $ 25,867,538 $ 81,678,083 $ 127,419,905
Issued to shareholders in
reinvestment of dividends....... 1,499,263 6,181,564 5,003,866
Repurchased........................ (14,888,011) (105,400,764) (140,119,721)
------------ ------------ -------------
Net increase (decrease)
from share transactions......... $ 12,478,790 $(17,541,117) $ (7,695,950)
============ ============ =============
<CAPTION>
SMALL COMPANY EQUITY
SHARE ACTIVITY
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Sold............................... 16,120,515 1,940,466 16,177,180
Issued to shareholders in
reinvestment of dividends....... 39,516 55,759 16,416
Repurchased........................ (15,852,473) (1,584,128) (12,804,007)
------------ ------------ -------------
Net increase (decrease)
from share transactions......... 307,558 412,097 3,389,589
============ ============ =============
<CAPTION>
DOLLAR AMOUNTS
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Sold............................... $223,987,809 $ 28,252,879 $ 193,588,918
Issued to shareholders in
reinvestment of dividends....... 462,339 652,934 197,487
Repurchased........................ (220,438,570) (22,162,262) (152,725,673)
------------ ------------ -------------
Net increase (decrease)
from share transactions......... $ 4,011,578 $ 6,743,551 $ 41,060,732
============ ============ =============
</TABLE>
65
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY
SHARE ACTIVITY
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Sold............................... 847,691 2,665,037 6,705,025
Issued to shareholders in
reinvestment of dividends....... 37,192 45,749 1,760
Repurchased........................ (1,046,098) (2,042,035) (1,212,708)
------------ ------------ -------------
Net increase (decrease)
from share transactions......... (161,215) 668,751 5,494,077
============ ============ =============
<CAPTION>
DOLLAR AMOUNTS
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Sold............................... $ 10,661,106 $ 33,867,277 $ 85,687,630
Issued to shareholders in
reinvestment of dividends....... 452,252 556,311 22,214
Repurchased........................ (13,114,155) (25,415,419) (15,459,971)
------------ ------------ -------------
Net increase (decrease)
from share transactions......... $ (2,000,797) $ 9,008,169 $ 70,249,873
============ ============ =============
</TABLE>
DIVIDENDS TO SHAREHOLDERS:
<TABLE>
<CAPTION>
ASSET ALLOCATION
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Net investment income.............. $ (1,835,264) $(1,945,032) $ (3,129,257)
Net realized gain on investments... -- -- --
------------ ------------ -------------
Total dividends.............. $ (1,835,264) $(1,945,032) $ (3,129,257)
============ ============ =============
<CAPTION>
EQUITY VALUE
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Net investment income.............. $ (1,403,785) $ (3,500,026) $ (2,670,131)
Net realized gain on investments... (6,772,276) (13,521,337) (3,937,109)
------------ ------------ -------------
Total dividends.............. $ (8,176,061) $(17,021,363) $ (6,607,240)
============ ============ =============
<CAPTION>
SMALL COMPANY EQUITY
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Net investment income.............. $ -- $ -- $ --
Net realized gain on investments... (494,152) (1,038,168) (257,026)
------------ ------------ -------------
Total dividends.............. $ (494,152) $(1,038,168) $ (257,026)
============ ============ =============
<CAPTION>
EQUITY INCOME
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Net investment income.............. $ (1,469,498) $ (2,187,618) $ (3,071,108)
Net realized gain on investments... (1,020,247) (1,269,894) (1,908,425)
------------ ------------ -------------
Total dividends.............. $ (2,489,745) $ (3,457,512) $ (4,979,533)
============ ============ =============
<CAPTION>
EQUITY GROWTH
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Net investment income.............. $ (698,829) $ (5,037,392) $ (4,990,137)
Net realized gain on investments... (824,582) (4,184,120) (1,959,834)
------------ ------------ -------------
Total dividends.............. $ (1,523,411) $ (9,221,512) $ (6,949,971)
============ ============ =============
<CAPTION>
INTERNATIONAL EQUITY
----------------------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31,
------------------------------------
RETAIL TRUST 1994
------------ ------------ -------------
<S> <C> <C> <C>
Net investment income.............. $ (63,100) $ (275,728) $ (39,335)
Net realized gain on investments... (415,622) (1,005,745) --
------------ ------------ -------------
Total dividends.............. $ (478,722) $ (1,281,473) $ (39,335)
============ ============ =============
</TABLE>
66
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
6. PURCHASES AND SALES OF SECURITIES
The cost of purchases and proceeds from sales of securities, excluding
short-term investments, for the year ended October 31, 1995 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------------------------- -------------------------------
FUND U.S. Government Other U.S. Government Other
--------------- ------------- --------------- -------------
<S> <C> <C> <C> <C>
Asset Allocation..................... $ 21,501,762 $ 31,615,088 $ 21,939,250 $ 55,064,846
Equity Income........................ -- 28,738,210 -- 41,776,930
Equity Value*........................ -- 160,489,327 -- 169,829,363
Equity Growth........................ -- 57,524,066 -- 89,659,647
Small Company Equity................. -- 66,078,630 358,338 56,939,440
International Equity................. -- 58,496,887 -- 49,170,930
</TABLE>
The aggregate gross unrealized appreciation and depreciation, net unrealized
appreciation (depreciation) and cost for all securities as computed on a Federal
income tax basis, at October 31, 1995 for each Fund is as follows:
<TABLE>
<CAPTION>
FUND APPRECIATION (DEPRECIATION) NET COST
- ---- ------------- -------------- ------------- ------------
<S> <C> <C> <C> <C>
Asset Allocation..................... $ 21,284,753 $ (1,133,543) $ 20,151,210 $132,727,178
Equity Income........................ 29,935,158 (853,529) 29,081,629 139,877,964
Equity Value......................... 36,188,641 (5,525,888) 30,662,753 231,316,905
Equity Growth........................ 151,767,042 (4,645,594) 147,121,448 372,703,018
Small Company Equity................. 49,847,042 (6,748,270) 43,098,772 99,166,051
International Equity................. 9,405,678 (5,099,432) 4,306,246 117,307,265
</TABLE>
- --------------------------------------------------------------------------------
* Sales include a $8,035,637 shareholder redemption-in-kind. In connection with
this transaction, the financial statements reflect a realized gain of
$1,434,868. For tax purposes, this gain is not recognized by the Fund.
67
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
7. FOREIGN SECURITIES
Each Fund, except the Asset Allocation Fund, can purchase securities of
foreign issuers. Investing in securities of foreign issuers involves special
risks not typically associated with investing in securities of U.S. issuers. The
risks include revaluation of currencies and future adverse political and
economic developments. Moreover, securities of many foreign issuers and their
markets may be less liquid and their prices more volatile than those of
securities of comparable U.S. issuers.
8. ACQUISITION OF SHAWMUT FUNDS
At a meeting held on June 12, 1995, the Board of Trustees of the Trust approved
an Agreement and Plan of Reorganization (the "Agreement") for the acquisition of
The Shawmut Funds ("Shawmut") by the Trust. Under the Agreement, all of the
assets and liabilities of the Shawmut Growth Equity Fund were transferred to the
Galaxy Equity Growth Fund in exchange for shares of the Galaxy Equity Growth
Fund. Accordingly, the net assets of the Shawmut Growth Equity Fund Investment
Shares and Trust Shares were exchanged for 578,307 Retail Shares and 1,090,562
Trust Shares, respectively, of the Galaxy Equity Growth Fund. In related
transactions, the assets and liabilities of the other Shawmut portfolios were
transferred to corresponding Galaxy portfolios in exchange for shares in such
Galaxy portfolios. The reorganization, which qualifies as a tax-free
reorganization for Federal income tax purposes, was completed on December 4,
1995 following the approval of the reorganization by The Shawmut Fund
shareholders. Certain share registration fees incurred in connection with the
reorganization were borne by the Trust. The following is a summary of the Net
Assets, Shares Outstanding, Net Asset Value per share and Unrealized
Appreciation associated with the transaction:
<TABLE>
<CAPTION>
Before Acquisition After Acquisition
-------------------------------------- -----------------
Galaxy Shawmut Galaxy
Equity Growth Equity
Growth Equity Growth
--------------- -------------- -----------------
<S> <C> <C> <C>
Net Assets...................................... $ 541,014,789 $ 29,513,366 $ 570,528,155
Shares outstanding.............................. 30,602,041 2,442,515 32,270,910
Retail and Trust Net Asset Value, per share..... $ 17.68 $ 12.08 $ 17.68
Unrealized Appreciation......................... $ 165,620,815 $ 4,373,967
</TABLE>
68
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
9. IMPOSITION OF FRONT-END SALES LOAD
Effective December 1, 1995, the public offering price for Retail Shares of
the Funds will be the sum of the Net Asset Value of the Retail Shares purchased
plus, if applicable, a maximum 3.75% front-end sales charge. Reduced sales
charges are available. No sales charge will be assessed on certain transactions
and/or investors, including purchases by persons who are beneficial owners of
shares of Galaxy or any other funds advised by Fleet Investment Advisors Inc. or
its affiliates before December 1, 1995.
- --------------------------------------------------------------------------------
TAX INFORMATION (UNAUDITED):
During the fiscal year ended October 31, 1995, the following Funds made
distributions from long-term capital gains:
<TABLE>
<CAPTION>
LONG-TERM GAINS
FUND PAID
- ---- ---------------
<S> <C>
Equity Income Fund............................................................... $ 2,290,141
Equity Value Fund................................................................ 17,823,729
Equity Growth Fund............................................................... 5,008,702
Small Company Equity Fund........................................................ 1,429,248
International Equity Fund........................................................ 1,394,616
</TABLE>
During the fiscal year ended October 31, 1995, the following Funds earned income
from direct obligations of the U.S. Government:
<TABLE>
<CAPTION>
U.S. GOVERNMENT
FUND INCOME
- ---- ---------------
<S> <C>
Asset Allocation Fund............................................................ 41.02%
Equity Income Fund............................................................... 6.63%
</TABLE>
Appropriate tax information detailing government income percentages on a
calendar year basis will accompany your year-end tax statement. As each state's
rules on the exemption of this income differ, please consult your tax advisor
regarding specific tax treatment.
The International Equity Fund earned income of $2,644,369 ($0.27 per share) from
foreign sources. In addition, the Fund paid $389,530 ($0.04 per share) in
foreign withholding taxes.
69
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
The Galaxy Fund:
We have audited the accompanying statements of assets and liabilities of
the Asset Allocation Fund, Equity Income Fund, Equity Value Fund, Equity Growth
Fund, Small Company Equity Fund and International Equity Fund (six series of The
Galaxy Fund), including the portfolios of investments, as of October 31, 1995,
and the related statements of operations, the statements of changes in net
assets, and financial highlights for each of the periods indicated therein.
These financial statements and financial highlights are the responsibility of
The Galaxy Fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
aforementioned series of The Galaxy Fund as of October 31, 1995, the results of
their operations, the changes in their net assets, and their financial
highlights for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
Boston, Massachusetts Coopers & Lybrand L.L.P.
December 8, 1995
<PAGE>
"A well-balanced asset allocation plan may help to control your risk while
pursuing your goals."
- --------------------
SHAREHOLDER
SERVICES
- --------------------
AUTOMATIC INVESTMENT PROGRAM
The Golden Rule of investing is "pay yourself first." That is easy to do with
Galaxy's Automatic Investment Program. For as little as $50 per month deducted
directly from your checking, statement savings, NOW or bank money market
account, you can consistently and conveniently add to your Galaxy investment.
When you establish an Automatic Investment Program, the $2,500 initial
investment requirement for Galaxy is waived. Of course, such a program does not
assure a profit and does not protect against loss in declining markets.
DIVERSIFICATION
A fundamental investment practice is "diversification." A well-balanced asset
allocation plan may help to control your risk while pursuing your goals. Many
mutual funds offer a low-cost way to diversify your investments while you
benefit from professional management. Galaxy's comprehensive array of investment
choices can be used in combination to match the needs of nearly everyone.
EXCHANGE PRIVILEGES
As your investment needs change, you can conveniently exchange your shares in
one fund for shares in another fund.
INFORMATION
Service also means giving you the practical information you need, in language
you can understand, to make smart investment decisions. The quarterly magazine,
Galaxy Observer, brings news, strategies and simple, straight-forward
explanations of investment basics and terminology. Timely, comprehensive mutual
fund account statements offer status reports on your individual account. If you
have a Fleet One or a Fleet Private Banking Account, your Galaxy Fund
information can appear on your regular bank account statement.
INVESTMENT SPECIALISTS
In many Fleet branch offices you can visit one-on-one with an Investment
Specialist* whose main concern is that you select the investments that match
your individual needs. This service is at no cost to you.
24-HOUR ACCESS TO REGISTERED REPRESENTATIVES
24 hours a day, seven days a week, 365 days a year, we are ready and available
to help. Our toll-free telephone lines offer round-the-clock access to Fund
information and service. Call 1-800-628-0414 for information on initial
purchases and current performance.
CUSTOMER SERVICE
Quality customer service is only a phone call away. Call 1-800-628-0413 between
9 a.m. and 5 p.m. to arrange bank wires, or to make telephone exchanges and
redemptions.
- --------------------------------------------------------------------------------
Certain shareholder services may not be available for Trust Share investors.
Please consult your Fund Prospectus.
* Investment Specialists are registered representatives of FIS Securities, Inc.,
member NASD, or 440 Financial Distributors, Inc., member NASD and SIPC.
<PAGE>
- ------------------------------
Trustees
and Officers
Dwight E. Vicks, Jr.
Chairman and Trustee
John T. O'Neill
President, Treasurer
and Trustee
Louis DeThomasis,
F.S.C., Ph.D.
Trustee
Donald B. Miller
Trustee
James M. Seed
Trustee
Bradford S. Wellman
Trustee
W. Bruce
McConnel, III, Esq.
Secretary
Louis J. Russo
Assistant Treasurer
Neil Forrest
Vice President &
Assistant Treasurer
Investment Adviser
Fleet Investment
Advisors Inc.
50 Kennedy Plaza
Providence, Rhode Island
02903
Distributor
440 Financial
Distributors, Inc.
290 Donald Lynch
Boulevard
Marlboro,
Massachusetts 01752
Administrator
First Data Investor
Services Group, Inc.
(formerly The Shareholder
Services Group, Inc.
d/b/a 440 Financial)
4400 Computer Drive
Westboro,
Massachusetts 01581-5108
- ------------------------------
This report is submitted for the general information of shareholders of The
Galaxy Fund. It is not authorized for distribution to prospective investors
unless accompanied or preceded by an effective prospectus for the Fund, which
contains more information concerning the Fund's investment policies, as well as
fees and expenses and other pertinent information. Read the prospectus carefully
before you invest.
Shares of the Funds are not deposits or obligations of, or guaranteed or
endorsed by Fleet Financial Group, Inc. or any of its affiliates, Fleet
Investment Advisors Inc., or any Fleet bank. Shares of the Funds are not
federally insured by the U.S. Government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency. Investment return
and principal value will vary as a result of market conditions or other factors
so that shares of the Funds, when redeemed, may be worth more or less than their
original cost. An investment in the Funds involves investment risks, including
the possible loss of principal.
[LOGO OF RECYCLED PAPER APPEARS HERE]
This report was printed on recycled paper.
<PAGE>
- -------------------- ----------------
BULK RATE
U. S. POSTAGE
PAID
[LOGO OF GALAXY FUNDS APPEARS HERE] PERMIT NO. 54201
BOSTON, MA
----------------
4400 Computer Drive
Box 5108
Westboro, MA 01581-5108
FN-081 (12/95)
<PAGE>
<PAGE>
[LOGO OF GALAXY FUNDS APPEARS HERE]
[PHOTO OF TWO MEN STANDING NEAR A SPIRAL WALKWAY APPEARS HERE]
- --------------------------------------------------------------------------------
Tax-Free Bond Funds Report
- --------------------------------------------------------------------------------
Tax-Exempt Bond Fund . New York Municipal Bond Fund
Connecticut Municipal Bond Fund . Massachusetts Municipal Bond Fund .
Rhode Island Municipal Bond Fund
- ------------------
Annual
Report
For the Year Ended
October 31, 1995
- ------------------
<PAGE>
- --------------------
CHAIRMAN'S
MESSAGE
- --------------------
Dear Shareholder:
What a difference a year makes! In the last 12 months a dramatic decline in
interest rates produced the third largest total return for bonds in the last 45
years. In addition to strong gains in prices, municipal bonds earned yields that
were quite exceptional given the moderate rates of inflation.
Although these returns were extraordinary by historic standards, and by no
means guarantee future performance, they underscore the importance of a long-
term approach toward municipal bond investing. Shareholders who retained fixed-
income holdings during the temporary market weakness of 1994 were in a position
to take full advantage of the market rally that occurred the following year.
Many investors who sold their holdings may have missed out on these gains and
suffered losses they may not recoup for some time to come.
The ups and downs in municipal bond prices are part of normal market cycles
that tend to smooth out over time, although, bond prices have been particularly
volatile during the last two years. While it's unlikely that the superior
returns of 1995 will be repeated in the year ahead, there may be additional
opportunities for capital appreciation and tax-free income. Such opportunities
make municipal bonds an important part of a well-diversified investment
strategy.
The enclosed performance report for the Galaxy Tax-Free Bond Funds covers
the 12 months ended October 31, 1995. Included is a Market Overview, which
explores the major events that affected municipal bonds during this time. There
are also individual Portfolio Reviews that explain how Fleet Investment Advisors
Inc. managed its municipal bond investments to make the most of these
conditions. In addition, the report provides an outlook for interest rates and
municipal bond prices in the months to come and considers how this might affect
future investment strategies.
After reading your report you may have additional questions about the
performance of the Funds' municipal bond investments. You can discuss such
questions with an Investment Specialist, at any time, by calling 800-628-0414.
Sincerely,
/s/ Dwight E. Vicks, Jr.
Dwight E. Vicks, Jr.
Chairman of the Board of Trustees
- -----------------------------------
Mutual Funds:
. are not bank deposits
. are not FDIC insured
. are not obligations of Fleet Bank
. are not guaranteed by Fleet Bank
. are subject to investment risk
including possible loss of
principal amount invested
- -----------------------------------
<PAGE>
- --------------------
MARKET OVERVIEW
- --------------------
"By investing in
attractively priced
issues before the
rally began, the
Galaxy Tax-Free
Bond Funds enjoyed
strong gains."
TAX-FREE BOND MARKET OVERVIEW
By Fleet Investment Advisors Inc.
Expectations for a weaker economy and steep declines in interest rates, drove
municipal bond prices sharply higher in the past year - helping prices more than
recover ground lost in 1994. By investing in attractively priced issues before
the rally began, the Galaxy Tax-Free Bond Funds enjoyed strong gains for the 12
months ended October 31, 1995.
When the period started, the economy was growing rapidly. For the fourth
quarter of 1994, the gross domestic product ("GDP"), which measures goods and
services, rose at an annualized rate of 5.1%. To slow the economy and keep
inflation under control, the Federal Reserve Board (the "Fed") continued to
raise interest rates - boosting its short-term Fed Funds rates from 4.75% to 6%
between November of 1994 and February of 1995.
This made investors realize that the Fed was serious about controlling
inflation and led to a slowdown in economic growth. Specifically, GDP growth was
just 2.7% on an annualized basis in 1995's first quarter. Investors also began
to believe the Fed could achieve a "soft landing" for the economy. At the same
time, investors became more hopeful that Congress would reduce the Federal
budget deficit. In this environment, 30-year Treasury bond prices soared and
their yields plummeted from 8.16% in October 1994 to 6.65% by the end of June.
PERFORMANCE AT-A-GLANCE
Average Annual Returns as of October 31, 1995
Trust Shares
[BAR CHARTS REPRESENTING THE AVERAGE ANNUAL RETURNS FOR TRUST SHARES AS OF
10/31/95 APPEARS HERE]
Tax-Exempt Bond Fund
Inception Date 12/30/91
1 year 13.62%
3 years 7.76%
Life of Fund 7.26%
New York Municipal Bond Fund
Inception Date 12/31/91
1 year 14.23%
3 years 7.51%
Life of Fund 6.87%
Connecticut Municipal Bond Fund
Inception Date 3/16/93
1 year 15.21%
Life of Fund 5.16%
Massachusetts Municipal Bond Fund
Inception Date 3/12/93
1 year 14.72%
Life of Fund 4.78%
1
<PAGE>
- --------------------
MARKET OVERVIEW
- --------------------
"In 1995's first
quarter, price
gains for municipal
bonds were
especially dramatic
as shortages of new
issues collided with
stronger demand."
In 1995's first quarter, price gains for municipal bonds were especially
dramatic as shortages of new issues collided with stronger demand. Municipal
price gains then lagged those for Treasuries in the second quarter, as lower
interest rates increased municipal supplies and investors grew worried that
Congress might eventually approve a flat income tax which would reduce the
overall attractiveness of municipal bonds. By the end of June, municipal bonds
yielded an average 5.97%, after peaking at 7.06% in 1994.
Concerned the economy might slow too quickly, the Fed lowered its Fed Funds
rate to 5.75% on July 6. This cut, the first in three years, prompted further
gains in bond prices. Prices then declined for several weeks, as positive
economic news rekindled fears of inflation. With further talk of tax reform,
municipal prices were especially hard hit. By September, however, Congress had
turned its attention from tax reform to balancing the federal budget, and
investors had grown less fearful of inflation. Prices rebounded for bonds of all
kinds. By the end of October, yields on 30-year Treasuries had dropped to 6.3%
and long-term municipals were yielding 5.76%.
