[Front cover]
[Galaxy Funds logo]
EQUITY FUNDS REPORT
Asset Allocation Fund [bullet] Equity Income Fund [bullet] Growth and Income
Fund [bullet] Equity Value Fund [bullet] Strategic Equity Fund [bullet] Equity
Growth Fund [bullet] Small Cap Value Fund [bullet] Small Company Equity Fund
[bullet] International Equity Fund
SEMI-ANNUAL
REPORT
FOR THE SIX MONTHS
ENDED APRIL 30, 1998
<PAGE>
CHAIRMAN'S
MESSAGE
Dear Shareholder:
The following performance report for the Galaxy Equity Funds covers the
six months ended April 30, 1998. The report includes a Market Overview that
details major economic and market trends that affected stocks during this time,
plus individual Portfolio Reviews that describe how Fleet Investment Advisors
Inc. managed each Fund in this climate. At the end of the report, you will find
the Funds' April 30, 1998 portfolios of investments and semi-annual financial
statements.
Returns for stocks remained exceptionally strong during the reporting
period. This strength was particularly impressive given the extraordinary gains
stocks have enjoyed for several years. For the 36 months ended April 30, 1998,
the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") earned a
total return of 130% -- a three-year return unmatched since the 1950s. While
stock prices were volatile in the last six months, as investors worried about
inflation and future growth, falling inflation and additional growth helped
stocks reach new highs.
Given strong stock returns, it is important to remember the time-tested
portfolio strategies of diversification and rebalancing. By diversifying among
different asset classes, you can significantly reduce investment risk. This can
be especially important with stock valuations at historic highs and vulnerable
to periodic corrections. If you include bonds and cash in your portfolio, and
spread investments among different market sectors, you can reduce the effect of
any correction on your returns.
If you have a long-term strategy for diversification, this may be a good
time to consider rebalancing the investments in your portfolio. After
significant stock gains, your portfolio may no longer represent the allocations
you originally set in place. In fact, the more dramatic the change in market
values, the more often you may need to rebalance. Ask your investment
professional to help you make portfolio adjustments that can restore your
intended allocations.
As of March 2, we have expanded the Galaxy Equity Funds to include the
Galaxy Strategic Equity Fund. A review of this Fund's objective and its
performance to date are included in the pages that follow. If you have any
questions about the new Fund, this report, or other Galaxy Funds and services,
please call the Galaxy Information Center at 1-800-628-0414.
Sincerely,
/s/ Dwight E. Vicks, Jr.
Dwight E. Vicks, Jr.
Chairman of the Board of Trustees
- -------------------------------- [SIDEBAR] -------------------------------------
Mutual Funds:
[bullet] are not bank deposits
[bullet] are not FDIC insured
[bullet] are not obligations of Fleet Bank
[bullet] are not guaranteed by Fleet Bank
[bullet] are subject to investment risk including possible loss of
principal amount invested
- ----------------------------- [END SIDEBAR] ------------------------------------
<PAGE>
MARKET OVERVIEW
EQUITY MARKET OVERVIEW
By Fleet Investment Advisors Inc.
Stock prices rose higher in the six months ended April 30, 1998. Although
investors worried that economic problems in Asia would slow U.S. exports and
growth, the domestic economy strengthened. At the same time, inflation fell,
keeping interest rates and bond yields low. This raised expectations that the
long-lived economic expansion would continue. Despite signs that sliding exports
might be taking their toll on corporate earnings, stocks again reached record
highs. During the period the S&P 500 earned a total return of 22.50% -- nearly
four times its historic average on an annualized basis.
In this nearly perfect investment climate, we remained committed to stocks
with reasonable prices and good potential for growth. To that end, we traded
issues that met or exceeded our expectations for shares whose prices were more
attractive. This strategy helped many of the Galaxy Equity Funds outpace the
average performance of funds with similar objectives.
Stronger Growth, Less Inflation
At the start of the reporting period, the annual rate of inflation was
about 2.2%. During the fourth quarter of 1997, the gross domestic product
("GDP"), which measures the production of U.S. goods and services, increased at
an annual rate of 3.7% -- up from 3.1% during the third quarter. Although
stronger growth continued to tighten employment, putting upward pressure on
wages, further gains in productivity and competitive pricing drove inflation to
1.7% by the end of the year.
Meanwhile, the economic problems in Asia that had surfaced during the
summer became a full-blown crisis. Although the prospect of reduced trade with
Asia raised concerns about U.S. growth, it eased fears about inflation. Bond
yields declined and stock prices rose modestly -- encouraged by strong earnings
and a positive balance of supply and demand.
[CALLOUT]
"In this nearly perfect investment climate, we remained committed to stocks with
reasonable prices and good potential for growth. To that end, we traded issues
that met or exceeded our expectations for shares whose prices were more
attractive."
[END CALLOUT]
Performance At-A-Glance
Average Annual Returns* as of April 30, 1998
Trust Shares
- ----------------------------- [BAR CHARTS] -------------------------------------
Asset Allocation Fund
Inception Date 12/30/91
<TABLE>
<S> <C>
Six Months* 11.78%
1 Year 24.98%
3 Years 21.14%
5 Years 14.88%
Life of Fund 13.35%
Equity Income Fund
Inception Date 12/14/90
Six Months* 18.58%
1 Year 32.41%
3 Years 25.21%
5 Years 18.39%
Life of Fund 16.85%
Growth and Income Fund
Inception Date 12/14/92
Six Months* 19.36%
1 Year 38.13%
3 Years 27.37%
5 Years 21.00%
Life of Fund 19.96%
Equity Value Fund
Inception Date 9/1/88
Six Months* 19.64%
1 Year 41.41%
3 Years 28.99%
5 Years 21.76%
Life of Fund 16.24%
Strategic Equity Fund**
Inception Date 3/4/98
Life of Fund 1.70%
Equity Growth Fund
Inception Date 12/14/90
Six Months* 19.73%
1 Year 43.32%
3 Years 30.09%
5 Years 20.99%
Life of Fund 19.01%
Small Cap Value Fund
Inception Date 2/12/93
Six Months* 9.30%
1 Year 49.48%
3 Years 31.35%
5 Years 22.90%
Life of Fund 20.60%
Small Company Equity Fund
Inception Date 12/30/91
Six Months* 5.69%
1 Year 46.70%
3 Years 24.68%
5 Years 21.58%
Life of Fund 16.54%
International Equity Fund
Inception Date 12/30/91
Six Months* 21.51%
1 Year 30.18%
3 Years 17.53%
5 Years 14.25%
Life of Fund 12.43%
</TABLE>
- ----------------------------- [END BAR CHARTS] ---------------------------------
* Six month returns are unannualized total returns.
** Total return from inception.
1
<PAGE>
MARKET OVERVIEW
Early in 1998, the trouble in Asia worsened -- raising expectations for
slower growth and a cut in interest rates. The problems in Asia also prompted a
"flight to quality" that boosted demand for U.S. securities. By the middle of
January, bond prices had gained enough to give 30-year Treasuries a yield of
5.69% -- an all-time low.
As it turned out, GDP improved by an estimated rate of 4.8% in the first
quarter of 1998. This may have been due partly to the flood of cash from abroad,
and partly to lower import prices. While investors abandoned hope for a rate
cut, a hike in rates also seemed unlikely. With falling energy prices, inflation
dropped to 1.4% -- its lowest level since 1986. News of a federal budget surplus
also argued against higher rates.