PERFORMANCE AT-A-GLANCE
Average Annual Returns* as of October 31, 1995
Retail Shares
[BAR CHARTS REPRESENTING THE AVERAGE ANNUAL RETURNS FOR RETAIL SHARES AS OF
10/31/95 APPEARS HERE]
Tax-Exempt Bond Fund
Inception Date 12/30/91
1 year 13.40%
3 years 7.69%
Life of Fund 7.21%
New York Municipal Bond Fund
Inception Date 12/31/91
1 year 14.03%
3 years 7.44%
Life of Fund 6.82%
Connecticut Municipal Bond Fund
Inception Date 3/16/93
1 year 14.94%
Life of Fund 5.05%
Massachusetts Municipal Bond Fund
Inception Date 3/12/93
1 year 14.52%
Life of Fund 4.71%
Rhode Island Municipal Bond Fund
Inception Date 12/20/94
Life of Fund 11.29%
* The Life of Fund return for the Rhode Island Municipal Bond Fund is a total
return since the date of inception.
2
<PAGE>
- --------------------
MARKET OVERVIEW
- --------------------
"If it looks like inter-
est rates will keep
falling, we would
likely add invest-
ments in the longer-
term sector again
where the specter of
tax reform has kept
prices quite attractive."
INVESTMENT STRATEGIES
During this time, the Galaxy Tax-Free Bond Funds benefited from several
investment strategies that were in place when the bond rally began. Many of the
Funds had sizable holdings in low-coupon bonds that had traded at a discount in
1994. As is typical of a rally, the prices on these bonds improved more quickly
than the prices for municipals as a whole.
Feeling yields for longer-maturity issues weren't high enough to offset the
extra price risks involved, we first focused on intermediate-term securities.
Once it was clear interest rates would keep falling, we added investments in
longer-term issues. This improved the potential for capital gains, while locking
in higher yields as interest rates fell.
As interest rates stabilized in the summer, we traded some of the low-
coupon municipals that had improved in value for issues with higher coupons. In
addition to strengthening the Funds' yields, we felt this would help protect the
value of the Funds' shares if interest rates reversed and bond prices fell.
Typically, higher-coupon issues hold up better when prices drop than other
fixed-income investments. Because intermediate-term bonds have less price
sensitivity than issues with longer maturities, we renewed our commitment to the
intermediate-term sector around the same time.
MARKET OUTLOOK
After improving at an annual rate of 4.2% in 1995's third quarter, GDP growth
should slow to 2.5% in 1996 due to limited gains in wages and consumption. With
small advances for commodity prices, Fleet Investment Advisors Inc. believes
this slow rate of growth should keep inflation near the current rate of 2.7%.
This, combined with progress in reducing federal deficits, could give the
Fed room to cut interest rates. Under this scenario, yields on 30-year
Treasuries may fall as low as 6%. Conversely, if there's faster improvement in
the economy, or reduced hope for federal budget cuts, yields could rise as high
as 6.75%. Municipal yields could get an extra boost if increased attention for
tax reform puts further downward pressure on municipal prices.
If it looks like interest rates will keep falling, we would likely add
investments in the longer-term sector again -- where the specter of tax reform
has kept prices quite attractive. We believe, however, that the current bond
rally is nearing an end and expect to place greater emphasis on strategies that
can improve the Funds' yields and protect share prices.
3
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
GALAXY TAX-EXEMPT BOND FUND
By Mary McGoldrick
Portfolio Manager
[A PHOTO OF TAX EXEMPT BOND FUND MANAGER MARY MCGOLDRICK APPEARS HERE]
As changing supplies of new issues and talk of tax reform caused municipal bonds
to respond differently to falling interest rates than taxable issues, we watched
the maturities, coupons and prices of holdings in the Galaxy Tax-Exempt Bond
Fund very carefully. This helped the Fund enjoy healthy returns for the 12
months ended October 31, 1995.
During that time, the Fund's Retail and Trust Shares provided total returns
of 13.40% and 13.62%, respectively, compared to 13.73% for the average general
municipal bond fund tracked by Lipper Analytical Services and 14.85% for the
Lehman Municipal Bond Index.
PORTFOLIO STRATEGIES
For some time, we'd kept the Fund's average maturity between 12 and 13 years.
While that's relatively short for a municipal bond fund, it let us earn 90% of
the yield that was available from 30-year municipals -- with much less
fluctuation in price. To enhance the Fund's yield, we bought issues with high
coupons where we could. Since high-coupon issues tend to outperform lower-coupon
issues when bond prices fall, this also helped protect the value of Fund shares
against a turnaround in interest rates.
In the third quarter of 1995, as prices grew more attractive and it was
GALAXY TAX-EXEMPT
BOND FUND
Growth of $10,000 investment*
[A MOUNTAIN CHART COMPARING THE GROWTH OF $10,000 INVESTED IN RETAIL SHARES AND
TRUST SHARES OF THE TAX EXEMPT BOND FUND AND THE LEHMAN BROTHERS MUNICIPAL BOND
INDEX APPEARS HERE]
<TABLE>
<CAPTION>
Start End
<S> <C> <C>
Retail Shares $10,000 $13,084
Trust Shares $10,000 13,058
Index $10,000 13,213
</TABLE>
*Since inception on 12/30/91. The Lehman Brothers Municipal Bond Index is an
unmanaged index in which investors cannot invest. Results for the index are
calculated since 12/31/91 because the results are calculated at month-end
only.Results for the index do not reflect the expenses and investment
management fees incurred by the Fund.
GALAXY TAX-EXEMPT
BOND FUND
Distribution of Total Net Assets
as of October 31, 1995
[A PIE CHART LISTING TAX-EXEMPT BOND FUND INVESTMENTS BY REGION APPEARS HERE]
<TABLE>
<S> <C>
North Central 16%
Other States & Territories 3%
Pacific 11%
Other Securities 4%
East 38%
South 23%
Mountain 5%
</TABLE>
4
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
clear that interest rates were headed lower, we added longer-term issues to the
portfolio. This improved the Fund's potential for capital gains as bond prices
rose and helped to lock in higher yields. In making these purchases, we
emphasized issues available in strong supply that we could sell quickly if bond
prices began to fall. We also emphasized bonds selling at discounted prices.
Discounted issues tend to perform especially well when bond prices rise.
As of October 31, 1995, the Fund's investments had an average maturity of
13.24 years, and Retail and Trust Shares of the Fund had SEC 30-day yields of
4.39% and 4.63%, respectively, on an annualized basis. These yields equal
taxable yields of 6.86% and 7.23%, respectively, for investors in the 36%
federal income tax bracket.
THE MONTHS TO COME
In an environment of slow economic growth and moderate inflation, municipal
bonds should probably stay in a narrow trading range or fall slightly lower. If
that happens, we might increase the Fund's investments in longer-term bonds
which continue to represent good value. If investors worry again about tax
reform, however, municipal prices could start to fall. Under this scenario, we
would protect the value of the Fund's holdings by giving greater attention to
issues with shorter maturities.
Mary McGoldrick has managed the Galaxy Tax-Exempt Fund since July of 1992. She
has managed portfolios at Fleet Investment Advisors Inc. and other banks for
nine years.
GALAXY NEW YORK
MUNICIPAL BOND FUND
By Don Jones
Portfolio Manager
After rising interest rates made municipal bond prices quite attractive in 1994,
we added longer-maturity issues to the portfolio of the Galaxy New York
Municipal Bond Fund. Because longer-maturity issues tend to outperform shorter-
maturity issues when bond prices rise, this increased the Fund's capital gains
as interest rates began to fall. It also helped improve the Fund's yield. We
further enhanced the yield by emphasizing issues with higher coupons.
GALAXY NEW YORK
MUNICIPAL BOND FUND
Growth of $10,000 investment*
[A MOUNTAIN CHART COMPARING THE GROWTH OF $10,000 INVESTED IN RETAIL SHARES AND
TRUST SHARES OF THE NEW YORK MUNICIPAL BOND FUND AND THE LEHMAN BROTHERS
MUNICIPAL BOND INDEX APPEARS HERE]
<TABLE>
<CAPTION>
Start End
<S> <C> <C>
Retail Shares $10,000 $12,901
Trust Shares $10.000 $12,878
Index $10,000 $13,213
</TABLE>
*Since inception on 12/31/91. The Lehman Brothers Municipal Bond Index is an
unmanaged index in which investors cannot invest. Results for the index are
calculated since 12/31/91 because the results are calculated at month-end only.
Results for the index do not reflect the expenses and investment management
fees incurred by the Fund.
5
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
[A PHOTO OF NEW YORK MUNICIPAL BOND FUND MANAGER DON JONES APPEARS HERE]
Don Jones
As a result of these and other strategies, the Fund produced competitive
returns in the 12 months ended October 31, 1995 -- exceeding the average for
other funds in its class. During that time, the Fund's Retail and Trust Shares
produced total returns of 14.03% and 14.23%, respectively, versus 13.53% for the
average New York tax-exempt bond fund tracked by Lipper Analytical Services.
Over the same period, the Lehman Municipal Bond Index returned 14.85%.
PROTECTING GAINS AND YIELDS
In the second quarter of 1995, as the rise in municipal prices slowed, we
reduced the Fund's investments in bonds maturing in 10 years or more from 65% of
its portfolio to 50%. Because shorter-term issues tend to outperform longer-term
issues when bond prices fall, this helped protect the value of Fund shares as
interest rates changed course in the third quarter.
To keep the Fund's yield as strong as possible, we continued to invest in
high-coupon issues and emphasized bonds with especially attractive prices. We
also remained heavily committed to bonds funding construction of revenue-
producing projects. The yields on these issues usually exceed the yields on
general obligation bonds, which pay interest from state and local taxes.
As of October 31, 1995, the Fund's Retail and Trust Shares had SEC 30-day
yields of 4.49% and 4.74%, respectively. These are the same as taxable yields of
7.02% and 7.41%, respectively, for taxpayers in the 36% federal income tax
bracket who live in the state of New York.
LOOKING AHEAD
We believe the Galaxy New York Municipal Bond Fund is well-positioned for the
months to come. The emphasis on shorter maturities should help preserve the
value of Fund shares if investors become nervous about rising interest rates or
new discussions of tax reform. If economic growth and inflation are more modest
than expected, and interest rates continue to decline, we might add longer-term
issues to the Fund again where we find investments offering attractive prices
and yields.
Don Jones assumed management responsibility for the New York Municipal Bond Fund
in September 1994. He has managed investment portfolios for Fleet Investment
Advisors Inc., and its predecessors, since 1988.
6
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
GALAXY CONNECTICUT MUNICIPAL
BOND FUND
By Steve Woodruff
Portfolio Manager
[A PHOTO OF CONNECTICUT MUNICIPAL BOND FUND MANAGER STEVE WOODRUFF APPEARS HERE]
When we launched the Galaxy Connecticut Municipal Bond Fund in March of 1993,
interest rates were relatively low. So the first investments we made had coupons
that were also fairly low. As interest rates rose in 1994, many of these lower-
coupon issues lost favor with investors and traded at discounted prices. When
bond prices rally, as they did for most of 1995, the prices of bonds that had
been selling at a discount typically outperform the market as a whole. This,
plus increased emphasis on higher-coupon issues, gave the Fund strong returns
that outpaced the returns for other funds in its class.
During the period, the Fund's Retail and Trust Shares had total returns of
14.94% and 15.21%, respectively. That compares with 13.73% for the average
Connecticut municipal bond fund tracked by Lipper Analytical Services and 14.85%
for the Lehman Municipal Bond Index.
HIGHER COUPONS
As the rally continued, we began to trade lower-coupon bonds that had improved
in price for municipals with higher coupons. This boosted the average coupon for
the Fund's investments by 15 to 20 basis points.
When the period ended, about 30% of the Fund's investments were trading at
discounted prices, down from 55% one year before. As of October 31, 1995, the
Fund's Retail and Trust Shares had SEC 30-day yields of 4.33% and 4.57%,
respectively. These yields equal taxable yields of 6.77% and 7.14%,
respectively, for taxpayers in the 36%
GALAXY CONNECTICUT
MUNICIPAL BOND FUND
Growth of $10,000 investment*
[A MOUNTAIN CHART COMPARING THE GROWTH OF $10,000 INVESTED IN RETAIL SHARES
AND TRUST SHARES OF THE CONNECTICUT MUNICIPAL BOND FUND AND THE LEHMAN BROTHERS
MUNICIPAL BOND INDEX APPEARS HERE ]
<TABLE>
<CAPTION>
Start End
<S> <C> <C>
Retail Shares $10,000 $11,413
Trust Shares $10,000 $11,383
Index $10,000 $12,594
</TABLE>
* Since inception on 3/16/93. The Lehman Brothers Municipal Bond Index is an
unmanaged index in which investors cannot invest. Results for the index are
calculated since 3/31/93 because the results are calculated at month-end only.
Results for the index do not reflect the expenses and investment management
fees incurred by the fund.
7
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
federal income tax bracket who live in Connecticut.
Because higher-coupon issues tend to outperform lower-coupon issues when
bond prices fall, greater emphasis on these issues helped protect the value of
Fund shares as municipal bond prices weakened in the third quarter of 1995.
FUTURE STRATEGIES
In the months ahead, we may increase investments in high-quality municipals with
longer maturities as we find attractive opportunities to do so. This would
improve the Fund's potential for capital gains if further weakness in the
economy raises the prices of municipal bonds. It would also strengthen the
Fund's yield. We expect to further improve the yield by continuing to purchase
higher-coupon securities.
Steve Woodruff has managed the Galaxy Connecticut Municipal Bond Fund since the
Fund began in March of 1993. He has managed fixed-income portfolios for Fleet
Investment Advisors Inc. since 1991.
GALAXY MASSACHUSETTS
MUNICIPAL BOND FUND
By David Lindsay
Portfolio Manager
With strong price gains from its low-coupon issues and attractive yields from
other holdings, the Galaxy Massachusetts Municipal Bond Fund`s returns for the
12 months ended October 31, 1995, outpaced the average return for other funds in
its class. During the period, the Fund's Retail and Trust shares enjoyed total
returns of 14.52% and 14.72%, respectively, versus 13.82% for
GALAXY MASSACHUSETTS
MUNICIPAL BOND FUND
Growth of $10,000 investment*
[MOUNTAIN CHART COMPARING THE GROWTH OF $10,000 INVESTED IN RETAIL SHARES AND
TRUST SHARES OF THE MASSACHUSETTS MUNICIPAL BOND FUND AND THE LEHMAN BROTHERS
MUNICIPAL BOND INDEX APPEARS HERE]
<TABLE>
Start End
<S> <C> <C>
Retail Shares $10,000 $11,312
Trust Shares $10,000 $11,292
Index $10,000 $12,594
</TABLE>
* Since inception on 3/12/93. The Lehman Brothers Municipal Bond Index is an
unmanaged index in which investors cannot invest. Results for the index are
calculated since 3/31/93 because the results are calculated at month-end only.
Results for the index do not reflect the expenses and investment management
fees incurred by the Fund.
8
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
[PHOTO OF MASSACHUSETTS MUNICIPAL BOND FUND MANAGER DAVID LINDSAY APPEARS HERE]
[CAPTION OF DAVID LINDSAY APPEARS HERE]
the average Massachusetts municipal bond fund tracked by Lipper Analytical
Services. Over the same time, the benchmark Lehman Municipal Bond Index had a
return of 14.85%.
ENHANCING FUND YIELDS
At the Fund's inception in 1993, interest rates were relatively low, so much of
the Fund's portfolio consisted of lower-coupon municipals. As interest rates
rose sharply in 1994, these issues became less attractive to investors and many
began to trade at deeply discounted prices. As interest rates fell in 1995,
however, the gains for discounted issues outpaced those for the market as a
whole. The Fund also enjoyed strong gains because nearly all of its bonds could
not be called by their issuers for at least several years.
As the Fund's lower-coupon issues improved in price, we traded them for
issues with higher coupons. Besides providing the Fund with additional income as
interest rates fell, this helped insulate the value of Fund shares against a
turn around in interest rates and bond prices. As rates began to stabilize in
the second quarter of 1995, we further protected the Fund by giving greater
attention to issues with shorter maturities. Like higher-coupon municipals,
shorter-term bonds tend to be less vulnerable to rising interest rates. By the
end of the period, the Fund had an average maturity of 12.29 years.
In addition, we increased the Fund's holdings in municipals that finance
construction of revenue-producing facilities. Since the supplies of revenue
bonds were more plentiful than supplies of general obligation bonds, which pay
interest from state and local taxes, the prices and yields of revenue bonds were
more attractive.
As of October 31, 1995, the Fund's Retail and Trust Shares had SEC 30-day
yields of 4.33% and 4.57%, respectively. These are equal to taxable yields of
6.77% and 7.14%, respectively, for taxpayers in the 36% federal income tax
bracket who live in Massachusetts.
9
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
BEING PREPARED FOR LOWER RATES
With signs that the economy is slowing and inflation is under control, we expect
to give equal emphasis in the near future to longer-term municipals -- whose
prices are still relatively attractive along with intermediate-term issues that
have maturities of five to ten years. In the meantime, we'll continue
strengthening the Fund's yield opportunities by trading lower-coupon municipals
for issues with higher coupons.
David Lindsay has managed the Galaxy Massachusetts Municipal Bond Fund since its
inception in March 1993. He has managed fixed-income portfolios for Fleet
Investment Advisors Inc. since 1986.
GALAXY RHODE ISLAND
MUNICIPAL BOND FUND
[PHOTO OF RHODE ISLAND MUNICIPAL BOND FUND MANAGER PAT GALUSKA APPEARS HERE]
By Pat Galuska
Portfolio Manager
The recent rise in municipal bond prices has been particularly beneficial to the
Galaxy Rhode Island Municipal Bond Fund. When the Fund began, interest rates had
risen steeply and municipal bond prices had become quite attractive. When
interest rates reversed, therefore, the Fund made the most of price gains in
municipal bonds. Having purchased holdings when yields were high, the Fund has
also enjoyed a strong yield during this time.
These factors helped the Fund produce positive returns between its
inception on December 20, 1994 through October 31, 1995. During the period the
Fund had a total return of 11.29%. For the period December 31, 1994 through
October 31, 1995, a period measured by Lipper Analytical Services, other Rhode
Island municipal bond funds tracked by had an average return of 12.69%. The
Lehman Municipal Bond Index returned 14.45% from December 31, 1994 through
October 31, 1995.
LIMITED SUPPLIES ENHANCE PRICE GAINS
Gains in municipal prices were particularly strong in Rhode Island because of a
large imbalance in supply and demand. With a state tax rate that's among the
GALAXY RHODE ISLAND
MUNICIPAL BOND FUND
Growth of $10,000 investment*
[MOUNTAIN CHART COMPARING THE GROWTH OF $10,000 INVESTED IN RETAIL SHARES OF THE
RHODE ISLAND MUNICIPAL BOND FUND AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
APPEARS HERE]
<TABLE>
<CAPTION>
Start End
<S> <C> <C>
Retail Shares $10,000 $11,129
Index $10,000 $11,445
</TABLE>
* Since inception on 12/20/94. The Lehman Brothers Municipal Bond Index is an
unmanaged index in which investors cannot invest. Results for the index are
calculated since 12/31/94 because the results are calculated at month-end
only. Results for the index do not reflect the expenses and investment
management fees incurred by the Fund.
10
<PAGE>
- --------------------
PORTFOLIO REVIEWS
- --------------------
highest in the nation, Rhode Island typically maintains a strong demand for
municipals. Over the past year, however, municipal supplies have been quite
limited. This put extra upward pressure on municipal prices, which were already
rising from lower interest rates.
In choosing the Fund's investments, we began with general obligation bonds
from the State of Rhode Island as well as bonds issued by the state's cities and
towns. These bonds pay interest from taxes gathered by their issuers. Later, we
purchased revenue bonds, which are repaid from proceeds of the projects they
fund.
Where possible, we focused on longer-term investments with strong yields
and high credit quality. Because long-term issues tend to outperform shorter-
term bonds when prices rise, this strategy improved the Fund's potential for
capital gains. It also provided the Fund with attractive yields as interest
rates fell.
As of October 31, 1995, the Fund had a 30-day SEC yield of 5.01%. This
equals a taxable yield of 7.82% for taxpayers in the 36% federal income tax
bracket who live in Rhode Island. When the period closed, the Fund had an
average maturity of 12.61 years.
LOOKING AHEAD
With its emphasis on longer-maturity issues, the Galaxy Rhode Island Municipal
Bond Fund should continue to make the most of further gains in municipal prices.
If it looks like interest rates are bottoming and bond prices may weaken,
however, we would probably emphasize municipals with shorter maturities to
protect the value of Fund shares. In the meantime, we'll be watching for gains
in municipal supplies that could mean new investment opportunities.
Pat Galuska has managed the Galaxy Rhode Island Municipal Bond Fund since its
inception in December 1994. She has managed the Galaxy Tax-Exempt Money Market
Fund since 1988 and the trading desk for Fleet Investment Advisors Inc. since
1982.