Although the Asian crisis seemed to dampen corporate earnings, investors
were heartened by interventions of the International Monetary Fund in February
that seemed to stabilize Asian economies. With healthy consumer confidence and
strong economic fundamentals, demand for stocks surged. Meanwhile, corporate
consolidations and stock buyback programs continued to trim stock supplies.
After a brief correction in January, stock prices advanced to new highs. This
gave the S&P 500 a total return of 15.10% for the first four months of 1998.
Stock gains were also strong overseas. After sliding at the end of 1997,
as the Asian crisis worsened, foreign stocks rebounded strongly at the beginning
of 1998. Stocks in Europe led the rally, benefiting from corporate
restructuring, industry consolidations, and progress toward a common regional
currency. Although many Asian markets recovered much of the ground they had
lost, stocks in Japan languished on new economic concerns. Latin American stocks
were also disappointing -- as investors favored opportunities in the emerging
markets of Asia.
Investing in an Expensive Market
As stocks became increasingly expensive, we used several strategies to
increase returns for the Galaxy Equity Funds. First, we regularly traded stocks
that we felt were fully
[CALLOUT]
"Although the Asian crisis seemed to dampen corporate earnings, investors were
heartened by interventions of the International Monetary Fund in February that
seemed to stabilize Asian economies. With healthy consumer confidence and strong
economic fundamentals, demand for stocks surged."
[END CALLOUT]
Performance At-A-Glance
Average Annual Returns* as of April 30, 1998.
Retail A Shares**
- ----------------------------- [BAR CHARTS] -------------------------------------
<TABLE>
Asset Allocation Fund
Inception Date 12/30/91
<S> <C>
Six Months* 7.57%
1 Year 20.11%
3 Years 19.41%
5 Years 13.84%
Life of Fund 12.54%
Equity Income Fund
Inception Date 12/14/90
Six Months* 13.96%
1 Year 26.92%
3 Years 23.05%
5 Years 17.09%
Life of Fund 15.98%
Growth and Income Fund
Inception Date 2/12/93
Six Months* 14.81%
1 Year 32.58%
3 Years 25.41%
5 Years 19.75%
Life of Fund 19.43%
Equity Value Fund
Inception Date 9/1/88
Six Months* 14.91%
1 Year 35.69%
3 Years 26.83%
5 Years 20.49%
Life of Fund 15.79%
Strategic Equity*** Fund
Inception Date 3/4/98
Life of Fund -2.12%
Equity Growth Fund
Inception Date 12/14/90
Six Months* 15.06%
1 Year 37.44%
3 Years 27.91%
5 Years 19.70%
Life of Fund 18.15%
Small Cap Value Fund
Inception Date 2/12/93
Six Months* 5.01%
1 Year 43.64%
3 Years 27.27%
5 Years 21.64%
Life of Fund 20.11%
Small Company Equity Fund
Inception Date 12/30/91
Six Months* 1.52%
1 Year 40.70%
3 Years 22.45%
5 Years 20.21%
Life of Fund 15.51%
International Equity Fund
Inception Date 12/30/91
Six Months* 16.57%
1 Year 24.63%
3 Years 15.37%
5 Years 12.88%
Life of Fund 11.37%
</TABLE>
- ----------------------------- [END BAR CHARTS] ---------------------------------
* Six month returns are unannualized total returns.
** Return figures have been restated to include the effect of the maximum 3.75%
front-end sales charge which became effective on December 1, 1995.
*** Total return from inception
2
<PAGE>
MARKET OVERVIEW
valued for stocks with better price potential. Second, we sought to make our
purchases at times of market weakness to enhance potential gains. Third, we gave
special attention to high-quality companies with strong earnings viability that
would be less vulnerable to economic concerns.
In addition, we tried to limit exposure to companies that do business with
Asia. Because investors moved rapidly among industry sectors, we also emphasized
broad portfolio diversification.
Slower Growth Likely
Believing Asia's problems may take years to resolve, we feel U.S. exports
and growth may remain vulnerable in months to come. We expect inflationary
pressures to moderate in this environment. Having announced in April that a rate
hike might be needed to keep stock gains from overstimulating the economy,
however, the Federal Reserve (the "Fed") will likely remain watchful of further
inflationary pressure from wages and consumer demand. Because U.S. economic
fundamentals are sound, however, we expect any hike in interest rates to be
moderate and think there is further room for growth.
In an environment of continued uncertainty, stocks prices could remain
volatile in coming months -- with earnings disappointments triggering temporary
market weakness. Although stock valuations continue to defy historic highs, the
market could rally further if investors continue to see price corrections as
buying opportunities. Given the exceptional returns stocks have earned for the
last three years, however, we believe returns for 1998 may be near or below
historic norms.
[CALLOUT]
"In addition, we tried to limit exposure to companies that do business with
Asia. Because investors moved rapidly among industry sectors, we also emphasized
broad portfolio diversification."
[END CALLOUT]
Performance At-A-Glance
Average Annual Returns* as of April 30, 1998.
Retail B Shares**
- ----------------------------- [BAR CHARTS] -------------------------------------
<TABLE>
<S> <C>
Asset Allocation Fund
Inception Date 3/4/96
Six month returns before contingent deferred sales charge 11.36%
deducted.
Six month returns after contingent deferred sales charge 6.36%
deducted as if shares were redeemed at end of period.
One year returns before contingent deferred sales charge 23.82%
deducted.
One year returns after contingent deferred sales charge 18.82%
deducted as if shares were redeemed at end of period.
Life of fund returns before contingent deferred sales charge 18.10%
deducted.
Life of fund returns after contingent deferred sales charge 16.94%
deducted as if shares were redeemed at end of period.
Growth and Income Fund
Inception Date 3/4/96
Six month returns before contingent deferred sales charge 18.80%
deducted.
Six month returns after contingent deferred sales charge 13.82%
deducted as if shares were redeemed at end of period.
One year returns before contingent deferred sales charge 36.71%
deducted.
One year returns after contingent deferred sales charge 31.71%
deducted as if shares were redeemed at end of period.
Life of fund returns before contingent deferred sales charge 25.74%
deducted.
Life of fund returns after contingent deferred sales charge 24.67%
deducted as if shares were redeemed at end of period.
Equity Value Fund
Inception Date 3/4/96
Six month returns before contingent deferred sales charge 18.96%
deducted.
Six month returns after contingent deferred sales charge 14.04%
deducted as if shares were redeemed at end of period.
One year returns before contingent deferred sales charge 39.90%
deducted.
One year returns after contingent deferred sales charge 34.90%
deducted as if shares were redeemed at end of period.
Life of fund returns before contingent deferred sales charge 26.66%
deducted.
Life of fund returns after contingent deferred sales charge 25.59%
deducted as if shares were redeemed at end of period.
Strategic Equity*** Fund
Inception Date 3/4/98
Life of fund returns before contingent deferred sales charge 1.70%
deducted.
Life of fund returns after contingent deferred sales charge -4.21%
deducted as if shares were redeemed at end of period.
Equity Growth Fund
Inception Date 3496
Six month returns before contingent deferred sales charge 19.09%
deducted.
Six month returns after contingent deferred sales charge 14.09%
deducted as if shares were redeemed at end of period.
One year returns before contingent deferred sales charge 41.80%
deducted.
One year returns after contingent deferred sales charge 36.80%
deducted as if shares were redeemed at end of period.
Life of fund returns before contingent deferred sales charge 27.25%
deducted.
Life of fund returns after contingent deferred sales charge 26.19%
deducted as if shares were redeemed at end of period.
Small Company Equity Fund
Inception Date 3/4/96
Six month returns before contingent deferred sales charge 5.18%
deducted.
Six month returns after contingent deferred sales charge 0.55%
deducted as if shares were redeemed at end of period.
One year returns before contingent deferred sales charge 45.27%
deducted.
One year returns after contingent deferred sales charge 40.27%
deducted as if shares were redeemed at end of period.
Life of fund returns before contingent deferred sales charge 18.21%
deducted.
Life of fund returns after contingent deferred sales charge 17.06%
deducted as if shares were redeemed at end of period.
</TABLE>
- ----------------------------- [END BAR CHARTS] ---------------------------------
* Six month returns are unannualized total returns.
** Retail B Shares are subject to a 5.00% contingent deferred sales charge if
shares are redeemed within the first year. The charge decreases to 4.00%,
3.00%, 3.00%, 2.00% and 1.00% for redemptions made during the second
through sixth years, respectively. Retail B Shares automatically convert to
Retail A Shares after six years. Total returns are from the date of
inception.
*** Total return from inception.
3
<PAGE>
PORTFOLIO REVIEWS
GALAXY ASSET ALLOCATION FUND
By Don Jones
Portfolio Manager
[Photo: Don Jones]
Don Jones
With stock prices still expensive by historic standards, we continued to
hold sizable investments in bonds and cash over the last six months -- further
increasing positions in corporate bonds as we found attractive opportunities.
The strong yields from corporates, combined with outstanding returns from
stocks, helped the Galaxy Asset Allocation Fund perform well against its market
benchmark and the average flexible fund tracked by Lipper Analytical Services
("Lipper").
For the six months ended April 30, 1998, the Fund's Trust Shares earned a
total return of 11.78%. For the same period, its Retail A Shares returned
11.75%, before deducting the maximum 3.75% front-end sales charge, and its
Retail B Shares returned 11.36%, before deducting the maximum 5.00% contingent
deferred sales charge. (Please see the chart on page 2 for total returns after
deducting the front-end sales charge and the chart on page 3 for total returns
after deducting the contingent deferred sales charge.)
These returns compare with a return of 10.85% for the average flexible
fund tracked by Lipper. During the same time, the S&P 500, which tracks the
performance of stocks only, returned 22.50%.
New Opportunities
In the third quarter of 1997, before the period began, we'd increased the
Fund's cash reserves. This let us take advantage of new investment opportunities
that occurred with temporary market weakness at the end of the year. In buying
stocks, we favored companies with strong U.S. sales over firms with excessive
Asian exposure.
In the first months of 1998, the Fund enjoyed strong performances from
holdings in pharmaceutical firms and other large companies -- which offset
disappointing returns from energy and certain technology shares. With large
additions of new cash -- and profits from stocks that became overvalued -- we
added new holdings in technology, transportation, drug, and banking firms and
increased shares of existing positions.
Throughout this time, we kept about 40% of the portfolio in bonds --
increasing the portion of high-grade corporate issues. The prices and yields of
corporates became more appealing during the period as investors worried that
slower economic growth would dampen corporate earnings. We further enhanced the
Fund's yield with investments in asset-backed and mortgage-backed securities.
Prices for mortgage-backed securities became particularly attractive when some
investors overreacted to high levels of mortgage prepayments.
Defending Returns against Slower Growth
With the prospect for slower growth in coming months, we are taking
several steps to defend Fund returns. In the stock portfolio, we continue to
take profits in shares that seem overvalued. Future trimming may focus on drug
and technology shares, where gains have been particularly strong. As in recent
months, we are de-emphasizing stocks whose fortunes are tied to an expanding
U.S. economy or trade with Asia. We remain committed to financial stocks, which
should benefit further from merger and acquisition activity. Recently, we have
added shares of energy firms -- which became attractive as oil prices fell. We
expect to keep a portion of the portfolio in cash to make the most of other
opportunities that a stock correction might bring.
We also plan to maintain the 40% allocation to bonds. We think bonds could
benefit as investors grow more confident that inflation will stay low. As in the
stock portfolio, we expect to emphasize corporate bonds of companies in
defensive sectors with strong balance sheets and good potential for earnings
growth.
Don Jones became manager of the Galaxy Asset Allocation Fund in April 1995. He
has managed investment portfolios for Fleet Investment Advisors Inc., and its
predecessors, since 1988.
- --------------------------------- [PIE CHART] ----------------------------------
Galaxy Asset
Allocation Fund
Distribution of Total Net Assets
as of April 30, 1998
<TABLE>
<S> <C>
Common & Convertible Preferred
Stocks 47%
Corporate Notes & Bonds 23%
Repurchase Agreement &
Net Other Assets & Liabilities 14%
U.S. Government & Agency
Obligations 14%
Asset-Backed and Mortgage-Backed
Securities 2%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------[MOUNTAIN CHART]--------------------------------
Galaxy Asset
Allocation Fund
Growth of $10,000 investment*
<TABLE>
<S> <C>
[solid box] S&P 500 31,186
[solid box] Galaxy Asset Allocation - Retail A Shares 21,134
[solid box] Galaxy Asset Allocation - Trust Shares 22,115
[solid box] Galaxy Asset Allocation - Retail B Shares 14,014
</TABLE>
- --------------------------------------------------------------------------------
*Since inception on 12/30/91 for Trust and Retail A Shares. Since inception on
3/4/96 for Retail B Shares. Performance figures for Retail A Shares include the
effect of the maximum 3.75% front-end sales charge. Performance figures for
Retail B Shares reflect the deduction of the maximum 5.00% contingent deferred
sales charge as if shares were redeemed on April 30, 1998. The S&P 500 is an
unmanaged index in which investors cannot invest. Results for the index do not
reflect the investment management fees and other expenses incurred by the Fund.
4
<PAGE>
PORTFOLIO REVIEWS
GALAXY EQUITY INCOME FUND
By Ed Klisiewicz
Portfolio Manager
[Photo: Ed Klisiewicz]
Ed Klisiewicz
With low interest rates and economic trouble abroad, stocks with good
dividends performed well in the last six months. By focusing on high-quality
issues of companies with reliable earnings, we helped the Galaxy Equity Income
Fund make the most of this environment and perform well against other funds with
similar investment objectives.
For the six months ended April 30, 1998, the Fund's Trust Shares had a
total return of 18.58%. Over the same time, Retail A Shares had a total return
of 18.38%, before deducting the maximum 3.75% front-end sales charge. (Please
see the chart on page 2 for total returns after deducting the front-end sales
charge.) Those returns compare to a return of 12.83% for the average equity
income fund tracked by Lipper and a return of 22.50% for the S&P 500.
Focus on Earnings
With a decline in interest rates at the end of 1997, the Fund enjoyed
strong returns from interest-sensitive issues -- particularly in the utility
sector. During times of temporary market weakness, we put cash to work in
selected shares of banks, telephone companies, and real estate investment trusts
(REITs). With investors concerned about the impact of Asia's problems on U.S.
earnings, we gave extra attention to high-quality stocks of companies with
reliable earnings and minimal exposure to Asia.
We continued to emphasize earnings in the first months of 1998. This
served the Fund well, as investors remained uncertain about where the economy
would head. Although returns from energy shares were disappointing, the Fund
earned good returns from shares of financial and consumer staples firms that
benefited from merger speculation. Using new cash and profits we took in
overvalued issues, we increased positions in telephone companies and
high-yielding REITs.
Future Strategies
We continue to look for financial firms, that might be takeover
candidates. To optimize these and other investment opportunities, we are still
holding sizable cash reserves. New opportunities could arise in coming months if
economic growth slows and stock prices correct.