- --------------------------------------------------------------------------------
Investment returns and principal values will vary with market conditions so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. The Investment Adviser and Administrator are presently waiving
fees and/or reimbursing expenses. Without such waivers and/or reimbursements,
performance would have been lower. Past performance is no guarantee of future
results. Total return figures in this report include changes in share price, and
reinvestment of dividends and capital gains distributions, if any.
11
<PAGE>
- --------------------
SHAREHOLDER'S
SERVICES
- --------------------
"A well-balanced
asset allocation
plan may help to
control your risk
while pursuing
your goals."
AUTOMATIC INVESTMENT PROGRAM
The Golden Rule of investing is "pay yourself first." That is easy to do with
Galaxy's Automatic Investment Program. For as little as $50 per month deducted
directly from your checking, statement savings, NOW or bank money market
account, you can consistently and conveniently add to your Galaxy investment.
When you establish an Automatic Investment Program, the $2,500 initial
investment requirement for Galaxy is waived. Of course, such a program does not
assure a profit and does not protect against loss in declining markets.
DIVERSIFICATION
A fundamental investment practice is "diversification." A well-balanced asset
allocation plan may help to control your risk while pursuing your goals. Many
mutual funds offer a low-cost way to diversify your investments while you
benefit from professional management. Galaxy's comprehensive array of investment
choices can be used in combination to match the needs of nearly everyone.
EXCHANGE PRIVILEGES
As your investment needs change, you can conveniently exchange your shares in
one fund for shares in another fund.
INFORMATION
Service also means giving you the practical information you need, in language
you can understand, to make smart investment decisions. The quarterly magazine,
Galaxy Observer, brings news, strategies and simple, straight-forward
explanations of investment basics and terminology. Timely, comprehensive mutual
fund account statements offer status reports on your individual account. If you
have a Fleet One or a Fleet Private Banking Account, your Galaxy Fund
information can appear on your regular bank account statement.
INVESTMENT SPECIALISTS
In many Fleet branch offices you can visit one-on-one with an Investment
Specialist* whose main concern is that you select the investments that match
your individual needs. This service is at no cost to you.
24-HOUR ACCESS TO REGISTERED REPRESENTATIVES
24 hours a day, seven days a week, 365 days a year, we are ready and available
to help. Our toll-free telephone lines offer round-the-clock access to Fund
information and service. Call 1-800-628-0414 for information on initial
purchases and current performance.
CUSTOMER SERVICE
Quality customer service is only a phone call away. Call 1-800-628-0413 between
9 a.m. and 5 p.m. to arrange bank wires, or to make telephone exchanges and
redemptions.
- --------------------------------------------------------------------------------
Certain shareholder services may not be available for Trust Share investors.
Please consult your Fund Prospectus.
* Investment Specialists are registered representatives of FIS Securities, Inc.,
member NASD, or 440 Financial Distributors, Inc., member NASD and SIPC.
12
<PAGE>
- --------------------
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
MUNICIPAL SECURITIES - 95.65%
ALASKA - 1.44%
$ 375,000 Alaska Municipal Bond Authority, GO, Series B
6.60%, 07/01/99
Insured: MBIA..................................................................... $ 389,531
1,275,000 Anchorage Alaska Hospital
Sisters of Providence Project
6.75%, 10/01/00................................................................... 1,386,557
-------------
1,776,088
-------------
ARIZONA - 5.25%
1,000,000 Maricopa County, Unified School District #97
Deer Valley Project of 1986, Series D
6.80%, 07/01/00
Insured: MBIA..................................................................... 1,105,000
1,455,000 Salt River Agricultural Improvement and Power District
Electric System Revenue, Series A
7.10%, 01/01/00................................................................... 1,571,400
2,000,000 Salt River Agricultural Improvement and Power District
Electric System Revenue, Series B
5.25%, 01/01/13................................................................... 1,925,000
2,000,000 Salt River Agricultural Improvement and Power District
Electric System Revenue, Series C
5.00%, 01/01/13................................................................... 1,870,000
-------------
6,471,400
-------------
CONNECTICUT - 4.87%
1,000,000 Connecticut State HEFA
St. Francis Hospital and Medical Center, Series C
5.00%, 07/01/13
Insured: FGIC..................................................................... 926,250
1,000,000 Connecticut State Housing Finance Authority
Housing Mortgage Finance Program, Series A
6.10%, 05/15/13................................................................... 1,015,000
1,000,000 Connecticut State Housing Finance Authority
Housing Mortgage Finance Program, Series B-1
6.25%, 05/15/11................................................................... 1,022,500
2,000,000 Connecticut State Special Tax Obligation
Transportation Infrastructure, Series A
5.40%, 09/01/10................................................................... 2,000,000
500,000 Connecticut State Special Tax Obligation
Transportation Infrastructure, Series B
6.10%, 09/01/07................................................................... 534,375
500,000 South Central Regional Water Authority
Water System Revenue, Series 11
5.75%, 08/01/12
Insured: FGIC..................................................................... 503,750
-------------
6,001,875
-------------
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
- --------------------
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
FLORIDA - 7.63%
$ 1,000,000 Dade County, School District, GO
5.50%, 08/01/13
Insured: MBIA..................................................................... $ 990,000
1,070,000 Florida State Board of Education Capital Outlay
Public Education, GO, Series D
5.13%, 06/01/18................................................................... 999,113
2,000,000 Jacksonville Electric Authority Revenue
Bulk Power, Scherer 4 Project, Series A
5.20%, 10/01/10................................................................... 1,940,000
1,000,000 Jacksonville Electric Authority Revenue
SP OB, St. Johns, Series 6-B
6.75%, 10/01/05................................................................... 1,112,500
1,400,000 Orange County Sales Tax Revenue, Series A
5.25%, 01/01/16
Insured: FGIC..................................................................... 1,331,750
1,500,000 Orlando Utilities Commission
Water and Electric Revenue
5.00%, 10/01/13................................................................... 1,380,000
1,500,000 Pinellas County Resource Recovery, Series A
6.60%, 10/01/00
Insured: MBIA..................................................................... 1,653,750
-------------
9,407,113
-------------
GEORGIA - 0.82%
1,000,000 Fulton County School District, GO
5.60%, 01/01/11................................................................... 1,012,500
-------------
IDAHO - 0.46%
500,000 Boise-Kuna Irrigation District Revenue
Lucky Peak Hydroelectric Project
6.60%, 07/01/05................................................................... 573,750
-------------
ILLINOIS - 4.65%
500,000 Chicago Wastewater Transmission Revenue
Insured: FGIC
5.375%, 01/01/13.................................................................. 479,375
1,000,000 Cook County, GO
7.25%, 11/01/07
Insured: MBIA..................................................................... 1,163,750
2,000,000 Cook County, GO, Series A
5.38%, 11/15/12
Insured: MBIA..................................................................... 1,940,000
50,000 Illinois State Revenue, GO
6.60%, 12/01/11................................................................... 51,689
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
- --------------------
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
ILLINOIS (CONTINUED)
$ 1,000,000 Peoria Public Building Commission
Building and Facilities, District #150
6.50%, 12/01/00
Insured: AMBAC.................................................................... $ 1,071,250
1,000,000 Regional Transportation Authority, Series A
6.25%, 06/01/15................................................................... 1,031,250
-------------
5,737,314
-------------
INDIANA - 2.39%
1,000,000 Indiana State Office Building Commission, Series B
Capital Complex, Government Center North
5.25%, 07/01/15
Insured: AMBAC.................................................................... 935,000
2,000,000 Indianapolis Local Public Improvement, Series A
6.00%, 01/10/18................................................................... 2,020,000
-------------
2,955,000
-------------
IOWA - 0.41%
500,000 Linn-Mar Community School District, GO
5.90%, 05/01/11
Insured: MBIA..................................................................... 508,750
-------------
KENTUCKY - 1.73%
1,000,000 Kentucky Housing Corp. Revenue, Series C-3
5.70%, 01/01/11................................................................... 1,010,000
1,000,000 Kentucky State Turnpike Authority, Economic Development
Road Revenue, Revitalization Projects
7.13%, 05/15/01................................................................... 1,121,250
-------------
2,131,250
-------------
MAINE - 3.23%
250,000 Kennebec Water District Revenue
6.00%, 12/01/13................................................................... 255,625
500,000 Kennebec Water District Revenue
5.30%, 12/01/14................................................................... 477,500
500,000 Maine Health and Higher Educational Facilities Authority, Series A
5.50%, 07/01/11
Insured: FSA...................................................................... 484,375
1,000,000 Maine Health and Higher Educational Facilities Authority
Maine Medical Center, Series C
5.00%, 11/15/13
Insured: FSA...................................................................... 915,000
250,000 Maine Municipal Bond Bank, Series B
6.75%, 11/01/12................................................................... 270,313
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
- --------------------
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
MAINE (CONTINUED)
$ 500,000 Maine Municipal Bond Bank, Sewer & Water, Series A
6.50%, 11/01/08................................................................... $ 536,875
1,000,000 Maine State Housing Authority Mortgage, Series C-1
6.50%, 11/15/11................................................................... 1,051,250
-------------
3,990,938
-------------
MARYLAND - 1.38%
1,750,000 Washington Suburban Sanitary District
Sewerage Disposal, GO and Revenue
5.25%, 06/01/13................................................................... 1,706,250
-------------
MASSACHUSETTS - 7.99%
790,000 Boston Revenue City Hospital, Series A
6.95%, 08/15/99
Insured: FHA...................................................................... 862,088
2,000,000 Commonwealth of Massachusetts, GO, Series A
5.50%, 02/01/11................................................................... 1,995,000
750,000 Massachusetts Bay Transportation Authority, Series B
6.00%, 03/01/12................................................................... 773,437
250,000 Massachusetts Bay Transportation Authority, Series C
6.10%, 03/01/07................................................................... 265,938
1,000,000 Massachusetts Municipal Wholesale Electric
Copower Supply System, Series D
6.00%, 07/01/11
Insured: MBIA..................................................................... 1,035,000
1,000,000 Massachusetts State HEFA
Capital Asset Program, Series F
6.70%, 10/01/98
Insured: MBIA..................................................................... 1,073,750
50,000 Massachusetts State HEFA
Brigham and Women's Hospital, Series D
6.50%, 07/01/04................................................................... 54,438
2,000,000 Massachusetts State HEFA
Baystate Medical Center, Series D
5.00%, 07/01/12
Insured: FGIC..................................................................... 1,882,500
200,000 Massachusetts State HEFA
South Shore Hospital, Series D
6.50%, 07/01/10................................................................... 217,000
50,000 Massachusetts State Housing Finance Agency
Residential Development, Series C
6.88%, 11/15/11................................................................... 53,625
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
- --------------------
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
MASSACHUSETTS (CONTINUED)
$ 640,000 Massachusetts State Housing Finance Agency
Single Family, Series 22
6.10%, 06/01/16................................................................... $ 641,600
1,000,000 Massachusetts State, SP OB, Series A
5.80%, 06/01/14................................................................... 1,007,500
-------------
9,861,876
-------------
MICHIGAN - 1.87%
1,000,000 Central Michigan University
6.00%, 10/01/13
Insured: MBIA..................................................................... 1,023,750
1,000,000 Michigan Public Power Agency
Belle River Project, Series A
5.50%, 01/01/13................................................................... 982,500
250,000 Michigan State Trunk Line, Series A
5.75%, 10/01/12................................................................... 250,625
50,000 Michigan State Trunk Line, Series A
6.00%, 08/15/19................................................................... 50,250
-------------
2,307,125
-------------
MINNESOTA - 0.90%
1,000,000 Minnesota Public Facilities Authority, PCR, Series A
6.90%, 03/01/03................................................................... 1,108,750
-------------
NEVADA - 2.01%
1,000,000 Clark County, GO, Series A
6.00%, 06/01/16
Insured: AMBAC.................................................................... 1,011,250
1,000,000 Las Vegas Sewer, GO, Series B
5.00%, 01/01/09
Insured: MBIA..................................................................... 955,000
500,000 Nevada State, GO, Series B
6.00%, 05/01/10................................................................... 516,875
-------------
2,483,125
-------------
NEW HAMPSHIRE - 1.03%
1,000,000 Manchester, GO, Series B
5.25%, 07/01/08................................................................... 1,011,250
250,000 New Hampshire State Turnpike System
6.00%, 04/01/13................................................................... 254,375
-------------
1,265,625
-------------
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
- --------------------
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
NEW JERSEY - 2.42%
$ 1,000,000 Mercer County Improvement Authority
Customer Receipts, Justice Complex
6.05%, 01/01/07................................................................... $ 1,001,380
2,000,000 New Jersey State Transportation Trust Fund Authority
Transportation System, Series B
5.50%, 06/15/15
Insured: MBIA..................................................................... 1,982,500
-------------
2,983,880
-------------
NEW YORK - 6.53%
1,000,000 Battery Park City Authority, Senior, Series A
5.50%, 11/01/10................................................................... 973,750
1,000,000 New York Municipal Water Finance Authority
Water and Sewer System, Series A
5.50%, 06/15/11................................................................... 975,000
250,000 New York State, GO
6.10%, 11/15/09................................................................... 261,563
1,000,000 New York State, GO
5.50%, 06/15/10................................................................... 997,500
1,000,000 New York State Dormitory Authority
University of Rochester
6.50%, 07/01/09................................................................... 1,040,000
125,000 New York State Local Government Assistance Corp., Series A
7.00%, 04/01/12................................................................... 138,906
1,000,000 New York State Local Government Assistance Corp., Series B
5.63%, 04/01/13................................................................... 991,250
2,000,000 New York State Local Government Assistance Corp., Series C
5.38%, 04/01/12................................................................... 1,940,000
675,000 Triborough Bridge and Tunnel Authority
General Purpose, Series P
6.80%, 01/01/02................................................................... 734,906
-------------
8,052,875
-------------
NORTH CAROLINA - 2.15%
1,500,000 Charlotte Certificates of Participation
Convention Facility Project
6.35%, 12/01/00
Insured: AMBAC.................................................................... 1,627,500
1,000,000 North Carolina Housing Finance Agency
Single Family Revenue, Series Y
6.30%, 09/01/15................................................................... 1,025,000
-------------
2,652,500
-------------
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
- --------------------
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
OHIO - 1.51%
$ 1,000,000 Cleveland Waterworks, First Mortgage, Series F-92 A
6.25%, 01/01/15
Insured: AMBAC.................................................................... $ 1,043,750
750,000 Ohio State Public Facilities Commission
Higher Education Facilities, Series B
6.50%, 12/01/99
Insured: AMBAC.................................................................... 815,625
-------------
1,859,375
-------------
OKLAHOMA - 0.78%
1,000,000 Muskogee County Home Finance Authority, Customer Receipts
5.13%, 10/01/12................................................................... 958,750
-------------
PENNSYLVANIA - 2.56%
1,000,000 Luzerne County, GO, Series B
6.00%, 09/15/11
Insured: FGIC..................................................................... 1,015,000
1,000,000 Pennsylvania State, GO, Second Series A
6.50%, 11/01/04
Insured: MBIA..................................................................... 1,103,750
955,000 Pennsylvania State Higher Education
Assistance Agency Student Loan Revenue, Series A
6.80%, 12/01/00................................................................... 1,039,756
-------------
3,158,506
-------------
RHODE ISLAND - 8.13%
50,000 Barrington, GO
6.35%, 12/01/07................................................................... 54,188
135,000 Jamestown, GO
6.75%, 09/01/10................................................................... 145,631
200,000 Rhode Island Clean Water Protection Finance Agency
PCR, Revolving Fund, Pooled Loan Issue, Series A
6.75%, 10/01/13
Insured: MBIA..................................................................... 218,250
1,000,000 Rhode Island Housing and Mortgage Finance Corp.
Homeownership Opportunity, Series 93-A
5.45%, 04/01/17................................................................... 923,750
700,000 Rhode Island Housing and Mortgage Finance Corp.
Homeownership Opportunity, Series 13
6.70%, 10/01/15................................................................... 728,875
250,000 Rhode Island State
Consolidated Capital Development Loan, GO, Series A
5.50%, 08/01/07................................................................... 257,500
1,000,000 Rhode Island State
Consolidated Capital Development Loan, GO, Series A
5.10%, 11/01/11................................................................... 957,500
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
- --------------------
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
RHODE ISLAND (CONTINUED)
$ 250,000 Rhode Island State
Consolidated Capital Development Loan, GO, Series B
6.25%, 05/15/07................................................................... $ 265,625
1,000,000 Rhode Island State Health and Educational Building Corp.
Higher Education, Auxiliary, Series A
5.50%, 09/15/13
Insured: MBIA..................................................................... 977,500
50,000 Rhode Island State Health and Educational Building Corp.
Higher Education, Brown University
6.60%, 09/01/05................................................................... 54,125
500,000 Rhode Island State Health and Educational Building Corp.
Miriam Hospital, Series B
6.50%, 04/01/13................................................................... 510,625
1,500,000 Rhode Island State Health and Educational Building Corp.
Higher Education, Johnson and Wales University
6.38%, 04/01/12
Insured: Connie Lee............................................................... 1,567,500
1,500,000 Rhode Island State Health and Educational Building Corp.
Higher Education, Johnson and Wales University, Series A
5.75%, 04/01/12
Insured: Connie Lee............................................................... 1,500,000
50,000 Rhode Island State Public Buildings Authority
State Projects, Series A
5.25%, 08/01/06................................................................... 50,313
1,000,000 Rhode Island State Public Buildings Authority
State Projects, Series A
5.10%, 02/01/05
Insured : AMBAC................................................................... 1,003,750
355,000 Rhode Island State Public Buildings Authority
State Projects, Series A
6.00%, 02/01/11
Insured: AMBAC................................................................... 359,881
395,000 Rhode Island State Public Buildings Authority
State Projects, Unrefunded Balance, Series A
6.00%, 02/01/11
Insured: AMBAC.................................................................... 401,419
50,000 Rhode Island State Student Loan Authority, Series A
6.40%, 12/01/99................................................................... 52,375
-------------
10,028,807
-------------
SOUTH CAROLINA - 2.84%
2,100,000 Oconee County, PCR, Duke Power Co. Project
5.80%, 04/01/14................................................................... 2,118,375
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
- --------------------
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
SOUTH CAROLINA (CONTINUED)
$ 500,000 Piedmont Municipal Power Agency
6.10%, 01/01/06
Insured: MBIA..................................................................... $ 547,500
750,000 Richland County Certificates of Participation
6.90%, 02/01/01
Insured: FGIC..................................................................... 833,438
-------------
3,499,313
-------------
SOUTH DAKOTA - 1.46%
1,000,000 Rapid City, Sales Tax Revenue, Series B
6.20%, 06/01/12
Insured: FGIC..................................................................... 1,038,750
750,000 South Dakota Housing Development Authority
Homeownership Mortgage, Series A
5.30%, 05/01/03................................................................... 765,938
-------------
1,804,688
-------------
TENNESSEE - 1.28%
500,000 Memphis Water Revenue, Series A................................................... 530,000
6.00%, 01/01/07
1,000,000 Metropolitan Government Nashville and Davidson County
Health and Education Facilities, Vanderbilt University, Series B
6.30%, 10/01/14................................................................... 1,046,250
-------------
1,576,250
-------------
TEXAS - 3.68%
215,000 Harris County, Toll Road, Prerefunded, Series A
6.50%, 08/15/17
Insured: AMBAC.................................................................... 241,069
35,000 Harris County, Toll Road, Unrefunded Balance, Series A
6.50%, 08/15/17
Insured: AMBAC.................................................................... 37,013
1,000,000 North Central Health Facilities Development Corp.
Hospital, Presbyterian Healthcare
5.90%, 06/01/21................................................................... 991,250
950,000 North Texas Higher Education Authority
Student Loan Revenue, Series A
6.50%, 04/01/99
Insured: AMBAC.................................................................... 984,438
2,000,000 San Antonio Airport System
7.13%, 07/01/05
Insured: AMBAC.................................................................... 2,290,000
-------------
4,543,770
-------------
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
- --------------------
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
UTAH - 2.49%
$ 2,000,000 Intermountain Power Agency Utah Power Supply, Series A
5.50%, 07/01/10................................................................... $ 2,010,000
1,000,000 Intermountain Power Agency Utah Power Supply, Series F
6.75%, 07/01/98................................................................... 1,036,640
25,000 Intermountain Power Agency Utah Power Supply, Series I
6.00%, 07/01/21................................................................... 24,999
-------------
3,071,639
-------------
VIRGINIA - 2.16%
1,000,000 Norfolk Industrial Development Authority
Children's Hospital, Kings Group
6.50%, 06/01/21
Insured: AMBAC.................................................................... 1,038,750
1,500,000 Virginia Beach, Public Improvement, GO, Series A
6.88%, 05/01/05................................................................... 1,621,875
-------------
2,660,625
-------------
WASHINGTON - 5.70%
1,000,000 Lewis County Public Utilities District
Cowlitz Falls Hydroelectric
5.50%, 10/01/13................................................................... 956,250
1,000,000 Seattle Municipal Light and Power
5.38%, 11/01/18................................................................... 943,750
1,000,000 Seattle Municipality Metropolitan Sewer, Series S
6.80%, 01/01/02................................................................... 1,066,250
500,000 Washington State, GO, Series 93-A
5.75%, 10/01/17................................................................... 498,750
300,000 Washington State Certificates of Participation, Series A
6.00%, 04/01/12................................................................... 307,875
1,500,000 Washington State Public Power Supply System
Nuclear Project No. 1, Series A
7.25%, 07/01/99................................................................... 1,638,750
1,000,000 Washington State Public Power Supply System
Nuclear Project No. 2, Series C
7.30%, 07/01/00................................................................... 1,111,250
500,000 Washington State Public Power Supply System
Nuclear Project No. 3, Series B
6.90%, 07/01/96................................................................... 509,625
-------------
7,032,500
-------------
WEST VIRGINIA - 0.39%
500,000 West Virginia State Housing Development, Series A
5.50%, 11/01/14................................................................... 475,000
-------------
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
- --------------------
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -------------
<C> <S> <C>
WISCONSIN - 2.20%
$ 600,000 Milwaukee Metropolitan Sewer District, GO, Series A
6.50%, 10/01/98................................................................... $ 636,750
500,000 Mukwonago School District, GO
5.90%, 03/01/13
Insured: AMBAC.................................................................... 502,500
500,000 Verona Area School District, GO, Series A
5.90%, 10/01/13
Insured: FGIC..................................................................... 510,625
1,000,000 Wisconsin State Transportation, Prerefunded, Series B
5.75%, 07/01/12................................................................... 1,062,500
-------------
2,712,375
-------------
OTHER TERRITORIES - 1.31%
1,650,000 Puerto Rico Public Buildings Authority
Government Facilities, Series A
5.50%, 07/01/21................................................................... 1,610,813
-------------
TOTAL INVESTMENTS - 95.65%.......................................................................... 117,980,395
(Cost $114,956,471) -------------
NET OTHER ASSETS AND LIABILITIES - 4.35%............................................................ 5,368,405
-------------
NET ASSETS - 100.00%................................................................................ $ 123,348,800
=============
</TABLE>
- --------------------------------------------------------------------------------
AMBAC American Municipal Bond Assurance Corp.