In choosing stocks for the Fund, we plan to remain focused on high-quality
securities with good yields that are issued by companies with strong earnings
histories. Where we can, we will emphasize companies with the potential for
dividend growth. We think health care stocks still look interesting and have
recently made modest purchases of drug and hospital-services shares.
Ed Klisiewicz has been portfolio manager of the Galaxy Equity Income Fund since
its inception in December 1990. He has managed portfolios for Fleet Investment
Advisors Inc., and its predecessors, since 1970.
GALAXY GROWTH AND INCOME FUND
By Brendan Henebry
Portfolio Manager
As stock prices advanced in the last six months, we continued to take
profits in shares that had performed well and buy shares that we felt had better
value. This helped the Galaxy Growth and Income Fund make the most of an
increasingly expensive market and earn returns for the six months ended April
30, 1998 that exceeded the average return for growth and income funds tracked by
Lipper.
During the period, the Fund's Trust Shares had a total return of 19.36%,
and Retail A Shares earned 19.26%, before deducting the maximum 3.75% front-end
sales charge. Over the same time, Retail B Shares earned 18.80%, before
deducting the maximum 5.00% contingent deferred sales charge. (Please see the
chart on page 2 for total returns after deducting the front-end sales charge and
the chart on page 3 for total returns after deducting the contingent deferred
sales charge.)
- --------------------------------- [PIE CHART] ----------------------------------
Galaxy Equity
Income Fund
Distribution of Total Net Assets
as of April 30, 1998
<TABLE>
<S> <C>
Consumer Staples 19%
Repurchase Agreement 15%
Finance 18%
Energy 10%
Utilities 9%
Consumer Cyclical 8%
Technology 8%
Capital Goods & Construction 6%
Other Common Stocks 6%
U.S. Government & Agency Obligations &
Net Other Assets & Liabilities 1%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------[MOUNTAIN CHART]--------------------------------
Galaxy Equity
Income Fund
Growth of $10,000 investment*
<TABLE>
<S> <C>
[solid box] S&P 500 41,166
[solid box] Galaxy Equity Income - Retail A Shares 29,836
[solid box] Galaxy Equity Income - Trust Shares 31,526
</TABLE>
- --------------------------------------------------------------------------------
*Since inception on 12/14/90. Performance figures for Retail A Shares include
the effect of the maximum 3.75% front-end sales charge. The S&P 500 is an
unmanaged index in which investors cannot invest. Results for the index do not
reflect investment management fees and other expenses incurred by the Fund.
5
<PAGE>
PORTFOLIO REVIEWS
[Photo: Brendan Henebry]
Brendan Henebry
For the same period, the S&P 500 had a return of 22.50%, while the average
growth and income fund tracked by Lipper had a return of 14.29%.
Looking for Value
In October 1997, before the period began, we took profits in certain bank,
health care, and oil-services shares that had performed well. When stock prices
corrected later in October, we used some of these proceeds to buy selected
banking and insurance shares and to add a specialty retailer and a water
filtration company to the portfolio. The Fund's banking and insurance stocks,
along with other financial-services shares, performed well as interest rates
fell in November and December. At the end of 1997 we used additional market
weakness to increase our long-term commitment to the technology sector.
When stock prices weakened early in 1998, we further increased technology
positions and introduced shares of a packaging firm. In addition, we traded
shares of a drug company with high valuations for a health maintenance
organization that we felt was undervalued. With strong flows of new cash in
February and March, we added a position in a biotech company and increased
shares of retail firms -- believing they should benefit from strong consumer
demand. We further reduced investments in drug stocks and cut holdings in the
energy sector. We remained overweighted in oil services companies, however,
which we feel have strong long-term potential. With further gains in the
financial sector, we took additional profits there.
Focus on Quality and Diversification
Although stock valuations are quite high by historic norms, we believe
equity investors will be rewarded by taking a long-term view and holding
diversified portfolios of quality firms. The Fund's portfolio remains broadly
diversified among high-quality names that we expect to perform well for the next
year or two. We have used profits from several major pharmaceutical companies to
buy shares of broad-based health care firms whose earnings should be consistent
even if the economy slows. Having taken profits in the financial sector, we are
now slightly underweighted there. Should new market weakness create other
opportunities, we hope to add financial shares.
Brendan Henebry has managed the Galaxy Growth and Income Fund, and its
predecessor, since inception in December 1992. He has managed equity portfolios
since 1969.
GALAXY EQUITY VALUE FUND
By G. Jay Evans, CFA
Portfolio Manager
In the six months ended April 30, 1998, the Galaxy Equity Value Fund
outperformed both its market benchmark and the average fund with similar
investment objectives. This was due principally to its strong position in
consumer cyclicals -- which outperformed strongly during the period.
Over this time, Trust Shares of the Galaxy Equity Value Fund earned a
total return of 19.64%. For the same period, Retail A Shares returned 19.38%,
before deducting the maximum 3.75% front-end sales charge, and Retail B Shares
returned 18.96%, before deducting the maximum 5.00% contingent deferred sales
charge. (Please see the chart on page 2 for total returns after deducting the
front-end sales charge and the chart on page
- --------------------------------- [PIE CHART] ----------------------------------
Galaxy Growth
and Income Fund
Distribution of Total Net Assets
as of April 30, 1998
<TABLE>
<S> <C>
Consumer Staples 20%
Other Preferred & Common Stocks 18%
Finance 13%
Technology 13%
Consumer Cyclical 12%
Capital Goods & Construction 9%
Energy 8%
Repurchase Agreement & Net Other
Assets & Liabilities 7%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------[MOUNTAIN CHART]--------------------------------
Galaxy Growth and Income Fund
Growth of $10,000 investment*
<TABLE>
<S> <C>
[solid box] S&P 500 29,324
[solid box] Galaxy Growth and Income - Retail A Shares 25,231
[solid box] Galaxy Growth and Income - Trust Shares 26,598
[solid box] Galaxy Growth and Income - Retail B Shares 16,087
</TABLE>
- --------------------------------------------------------------------------------
*Since inception on 12/14/92 for Trust Shares and 2/12/93 for Retail A Shares.
Since inception on 3/4/96 for Retail B Shares. Performance figures for Retail A
Shares include the effect of the maximum 3.75% front-end sales charge.
Performance figures for Retail B Shares reflect the deduction of the maximum
5.00% contingent deferred sales charge as if shares were redeemed on April 30,
1998. The S&P 500 is an unmanaged index in which investors cannot invest.
Results for the index do not reflect the investment management fees and other
expenses incurred by the Fund.
6
<PAGE>
PORTFOLIO REVIEWS
[Photo: G. Jay Evans]
G. Jay Evans
3 for total returns after deducting the contingent deferred sales charge.)
For the same six-month period, the average growth and income fund tracked
by Lipper earned a return of 14.29% and the S&P 500 returned 22.50%.
Top Performers
Consumer cyclicals benefited as higher wages and greater job security
combined with mortgage refinancings, lower oil prices, and a roaring stock
market to push consumer confidence near record levels. Holdings in auto,
apparel, homebuilding, and retail firms were among the top performers in this
part of the portfolio.
Technology issues also contributed to performance, as they recovered from
pre-announcements of earnings disappointments. In typical bull-market fashion,
investors ignored the near-term slack in demand caused by problems in Asia and
embraced the positive long-term outlook for technology shares. During the period
the Fund was correctly underweighted in the underperforming energy and consumer
staples sectors. Within the health care group, the Fund benefited from an
excellent selection of individual issues.