Connie Lee College Construction Loan Association
FGIC Financial Guarantee Insurance Corp.
FHA Federal Housing Authority
FSA Financial Security Assurance
GO General Obligation
HEFA Health and Educational Facilities Authority
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
SP OB Special Obligation
See Notes to Financial Statements.
23
<PAGE>
- --------------------
NEW YORK MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -----------
<C> <S> <C>
MUNICIPAL SECURITIES - 97.51%
NEW YORK - 97.51%
$ 1,000,000 Albany County, GO
5.50%, 06/01/08
Insured: FGIC.................................................................................. $ 1,035,000
500,000 Albany County, GO
5.25%, 11/01/08
Insured: MBIA.................................................................................. 507,495
500,000 Albany County, GO
5.25%, 11/01/09
Insured: MBIA.................................................................................. 501,250
300,000 Battery Park City Authority
7.60%, 05/01/06................................................................................ 337,500
2,000,000 Battery Park City Authority
Senior Lien, Series A
5.00%, 11/01/08................................................................................ 1,877,500
100,000 Canandaigua City School District, GO
6.50%, 06/01/10
Insured: AMBAC................................................................................. 112,250
150,000 Chenango, GO
6.00%, 07/15/06................................................................................ 158,813
650,000 Farmingdale Union Free School District, GO
5.13%, 08/01/07
Insured: FGIC.................................................................................. 650,000
100,000 Grand Island, GO
6.10%, 05/15/04................................................................................ 106,375
1,000,000 Hempstead Town, GO
5.00%, 08/01/06
Insured: AMBAC................................................................................. 1,001,250
100,000 Huntington, GO, Series B
6.25%, 04/15/07
Insured: AMBAC................................................................................. 108,125
500,000 Irvington Union Free School District, GO, Series B
5.10%, 07/15/06
Insured: AMBAC................................................................................. 506,250
750,000 Monroe County Public Improvement, GO
6.10%, 03/01/09
Insured: MBIA.................................................................................. 788,438
1,000,000 Monroe County Public Improvement, GO
6.10%, 06/01/14
Insured: AMBAC................................................................................. 1,051,250
1,000,000 Monroe County Water Authority, Series A
6.25%, 08/01/11................................................................................ 1,042,500
100,000 Monroe County Water Improvement, GO
6.20%, 06/01/05
Insured: AMBAC................................................................................. 107,750
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
- --------------------
NEW YORK MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -----------
<C> <S> <C>
NEW YORK (CONTINUED)
$ 450,000 Municipal Assistance Corp., Series 59
6.50%, 07/01/07................................................................................ $ 466,313
1,000,000 Municipal Assistance Corp., Series 60
6.00%, 07/01/08................................................................................ 1,028,750
750,000 Municipal Assistance Corp., Series 61
5.75%, 07/01/08................................................................................ 768,750
225,000 Nassau County, GO
6.10%, 05/15/05
Insured: MBIA.................................................................................. 244,406
500,000 New Castle Public Improvement, GO
5.88%, 09/15/09................................................................................ 522,500
200,000 New Paltz Central School District, GO
6.00%, 06/15/06
Insured: AMBAC................................................................................. 216,750
750,000 New York City Municipal Water Finance Authority, Water and Sewer Assistance, Series A
5.90%, 06/15/04................................................................................ 798,750
500,000 New York City Municipal Water Finance Authority, Water and Sewer Assistance, Series A
6.10%, 06/15/06................................................................................ 530,625
1,675,000 New York City Municipal Water Finance Authority, Water and Sewer Assistance, Series A
5.50%, 06/15/11................................................................................ 1,633,125
1,000,000 New York City Municipal Water Finance Authority, Water and Sewer Assistance, Series A
6.00%, 06/15/17................................................................................ 1,005,000
1,000,000 New York City Municipal Water Finance Authority, Water and Sewer Assistance, Series A
5.75%, 06/15/18
Insured: AMBAC................................................................................. 1,006,250
1,000,000 New York City Municipal Water Finance Authority, Water and Sewer Assistance, Series B
5.00%, 06/15/03................................................................................ 1,012,500
2,000,000 New York City Municipal Water Finance Authority, Water and Sewer Assistance, Series B
5.13%, 06/15/04................................................................................ 2,030,000
750,000 New York City Municipal Water Finance Authority, Water and Sewer Assistance, Series B
5.75%, 06/15/13
Insured: MBIA.................................................................................. 746,250
500,000 New York State, GO, Series A
5.50%, 03/15/05................................................................................ 515,000
1,000,000 New York State, GO
5.25%, 06/15/05................................................................................ 1,023,750
200,000 New York State, GO
6.70%, 03/01/07................................................................................ 218,750
1,000,000 New York State, GO
6.25%, 09/15/07................................................................................ 1,075,000
100,000 New York State, GO
6.90%, 02/01/08................................................................................ 110,250
500,000 New York State, GO
6.25%, 06/15/08................................................................................ 533,125
1,000,000 New York State, GO
5.50%, 06/15/10................................................................................ 997,500
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
- --------------------
NEW YORK MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -----------
<C> <S> <C>
NEW YORK (CONTINUED)
$ 1,000,000 New York State, GO
6.13%, 11/15/10................................................................................ $ 1,041,250
500,000 New York State, GO
6.00%, 11/15/11................................................................................ 513,125
500,000 New York State Dormitory Authority Revenue
New York University
6.25%, 07/01/09
Insured: FGIC.................................................................................. 531,875
125,000 New York State Dormitory Authority
New York University, Prerefunded at 102
6.70%, 07/01/11
Insured: MBIA.................................................................................. 129,816
500,000 New York State Dormitory Authority
University of Rochester
6.50%, 07/01/09................................................................................ 520,000
1,000,000 New York State Dormitory Authority
University of Rochester, Strong Memorial Hospital
5.40%, 07/01/06................................................................................ 1,030,000
1,000,000 New York State Environmental Facilities Corp., PCR
State Water, Revolving Fund, NYC Municipal Water
5.60%, 06/15/05................................................................................ 1,048,750
1,000,000 New York State Environmental Facilities Corp., PCR
State Water, Revolving Fund, Pooled Loan, Series A
5.35%, 09/15/06................................................................................ 1,030,000
1,000,000 New York State Environmental Facilities Corp., PCR
State Water, Revolving Fund, Pooled Loan, Series A
5.40%, 09/15/07................................................................................ 1,026,250
500,000 New York State Environmental Facilities Corp., PCR
State Water, Revolving Fund, Pooled Loan, Series B
6.50%, 09/15/08................................................................................ 551,875
100,000 New York State Environmental Facilities Corp., PCR
State Water, Revolving Fund, Series A
6.40%, 09/15/06................................................................................ 110,875
100,000 New York State Environmental Facilities Corp., PCR
State Water, Revolving Fund, Series E
6.30%, 06/15/02................................................................................ 109,125
100,000 New York State Environmental Facilities Corp., PCR
State Water, Revolving Fund, Series E
6.88%, 06/15/10................................................................................ 110,250
500,000 New York State Housing Finance Agency
Multifamily Mortgage Housing, Series A
6.95%, 08/15/12................................................................................ 531,250
300,000 New York State Local Government Assistance Corp., Series A
6.88%, 04/01/06................................................................................ 333,000
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
- --------------------
NEW YORK MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -----------
<C> <S> <C>
NEW YORK (CONTINUED)
$ 375,000 New York State Local Government Assistance Corp., Series A
6.88%, 04/01/07................................................................................ $ 414,375
250,000 New York State Local Government Assistance Corp., Series B
6.00%, 04/01/07................................................................................ 263,438
1,000,000 New York State Local Government Assistance Corp., Series B
5.63%, 04/01/13................................................................................ 991,250
1,000,000 New York State Local Government Assistance Corp., Series B
6.00%, 04/01/18................................................................................ 1,002,500
1,250,000 New York State Local Government Assistance Corp., Series C
6.00%, 04/01/07................................................................................ 1,317,188
250,000 New York State Local Government Assistance Corp., Series C
6.50%, 04/01/15................................................................................ 260,313
500,000 New York State Local Government Assistance Corp., Series D
6.75%, 04/01/07................................................................................ 548,750
300,000 New York State Local Government Assistance Corp., Series D
7.00%, 04/01/11................................................................................ 331,500
750,000 New York State Medical Care Facilities Finance Agency
Hospital Mortgage, Series A
5.05%, 02/15/08................................................................................ 729,375
850,000 New York State Medical Care Facilities Finance Agency
Second Mortgage Program, Health Care Projects, Series B
6.35%, 11/01/14................................................................................ 884,000
500,000 New York State Mortgage Agency
Homeowner Mortgage, Series 27
6.90%, 04/01/15................................................................................ 529,375
145,000 New York State Mortgage Agency Revenue, Series A
6.88%, 04/01/17................................................................................ 147,900
1,000,000 New York State Power Authority Revenue, Series AA
6.38%, 01/01/12................................................................................ 1,050,000
500,000 New York State Power Authority Revenue, Series BB
6.30%, 01/01/07................................................................................ 539,375
1,000,000 New York State Power Authority Revenue, Series CC
5.00%, 01/01/08................................................................................ 980,000
1,250,000 New York State Power Authority Revenue, Series CC
5.13%, 01/01/10................................................................................ 1,214,063
500,000 New York State Power Authority Revenue, Series Z
6.63%, 01/01/12................................................................................ 534,375
1,250,000 New York State Thruway Authority Revenue, Series A
5.88%, 01/01/07................................................................................ 1,310,938
500,000 Onondaga County, GO
5.88%, 02/15/10................................................................................ 526,875
250,000 Orange County, GO
6.20%, 12/01/09................................................................................ 263,125
100,000 Orange County, GO
6.20%, 12/01/10................................................................................ 104,625
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
- --------------------
NEW YORK MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -----------
<C> <S> <C>
NEW YORK (CONTINUED)
$ 100,000 Orleans County, GO
6.50%, 09/15/08................................................................................ $ 112,000
450,000 Oyster Bay, GO, Series A
5.25%, 04/15/05
Insured: FGIC.................................................................................. 460,688
500,000 Oyster Bay, GO, Series A
5.30%, 04/15/08
Insured: FGIC.................................................................................. 502,500
200,000 Port Authority of New York and New Jersey
Consolidated Loan, Series 71
6.90%, 07/15/09................................................................................ 214,000
500,000 Port Authority of New York and New Jersey
Consolidated Loan, Series 78
6.50%, 04/15/11................................................................................ 527,500
500,000 Port Authority of New York and New Jersey
Consolidated Loan, Series 82
5.70%, 08/01/07................................................................................ 526,875
1,000,000 Port Authority of New York and New Jersey
Consolidated Loan, Series 86
5.00%, 07/01/06................................................................................ 1,020,000
500,000 Port Authority of New York and New Jersey
Consolidated Loan, Series 100
5.75%, 12/15/13................................................................................ 501,875
500,000 Rochester, GO, Series A
5.00%, 08/15/07
Insured: AMBAC................................................................................. 498,750
100,000 Suffolk County, GO
6.40%, 02/01/08
Insured: FGIC.................................................................................. 102,767
500,000 Syracuse, Prerefunded, GO
6.70%, 02/15/07................................................................................ 559,375
1,000,000 Syracuse, GO, Series A
5.10%, 02/15/08................................................................................ 991,250
500,000 Tompkins County, GO, Series B
5.63%, 09/15/12................................................................................ 505,625
1,000,000 Triborough Bridge and Tunnel Authority Revenue, General Purpose, Series A
5.00%, 01/01/07................................................................................ 1,006,250
500,000 Triborough Bridge and Tunnel Authority, Revenue, General Purpose, Series X
6.00%, 01/01/06................................................................................ 533,750
500,000 Triborough Bridge and Tunnel Authority, Revenue, General Purpose, Series X
6.00%, 01/01/07................................................................................ 530,625
750,000 Triborough Bridge and Tunnel Authority, Revenue, General Purpose, Series X
6.00%, 01/01/08................................................................................ 792,188
300,000 Triborough Bridge and Tunnel Authority, Revenue, General Purpose, Series X
6.63%, 01/01/12................................................................................ 336,750
750,000 Triborough Bridge and Tunnel Authority, Revenue, General Purpose, Series Y
6.00%, 01/01/12................................................................................ 794,063
</TABLE>
See Notes to Financial Statements.
28
<PAGE>
- --------------------
NEW YORK MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -----------
<C> <S> <C>
NEW YORK (CONTINUED)
$ 100,000 Triborough Bridge and Tunnel Authority Revenue, SP OB
6.10%, 01/01/05
Insured: FGIC.................................................................................. $ 108,250
250,000 Triborough Bridge and Tunnel Authority Revenue, SP OB
6.15%, 01/01/06
Insured: FGIC.................................................................................. 270,625
350,000 Triborough Bridge and Tunnel Authority Revenue, SP OB
6.20%, 01/01/07
Insured: FGIC.................................................................................. 378,000
500,000 United Nations Development Corp.
Senior Lien, Series A
6.00%, 07/01/06................................................................................ 535,000
2,000,000 United Nations Development Corp.
Senior Lien, Series A
6.00%, 07/01/12................................................................................ 2,062,500
500,000 United Nations Development Corp.
Subordinate Lien, Series B
6.20%, 07/01/11................................................................................ 524,375
1,000,000 White Plains, GO
4.80%, 01/15/07................................................................................ 970,000
-----------
TOTAL INVESTMENTS - 97.51%....................................................................................... 64,301,452
(Cost $62,555,778) -----------
NET OTHER ASSETS AND LIABILITIES - 2.49%......................................................................... 1,645,261
-----------
NET ASSETS - 100.00%............................................................................................. $65,946,713
===========
</TABLE>
- --------------------------------------------------------------------------------
AMBAC American Municipal Bond Assurance Corp.
GO General Obligation
FGIC Financial Guarantee Insurance Corp.
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
SP OB Special Obligation
See Notes to Financial Statements.
29
<PAGE>
- --------------------
CONNECTICUT MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -----------
<C> <S> <C>
MUNICIPAL SECURITIES - 95.07%
CONNECTICUT - 95.07%
$ 245,000 Bolton, GO
5.10%, 06/01/06............................................................................. $ 249,288
145,000 Bozrah, GO
4.90%, 04/15/03
Insured: MBIA............................................................................... 146,804
355,000 Bristol, GO
5.15%, 06/15/07............................................................................. 356,331
175,000 Brookfield, GO
5.10%, 07/15/07............................................................................. 179,594
210,000 Brookfield, GO
5.20%, 07/15/09............................................................................. 209,213
250,000 Cheshire, GO
4.30%, 08/15/01............................................................................. 247,188
250,000 Cheshire, GO
5.10%, 08/15/07............................................................................. 251,875
100,000 Connecticut State, GO, Series A
4.75%, 11/15/01............................................................................. 101,625
250,000 Connecticut State, GO, Series A
5.10%, 11/15/04............................................................................. 256,875
200,000 Connecticut State, GO, Series B
4.80%, 09/15/01............................................................................. 203,750
200,000 Connecticut State, GO, Series B
5.20%, 09/15/05............................................................................. 205,750
75,000 Connecticut State, GO, Series B
5.25%, 03/15/06............................................................................. 76,594
100,000 Connecticut State, GO, Series B
5.30%, 03/15/07............................................................................. 101,875
400,000 Connecticut State, GO, Series B
5.40%, 03/15/08............................................................................. 408,000
315,000 Connecticut State, GO, Series C
4.90%, 05/01/04............................................................................. 319,725
100,000 Connecticut State, GO, Series C
5.00%, 05/01/05............................................................................. 101,625
500,000 Connecticut State, GO, Series C
5.50%, 08/15/05............................................................................. 525,625
1,000,000 Connecticut State, GO, Series D
4.70%, 08/01/03............................................................................. 1,001,250
300,000 Connecticut State, GO, Series D
4.75%, 08/01/04............................................................................. 299,250
500,000 Connecticut State, GO, Series D
5.00%, 08/01/07............................................................................. 496,250
500,000 Connecticut State, GO, Series E
6.00%, 03/15/12............................................................................. 533,125
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
- --------------------
CONNECTICUT MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -----------
<C> <S> <C>
CONNECTICUT (CONTINUED)
$ 200,000 Connecticut State Clean Water Fund
6.00%, 10/01/12............................................................................. $ 213,500
750,000 Connecticut State Development Authority,
Stamford Water Co. Project
5.30%, 09/01/28............................................................................. 687,188
50,000 Connecticut State HEFA
Cherry Brook Nursing Center Project
5.88%, 11/01/12............................................................................. 50,875
300,000 Connecticut State HEFA
St. Francis Hospital and Medical Center, Series C
5.00%, 07/01/13
Insured: FGIC............................................................................... 277,875
200,000 Connecticut State HEFA
Taft School Issue, Series B
5.25%, 07/01/13............................................................................. 188,250
200,000 Connecticut State HEFA
Taft School Issue, Series B
5.40%, 07/01/20............................................................................. 188,750
350,000 Connecticut State HEFA
Yale University, Series K
6.38%, 07/01/13............................................................................. 360,500
125,000 Connecticut State Housing Finance Authority,
Housing Mortgage Finance Program, Series A-1
5.85%, 11/15/16............................................................................. 124,063
100,000 Connecticut State Housing Finance Authority,
Housing Mortgage Finance Program, Series B
6.20%, 05/15/12............................................................................. 102,000
415,000 Connecticut State Housing Finance Authority,
Housing Mortgage Finance Program, Series F-1
5.60%, 05/15/14............................................................................. 403,069
400,000 Connecticut State Special Assessment,
Unemployment Compensation, Series A
4.60%, 11/15/00
Insured: AMBAC.............................................................................. 406,500
150,000 Connecticut State Special Tax Obligation,
Transportation Infrastructure, Series A
5.10%, 09/01/04............................................................................. 154,125
250,000 Connecticut State Special Tax Obligation,
Transportation Infrastructure, Series A
5.13%, 09/01/05............................................................................. 255,938
500,000 Connecticut State Special Tax Obligation,
Transportation Infrastructure, Series A
5.25%, 09/01/06............................................................................. 510,625
</TABLE>
See Notes to Financial Statements.
31
<PAGE>
- --------------------
CONNECTICUT MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -----------
<C> <S> <C>
CONNECTICUT (CONTINUED)
$ 700,000 Connecticut State Special Tax Obligation,
Transportation Infrastructure, Series A
5.40%, 04/01/07............................................................................. $ 718,375
850,000 Connecticut State Special Tax Obligation
Transportation Infrastructure, Series A
5.25%, 09/01/07............................................................................. 859,563
925,000 Connecticut State Special Tax Obligation
Transportation Infrastructure, Series A
5.38%, 09/01/08............................................................................. 937,719
750,000 Connecticut State Special Tax Obligation
Transportation Infrastructure, Series B
4.40%, 10/01/04............................................................................. 720,000
400,000 Connecticut State Special Tax Obligation
Transportation Infrastructure, Series B
6.13%, 09/01/12............................................................................. 427,000
170,000 Connecticut State Special Tax Obligation
Transportation Infrastructure, Series C
4.50%, 10/01/04............................................................................. 164,688
200,000 Danbury, GO
5.63%, 02/01/13............................................................................. 202,500
175,000 East Haddam, GO
5.00%, 05/01/06
Insured: MBIA............................................................................... 176,531
100,000 East Hampton, GO
4.95%, 06/15/04
Insured: MBIA............................................................................... 102,125
250,000 East Hampton, GO
5.10%, 06/15/05
Insured: MBIA............................................................................... 255,938
175,000 Groton City, GO
5.30%, 05/15/06............................................................................. 177,625
50,000 Groton City, GO
5.40%, 05/15/07............................................................................. 50,750
250,000 Groton Town, Lot A, GO
5.00%, 08/15/07............................................................................. 244,688
500,000 Guilford, GO
5.00%, 11/15/08............................................................................. 495,000
250,000 Hartford County, Metropolitan District, GO
6.70%, 10/01/09............................................................................. 286,875
500,000 Hartford County, Metropolitan District, GO
5.10%, 12/01/09............................................................................. 491,250
200,000 Madison, GO
5.00%, 05/01/06............................................................................. 200,250
100,000 Middletown, GO
4.75%, 04/15/01............................................................................. 101,250
400,000 Milford, GO
5.00%, 01/15/08............................................................................. 400,000
</TABLE>
See Notes to Financial Statements.
32
<PAGE>
- --------------------
CONNECTICUT MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -----------
<C> <S> <C>
CONNECTICUT (CONTINUED)
$ 370,000 Montville, GO
5.30%, 12/01/09............................................................................. $ 374,625
370,000 Montville, GO
5.35%, 12/01/10............................................................................. 373,238
250,000 New Milford, GO
5.50%, 08/01/08............................................................................. 262,188
140,000 North Branford, GO
5.00%, 02/01/11............................................................................. 131,425
150,000 North Branford, GO
5.00%, 02/01/12............................................................................. 140,063
350,000 Norwalk, GO
5.00%, 01/15/05............................................................................. 357,875
200,000 Norwalk, GO
5.00%, 01/15/06............................................................................. 202,500
500,000 Norwich, GO
5.63%, 09/15/07............................................................................. 528,750
50,000 Regional School District No. 5, GO
4.90%, 05/15/02............................................................................. 51,188
135,000 Regional School District No. 5, GO
5.15%, 05/15/05............................................................................. 137,869
225,000 South Central Regional Water Authority
Water System, Series 11
5.75%, 08/01/12
Insured: FGIC............................................................................... 226,688
175,000 South Central Regional Water Authority
Water System, Series 12
5.13%, 08/01/07
Insured: FGIC............................................................................... 175,656
250,000 South Central Regional Water Authority
Water System, Series 12
5.25%, 08/01/12
Insured: FGIC............................................................................... 239,375
75,000 Torrington, GO
5.20%, 04/15/06
Insured: FGIC............................................................................... 76,594
55,000 Washington, GO
4.85%, 11/01/10............................................................................. 52,800
55,000 Washington, GO
4.90%, 11/01/11............................................................................. 52,388
</TABLE>
See Notes to Financial Statements.
33
<PAGE>
- --------------------
CONNECTICUT MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- -----------
<C> <S> <C>
CONNECTICUT (CONTINUED)
$ 100,000 West Hartford, GO
6.00%, 05/01/07............................................................................. $ 109,125
100,000 West Haven, GO, Series A
4.75%, 12/01/01............................................................................. 101,500
250,000 West Haven, GO, Series B
5.20%, 06/01/05............................................................................. 255,000
------------
TOTAL INVESTMENTS - 95.07%.................................................................................... 21,055,844
(Cost $20,932,491) ------------
NET OTHER ASSETS AND LIABILITIES - 4.93%...................................................................... 1,092,625
------------
NET ASSETS - 100.00%.......................................................................................... $ 22,148,469
============
</TABLE>
- --------------------------------------------------------------------------------
AMBAC American Municipal Bond Assurance Corp.
FGIC Federal Guarantee Insurance Corp.
GO General Obligation
HEFA Health and Educational Facilities Authority
MBIA Municipal Bond Insurance Association
See Notes to Financial Statements.
34
<PAGE>
- --------------------
MASSACHUSETTS MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- ------------
<C> <S> <C>
MUNICIPAL SECURITIES - 96.69%
MASSACHUSETTS - 96.69%
$ 375,000 Billerica, Lot A, GO
5.40%, 07/15/09
Insured: MBIA............................................................................. $ 374,063
250,000 Boston, GO
5.25%, 10/01/05
Insured: MBIA............................................................................. 257,167
200,000 Boston, GO, Series A
5.00%, 02/01/03
Insured: AMBAC............................................................................ 204,000
70,000 Boston, GO, Series A
5.35%, 02/01/06
Insured: AMBAC............................................................................ 71,925
225,000 Boston, GO, Series A
5.55%, 02/01/08
Insured: AMBAC............................................................................ 230,906
200,000 Boston Metropolitan District, GO
5.35%, 12/01/12........................................................................... 197,250
290,000 Boston Metropolitan District, GO
5.35%, 12/01/14........................................................................... 282,388
200,000 Boston Water and Sewer Commission, Senior Series A
5.50%, 11/01/01
Insured: FSA.............................................................................. 211,750
230,000 Boston Water and Sewer Commission, Senior Series A, Prerefunded at 102
7.00%, 11/01/18
Insured: FGIC............................................................................. 263,350
50,000 Boston Water and Sewer Commission, Senior Series A
5.25%, 11/01/07........................................................................... 50,000
50,000 Boston Water and Sewer Commission, Senior Series A
5.40%, 11/01/09........................................................................... 49,750
25,000 Boston Water and Sewer Commission, Senior Series A
5.25%, 11/01/11........................................................................... 23,969
100,000 Brookline, GO
5.60%, 09/01/10........................................................................... 101,250
25,000 Brookline, GO
5.60%, 09/01/12........................................................................... 25,125
230,000 Burlington, GO
5.05%, 01/15/11........................................................................... 218,500
</TABLE>
See Notes to Financial Statements.
35
<PAGE>
- --------------------
MASSACHUSETTS MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- ------------
<C> <S> <C>
MASSACHUSETTS (CONTINUED)
$ 10,000 Dedham-Westwood Water District, GO
5.20%, 11/01/05
Insured: MBIA............................................................................. $ 10,188
50,000 Dedham-Westwood Water District, GO
5.40%, 11/01/07
Insured: MBIA............................................................................. 51,188
250,000 Deerfield, GO
5.60%, 06/15/02........................................................................... 265,938
10,000 Deerfield, GO
6.10%, 06/15/08........................................................................... 10,675
25,000 Fairhaven, GO
7.10%, 02/01/04........................................................................... 27,344
40,000 Hamilton-Wenham Regional School District
5.60%, 10/01/10
Insured: AMBAC............................................................................ 40,350
100,000 Kingston, GO
5.70%, 08/01/07........................................................................... 104,250
105,000 Lawrence, GO
4.63%, 09/15/99........................................................................... 105,394
250,000 Lawrence, GO
5.13%, 09/15/03........................................................................... 251,563
250,000 Lowell, GO
6.05%, 04/01/11
Insured: CGIC............................................................................. 257,188
200,000 Lowell, GO, Series A
5.10%, 01/15/04
Insured: FSA.............................................................................. 202,750
265,000 Lowell, GO, Series A
5.20%, 01/15/05
Insured: FSA.............................................................................. 268,975
25,000 Ludlow, GO
7.30%, 11/01/02
Insured: MBIA............................................................................. 28,938
35,000 Lynn Water and Sewer Commission
5.50%, 06/01/99
Insured: FGIC............................................................................. 36,575
100,000 Lynn Water and Sewer Commission
5.30%, 12/01/06
Insured: FGIC............................................................................. 103,125
250,000 Massachusetts Bay Transportation Authority, Series A
4.90%, 03/01/01........................................................................... 255,313
175,000 Massachusetts Bay Transportation Authority, Series A
5.00%, 03/01/03
Insured: MBIA............................................................................. 178,719
</TABLE>
See Notes to Financial Statements.
36
<PAGE>
- --------------------
MASSACHUSETTS MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- ------------
<C> <S> <C>
MASSACHUSETTS (CONTINUED)
$ 130,000 Massachusetts Bay Transportation Authority, Series A
6.00%, 03/01/12........................................................................... $ 133,738
200,000 Massachusetts Bay Transportation Authority, Series A
5.75%, 03/01/22........................................................................... 199,500
70,000 Massachusetts Bay Transportation Authority, Series A
5.75%, 03/01/22
Insured: FGIC............................................................................. 70,000
350,000 Massachusetts Bay Transportation Authority, Series B
5.50%, 03/01/21........................................................................... 339,938
100,000 Massachusetts Bay Transportation Authority, Series C
6.00%, 03/01/05........................................................................... 107,375
50,000 Massachusetts Bay Transportation Authority, Series C
6.10%, 03/01/23........................................................................... 51,063
250,000 Massachusetts State, GO, Series A
6.25%, 07/01/02........................................................................... 273,750
250,000 Massachusetts State, GO, Series A
6.25%, 07/01/04........................................................................... 275,938
750,000 Massachusetts State, GO, Series A
5.25%, 02/01/08........................................................................... 751,875
100,000 Massachusetts State, GO, Series B
5.10%, 11/01/02........................................................................... 103,125
200,000 Massachusetts State, GO, Series B
5.30%, 11/01/05........................................................................... 206,750
100,000 Massachusetts State, GO, Series B
5.50%, 11/01/07........................................................................... 103,375
250,000 Massachusetts State, GO, Series C
4.80%, 08/01/03
Insured: AMBAC............................................................................ 252,188
250,000 Massachusetts State, GO, Series C
4.80%, 08/01/03
Insured: MBIA............................................................................. 252,188
50,000 Massachusetts State Consolidated Loan, GO, Series A
5.10%, 11/01/03........................................................................... 51,438
200,000 Massachusetts State Consolidated Loan, GO, Series A
4.50%, 01/01/04........................................................................... 195,000
250,000 Massachusetts State Consolidated Loan, GO, Series A
5.75%, 02/01/15
Insured: MBIA............................................................................. 252,188
100,000 Massachusetts State Consolidated Loan, GO, Series D
5.75%, 05/01/12........................................................................... 101,250
100,000 Massachusetts State Convention Center Authority
Boston Common Parking Garage, Series A
5.35%, 09/01/06........................................................................... 102,500
</TABLE>
See Notes to Financial Statements.
37
<PAGE>
- --------------------
MASSACHUSETTS MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- ------------
<C> <S> <C>
MASSACHUSETTS (CONTINUED)
$ 100,000 Massachusetts State Convention Center Authority
Boston Common Parking Garage, Series A
5.40%, 09/01/07........................................................................... $ 101,750
100,000 Massachusetts State Convention Center Authority
Boston Common Parking Garage, Series A
5.45%, 09/01/08........................................................................... 101,375
100,000 Massachusetts State Convention Center Authority
Boston Common Parking Garage, Series A
5.38%, 09/01/13........................................................................... 96,875
200,000 Massachusetts State Convention Center Authority
Hynes Convention Center, Lot A
6.00%, 09/01/99........................................................................... 212,000
370,000 Massachusetts State Federal Assisted Housing, GO
6.00%, 02/01/08........................................................................... 398,213
400,000 Massachusetts State HEFA, Series G
4.60%, 07/01/03
Insured: MBIA............................................................................. 398,000
25,000 Massachusetts State HEFA - Beth Israel Hospital, Series G
5.75%, 07/01/12
Insured: AMBAC............................................................................ 25,375
350,000 Massachusetts State HEFA - Boston College, Series K
4.70%, 06/01/03........................................................................... 351,750
385,000 Massachusetts State HEFA - Brigham & Women's Hospital, Series E
4.50%, 07/01/01........................................................................... 376,338
130,000 Massachusetts State HEFA - Brigham & Women's Hospital, Series E
4.60%, 07/01/02........................................................................... 127,075
100,000 Massachusetts State HEFA - Brigham & Women's Hospital, Series E
4.80%, 07/01/04........................................................................... 97,500
350,000 Massachusetts State HEFA - Cape Cod Health System, Series A
5.25%, 11/15/21
Insured: Connie Lee....................................................................... 317,188
65,000 Massachusetts State HEFA - Children's Hospital, Series E
5.40%, 10/01/01........................................................................... 67,519
50,000 Massachusetts State HEFA - Harvard University, Series M
5.50%, 12/01/15........................................................................... 50,000
100,000 Massachusetts State HEFA - Lahey Clinic Medical Center, Series B
5.63%, 07/01/15
Insured: MBIA............................................................................. 100,000
500,000 Massachusetts State HEFA - Lahey Clinic Medical Center, Series B
5.38%, 07/01/23
Insured: MBIA............................................................................. 476,250
40,000 Massachusetts State HEFA - Massachusetts General Hospital, Series F
6.00%, 07/01/05
Insured: AMBAC............................................................................ 43,650
250,000 Massachusetts State HEFA - Massachusetts General Hospital, Series G
4.65%, 07/01/02
Insured: AMBAC............................................................................ 251,563
</TABLE>
See Notes to Financial Statements.
38
<PAGE>
- --------------------
MASSACHUSETTS MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- ------------
<C> <S> <C>
MASSACHUSETTS (CONTINUED)
$ 100,000 Massachusetts State HEFA - Massachusetts General Hospital, Series G
4.75%, 07/01/03
Insured: AMBAC............................................................................ $ 100,625
100,000 Massachusetts State HEFA - Massachusetts General Hospital, Series G
5.15%, 07/01/07
Insured: AMBAC............................................................................ 100,625
550,000 Massachusetts State HEFA - Massachusetts Institute of Technology, Series H
4.70%, 07/01/04........................................................................... 555,500
100,000 Massachusetts State HEFA - McLean Hospital, Series C
6.63%, 07/01/15
Insured: FGIC............................................................................. 107,625
250,000 Massachusetts State HEFA - Medical Center of Central Massachusetts, Series B
6.00%, 07/01/02
Insured: AMBAC............................................................................ 271,250
250,000 Massachusetts State HEFA - Newton-Wellesley Hospital, Series E
5.00%, 07/01/03
Insured: MBIA............................................................................. 256,875
100,000 Massachusetts State HEFA - South Shore Hospital, Series E
5.40%, 07/01/07
Insured: MBIA............................................................................. 102,750
325,000 Massachusetts State HEFA - South Shore Hospital, Series E
5.50%, 07/01/13
Insured: MBIA............................................................................. 322,969
10,000 Massachusetts State HEFA - Tufts University, Series F
5.65%, 08/15/07
Insured: FGIC............................................................................. 10,425
75,000 Massachusetts State HEFA - University of Massachusetts Medical School Research
6.00%, 07/01/12
Insured: Connie Lee....................................................................... 76,500
10,000 Massachusetts State HEFA - University of Massachusetts Medical School Research
6.00%, 07/01/23
Insured: Connie Lee....................................................................... 10,050
250,000 Massachusetts State HEFA - Wheaton College, Series C
5.25%, 07/01/19........................................................................... 232,188
50,000 Massachusetts State HEFA - Williams College, Series D
5.50%, 07/01/17........................................................................... 48,688
200,000 Massachusetts State IFA - Brooks School
5.95%, 07/01/23........................................................................... 202,750
300,000 Massachusetts State IFA - Holy Cross College
5.90%, 11/01/01........................................................................... 324,000
50,000 Massachusetts State IFA - Holy Cross College
5.75%, 01/01/02........................................................................... 53,250
250,000 Massachusetts State IFA - Lesley College Project, Series A
6.00%, 07/01/10
Insured: Connie Lee....................................................................... 258,750
</TABLE>
See Notes to Financial Statements.
39
<PAGE>
- --------------------
MASSACHUSETTS MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- ------------
<C> <S> <C>
MASSACHUSETTS (CONTINUED)
$ 300,000 Massachusetts State IFA - Milton Academy, Series B
5.30%, 09/01/08
Insured: MBIA............................................................................. $ 303,000
240,000 Massachusetts State IFA - Milton Academy, Series B
5.25%, 09/01/19
Insured: MBIA............................................................................. 225,000
635,000 Massachusetts State Port Authority
5.625%, 07/01/12.......................................................................... 648,494
40,000 Massachusetts State Port Authority, Series A
5.50%, 07/01/07
Insured: FGIC............................................................................. 41,350
250,000 Massachusetts State Port Authority, Series B
5.30%, 07/01/01........................................................................... 259,063
200,000 Massachusetts State, SP OB and Revenue, Series A
5.80%, 06/01/00
Insured: AMBAC............................................................................ 212,000
200,000 Massachusetts State, SP OB and Revenue, Series A
6.00%, 06/01/13
Insured: AMBAC............................................................................ 203,750
250,000 Massachusetts State, SP OB and Revenue, Series A
5.80%, 06/01/14........................................................................... 251,875
250,000 Massachusetts State Turnpike Authority, Series A
4.63%, 01/01/02........................................................................... 252,188
20,000 Massachusetts State Turnpike Authority, Series A
5.10%, 01/01/08........................................................................... 20,125
50,000 Massachusetts State Water Pollution Abatement Trust
MWRA Loan Program, Series A
4.85%, 02/01/03........................................................................... 50,438
100,000 Massachusetts State Water Pollution Abatement Trust
MWRA Loan Program, Series A
4.85%, 08/01/03........................................................................... 101,000
50,000 Massachusetts State Water Pollution Abatement Trust
MWRA Loan Program, Series A
5.20%, 02/01/06........................................................................... 50,750
25,000 Massachusetts State Water Pollution Abatement Trust
MWRA Loan Program, Series A
5.30%, 02/01/07........................................................................... 25,375
50,000 Massachusetts State Water Pollution Abatement Trust
MWRA Loan Program, Series A
5.30%, 08/01/07........................................................................... 50,750
250,000 Massachusetts State Water Pollution Abatement Trust
Pooled Loan Program, Series 1
5.00%, 02/01/02........................................................................... 255,313
</TABLE>
See Notes to Financial Statements.
40
<PAGE>
- --------------------
MASSACHUSETTS MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- ------------
<C> <S> <C>
MASSACHUSETTS (CONTINUED)
$ 100,000 Massachusetts State Water Research Authority, Series A
6.00%, 04/01/20........................................................................... $ 100,750
190,000 Massachusetts State Water Research Authority, Series A
6.50%, 07/15/21........................................................................... 213,513
40,000 Massachusetts State Water Research Authority, Series A
5.75%, 12/01/21........................................................................... 39,700
50,000 Massachusetts State Water Research Authority, Series B
6.00%, 11/01/06........................................................................... 53,000
50,000 Massachusetts State Water Research Authority, Series B
6.25%, 11/01/10........................................................................... 52,250
100,000 Massachusetts State Water Research Authority, Series B
5.50%, 11/01/15........................................................................... 97,250
200,000 Massachusetts State Water Research Authority, Series C
5.00%, 12/01/03........................................................................... 202,750
220,000 Nantucket Islands Land Bank, GO and Revenue, Series E
7.25%, 07/01/19........................................................................... 242,275
65,000 Norfolk, GO
5.60%, 01/15/05
Insured: AMBAC............................................................................ 67,194
50,000 North Adams, GO
5.40%, 03/01/07
Insured: AMBAC............................................................................ 50,688
50,000 North Adams, GO
5.50%, 03/01/08
Insured: AMBAC............................................................................ 50,938
150,000 North Middlesex Regional School District Lot B, GO
4.50%, 08/15/02
Insured: AMBAC............................................................................ 147,000
175,000 Northampton, GO
5.30%, 03/01/09
Insured: AMBAC............................................................................ 172,813
200,000 Northampton, GO
5.30%, 09/01/10
Insured: AMBAC............................................................................ 196,250
150,000 Pittsfield, GO
5.40%, 07/15/13
Insured: MBIA............................................................................. 148,313
25,000 Plainville, GO
7.00%, 09/01/03........................................................................... 27,313
20,000 Plymouth-Carver Regional School District, GO
6.05%, 10/01/02
Insured: AMBAC............................................................................ 21,350
25,000 Plymouth-Carver Regional School District, GO
6.15%, 10/01/03
Insured: AMBAC............................................................................ 26,969
</TABLE>
See Notes to Financial Statements.
41
<PAGE>
- --------------------
MASSACHUSETTS MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- ------------
<C> <S> <C>
MASSACHUSETTS (CONTINUED)
$ 25,000 Quaboag Regional School District, GO
5.10%, 06/15/06
Insured: MBIA............................................................................. $ 24,906
25,000 Quaboag Regional School District, GO
5.40%, 06/15/09
Insured: MBIA............................................................................. 24,938
100,000 Quaboag Regional School District, GO
5.50%, 06/15/10
Insured: MBIA............................................................................. 100,125
250,000 Salem, GO
4.50%, 07/15/03
Insured: MBIA............................................................................. 243,125
100,000 Salem, GO
5.90%, 07/15/07
Insured: AMBAC............................................................................ 104,500
200,000 Sandwich, GO
5.40%, 11/01/07
Insured: AMBAC............................................................................ 204,500
75,000 Sandwich Water District, GO and Revenue
5.40%, 05/15/07........................................................................... 76,688
25,000 Sandwich Water District, GO and Revenue
5.50%, 05/15/08........................................................................... 25,563
40,000 Sandwich Water District, GO and Revenue
5.50%, 05/15/10........................................................................... 39,600
25,000 Sandwich Water District, GO and Revenue
5.60%, 05/15/12........................................................................... 24,906
125,000 Sandwich Water District, GO and Revenue
5.60%, 05/15/13........................................................................... 123,906
115,000 South Essex Sewer District, GO
5.30%, 11/01/01
Insured: AMBAC............................................................................ 118,019
245,000 South Shore Regional School District, GO
5.10%, 02/01/12
Insured: AMBAC............................................................................ 233,363
240,000 South Shore Regional School District, GO
5.10%, 02/01/13
Insured: AMBAC............................................................................ 225,600
110,000 Southbridge, GO
5.80%, 01/01/03
Insured: AMBAC............................................................................ 114,950
200,000 Southern Berkshire Regional School District
5.38%, 04/15/10
Insured: MBIA............................................................................. 198,000
</TABLE>
See Notes to Financial Statements.