Rosy Glasses
Looking ahead, the greatest risk in the market is that profits will fail
to meet expectations due to greater price pressure, higher labor costs, and
slower improvement in productivity. Stocks could also fall prey to uncertainties
about Asian economies and the ability of companies to reprogram their computers
for the Year 2000. Such concerns are balanced, however, by an excellent outlook
for inflation, the likelihood of further economic growth, ongoing merger
potential and the continued flow of money into stocks.
Near term, happy investors will view the relative importance of these
factors through rosy glasses. We expect a fairly volatile market, however, with
rapid sector rotation. Such an environment should provide further opportunities
for our valuation system to identify mispriced stocks that can add to Fund
returns.
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 STRATEGIC EQUITY FUND
By Peter B. Hathaway, CFA
Portfolio Manager
The Galaxy Strategic Equity Fund seeks to provide a core equity investment
for investors who desire growth with below market risk, reasonable income, and a
value-oriented investment style. To achieve these objectives, we select stocks
from a universe of 300 to 400 large- and mid-sized companies similar to those in
the S&P 500 (and monitored by Fleet Investment Advisors Equity Analysts).
Two-year potential forecast returns for each stock, giving consideration to its
price and future earnings potential, provide the focus for buy and sell
candidates. This process also leads to stock, industry and sector concentration
and is non-discriminatory with regard to the selection of growth and value
stocks or stocks of large and medium sixed companies.
From the Fund's inception on March 4, 1998, through the end of the
reporting period on April 30, 1998, Trust Shares earned a total return of 1.70%.
For the same period, Retail A
- --------------------------------- [PIE CHART] ----------------------------------
Galaxy Equity
Value Fund
Distribution of Total Net Assets
as of April 30, 1998
<TABLE>
<S> <C>
Consumer Cyclical 21%
Finance 18%
Technology 15%
Capital Goods & Construction 10%
Consumer Staples 10%
Utilities 10%
Energy 7%
Repurchase Agreement & Net Other
Assets & Liabilities 6%
Other Common Stocks 3%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------[MOUNTAIN CHART]--------------------------------
Galaxy Equity Value Fund
Growth of $10,000 investment*
<TABLE>
<S> <C>
[solid box] S&P 500 55,752
[solid box] Galaxy Equity Value - Retail A Shares 41,216
[solid box] Galaxy Equity Value - Trust Shares 43,453
[solid box] Galaxy Equity Value - Retail B Shares 16,345
</TABLE>
- --------------------------------------------------------------------------------
*Since inception on 9/1/88 for Trust and Retail A Shares. Since inception on
3/4/96 for Retail B Shares. Performance figures for Retail A Shares include the
effect of the maximum 3.75% front-end sales charge. Performance figures for
Retail B Shares reflect the deduction of the maximum 5.00% contingent deferred
sales charge as if shares were redeemed on April 30, 1998. The S&P 500 is an
unmanaged index in which investors cannot invest. Results for the index do not
reflect the investment management fees and other expenses incurred by the Fund.
7
<PAGE>
PORTFOLIO REVIEWS
[Photo: Peter B. Hathaway]
Peter B. Hathaway
Shares returned 1.70%, before deducting the maximum 3.75% front-end sales
charge, and Retail B Shares returned 1.70%, before deducting the maximum 5.00%
contingent deferred sales charge. (Please see the chart on page 2 for total
returns after deducting the front-end sales charge and the chart on page 3 for
total returns after deducting the contingent deferred sales charge.)
Over the same time, the average growth and income fund tracked by Lipper
earned a return of 5.17% and the S&P 500 returned 6.19%.
Building the Portfolio
In building the portfolio, those stocks having the more attractive
forecast returns lead to a 45%/55% mix of mid-cap and large-cap stocks as
compared to 35%/65% for the S&P 500. By sector, the portfolio is overweighted in
healthcare, specialty retail, technology and energy, with below market
weightings in consumer staples, basic materials, finance and utilities.
In an extended business cycle, earnings viability enhances the confidence
in forecast returns. Stocks of growth companies, having more stable earnings
growth, comprise nearly 60% of the portfolio with the remainder invested in
cyclical and value stocks. While the Fund's dividend yield is modestly below the
S&P 500's dividend yield, the portfolio's valuation as measured by its
price-to-earnings ratio is 15% below that of the market and its projected
long-term earnings growth rate is higher.
Looking Ahead
We believe this portfolio mix should serve the Fund well in coming months.
Although Asia's economic problems may cloud the outlook for U.S. earnings, we
believe our economy lacks the excesses that usually signal a waning expansion.
While economic growth may slow, we expect further growth from quality companies.
With stock valuations still breaking records, however, and earnings
disappointments likely to prompt market weakness, we think value investors could
find many new opportunities. Feeling that the energy and technology stocks offer
more value than other sectors, we plan to add shares of those groups as
opportunities arise.
Peter Hathaway has managed the Galaxy Strategic Equity Fund since its inception
in March 1998. He has worked for Fleet Investment Advisors Inc. or its
predecessors since 1964 and has managed investments since 1974.
GALAXY EQUITY GROWTH FUND
By Bob Armknecht
Portfolio Manager
While the stock market, as measured by the S&P 500, rose significantly
over the past six months, it became increasingly narrow in its focus and
experienced significant rotation among industry sectors. During this time we
continued to emphasize stocks of large firms, whose reliable earnings attracted
investors at a time of economic uncertainty. In addition, we focused on sectors
with especially strong earnings growth potential due to long-term demographic,
technological and economic trends. A third tactic was to realize profits in
stocks that we believed had advanced too quickly and use the proceeds for shares
with greater promise.
Through these actions, the Galaxy Equity Growth Fund significantly
outperformed the average growth fund tracked by Lipper. For the six months ended
April 30, 1998, the Fund's Trust Shares earned a total return of 19.73%. Over
the same time, Retail A Shares earned 19.54%, before deducting the maximum 3.75%
front-end sales charge, and Retail B Shares earned 19.09%, before deducting the
5.00% maximum contingent deferred sales charge. (Please see the chart on page 2
for total returns after deducting the front-end sales charge and the chart on
page 3 for total returns after deducting the contingent deferred sales charge.)
- --------------------------------- [PIE CHART] ----------------------------------
Galaxy Strategic
Equity Fund
Distribution of Total Net Assets
as of April 30, 1998
<TABLE>
<S> <C>
U.S. Agency Obligation &
Net Other Assets & Liabilities 18%
Consumer Cyclical 15%
Technology 15%
Consumer Staples 14%
Capital Goods & Construction 10%
Energy 10%
Basic Materials 7%
Finance 7%
Other Common Stocks 4%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------[MOUNTAIN CHART]--------------------------------
Galaxy Strategic
Equity Fund
Growth of $10,000 investment*
<TABLE>
<S> <C>
[solid box] S&P 500 10,619
[solid box] Galaxy Strategic Equity - Retail A Shares 9,788
[solid box] Galaxy Strategic Equity - Trust Shares 10,170
[solid box] Galaxy Strategic Equity - Retail B Shares 9,579
</TABLE>
- --------------------------------------------------------------------------------
*Since inception on 3/4/98 for Trust, Retail A Shares and Retail B Shares.
Performance figures for Retail A Shares include the effect of the maximum 3.75%
front-end sales charge. Performance figures for Retail B Shares reflect the
deduction of the maximum 5.00% contingent deferred sales charge as if shares
were redeemed on April 30, 1998. The S&P 500 is an unmanaged index in which
investors cannot invest. Results for the index do not reflect the investment
management fees and other expenses incurred by the Fund.