42
<PAGE>
- --------------------
MASSACHUSETTS MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- ------------
<C> <S> <C>
MASSACHUSETTS (CONTINUED)
$ 25,000 Spencer-East Brookfield Regional School District
5.20%, 04/15/09
Insured: MBIA............................................................................. $ 24,469
400,000 Taunton, GO
8.00%, 02/01/01........................................................................... 457,500
250,000 University of Lowell Building Authority, Fifth Series A
6.75%, 11/01/03
Insured: AMBAC............................................................................ 285,938
50,000 Westfield, GO
6.70%, 12/15/00
Insured: AMBAC............................................................................ 54,625
100,000 Woods Hole, Martha's Vineyard and Nantucket
Steamship Bonds, Series B
6.00%, 03/01/02........................................................................... 108,250
50,000 Yarmouth, GO
5.10%, 03/01/08........................................................................... 50,000
------------
TOTAL INVESTMENTS - 96.69%.................................................................................. 22,934,544
(Cost $22,754,145) ------------
NET OTHER ASSETS AND LIABILITIES - 3.31%.................................................................... 785,903
------------
NET ASSETS - 100.00%........................................................................................ $ 23,720,447
============
</TABLE>
- --------------------------------------------------------------------------------
AMBAC American Municipal Bond Assurance Corp.
CGIC Capital Guarantee Insurance Corp.
Connie Lee College Construction Loan Association
FGIC Financial Guarantee Insurance Corp.
FSA Financial Security Assurance
GO General Obligation
HEFA Health and Educational Facilities Authority
IFA Industrial Finance Agency
MBIA Municipal Bond Insurance Association
MWRA Massachusetts Water Resource Authority
SP OB Special Obligation
See Notes to Financial Statements.
43
<PAGE>
- --------------------
RHODE ISLAND MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- ------------
<C> <S> <C>
MUNICIPAL SECURITIES - 96.15%
RHODE ISLAND - 91.56%
$ 200,000 Burrillville, GO
5.85%, 05/01/14
Insured: FGIC............................................................................. $ 204,747
150,000 Burrillville, GO
5.75%, 10/15/17
Insured: MBIA............................................................................. 150,563
460,000 Convention Center Authority, Series A
6.70%, 05/15/20
Insured: MBIA............................................................................. 515,200
270,000 Convention Center Authority, Series A
6.38%, 05/15/23
Insured: MBIA............................................................................. 298,013
100,000 Cumberland, GO
5.70%, 09/01/08
Insured: MBIA............................................................................. 104,875
350,000 Lincoln, GO
5.50%, 08/15/10
Insured: MBIA............................................................................. 356,125
400,000 Pawtucket, GO
5.75%, 04/15/11
Insured: FGIC............................................................................. 408,500
225,000 Providence, GO
6.75%, 01/15/10
Insured: MBIA............................................................................. 244,125
350,000 Rhode Island Clean Water Protection Finance Agency,
PCR, Revolving Fund, Pooled Loan Issue, Series A
5.40%, 10/01/15
Insured: MBIA............................................................................. 335,125
150,000 Rhode Island Clean Water Protection Finance Agency Revenue
Safe Drinking Water, Providence, Series A
6.20%, 01/01/06
Insured: AMBAC............................................................................ 163,688
100,000 Rhode Island Clean Water Protection Finance Agency Revenue
Safe Drinking Water, Providence, Series A
6.70%, 01/01/15
Insured: AMBAC............................................................................ 108,375
300,000 Rhode Island Housing and Mortgage Finance Corp. Revenue
Homeownership Opportunity, Series 17-A
6.25%, 04/01/17........................................................................... 303,750
425,000 Rhode Island Housing and Mortgage Finance Corp. Revenue
Multifamily Housing, Series A
6.15%, 07/01/17
Insured: AMBAC............................................................................ 429,250
</TABLE>
See Notes to Financial Statements.
44
<PAGE>
- --------------------
RHODE ISLAND MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- ------------
<C> <S> <C>
RHODE ISLAND (CONTINUED)
$ 250,000 Rhode Island Housing and Mortgage Finance Corp. Revenue,
Rental Housing Program, Series A
5.65%, 10/01/07........................................................................... $ 249,063
100,000 Rhode Island State, GO
6.60%, 06/15/06........................................................................... 103,826
200,000 Rhode Island State, GO, Series A
6.10%, 06/15/03
Insured: FGIC............................................................................. 219,000
300,000 Rhode Island State, GO, Series A
6.25%, 06/15/07
Insured: FGIC............................................................................. 323,625
360,000 Rhode Island State
Consolidated Capital Development Loan, GO, Series A
5.50%, 08/01/10........................................................................... 361,350
225,000 Rhode Island State
Consolidated Capital Development Loan, GO, Series A
5.70%, 08/01/14
Insured: FGIC............................................................................. 226,969
100,000 Rhode Island State
Consolidated Capital Development Loan, GO, Series B
6.00%, 05/15/98........................................................................... 104,375
400,000 Rhode Island State Health and Educational Building Corp. Revenue
Higher Education Facility, Auxiliary, Series A
5.50%, 09/15/13
Insured: MBIA............................................................................. 391,000
105,000 Rhode Island State Health and Educational Building Corp. Revenue
Higher Education Facility, Brown University
6.75%, 09/01/16........................................................................... 111,169
500,000 Rhode Island State Health and Educational Building Corp. Revenue
Higher Education Facility, Brown University
6.00%, 09/01/20........................................................................... 513,750
275,000 Rhode Island State Health and Educational Building Corp.
Higher Education Facility, Bryant College, SP OB
6.50%, 06/01/05
Insured: MBIA............................................................................. 302,156
100,000 Rhode Island State Health and Educational Building Corp. Revenue
Higher Education, Johnson and Wales University
5.88%, 04/01/05
Insured: Connie Lee....................................................................... 106,250
275,000 Rhode Island State Health and Educational Building Corp. Revenue
Higher Education Facility, New England Institute
6.00%, 03/01/15
Insured: Connie Lee....................................................................... 276,031
300,000 Rhode Island State Health and Educational Building Corp. Revenue
Higher Education Facility, Providence College
5.60%, 11/01/09
Insured: MBIA............................................................................. 304,875
</TABLE>
See Notes to Financial Statements.
45
<PAGE>
- --------------------
RHODE ISLAND MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- ------------
<C> <S> <C>
RHODE ISLAND (CONTINUED)
$ 100,000 Rhode Island State Health and Educational Building Corp. Revenue
Higher Education Facility, Roger Williams
7.25%, 11/15/24
Insured: Connie Lee....................................................................... $ 109,875
150,000 Rhode Island State Health and Educational Building Corp. Revenue
Higher Education Facility, Roger Williams
6.50%, 11/15/24
Insured: Connie Lee....................................................................... 155,625
260,000 Rhode Island State Health and Educational Building Corp. Revenue
Higher Education Facility, Salve Regina
6.25%, 03/15/13
Insured: Connie Lee....................................................................... 267,475
50,000 Rhode Island State Health and Educational Building Corp. Revenue
Higher Education Facility, Salve Regina
6.30%, 03/15/20
Insured: Connie Lee....................................................................... 51,063
500,000 Rhode Island State Health and Educational Building Corp. Revenue
Miriam Hospital Issue, Series B
6.60%, 04/01/19........................................................................... 512,500
300,000 Rhode Island State Health and Education Building Corp. Revenue
Saint Antoine
6.75%, 11/15/18
LOC: Allied Irish Banks NY................................................................ 308,625
500,000 Rhode Island State Industrial Facilities Corp. Revenue
Marine Terminal, Mobil Oil Refining
6.00%, 11/01/14........................................................................... 505,625
185,000 Rhode Island State Public Buildings Authority Revenue
State Projects, Series A
6.70%, 02/01/03
Insured: AMBAC............................................................................ 206,275
100,000 Warwick, GO
7.00%, 11/15/02
Insured: FGIC............................................................................. 111,000
215,000 West Warwick, GO
6.88%, 03/01/07
Insured: MBIA............................................................................. 243,488
100,000 Westerly, GO
5.60%, 09/15/06
Insured: AMBAC............................................................................ 102,500
140,000 Westerly, GO
6.00%, 09/15/14
Insured: AMBAC............................................................................ 144,200
------------
9,934,026
------------
</TABLE>
See Notes to Financial Statements.
46
<PAGE>
- --------------------
RHODE ISLAND MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
--------- ------------
<C> <S> <C>
OTHER TERRITORIES - 4.59%
$ 400,000 Puerto Rico Public Buildings Authority
Government Facilities, Series A
5.50%, 07/01/21........................................................................... $ 390,500
100,000 Puerto Rico Public Buildings Authority
Public Education and Health Facilities, Series H
7.40%, 07/01/99
Insured: FGIC............................................................................. 107,500
------------
498,000
------------
TOTAL INVESTMENTS - 96.15%.................................................................................. 10,432,026
(Cost $10,164,419) ------------
NET OTHER ASSETS AND LIABILITIES - 3.85%.................................................................... 417,818
------------
NET ASSETS - 100.00%........................................................................................ $ 10,849,844
============
</TABLE>
- --------------------------------------------------------------------------------
AMBAC American Municipal Bond Assurance Corp.
Connie Lee College Construction Loan Association
FGIC Financial Guarantee Insurance Corp.
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
SP OB Special Obligation
See Notes to Financial Statements.
47
<PAGE>
- --------------------
STATEMENTS OF ASSETS AND LIABILITIES
THE GALAXY FUND OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
NEW YORK CONNECTICUT MASSACHUSETTS RHODE ISLAND
TAX-EXEMPT MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND BOND FUND BOND FUND
------------ ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost............................ $ 114,956,471 $ 62,555,778 $ 20,932,491 $ 22,754,145 $ 10,164,419
Net unrealized appreciation (depreciation)..... 3,023,924 1,745,674 123,353 180,399 267,607
------------- ------------ ------------ ------------ ------------
Total investments at value..................... 117,980,395 64,301,452 21,055,844 22,934,544 10,432,026
Cash............................................. 3,856,951 695,461 676,006 431,413 207,783
Receivable for investments sold.................. -- -- 205,698 -- --
Receivable for shares sold....................... 187,260 73,004 2,581 74,302 59,250
Interest and dividend receivables................ 2,022,861 1,066,963 286,612 383,125 177,356
Receivable from investment adviser (Note 4)...... 10,970 7,953 159 429 31,433
Deferred organizational expense (Note 2)......... 3,394 4,678 4,932 4,888 13,699
------------- ------------ ------------ ------------ ------------
Total Assets................................... 124,061,831 66,149,511 22,231,832 23,828,701 10,921,547
------------- ------------ ------------ ------------ ------------
LIABILITIES:
Dividends payable................................ 395,675 122,924 34,856 51,520 24,957
Payable for shares repurchased................... 175,885 16,424 123 7,949 10,000
Advisory fee payable (Note 3).................... 57,088 30,309 2,742 3,096 3,508
Payable to Fleet and affiliates (Note 3)......... 9,500 11,469 5,000 4,220 --
Payable to FDISG (Note 3)........................ 30,660 6,626 7,268 7,887 4,274
Trustees' fees and expenses payable (Note 3)..... 3,186 2,914 1,780 2,698 3,064
Accrued expenses and other payables.............. 41,037 12,132 31,594 30,884 25,900
------------- ------------ ------------ ------------ ------------
Total Liabilities.............................. 713,031 202,798 83,363 108,254 71,703
------------- ------------ ------------ ------------ ------------
NET ASSETS......................................... $ 123,348,800 $ 65,946,713 $ 22,148,469 $ 23,720,447 $ 10,849,844
============= ============ ============ ============ ============
NET ASSETS CONSIST OF:
Par value (Note 5)............................... $ 11,443 $ 6,118 $ 2,187 $ 2,377 $ 1,017
Paid-in capital in excess of par value........... 120,415,311 66,076,347 22,748,338 24,255,105 10,521,964
Undistributed (overdistributed)
net investment income.......................... (19) -- -- -- 1,300
Accumulated net realized gain (loss) on
investments sold............................... (101,859) (1,881,426) (725,409) (717,434) 57,956
Net unrealized appreciation (depreciation)
of investments................................. 3,023,924 1,745,674 123,353 180,399 267,607
------------- ------------ ------------ ------------ ------------
TOTAL NET ASSETS................................... $ 123,348,800 $ 65,946,713 $ 22,148,469 $ 23,720,447 $ 10,849,844
============= ============ ============ ============ ============
Retail Shares:
Net Assets....................................... $ 31,608,518 $ 42,870,155 $ 18,065,593 $ 16,112,977 $ 10,849,844
Shares Outstanding............................... 2,932,336 3,977,437 1,783,739 1,614,697 1,016,780
NET ASSET VALUE, offering and redemption
price per share................................ $ 10.78 $ 10.78 $ 10.13 $ 9.98 $ 10.67
============= ============ ============ ============ ============
Trust Shares:
Net Assets....................................... $ 91,740,282 $ 23,076,558 $ 4,082,876 $ 7,607,470 $ --
Shares Outstanding............................... 8,510,984 2,140,906 403,126 762,400 --
NET ASSET VALUE, offering and redemption
price per share................................ $ 10.78 $ 10.78 $ 10.13 $ 9.98 $ --
============= ============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
48
<PAGE>
- --------------------
STATEMENTS OF OPERATIONS
THE GALAXY FUND FOR THE YEAR ENDED OCTOBER 31, 1995
- --------------------
<TABLE>
<CAPTION>
NEW YORK CONNECTICUT MASSACHUSETTS RHODE ISLAND
TAX-EXEMPT MUNICIPAL MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND BOND FUND BOND FUND
------------- ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2)............................... $ 7,041,130 $ 3,578,740 $ 1,086,971 $ 1,126,476 $ 310,510
Dividends (Note 2).............................. 8,819 3,311 1,020 3,484 --
------------ ----------- ----------- ----------- ----------
Total investment income....................... 7,049,949 3,582,051 1,087,991 1,129,960 310,510
------------ ----------- ----------- ----------- ----------
EXPENSES:
Investment advisory fee (Note 3)................ 895,998 475,437 156,670 161,226 41,854
Administration fee (Note 3)..................... 104,560 55,482 18,409 18,853 4,830
Custodian fee................................... 13,279 10,136 5,014 5,498 7,646
Fund Accounting fee (Note 3).................... 66,927 58,911 45,446 52,880 27,048
Legal fee (Note 3).............................. 7,280 5,402 922 1,695 272
Audit fee....................................... 11,943 11,943 11,943 11,943 11,920
Transfer agent fee (Note 3)..................... 37,234 36,886 16,584 16,076 4,682
Shareholder Service fee (Note 3)................ 47,093 60,513 25,383 22,206 --
Trustees' fees and expenses (Note 3)............ 6,016 5,744 4,611 5,529 7,089
Amortization of organization costs (Note 2)..... 4,494 5,399 2,000 2,000 3,414
Reports to shareholders......................... 25,845 19,597 4,162 14,450 2,900
Registration fees............................... -- 25,482 6,126 6,737 4,169
Insurance....................................... 5,264 2,073 286 297 97
Miscellaneous................................... 17,264 1,818 1,800 1,790 10,488
------------ ----------- ----------- ----------- ----------
Total Expenses before
reimbursement/waiver........................ 1,243,197 774,823 299,356 321,180 126,409
Less: Reimbursement/waiver (Note 4)........... (327,327) (234,494) (166,391) (182,922) (103,670)
------------ ----------- ----------- ----------- ----------
Total Expenses net of
reimbursement/waiver........................ 915,870 540,329 132,965 138,258 22,739
------------ ----------- ----------- ----------- ----------
NET INVESTMENT INCOME............................. 6,134,079 3,041,722 955,026 991,702 287,771
------------ ----------- ----------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 2):
Net realized gain (loss) on
investments sold.............................. (100,337) (676,456) (685,391) (487,619) 59,256
Net change in unrealized appreciation
(depreciation) of investments................. 8,951,806 5,939,391 2,577,697 2,378,642 267,607
------------ ----------- ----------- ----------- ----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS...................... 8,851,469 5,262,935 1,892,306 1,891,023 326,863
------------ ----------- ----------- ----------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS................ $ 14,985,548 $ 8,304,657 $ 2,847,332 $ 2,882,725 $ 614,634
============ =========== =========== =========== ==========
</TABLE>
- ------------------------------------
(1) The Fund commenced operations on December 20, 1994
See Notes to Financial Statements.
49
<PAGE>
- --------------------
THE GALAXY FUND STATEMENTS OF CHANGES IN NET ASSETS
- --------------------
<TABLE>
<CAPTION>
TAX-EXEMPT BOND FUND NEW YORK MUNICIPAL BOND FUND
------------------------------- -----------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
------------------------------- -----------------------------
1995 1994 1995 1994
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD............................ $ 127,557,885 $ 144,048,077 $ 66,660,390 $ 70,241,596
------------- ------------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income...................................... 6,134,079 6,923,711 3,041,722 3,332,299
Net realized gain (loss) on investments sold............... (100,337) (358) (676,456) (1,195,340)
Net change in unrealized appreciation
(depreciation) of investments............................ 8,951,806 (13,704,825) 5,939,391 (6,939,929)
------------- ------------- ------------ ------------
Net increase (decrease) in net assets resulting
from operations.......................................... 14,985,548 (6,781,472) 8,304,657 (4,802,970)
------------- ------------- ------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM (NOTE 5):
Net investment income...................................... (6,134,060) (6,923,711) (3,041,722) (3,332,299)
Dividends in excess of net investment income............... (19) (1,783) -- --
Net realized gain on investments........................... -- -- -- --
Dividends in excess of net realized gain on investments.... -- (1,174,223) -- --
------------- ------------- ------------ ------------
Total Dividends.......................................... (6,134,079) (8,099,717) (3,041,722) (3,332,299)
------------- ------------- ------------ ------------
NET INCREASE (DECREASE) FROM SHARE TRANSACTIONS (NOTE 5)..... (13,060,554) (1,609,003) (5,976,612) 4,554,063
------------- ------------- ------------ ------------
Net increase (decrease) in net assets...................... (4,209,085) (16,490,192) (713,677) (3,581,206)
------------- ------------- ------------ ------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A)............... $ 123,348,800 $ 127,557,885 $ 65,946,713 $ 66,660,390
============= ============= ============ ============
(A) Accumulated undistributed (overdistributed)
net investment income.................................... $ (19) $ (19) $ -- $ --
============= ============= ============ ============
</TABLE>
- -----------------------------------------------------
See Notes to Financial Statements.
50
<PAGE>
<TABLE>
<CAPTION>
CONNECTICUT MUNICIPAL MASSACHUSETTS MUNICIPAL RHODE ISLAND
BOND FUND BOND FUND MUNICIPAL
--------------------------- --------------------------- BOND FUND
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31, ---------------------
--------------------------- --------------------------- PERIOD ENDED
1995 1994 1995 1994 OCTOBER 31, 1995/(1)/
------------ ------------ ------------ ------------ ---------------------
<S> <C> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD................... $ 22,647,317 $ 18,771,142 $ 21,583,932 $ 20,121,070 $ --
------------ ------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income............................. 955,026 1,110,575 991,702 1,117,161 287,771
Net realized gain (loss) on investments sold...... (685,391) (36,223) (487,619) (229,478) 59,256
Net change in unrealized appreciation
(depreciation) of investments................... 2,577,697 (2,738,558) 2,378,642 (2,507,950) 267,607
------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting
from operations................................. 2,847,332 (1,664,206) 2,882,725 (1,620,267) 614,634
------------ ------------ ------------ ------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM (NOTE 5):
Net investment income............................. (955,026) (1,110,575) (991,702) (1,117,161) (287,771)
Dividends in excess of net investment income...... -- -- -- -- --
Net realized gain on investments.................. -- -- -- -- --
Dividends in excess of net realized gain on
investments..................................... -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Total Dividends................................. (955,026) (1,110,575) (991,702) (1,117,161) (287,771)
------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) FROM SHARE TRANSACTIONS
(NOTE 5).......................................... (2,391,154) 6,650,956 245,492 4,200,290 10,522,981
------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets............. (498,848) 3,876,175 2,136,515 1,462,862 10,849,844
------------ ------------ ------------ ------------ ------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A)...... $ 22,148,469 $ 22,647,317 $ 23,720,447 $ 21,583,932 $ 10,849,844
============ ============ ============ ============ ============
(A) Accumulated undistributed (overdistributed)
net investment income........................... $ -- $ -- $ -- $ -- $ 1,300
============ ============ ============ ============ ============
</TABLE>
- ------------------------------------
(1) The Fund commenced operations on December 20, 1994.
51
<PAGE>
- --------------------
TAX-EXEMPT BOND FUND
FINANCIAL HIGHLIGHTS
FOR A RETAIL AND TRUST SHARE OUTSTANDING
THE GALAXY FUND THROUGHOUT EACH PERIOD.