8
<PAGE>
PORTFOLIO REVIEWS
[Photo: Bob Armknecht]
Bob Armknecht
Those returns compare with an average return of 15.37% for growth funds
tracked by Lipper and a return of 22.50% for the S&P 500.
Portfolio Focus
As a result of our investment strategies, which we have used for more than
a year, we gave extra attention to shares of health care, energy, financial,
technology and communications firms. When Asian troubles sent investors to
quality domestic firms at the end of 1997, the Fund benefited from its emphasis
on health care stocks, as well as other large consumer issues. Returns from
those shares offset disappointing performances by technology and energy shares.
Although energy and technology stocks continued to disappoint in the first
quarter of 1998, there were strong performances from retail, drug and financial
shares. Some individual technology stocks also contributed positively to
performance. During this time we used large flows of new cash that came into the
Fund to increase shares of retail, basic materials, and financial firms. Because
prices for energy stocks had become quite attractive, we also added investments
there. At the end of the period, energy and technology stocks started to
rebound. We used further additions of new cash to increase selected holdings
across a number of sectors.
A Long-Term Strategy
We believe the investment themes we have chosen should serve the Fund well
in months to come. These themes are based on long-term trends with significant
time to run. This potential for sustainable earnings growth should help protect
Fund returns should we face renewed short-term uncertainty from further economic
deterioration abroad or fears of hikes in interest rates by the Fed.
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 SMALL CAP VALUE FUND
By Peter Larson
Portfolio Manager
In the past six months the economic uncertainty caused by trouble in Asia
kept investors focused on the more reliable earnings of larger companies.
Although prices for stocks of smaller firms continued to lag in this climate,
their gains were strong by historic norms. By maintaining our strategy of taking
profits in stocks that had performed well and adding investments with better
value, we helped the Galaxy Small Cap Value Fund benefit from this environment.
For the six months ended April 30, 1998, the Fund's Trust Shares earned a
total return of 10.33%. Over the same time, Retail A Shares earned 10.12%,
before deducting the maximum 3.75% front-end sales charge. (Please see the chart
on page 2 for total returns after deducting the front-end sales charge.) These
returns compare to 12.73% earned by the average small-company growth fund
tracked by Lipper and to 11.88% earned by the Russell 2000 Index (the "Russell
2000").
Value in Technology, Energy and REITs
At the end of 1997, when the period began, stocks of smaller firms that
represented good value were outperforming other small-cap shares. During this
time, the Fund
- --------------------------------- [PIE CHART] ----------------------------------
Galaxy Equity
Growth Fund
Distribution of Total Net Assets
as of April 30, 1998
<TABLE>
<S> <C>
Consumer Staples 19%
Technology 17%
Finance 15%
Consumer Cyclical 13%
Capital Goods & Construction 11%
Energy 11%
Convertible Preferred &
Other Common Stocks 9%
Repurchase Agreement
and Net Other Assets & Liabilities 5%
</TABLE>
Net Other Assets & Liabilities = (1)%
- --------------------------------------------------------------------------------
- --------------------------------[MOUNTAIN CHART]--------------------------------
Galaxy Equity Growth Fund
Growth of $10,000 investment*
<TABLE>
<S> <C>
[solid box] S&P 500 37,739
[solid box] Galaxy Equity Growth - Retail A Shares 34,224
[solid box] Galaxy Equity Growth - Trust Shares 36,099
[solid box] Galaxy Equity Growth - Retail B Shares 16,517
</TABLE>
- --------------------------------------------------------------------------------
*Since inception on 12/14/90 for Trust and Retail A Shares. Since inception on
3/4/96 for Retail B Shares. Performance figures for Retail A Shares include the
effect of the maximum 3.75% front-end sales charge. Performance figures for
Retail B Shares reflect the deduction of the maximum 5.00% contingent deferred
sales charge as if shares were redeemed on April 30, 1998. The S&P 500 is an
unmanaged index in which investors cannot invest. Results for the index do not
reflect the investment management fees and other expenses incurred by the Fund.
9
<PAGE>
PORTFOLIO REVIEWS
[Photo: Peter Larson]
Peter Larson
benefited from investments in insurance stocks, which gained as interest rates
fell, as well as investments in banking stocks, which gained on further
consolidation within their industry. As we took profits in shares with strong
returns, we increased investments in shares of real estate investment trusts and
technology companies.
In the first months of 1998, the Fund enjoyed outstanding returns from
many individual issues that benefited from corporate mergers. Many of these
stocks were concentrated in the finance and technology sectors. These returns,
plus additional contributions from insurance stocks, helped offset disappointing
performance from energy stocks -- which suffered as oil prices fell. Believing
that energy stocks represented some of the better values in an increasingly
expensive market, we raised positions there. With valuations for banking stocks
quite high, we took profits in that sector.
New Pockets of Value
If economic growth slows later this year, and stock prices correct, stocks
of small companies should hold up relatively well. We believe valuations of
smaller firms remain quite reasonable compared to valuations of larger firms. We
continue to hold a sizable cash reserve that we could put to work if market
weakness creates new pockets of value. Still suffering from a downturn in oil
prices, energy stocks may be likely candidates for purchase. Given the high
valuations for stocks generally, however, we expect to remain focused on finding
value in individual issues.
Peter Larson has managed the Galaxy Small Cap Value Fund, and its predecessor,
since 1992. He has managed small company portfolios since 1981.
GALAXY SMALL COMPANY
EQUITY FUND
By Steve Barbaro
Portfolio Manager
The same economic uncertainty that caused stocks of small companies to
underperform stocks of large companies in the past six months caused small-cap
stocks oriented toward growth to underperform other issues in the sector.
Although the Galaxy Small Company Equity Fund earned a solid return during this
time by historic norms, the Fund lagged its market benchmark due to its focus on
growth investments. The Fund was also hurt by a poor performance from
investments in the health care sector.
Offsetting these factors were overweightings in airline and technology
stocks, which performed well during the period. With investors looking for value
in an increasingly costly market, we further enhanced returns by emphasizing
investments that had appealing valuations as well as strong growth potential.
In the six months ended April 30, 1998, the Fund's Trust Shares had a
total return of 5.69%. For the same period, Retail A Shares earned 5.49%, before
deducting the maximum 3.75% front-end sales charge and Retail B Shares earned
5.18%, before deducting the maximum 5.00% contingent deferred sales charge.
(Please see the chart on page 2 for total returns after deducting the front-end
sales charge and the chart on page 3 for total returns after deducting the
contingent deferred sales charge.)
These returns compare with the average return of 12.73% for small company
growth funds tracked by Lipper, and a return of 11.88% for the Russell 2000.
- --------------------------------- [PIE CHART] ----------------------------------
Galaxy Small Cap
Value Fund
Distribution of Total Net Assets
as of April 30, 1998
<TABLE>
<S> <C>
Technology 20%
Consumer Cyclical 17%
Consumer Staples 14%
Capital Goods & Construction 12%
Finance 12%
Repurchase Agreement, Corporate Bond
& Net Other Assets & Liabilities 13%
Other Common Stocks 7%
Energy 5%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------[MOUNTAIN CHART]--------------------------------
Galaxy Small Cap Value Fund
Growth of $10,000 investment*
<TABLE>
<S> <C>
[solid box] Russell 2000 24,634
[solid box] Galaxy Small Cap Value - Retail A Shares 25,988
[solid box] Galaxy Small Cap Value - Trust Shares 27,367
</TABLE>
- --------------------------------------------------------------------------------
*Since inception on 12/14/92 for Trust Shares and 2/12/93 for Retail A Shares.
Performance figures for Retail A Shares include the effect of the maximum 3.75%
front-end sales charge. The Russell 2000 is an unmanaged index in which
investors cannot invest. Results for the index do not reflect the investment
management fees and other expenses incurred by the Fund.
10
<PAGE>
PORTFOLIO REVIEWS
[Photo: Steve Barbaro]
Steve Barbaro
Trading for Value
At the end of 1997, the small-cap sector was hurt by profit taking in
energy and technology issues. Although the Fund was overweighted in energy
shares, it was underweighted in technology stocks. We used the weakness in
small-cap stocks to buy shares of better-quality companies with more visible
earnings -- adding new names while enlarging old positions.
Many of the stocks we bought came from the technology sector, which
rebounded in the first quarter of 1998. As falling oil prices caused further
disappointments from energy stocks during the quarter, we trimmed positions in
that sector. With the proceeds from these sales, and profits we took in other
issues that had performed well, we made additional investments in technology
stocks -- as well as health care and consumer firms.
While many of the Fund's technology and health care stocks underperformed
at the end of the period, the Fund benefited from its selection of auto stocks.
A strong rebound in energy stocks also helped returns. As in previous months, we
added shares of technology, health care and consumer firms as we found
attractive prices. We also took advantage of opportunities in capital goods and
transportation stocks. We paid for these purchases with profits from technology
and airline stocks that we felt had become overpriced.
An Attractive Play
If investors remain hopeful about the economy in coming months, the more
reasonable valuations of small-cap growth stocks could help them outperform.
Small-cap stocks may also draw investors with the recent strength of their
earnings and their greater focus on domestic sales.
As before, we will continue to look for stocks with reasonable valuations
versus their potential for growth. We will also remain committed to companies
with good earnings viability.
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 Thomas M. O'Neill, Chief Investment Officer
Fleet Investment Advisors Inc.,
and Oechsle International Advisors, L.P.
Sub-Advisor
The Galaxy International Equity Fund performed well in the last six months
- -- far outpacing its market benchmark and the average international fund tracked
by Lipper. This was due largely to an underweighting in Asian stocks, which
performed poorly during the period, and an overweighting in stocks of the
better-performing European bourses. The Fund's weightings in individual markets
and its selection of investments also contributed positively to returns.
For the six months ended April 30, 1998, the Fund's Trust Shares earned a
total return of 21.51%. Over the same time, Retail A Shares earned 21.10%,
before deducting the maximum 3.75% front-end sales charge. (Please see the chart
on page 2 for total returns after deducting the front-end sales charge.)
Those returns compare with 17.21% for the average international fund
tracked by
- --------------------------------- [PIE CHART] ----------------------------------
Galaxy Small Company
Equity Fund
Distribution of Total Net Assets
as of April 30, 1998
<TABLE>
<S> <C>
Technology 38%
Consumer Staples 17%
Consumer Cyclical 16%
Other Common Stocks 12%
Capital Goods & Construction 6%
Repurchase Agreement &
Net Other Assets & Liabilities 6%
Energy 5%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------[MOUNTAIN CHART]--------------------------------
Galaxy Small Company Equity Fund
Growth of $10,000 investment*
<TABLE>
<S> <C>
[solid box] Russell 2000 28,015
[solid box] Galaxy Small Company Equity - Retail A Shares 24,913
[solid box] Galaxy Small Company Equity - Trust Shares 26,356
[solid box] Galaxy Small Company Equity - Retail B Shares 14,044
</TABLE>
- --------------------------------------------------------------------------------
*Since inception on 12/30/91 for Trust and Retail A Shares. Since inception on
3/4/96 for Retail B Shares. Performance figures for Retail A Shares include the
effect of the maximum 3.75% front-end sales charge. Performance figures for
Retail B Shares reflect the deduction of the maximum 5.00% contingent deferred
sales charge as if shares were redeemed on April 30, 1998. The Russell 2000 is
an unmanaged index in which investors cannot invest. Results for the index do
not reflect the investment management fees and other expenses incurred by the
Fund.
11
<PAGE>
PORTFOLIO REVIEWS
[Photo: Thomas M. O'Neill]
Thomas M. O'Neill
Lipper, and 15.44% for the Morgan Stanley Capital International Europe,
Australia & Far East (EAFE) Index.
Focus on Europe
For some time, the Fund has been underweighted in Japan as compared to the
EAFE Index. When the period began in November 1997, Japanese stocks accounted
for about 20% of the Fund's equity holdings and about 30% of the EAFE Index.
This helped to buffer the Fund as the economic crisis in Southeast Asia
worsened and infected the economy of Japan. The Fund also profited from
overweightings in the better-performing European markets of Italy, France and
the Netherlands.
With further deterioration in Southeast Asia, we reduced investments there
- -- as well as shares of firms outside the region with ties to Southeast Asian
economies. As stock prices weakened in Japan, we took advantage of selected
opportunities in high-quality issues with good value. During this time we also
found opportunities in European stocks with a small Asian exposure that seemed
to become oversold. With uncertainty about the long-term effects of Asia's
troubles on European economies, we emphasized stocks in non-cyclical sectors.
In the first months of 1998 the Fund's underweighting in Japan and
overweighting in the strongly performing markets of the Netherlands, Italy and
France more than compensated for underweightings in the solid-performing markets
of Germany and the United Kingdom and overweightings in the lesser-performing
markets of Latin America and Australia. The Fund also benefited from strong
stock selection in Europe. During this time we took profits in Japanese stocks
whose valuations had become excessive and added stocks that we expect to benefit
from further consolidation among companies in Europe. We also took advantage of
selected opportunities that arose in the Philippines. Generally, however, we
remained cautious about the markets of Southeast Asia.
Continued Caution in Asia
We expect to stay underweighted in Southeast Asia in coming months --
believing economies there could unravel further before they improve. Even if the
region becomes more stable, we feel its stock prices remain quite high. We will
also be wary in Japan, where economic problems abound, but may look for
individual Japanese companies that could be part of a recent restructuring
trend. Restructuring will also remain a theme in European investments and may
lead us outside the large-cap area, where investments have been concentrated so
far.
We expect to remain overweighted in Latin America, especially in Mexico.
We believe that investors may soon flee Asia again for emerging markets with
better fundamentals.
Thomas M. O'Neill is Chief Investment Officer of Fleet Investment Advisors Inc.
Oeschle International Advisors, L.P., serves as sub-advisor for the Fund.
Oeschle International Advisors, L.P. is a $9.4 billion firm dedicated to
international investing.
- --------------------------------- [PIE CHART] ----------------------------------
Galaxy International
Equity Fund
Distribution of Total Net Assets
as of April 30, 1998
<TABLE>
<S> <C>
Europe 54%
United Kingdom 18%
Far East 16%
Central & South America 6%
Australia 3%
Repurchase Agreement & Net
Other Assets & Liabilities 3%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------[MOUNTAIN CHART]--------------------------------
Galaxy International Equity Fund
Growth of $10,000 investment*
<TABLE>
<S> <C>
[solid box] Morgan Stanley Europe, Australia & Far East Index 17,561
[solid box] Galaxy International Equity - Retail A Shares 19,778
[solid box] Galaxy International Equity - Trust Shares 20,998
</TABLE>
- --------------------------------------------------------------------------------
*Since inception on 12/30/91. Performance figures for Retail A Shares include
the effect of the maximum 3.75% front-end sales charge. The Morgan Stanley
Capital International Europe, Australia & Far East (EAFE) Index is an unmanaged
index in which investors cannot invest. Results for the index do not reflect
the investment management fees and other expenses incurred by the Fund.