- --------------------
Retail Shares
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
----------------------------------------------------------
1995 1994 1993/(2)/ 1992/(1)(2)/
------- -------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of period.............................. $ 9.99 $ 11.12 $ 10.11 $ 10.00
------- -------- --------- --------
Income from Investment Operations:
Net investment income (A)....................................... 0.52 0.53 0.54 0.34
Net realized and unrealized gain (loss) on investments.......... 0.79 (1.04) 1.01 0.11
------- -------- --------- --------
Total from Investment Operations:............................. 1.31 (0.51) 1.55 0.45
------- -------- --------- --------
Less Dividends:
Dividends from net investment income............................ (0.52) (0.53) (0.54) (0.34)
Dividends from net realized capital gains....................... -- -- -- --
Dividends in excess of net realized capital gains............... -- (0.09) -- --
------- -------- --------- --------
Total Dividends:.............................................. (0.52) (0.62) (0.54) (0.34)
------- -------- --------- --------
Net increase (decrease) in net asset value........................ 0.79 (1.13) 1.01 0.11
------- -------- --------- --------
Net Asset Value, End of period.................................... $ 10.78 $ 9.99 $ 11.12 $ 10.11
======== ======== ========= ========
Total Return...................................................... 13.40% (4.75)% 15.63% 4.55%**
Ratios/Supplemental Data:
Net Assets, End of period (000's)................................. $ 31,609 $ 35,911 $ 144,048 $ 15,891
Ratios to average net assets:
Net investment income including reimbursement/waiver........... 4.99% 5.01% 5.00% 5.03%*
Operating expenses including reimbursement/waiver.............. 0.91% 0.80% 0.64% 0.42%*
Operating expenses excluding reimbursement/waiver.............. 1.24% 1.03% 1.08% 2.15%*
Portfolio Turnover Rate........................................... 11% 17% 38% 11%**
</TABLE>
- ------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on December 30, 1991.
(2) For periods prior to the year ended October 31, 1994, the per share amounts
and selected ratios reflect the financial results of both Retail and Trust
Shares. (see Note 5)
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or Administrator was as follows:
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
-------------------------------------------------------
1995 1994 1993/(2)/ 1992/(2)/
------ ------ --------- ---------
<S> <C> <C> <C> <C>
Retail Shares $ 0.48 $ 0.50 $ 0.49 $ 0.23
Trust Shares 0.51 0.50 0.49 0.23
</TABLE>
See Notes to Financial Statements.
52
<PAGE>
TRUST SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
----------------------------------------------------------
1995 1994 1993/(2)/ 1992/(1)(2)/
------- -------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of period.............................. $ 9.99 $ 11.12 $ 10.11 $ 10.00
-------- -------- --------- --------
Income from Investment Operations:
Net investment income (A)....................................... 0.54 0.53 0.54 0.34
Net realized and unrealized gain (loss) on investments.......... 0.79 (1.04) 1.01 0.11
-------- -------- --------- --------
Total from Investment Operations:............................. 1.33 (0.51) 1.55 0.45
-------- -------- --------- --------
Less Dividends:
Dividends from net investment income............................ (0.54) (0.53) (0.54) (0.34)
Dividends from net realized capital gains....................... -- -- -- --
Dividends in excess of net realized capital gains............... -- (0.09) -- --
-------- -------- --------- --------
Total Dividends:.............................................. (0.54) (0.62) (0.54) (0.34)
-------- -------- --------- --------
Net increase (decrease) in net asset value........................ 0.79 (1.13) 1.01 0.11
-------- -------- --------- --------
Net Asset Value, End of period.................................... $ 10.78 $ 9.99 $ 11.12 $ 10.11
======== ======== ========= ========
Total Return...................................................... 13.62% (4.75)% 15.63% 4.55%**
Ratios/Supplemental Data:
Net Assets, End of period (000's)................................. $ 91,740 $ 91,647 $ 144,048 $ 15,891
Ratios to average net assets:
Net investment income including reimbursement/waiver........... 5.18% 5.01% 5.00% 5.03%*
Operating expenses including reimbursement/waiver.............. 0.72% 0.78% 0.64% 0.42%*
Operating expenses excluding reimbursement/waiver.............. 0.97% 1.00% 1.08% 2.15%*
Portfolio Turnover Rate........................................... 11% 17% 38% 11%**
</TABLE>
- ------------------------------------
53
<PAGE>
- --------------------
NEW YORK MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
FOR A RETAIL AND TRUST SHARE OUTSTANDING
THE GALAXY FUND THROUGHOUT EACH PERIOD.
- --------------------
RETAIL SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
-------------------------------------------------------
1995 1994 1993/(2)/ 1992/(1)(2)/
-------- -------- --------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of period........................... $ 9.89 $ 11.04 $ 10.00 $ 10.00
-------- -------- -------- --------
Income from Investment Operations:
Net investment income (A).................................... 0.49 0.49 0.50 0.38
Net realized and unrealized gain (loss) on investments....... 0.89 (1.15) 1.04 --
-------- -------- -------- --------
Total from Investment Operations:.......................... 1.38 (0.66) 1.54 0.38
-------- -------- -------- --------
Less Dividends:
Dividends from net investment income......................... (0.49) (0.49) (0.50) (0.38)
Dividends from net realized capital gains.................... -- -- -- --
-------- -------- -------- --------
Total Dividends:........................................... (0.49) (0.49) (0.50) (0.38)
-------- -------- -------- --------
Net increase (decrease) in net asset value..................... 0.89 (1.15) 1.04 --
-------- -------- -------- --------
Net Asset Value, End of period................................. $ 10.78 $ 9.89 $ 11.04 $ 10.00
======== ======== ======== ========
Total Return................................................... 14.03% (6.14)% 15.66% 3.83%**
Ratios/Supplemental Data:
Net Assets, End of period (000's).............................. $ 42,870 $ 42,451 $ 70,242 $ 20,144
Ratios to average net assets:
Net investment income including reimbursement/waiver......... 4.73% 4.64% 4.54% 5.22%*
Operating expenses including reimbursement/waiver............ 0.92% 0.87% 0.87% 0.65%*
Operating expenses excluding reimbursement/waiver............ 1.31% 1.10% 1.19% 1.70%*
Portfolio Turnover Rate........................................ 5% 18% 3% 19%**
</TABLE>
- --------------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on December 31, 1991.
(2) For periods prior to the year ended October 31, 1994, the per share amounts
and selected ratios reflect the financial results of both Retail and Trust
Shares. (see Note 5)
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or Administrator was as follows:
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
-----------------------------------------------
1995 1994 1993/(2)/ 1992/(2)/
------ ------ --------- ---------
<S> <C> <C> <C> <C>
Retail Shares $ 0.44 $ 0.46 $ 0.47 $ 0.30
Trust Shares 0.48 0.47 0.47 0.30
</TABLE>
See Notes to Financial Statements.
54
<PAGE>
TRUST SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
-------------------------------------------------------
1995 1994 1993/(2)/ 1992/(1)(2)/
-------- -------- --------- ------------
<S> <C> <C> <C>
$ 9.89 $ 11.04 $ 10.00 $ 10.00
-------- -------- -------- --------
0.51 0.49 0.50 0.38
0.89 (1.15) 1.04 --
-------- -------- -------- --------
1.40 (0.66) 1.54 0.38
-------- -------- -------- --------
(0.51) (0.49) (0.50) (0.38)
-- -- -- --
-------- -------- -------- --------
(0.51) (0.49) (0.50) (0.38)
-------- -------- -------- --------
0.89 (1.15) 1.04 --
-------- -------- -------- --------
$ 10.78 $ 9.89 $ 11.04 $ 10.00
======== ======== ======== ========
14.23% (6.14)% 15.66% 3.83%**
$ 23,077 $ 24,209 $ 70,242 $ 20,144
4.91% 4.64% 4.54% 5.22%*
0.74% 0.87% 0.87% 0.65%*
1.07% 1.08% 1.19% 1.70%*
5% 18% 3% 19%**
</TABLE>
55
<PAGE>
- --------------------
CONNECTICUT MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
FOR A RETAIL AND TRUST SHARE OUTSTANDING
THE GALAXY FUND THROUGHOUT EACH PERIOD.
- --------------------
RETAIL SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
--------------------------------------------
1995 1994 1993/(1)(2)/
-------- -------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of period................................ $ 9.22 $ 10.32 $ 10.00
-------- -------- --------
Income from Investment Operations:
Net investment income (A)......................................... 0.44 0.46 0.25
Net realized and unrealized gain (loss) on investments............ 0.91 (1.10) 0.32
-------- -------- --------
Total from Investment Operations:............................... 1.35 (0.64) 0.57
-------- -------- --------
Less Dividends:
Dividends from net investment income.............................. (0.44) (0.46) (0.25)
Dividends from net realized capital gains......................... -- -- --
-------- -------- --------
Total Dividends:................................................ (0.44) (0.46) (0.25)
-------- -------- --------
Net increase (decrease) in net asset value.......................... 0.91 (1.10) 0.32
-------- -------- --------
Net Asset Value, End of period...................................... $ 10.13 $ 9.22 $ 10.32
======== ======== ========
Total Return........................................................ 14.94% (6.39)% 5.80%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)................................... $ 18,066 $ 18,229 $ 18,771
Ratios to average net assets:
Net investment income including reimbursement/waiver.............. 4.53% 4.66% 4.30%*
Operating expenses including reimbursement/waiver................. 0.68% 0.25% 0.00%*
Operating expenses excluding reimbursement/waiver................. 1.48% 1.42% 1.73%*
Portfolio Turnover Rate............................................. 7% 4% 7%**
</TABLE>
- ----------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on March 16, 1993.
(2) For periods prior to the year ended October 31, 1994, the per share amounts
and selected ratios reflect the financial results of both Retail and Trust
Shares. (see Note 5)
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or Administrator was as follows:
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
---------------------------------------
1995 1994 1993/(2)/
------ ------ ---------
<S> <C> <C> <C>
Retail Shares $ 0.37 $ 0.34 $ 0.15
Trust Shares 0.38 0.35 0.15
</TABLE>
See Notes to Financial Statements.
56
<PAGE>
Trust Shares
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
--------------------------------------------
1995 1994 1993/(1)(2)/
-------- -------- ------------
<S> <C> <C>
$ 9.22 $ 10.32 $ 10.00
------- ------- --------
0.46 0.46 0.25
0.91 (1.10) 0.32
------- ------- --------
1.37 (0.64) 0.57
------- ------- --------
(0.46) (0.46) (0.25)
-- -- --
------- ------- --------
(0.46) (0.46) (0.25)
------- ------- --------
0.91 (1.10) 0.32
------- ------- --------
$ 10.13 $ 9.22 $ 10.32
======= ======= ========
15.21% (6.37)% 5.80%**
$ 4,083 $ 4,419 $ 18,771
4.76% 4.66% 4.30%*
0.45% 0.23% 0.00%*
1.24% 1.41% 1.73%*
7% 4% 7%**
</TABLE>
57
<PAGE>
- --------------------
MASSACHUSETTS MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
FOR A RETAIL AND TRUST SHARE OUTSTANDING
THE GALAXY FUND THROUGHOUT EACH PERIOD.
- --------------------
RETAIL SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
--------------------------------------------
1995 1994 1993/(1)(2)/
-------- -------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of period.............................. $ 9.12 $ 10.24 $ 10.00
-------- -------- --------
Income from Investment Operations:
Net investment income (A)....................................... 0.44 0.47 0.29
Net realized and unrealized gain (loss) on investments.......... 0.86 (1.12) 0.24
-------- -------- --------
Total from Investment Operations:............................. 1.30 (0.65) 0.53
-------- -------- --------
Less Dividends:
Dividends from net investment income............................ (0.44) (0.47) (0.29)
Dividends from net realized capital gains....................... -- -- --
-------- -------- --------
Total Dividends:.............................................. (0.44) (0.47) (0.29)
-------- -------- --------
Net increase (decrease) in net asset value........................ 0.86 (1.12) 0.24
-------- -------- --------
Net Asset Value, End of period.................................... $ 9.98 $ 9.12 $ 10.24
======== ======== ========
Total Return...................................................... 14.52% (6.46)% 5.42%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)................................. $ 16,113 $ 15,966 $ 20,121
Ratios to average net assets:
Net investment income including reimbursement/waiver.............. 4.56% 4.89% 4.87%*
Operating expenses including reimbursement/waiver............... 0.70% 0.33% 0.05%*
Operating expenses excluding reimbursement/waiver............... 1.58% 1.43% 1.82%*
Portfolio Turnover Rate........................................... 19% 11% 0%**
</TABLE>
- -----------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on March 12, 1993.
(2) For periods prior to the year ended October 31, 1994, the per share amounts
and selected ratios reflect the financial results of both Retail and Trust
Shares. (see Note 5)
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or Administrator was as follows:
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
----------------------------------------
1995 1994 1993/(2)/
------ ------ ---------
<S> <C> <C> <C>
Retail Shares $ 0.36 $ 0.37 $ 0.18
Trust Shares 0.38 0.38 0.18
</TABLE>
See Notes to Financial Statements.
58
<PAGE>
TRUST SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
--------------------------------------------
1995 1994 1993/(1)(2)/
-------- -------- ------------
<S> <C> <C>
$ 9.12 $ 10.24 $ 10.00
------- ------- --------
0.45 0.48 0.29
0.86 (1.12) 0.24
------- ------- --------
1.31 (0.64) 0.53
------- ------- --------
(0.45) (0.48) (0.29)
-- -- --
------- ------- --------
(0.45) (0.48) (0.29)
------- ------- --------
0.86 (1.12) 0.24
------- ------- --------
$ 9.98 $ 9.12 $ 10.24
======= ======= ========
14.72% (6.46)% 5.42%**
$ 7,607 $ 5,617 $ 20,121
4.73% 4.89% 4.87%*
0.52% 0.33% 0.05%*
1.31% 1.41% 1.82%*
19% 11% 0%**
</TABLE>
59
<PAGE>
- --------------------
RHODE ISLAND MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
FOR A RETAIL SHARE OUTSTANDING
THE GALAXY FUND THROUGHOUT THE PERIOD.
- --------------------
RETAIL SHARES
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31, 1995/(1)/
-------------------
<S> <C>
Net Asset Value, Beginning of period..................................... $ 10.00
--------
Income from Investment Operations:
Net investment income (A).............................................. 0.44
Net realized and unrealized gain (loss) on investments................. 0.67
--------
Total from Investment Operations:.................................... 1.11
--------
Less Dividends:
Dividends from net investment income................................... (0.44)
Dividends from net realized capital gains.............................. --
--------
Total Dividends:..................................................... (0.44)
--------
Net increase (decrease) in net asset value............................... 0.67
--------
Net Asset Value, End of period........................................... $ 10.67
========
Total Return............................................................. 11.29%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)........................................ $ 10,850
Ratios to average net assets:
Net investment income including reimbursement/waiver................... 5.13%*
Operating expenses including reimbursement/waiver...................... 0.40%*
Operating expenses excluding reimbursement/waiver...................... 2.25%*
Portfolio Turnover Rate.................................................. 34%**
</TABLE>
- -----------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on December 20, 1994.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Adviser and/or administrator for the period ended October 31,
1995 was $0.28.
See Notes to Financial Statements.
60
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS
- --------------------
1. ORGANIZATION
The Galaxy Fund, a Massachusetts business trust (the "Trust"), is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company. As of the date of this report, the Trust offered twenty
managed investment portfolios. The accompanying financial statements and
financial highlights are those of the Tax-Exempt Bond, New York Municipal Bond,
Connecticut Municipal Bond, Massachusetts Municipal Bond and Rhode Island
Municipal Bond Funds (individually, a "Fund", collectively, the "Funds") only.
Each Fund is authorized to issue two series of shares (Trust Shares and
Retail Shares). Trust Shares and Retail Shares are substantially the same,
except that, effective as of October 1, 1994, each series bears the following
series specific expenses: shareholder servicing fees and transfer agent charges.
As of October 31, 1995, the Rhode Island Municipal Bond had issued only Retail
Shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies in conformity
with generally accepted accounting principles consistently followed by the Funds
in the preparation of their financial statements.
PORTFOLIO VALUATION: Investment securities are valued by an independent
pricing service approved by the Trust's Board of Trustees. When, in the judgment
of the service, quoted bid prices are readily available and are representative
of the bid side of the market, investments are valued at the mean between quoted
bid prices and asked prices. Other investments are carried at fair value as
determined by the service based on methods which include consideration of yields
or prices of bonds of comparable quality, coupon maturity and type; indications
as to values from dealers; and general market conditions. Short-term obligations
that mature in 60 days or less are valued at amortized cost, which constitutes
fair value as determined by the Board of Trustees of the Trust. All other
securities and other assets are appraised at their fair value as determined in
good faith under consistently applied procedures established by and under the
general supervision of the Board of Trustees.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
accounted for on the trade date basis. Net realized gains or losses on sales of
securities are determined by the identified cost method. Interest income is
recorded on the accrual basis. Investment income and realized and unrealized
gains and losses are allocated to the separate series based upon the relative
net assets of each series.
DIVIDENDS TO SHAREHOLDERS: Dividends from net investment income are
determined separately for each series and are declared daily and paid monthly.
Net realized capital gains, if any, are distributed at least annually.
Income dividends and capital gain dividends are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles.
FEDERAL INCOME TAXES: The Trust treats each Fund as a separate entity for
Federal income tax purposes. Each Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended. By so qualifying, each Fund will not be subject to Federal
income taxes to the extent that it distributes substantially all of its taxable
or tax-exempt income, if any, for its tax year ending October 31. In addition,
by distributing in each calendar year substantially all of its net investment
income, capital gains, and certain other amounts, if any, each Fund will not be
subject to a Federal excise tax. Therefore, no Federal income tax provision is
required.
EXPENSES: The Trust accounts separately for the assets, liabilities and
operations of each Fund. Expenses directly attributed to a Fund are charged
61
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
to the Fund, while expenses which are attributable to more than one fund of the
Trust are allocated among the respective funds.
In addition, expenses of a Fund not directly attributable to the operations
of a particular series of shares of the Fund are allocated to the separate
series based upon the relative net assets of each series. Operating expenses
directly attributable to a series of shares of a Fund are charged to the
operations of that series.
ORGANIZATION COSTS: Each Fund bears all costs in connection with its
organization, including the fees and expenses of registering and qualifying its
initial shares for distribution under Federal and state securities laws. All
such costs are amortized using the straight-line method over a period of five
years beginning with the Funds commencement of each Fund's operations. In the
event that any of the initial shares purchased by the Fund's sponsor are
redeemed during such period by any holder thereof, the Fund involved will be
reimbursed by such holder for any unamortized organization costs in the same
proportion as the number of initial shares being redeemed bears to the number of
initial shares outstanding at the time of redemption.
WHEN-ISSUED SECURITIES: Each Fund may purchase and sell securities, such as
municipal obligations, on a "when-issued" basis. Delivery of the security and
payment take place after the date of the commitment to purchase and such
securities are subject to market fluctuations during this period. The current
market value of these securities is determined in the same manner as other
municipal obligations. The Trust's custodian will set aside cash or liquid
portfolio securities equal to the amount of the when-issued commitment in a
separate account.
3. INVESTMENT ADVISORY, ADMINISTRATION, SHAREHOLDER SERVICES AND OTHER FEES
The Trust and Fleet Investment Advisors Inc. (the "Investment Adviser"), an
indirect wholly-owned subsidiary of Fleet Financial Group, Inc., are parties to
an investment advisory agreement under which the Investment Adviser provides
services for a fee, computed daily and paid monthly, at the annual rate of 0.75%
of the average daily net assets of the Funds.
The Trust and First Data Investor Services Group, Inc. ("FDISG"), (formerly
known as The Shareholders Services Group, Inc. doing business as 440 Financial),
a wholly-owned subsidiary of First Data Corporation, are parties to an
administration agreement under which FDISG (the "Administrator") provides
services for a fee that is computed daily and paid monthly, at the annual rate
of 0.09% of the first $2.5 billion of the combined average daily net assets of
the Funds and the other funds offered by the Trust, 0.085% of the next $2.5
billion of combined average daily net assets and 0.08% of combined average daily
net assets over $5 billion. In addition, FDISG also provides certain fund
accounting, custody administration and transfer agency services pursuant to
certain fee arrangements. Pursuant to these fee arrangements, FDISG compensates
the Trust's custodian bank for its services. Prior to March 31, 1995, the
administration, fund accounting, custody administration and transfer agency
services described above were provided by 440 Financial Group of Worcester,
Inc., a wholly-owned subsidiary of State Mutual Life Assurance Company of
America ("State Mutual"), for the same annual fees. On that date, FDISG acquired
substantially all of the assets of 440 Financial Group of Worcester, Inc.
Prior to March 1, 1994, 440 Financial Group of Worcester, Inc. was entitled
to receive administration fees, computed daily and paid monthly, at an annual
rate of 0.078% of the first $2.5 billion of the combined average daily net
assets of the Funds and the other funds offered by the Trust plus 0.073% of
combined average daily net assets in excess of $2.5 billion.
Effective October 1, 1994, the Trust implemented a shareholder services plan
("Services Plan") with
62
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
respect to Retail Shares of the Funds. Currently, the Services Plan has not been
implemented with respect to the Funds' Trust Shares. The Services Plan provides
compensation to institutions (including and currently limited to Fleet Bank and
its affiliates) which provide administrative and support services to their
customers who beneficially own Retail Shares at an annual rate not to exceed
0.30% of the average daily net asset value of the outstanding Retail Shares of
each Fund beneficially owned by such customers. The Trust, under the direction
of the Board of Trustees, is currently limiting fees payable under the Services
Plan with respect to each Fund to an annual rate not to exceed 0.15% of the
average daily net asset value of the outstanding Retail Shares beneficially
owned by such customers. No fees were charged under the Services Plan with
respect to the Rhode Island Municipal Bond Fund for the period ended October 31,
1995.
Effective October 1, 1994, the Retail Shares and Trust Shares of the Funds
bear series specific transfer agent charges based upon the number of shareholder
accounts for each series. For the year ended October 31, 1995, transfer agent
charges for each series were as follows:
<TABLE>
<CAPTION>
FUND RETAIL TRUST
- ---- ------ -----
<S> <C> <C>
Tax-Exempt Bond............................... $37,161 $73
New York Municipal Bond....................... 36,824 62
Connecticut Municipal Bond.................... 16,522 62
Massachusetts Municipal Bond.................. 16,007 69
Rhode Island Municipal Bond................... 4,682 --
</TABLE>
440 Financial Distributors, Inc. (the "Distributor"), a wholly-owned
subsidiary of FDISG and an indirect wholly-owned subsidiary of First Data
Corporation, acts as the exclusive distributor of the Trust's shares. Prior to
March 31, 1995, the Distributor was a wholly-owned subsidiary of 440 Financial
Group of Worcester, Inc., and an indirect wholly-owned subsidiary of State
Mutual. Prior to March 1, 1994, Allmerica Investments, Inc., a wholly-owned
subsidiary of State Mutual, served as the Trust's distributor.
Certain officers of the Trust may be officers of the Administrator and/or
Distributor. Such officers receive no compensation from the Trust for serving in
their respective roles. No officer, director or employee of the Investment
Adviser serves as an officer, Trustee or employee of the Trust. Effective May
26, 1995, each Trustee is entitled to receive for services as a Trustee of both
the Trust and The Galaxy VIP Fund ("VIP") an aggregate fee of $18,000 per annum
plus certain other fees for attending or participating in meetings. The Chairman
of the Boards of Trustees of the Trust and VIP is entitled to an additional
annual fee of $4,000 and the President and Treasurer of the Trust and VIP is
entitled to an additional annual fee of $2,500 for their services in these
capacities. These fees are allocated among the Funds of the Trust and VIP based
on their relative net assets.
Expenses for the year ended October 31, 1995 include legal fees paid to
Drinker Biddle & Reath. A partner of that firm is Secretary to the Trust.
4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
The Investment Adviser and Administrator voluntarily agreed to waive a
portion of their fees and/or to reimburse the Funds for certain expenses so that
total expenses would not exceed certain expense limitations established for each
series. The Investment Adviser and Administrator, at their discretion, may
revise or discontinue the voluntary fee waivers and expense reimbursements. For
the year ended October 31, 1995, the Investment Adviser and Administrator waived
fees and/or reimbursed expenses with respect to the Funds in the following
amounts:
<TABLE>
<CAPTION>
FEES WAIVED BY
-----------------------------
INVESTMENT
FUND ADVISER ADMINISTRATOR
- ---- ---------- -------------
<S> <C> <C>
Tax-Exempt Bond.............................. $238,933 $ --
New York Municipal Bond...................... 126,783 --
Connecticut Municipal Bond................... 125,384 39,479
Massachusetts Municipal Bond................. 128,981 39,900
Rhode Island Municipal Bond.................. 32,013 --
</TABLE>
63
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
<TABLE>
<CAPTION>
REIMBURSEMENT BY
FUND INVESTMENT ADVISER
- ---- ------------------
<S> <C>
Tax-Exempt Bond.............................. $88,394
New York Municipal Bond...................... 107,711
Connecticut Municipal Bond................... 1,528
Massachusetts Municipal Bond................. 14,041
Rhode Island Municipal Bond.................. 71,657
</TABLE>
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an
unlimited number of shares of beneficial interest, each with a par value of
$0.001. Shares of the Trust are currently classified into twenty classes of
shares each consisting of two series including: Class M - Series 1 and Class M -
Series 2 - Tax-Exempt Bond Fund; Class O - Series 1 and Class O - Series 2 - New
York Municipal Bond Fund; Class P - Series 1 and Class P - Series 2 -
Connecticut Municipal Bond Fund; Class Q - Series 1 and Class Q - Series 2 -
Massachusetts Municipal Bond Fund; and Class R - Series 1 and Class R -
Series 2 - Rhode Island Municipal Bond Fund. Each share represents an equal
proportionate interest in the respective Fund, bears the same fees and expenses
(except that effective October 1, 1994, Retail Shares bear the expense of
payments under the Services Plan and Trust Shares and Retail Shares bear series
specific transfer agent charges), and are entitled to such dividends and
distributions of income earned as are declared at the discretion of the Trust's
Board of Trustees.
Shareholders are entitled to one vote for each full share held and will vote
in the aggregate and not by class or series, except as otherwise expressly
required by law or when the Board of Trustees determines that the matter to be
voted on affects only the interests of shareholders of a particular class or
series.
The following is a summary of transactions in portfolio shares and dividends
to shareholders for the year ended October 31, 1995 (by series for each Fund)
and for the year ended October 31, 1994 (in the aggregate):
TRANSACTIONS IN PORTFOLIO SHARES:
TAX-EXEMPT BOND:
<TABLE>
<CAPTION>
SHARE ACTIVITY DOLLAR AMOUNTS
-------------------------------------- --------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 YEAR ENDED OCTOBER 31, 1995 YEAR ENDED,
----------------------- OCTOBER 31, --------------------------- OCTOBER 31,
RETAIL TRUST 1994 RETAIL TRUST 1994
---------- ---------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Sold.............................. 324,422 1,143,572 3,308,800 $ 3,393,523 $ 11,981,067 $ 35,409,673
Issued to shareholders
in reinvestment of dividends.. 108,329 6,696 232,264 1,127,507 69,312 2,488,100
Repurchased....................... (1,093,280) (1,808,645) (3,727,693) (11,114,588) (18,517,375) (39,506,776)
---------- ---------- ---------- ------------ ------------ ------------
Net Increase (decrease)
in shares outstanding....... (660,529) (658,377) (186,629) $ (6,593,558) $ (6,466,996) $ (1,609,003)
========== ========== ========== ============ ============ ============
</TABLE>
NEW YORK MUNICIPAL BOND:
<TABLE>
<CAPTION>
SHARE ACTIVITY DOLLAR AMOUNTS
-------------------------------------- --------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 YEAR ENDED OCTOBER 31, 1995 YEAR ENDED,
----------------------- OCTOBER 31, --------------------------- OCTOBER 31,
RETAIL TRUST 1994 RETAIL TRUST 1994
---------- ---------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Sold.............................. 819,060 534,383 2,889,091 $ 8,557,413 $ 5,456,617 $ 31,043,962
Issued to shareholders
in reinvestment of dividends.. 133,768 14,344 177,005 1,383,629 148,397 1,856,804
Repurchased....................... (1,266,830) (855,234) (2,690,606) (12,892,384) (8,630,284) (28,346,703)
---------- -------- ---------- ------------ ----------- ------------
Net Increase (decrease)
in shares outstanding....... (314,002) (306,507) 375,490 $ (2,951,342) $(3,025,270) $ 4,554,063
========== ======== ========== ============ =========== ============
</TABLE>
64
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
CONNECTICUT MUNICIPAL BOND:
<TABLE>
<CAPTION>
SHARE ACTIVITY DOLLAR AMOUNT
-------------------------------------- --------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 YEAR ENDED OCTOBER 31, 1995 YEAR ENDED,
----------------------- OCTOBER 31, --------------------------- OCTOBER 31,
RETAIL TRUST 1994 RETAIL TRUST 1994
---------- ---------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Sold.............................. 249,241 116,490 1,511,757 $ 2,461,093 $ 1,132,087 $ 15,195,592
Issued to shareholders
in reinvestment of dividends.. 52,285 2,465 70,055 505,845 23,783 684,789
Repurchased....................... (495,791) (195,278) (943,619) (4,667,739) (1,846,223) (9,229,425)
-------- -------- -------- ---------- ---------- ----------
Net Increase (decrease)
in shares outstanding....... (194,265) (76,323) 638,193 $ (1,700,801) $ (690,353) $ 6,650,956
======== ======= ======= ============ =========== ============
</TABLE>
MASSACHUSETTS MUNICIPAL BOND:
<TABLE>
<CAPTION>
SHARE ACTIVITY DOLLAR AMOUNTS
-------------------------------------- --------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 YEAR ENDED OCTOBER 31, 1995 YEAR ENDED,
----------------------- OCTOBER 31, --------------------------- OCTOBER 31,
RETAIL TRUST 1994 RETAIL TRUST 1994
---------- ---------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Sold.............................. 410,284 307,893 1,374,710 $ 3,953,342 $ 2,920,242 $ 13,589,538
Issued to shareholders
in reinvestment of dividends.. 42,549 71 58,516 406,422 681 566,229
Repurchased....................... (589,053) (161,596) (1,031,542) (5,497,814) (1,537,381) (9,955,477)
-------- -------- -------- ---------- ---------- ----------
Net Increase (decrease)
in shares outstanding....... (136,220) 146,368 401,684 $ (1,138,050) $ 1,383,542 $ 4,200,290
======== ======= ======= ============ =========== ============
</TABLE>
RHODE ISLAND MUNICIPAL BOND: (1)
<TABLE>
<CAPTION>
SHARE ACTIVITY DOLLAR AMOUNTS
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 1995 OCTOBER 31, 1995
------------------- --------------------
RETAIL RETAIL
---------- ----------
<S> <C> <C>
Sold.............................. 1,056,796 $ 10,940,054
Issued to shareholders
in reinvestment of dividends.. 11,026 115,793
Repurchased....................... (51,042) (532,866)
--------- ------------
Net Increase (decrease)
in shares outstanding....... 1,016,780 $ 10,522,981
========== ============
</TABLE>
- -----------------------------
(1) As of October 31, 1995, the Rhode Island Municipal Bond Fund had not
issued Trust Shares.
65
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
DIVIDENDS TO SHAREHOLDERS:
<TABLE>
<CAPTION>
TAX-EXEMPT BOND NEW YORK MUNICIPAL BOND
-------------------------------------- --------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 YEAR ENDED OCTOBER 31, 1995 YEAR ENDED,
----------------------- OCTOBER 31, --------------------------- OCTOBER 31,
RETAIL TRUST 1994 RETAIL TRUST 1994
---------- ---------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income............. $(1,567,694) $(4,566,366) $(6,923,711) $ (1,910,077) $(1,131,645) $ (3,332,299)
Dividends in excess of
net investment income......... (19) -- (1,783) -- -- --
Net realized gain on
investments................... -- -- -- -- -- --
Dividends in excess of net
realized gain on investments.. -- -- (1,174,223) -- -- --
----------- ----------- ----------- ------------ ----------- ------------
Total dividends............. $(1,567,713) $(4,566,366) $(8,099,717) $ (1,910,077) $(1,131,645) $ (3,332,299)
=========== =========== =========== ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
CONNECTICUT MUNICIPAL BOND MASSACHUSETTS MUNICIPAL BOND
-------------------------------------- --------------------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 YEAR ENDED OCTOBER 31, 1995 YEAR ENDED,
----------------------- OCTOBER 31, --------------------------- OCTOBER 31,
RETAIL TRUST 1994 RETAIL TRUST 1994
---------- ---------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income............ $ (766,186) $ (188,840) $(1,110,575) $ (675,007) $ (316,695) $ (1,117,161)
Net realized gain on
investments.................. -- -- -- -- -- --
----------- ----------- ----------- ------------ ----------- ------------
Total dividends............ $ (766,186) $ (188,840) $(1,110,575) $ (675,007) $ (316,695) $ (1,117,161)
=========== =========== =========== ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
RHODE ISLAND MUNICIPAL BOND
---------------------------
PERIOD ENDED
OCTOBER 31, 1995
---------------------------
RETAIL
-----------
<S> <C>
Net investment income...................... $ (287,771)
Net realized gain on
investments............................ --
-----------
Total dividends...................... $ (287,771)
===========
</TABLE>
66
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
6. PURCHASES AND SALES OF SECURITIES
The cost of purchases and proceeds from sales of securities, other than
short-term investments, for the year ended October 31, 1995 were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- ---- ----------- ------------
<S> <C> <C>
Tax-Exempt Bond..................... $11,854,867 $ 27,761,782
New York Municipal Bond............. 2,491,200 7,980,633
Connecticut Municipal Bond.......... 1,356,903 4,373,533
Massachusetts Municipal Bond........ 4,231,233 3,863,551
Rhode Island Municipal Bond......... 12,242,522 2,134,279
</TABLE>
The aggregate gross unrealized appreciation, aggregate gross unrealized
depreciation, net unrealized appreciation (depreciation), and cost of all
securities as computed on a Federal income tax basis, at October 31, 1995 for
each Fund is as follows:
<TABLE>
<CAPTION>
FUND APPRECIATION (DEPRECIATION)
- ---- ----------- ------------
<S> <C> <C>
Tax-Exempt Bond..................... $ 3,829,899 $ (805,975)
New York Municipal Bond............. 2,022,142 (276,468)
Connecticut Municipal Bond.......... 323,296 (199,943)
Massachusetts Municipal Bond........ 312,139 (132,077)
Rhode Island Municipal Bond......... 268,183 (576)
<CAPTION>
FUND NET COST
- ---- ----------- ------------
<S> <C> <C>
Tax-Exempt Bond..................... $ 3,023,924 $114,956,471
New York Municipal Bond............. 1,745,674 62,555,778
Connecticut Municipal Bond.......... 123,353 20,932,491
Massachusetts Municipal Bond........ 180,062 22,754,482
Rhode Island Municipal Bond......... 267,607 10,164,419
</TABLE>
At October 31, 1995, the following Funds had capital loss carryforwards:
<TABLE>
<CAPTION>
FUND AMOUNT EXPIRATION
- ---- ----------- ------------
<S> <C> <C>
Tax-Exempt Bond..................... $ 1,522 2002
100,337 2003
New York Municipal Bond............. 9,630 2000
1,195,340 2002
676,456 2003
Connecticut Municipal Bond.......... 3,795 2001
36,223 2002
685,391 2003
Massachusetts Municipal Bond........ 229,478 2002
487,619 2003
</TABLE>
7. CONCENTRATION OF CREDIT
The New York Municipal Bond, Connecticut Municipal Bond, Massachusetts
Municipal Bond, and Rhode Island Municipal Bond Funds invest primarily in debt
obligations issued by the State of New York, the State of Connecticut, the
Commonwealth of Massachusetts and the State of Rhode Island, respectively, and
their respective political subdivisions, agencies and public authorities to
obtain funds for various public purposes. The Funds are more susceptible to
economic and political factors adversely affecting issuers of each respective
state's specific municipal securities than are municipal bond funds that are not
concentrated in these issuers to the same extent.
67
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
8. ACQUISITION OF THE SHAWMUT FUNDS
At a meeting held on June 12, 1995, the Board of Trustees of the Trust
approved an Agreement and Plan of Reorganization (the "Agreement") for the
acquisition of The Shawmut Funds ("Shawmut") by the Trust. Under the Agreement,
all of the assets and liabilities of the Shawmut Connecticut Intermediate
Municipal Income Fund and Massachusetts Intermediate Municipal Income Fund were
transfered to the Galaxy Connecticut Municipal Bond Fund and the Galaxy
Massachusetts Municipal Bond Fund, respectively, in exchange for shares of the
Galaxy Connecticut Municipal Bond Fund and the Galaxy Massachusetts Municipal
Bond Fund, respectively. Accordingly, the net assets of the Shawmut Connecticut
Intermediate Municipal Income Fund Investment Shares and Trust Shares were
exchanged for 765,050 Retail Shares and 185,222 Trust Shares of the Galaxy
Connecticut Municipal Bond Fund and the net assets of the Shawmut Massachusetts
Intermediate Municipal Income Fund Investment Shares and Trust Shares were
exchanged for 1,090,523 Retail Shares and 179,482 Trust Shares of the Galaxy
Massachusetts Municipal Bond Fund. In related transactions, the assets and
liabilities of the other Shawmut portfolios were transferred to corresponding
Galaxy portfolios in exchange for shares in such Galaxy portfolios. The
reorganization, which qualifies as a tax-free reorganization for Federal income
tax purposes, was completed on December 4, 1995 following the approval of the
reorganization by The Shawmut Fund shareholders. Certain share registration fees
incurred in connection with the reorganization were borne by the Trust. The
following is a summary of the Net Assets, Shares Outstanding, Net Asset Value
per share and Unrealized Appreciation associated with the transaction:
<TABLE>
<CAPTION>
Before Acquisition After Acquisition
-------------------------------------- -----------------
Galaxy Shawmut Galaxy
Connecticut Connecticut Connecticut
Municipal Intermediate Municipal
Bond Municipal Bond Bond
------------- ------------- -----------------
<S> <C> <C> <C>
Net Assets........................................... $ 22,703,295 $ 9,758,479 $ 32,461,774
Shares outstanding................................... 2,210,642 963,404 3,160,914
Retail and trust Net Asset Value, per share.......... $ 10.27 $ 10.13 $ 10.27
Unrealized Appreciation.............................. $ 435,707 $ 182,610
<CAPTION>
Before Acquisition After Acquisition
-------------------------------------- -----------------
Galaxy Shawmut Galaxy
Massachusetts Massachusetts Massachusetts
Municipal Intermediate Municipal
Bond Municipal Bond Bond
------------- ------------- -----------------
<S> <C> <C> <C>
Net Assets........................................... $ 24,534,165 $ 12,840,124 $ 37,374,289
Shares outstanding................................... 2,426,213 1,270,005 3,696,218
Retail and Trust Net Asset Value, per share.......... $ 10.11 $ 10.11 $ 10.11
Unrealized Appreciation.............................. $ 501,126 $ 199,433
</TABLE>
68
<PAGE>
- --------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------
9. IMPOSITION OF FRONT-END SALES LOAD
Effective December 1, 1995, the public offering price for Retail Shares of
the Funds will be the sum of the net asset value of the Retail Shares purchased
plus, if applicable, a maximum 3.75% front-end sales charge. Reduced sales
charges are available. No sales charge will be assessed on certain transactions
and/or investors, including purchases by persons who were beneficial owners of
shares of Galaxy or any other funds advised by Fleet Investment Advisors Inc. or
its affiliates before December 1, 1995.
- --------------------------------------------------------------------------------
TAX INFORMATION (UNAUDITED):
During the fiscal year ended October 31, 1995, the Fund earned 100% of it's
income from municipal obligations which generally qualify as exempt from federal
and state taxation.
69
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
The Galaxy Fund:
We have audited the accompanying statements of assets and liabilities of
the Tax-Exempt Bond Fund, New York Municipal Bond Fund, Connecticut Municipal
Bond Fund, Massachusetts Municipal Bond Fund and Rhode Island Municipal Bond
Fund (five series of The Galaxy Fund), including the portfolios of investments,
as of October 31, 1995, and the related statements of operations, the statements
of changes in net assets, and financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of The Galaxy Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
aforementioned series of The Galaxy Fund as of October 31, 1995, the results of
their operations, the changes in their net assets, and their financial
highlights for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
Boston, Massachusetts Coopers & Lybrand L.L.P.
December 8, 1995
70
<PAGE>
This page left blank intentionally.
71
<PAGE>
This page left blank intentionally.
72
<PAGE>
- ------------------------------
Trustees
and Officers
Dwight E. Vicks, Jr.
Chairman and Trustee
John T. O'Neill
President, Treasurer
and Trustee
Louis DeThomasis,
F.S.C., Ph.D.
Trustee
Donald B. Miller
Trustee
James M. Seed
Trustee
Bradford S. Wellman
Trustee
W. Bruce
McConnel, III, Esq.
Secretary
Louis J. Russo
Assistant Treasurer
Neil Forrest
Vice President &
Assistant Treasurer
Investment Adviser
Fleet Investment
Advisors Inc.
50 Kennedy Plaza
Providence, Rhode Island
02903
Distributor
440 Financial
Distributors, Inc.
290 Donald Lynch Boulevard
Marlboro,
Massachusetts 01752
Administrator
First Data Investor
Services Group, Inc.
(formerly The Shareholder
Services Group, Inc.
d/b/a 440 Financial)
4400 Computer Drive
Westboro,
Massachusetts 01581-5108
- ------------------------------
This report is submitted for the general information of shareholders of The
Galaxy Fund. It is not authorized for distribution to prospective investors
unless accompanied or preceded by an effective prospectus for the Fund, which
contains more information concerning the Fund's investment policies, as well as
fees and expenses and other pertinent information. Read the prospectus carefully
before you invest.
Shares of the Funds are not deposits or obligations of, or guaranteed or
endorsed by Fleet Financial Group, Inc. or any of its affiliates, Fleet
Investment Advisors Inc., or any Fleet bank. Shares of the Funds are not
federally insured by the U.S. Government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency. Investment return
and principal value will vary as a result of market conditions or other factors
so that shares of the Funds, when redeemed, may be worth more or less than their
original cost. An investment in the Funds involves investment risks, including
the possible loss of principal.
[PRINTED ON RECYCLED PAPER LOGO APPEARS HERE]
This report was printed on recycled paper.
<PAGE>
- ------------------ ----------------
BULK RATE
[LOGO OF U.S. POSTAGE
GALAXY 4400 Computer Drive PAID
FUNDS Box 5108 PERMIT NO. 54201
APPEARS HERE] Westboro, MA 01581-5108 BOSTON, MA
FN-243 (12/95)