- --------------------------------------------------------------------------------
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 and may revise or discontinue such practice at any time.
Without such waivers and/or reimbursements, performance would be lower. Past
performance is no guarantee of future results. Unless otherwise indicated, total
return figures in this report include changes in share price, the effect of
sales charges, where applicable, and reinvestment of dividends and capital gains
distributions, if any.
12
<PAGE>
THE GALAXY FUND
Asset Allocation Fund
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
-------- ---------
COMMON STOCKS - 46.50%
Consumer Staples - 11.30%
<S> <C> <C>
45,000 Becton Dickinson & Co. ......... $ 3,133,125
110,000 Bestfoods ...................... 6,036,250
100,000 Coca Cola Enterprises, Inc. .... 3,775,000
45,000 Elan Corp. Plc, ADR * .......... 2,795,625
75,000 Genzyme Corp.* ................. 2,320,313
40,000 Gillette Co. ................... 4,617,500
100,000 Lilly (Eli) & Co. .............. 6,956,250
60,000 Merck & Co., Inc. .............. 7,230,000
145,000 PepsiCo, Inc. .................. 5,754,688
80,000 Pfizer, Inc. ................... 9,105,000
50,000 Procter & Gamble Co. ........... 4,109,375
20,000 Warner-Lambert Co. ............. 3,783,750
------------
59,616,876
------------
Technology - 8.04%
60,000 Automatic Data Processing, Inc. 4,016,250
80,000 Boston Scientific Corp.* ....... 5,785,000
100,000 Cisco Systems, Inc.* ........... 7,325,000
50,000 Compaq Computer Corp. .......... 1,403,125
35,000 EMC Corp.* ..................... 1,614,375
50,000 Maxim Integrated Products, Inc.* 2,018,750
80,000 Hewlett-Packard Co. ............ 6,025,000
50,000 Intel Corp. .................... 4,040,625
60,000 Motorola, Inc. ................. 3,337,500
60,000 Xerox Corp. .................... 6,810,000
------------
42,375,625
------------
Finance - 7.73%
50,000 American International
Group, Inc. .................. 6,578,125
35,000 Associates First Capital Corp. . 2,616,234
25,000 BankBoston Corp. ............... 2,698,438
17,000 Chase Manhattan Corp. .......... 2,355,563
82,000 Fannie Mae ..................... 4,909,750
60,000 First Union Corp. .............. 3,622,500
60,000 Hartford Financial
Services Group, Inc. ........... 6,645,000
100,000 Norwest Corp. .................. 3,968,750
40,000 SunAmerica, Inc. ............... 1,997,500
50,000 Washington Mutual, Inc. ........ 3,503,125
5,000 Wells Fargo & Co. .............. 1,842,500
------------
40,737,485
------------
Capital Goods and Construction - 4.31%
80,000 Boeing Co. ..................... 4,005,000
50,000 Dresser Industries, Inc. ....... 2,643,750
60,000 General Electric Co. ........... 5,107,500
115,000 Thermo Electron Corp.* ......... 4,578,438
25,000 United Technologies Corp. ...... 2,460,938
120,000 US Filter Corp.* ............... 3,915,000
------------
22,710,626
------------
Consumer Cyclical - 3.89%
120,000 Home Depot, Inc. ............... $ 8,355,000
60,000 McDonald's Corp. ............... 3,712,500
170,000 Sherwin-Williams Co. ........... 6,056,250
70,000 Walgreen Co. ................... 2,415,000
------------
20,538,750
------------
Energy - 3.79%
35,000 Baker Hughes, Inc. ............. 1,417,500
30,000 Enron Corp. .................... 1,475,625
50,000 Halliburton Co. ................ 2,750,000
70,000 Mobil Corp. .................... 5,530,000
80,000 Noble Affiliates, Inc. ......... 3,450,000
65,000 Schlumberger, Ltd. ............. 5,386,875
------------
20,010,000
------------
Basic Materials - 3.23%
110,000 Crown Cork & Seal Co., Inc. .... 5,726,875
60,000 Minnesota Mining &
Manufacturing Co. .............. 5,662,500
140,000 Sonoco Products Co. ............ 5,626,250
------------
17,015,625
------------
Utilities - 2.83%
90,000 Frontier Corp. ................. 2,694,375
120,000 SBC Communications, Inc. ....... 4,972,500
170,000 WorldCom, Inc.* ................ 7,272,813
------------
14,939,688
------------
Transportation - 1.38%
40,000 Burlington Northern
Santa Fe Corp. ................. 3,960,000
120,000 Southwest Airlines Co. ......... 3,292,500
------------
7,252,500
------------
Total Common Stocks ............ 245,197,175
(Cost $166,866,629) ------------
Par Value
---------
CORPORATE NOTES AND BONDS - 23.19%
$ 2,225,000 Abbott Laboratories
6.00%, 03/15/08 ................ 2,211,872
1,000,000 American Express Credit Corp.
6.13%, 06/15/00 ................ 1,003,750
1,000,000 American Express Co.
Senior Bond
6.75%, 06/23/04 ................ 1,028,750
200,000 American Telephone &
Telegraph Corp.
7.00%, 05/15/05 ................ 209,500
500,000 Archer Daniels-Midland Co.
Debenture
8.13%, 06/01/12 ................ 576,250
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
THE GALAXY FUND
Asset Allocation Fund
PORTFOLIO OF INVESTMENTS (continued)
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Par Value (Note 2)
--------- --------
CORPORATE NOTES AND BONDS (continued)
<S> <C> <C>
$ 1,000,000 Arizona Public Service Co.
First Mortgage
7.63%, 06/15/99 ................ $ 1,016,250
1,000,000 Associates Corp. of
North America
Senior Note
7.25%, 09/01/99 ................ 1,014,260
1,000,000 Associates Corp. of
North America, MTN
6.13%, 11/12/99 ................ 1,000,040
1,000,000 Associates Corp. of
North America
Senior Note
5.25%, 03/30/00 ................ 987,500
1,000,000 Associates Corp. of
North America
5.85%, 01/15/01 ................ 996,250
1,000,000 Bank One Milwaukee, MTN
6.35%, 03/19/01 ................ 1,008,750
1,000,000 Borg-Warner Automotive, Inc.
Senior Note
7.00%, 11/01/06 ................ 1,035,000
2,000,000 Branch Banking & Trust
Senior Note
6.20%, 09/15/99 ................ 2,012,720
200,000 Burlington Northern Santa Fe
6.88%, 02/15/16 ................ 201,250
330,000 California Infrastructure PG&E
6.16%, 06/25/03 ................ 331,752
1,000,000 Caterpillar Financial
Services Corp., MTN
6.84%, 09/15/99 ................ 1,009,540
1,000,000 Caterpillar Financial
Services Corp.
Series F, MTN
6.40%, 04/16/01 ................ 1,011,250
1,700,000 Caterpillar Financial
Services Corp., MTN
6.00%, 05/23/02 ................ 1,691,500
500,000 CIT Group Holdings, Inc.,
Senior MTN
6.20%, 06/17/99 ................ 500,805
1,150,000 CIT Group Holdings, Inc., MTN
6.40%, 01/28/00 ................ 1,157,187
1,200,000 Citicorp, Senior MTN
8.63%, 11/01/04 ................ 1,246,500
1,000,000 Coca-Cola Enterprises, Inc.
7.13%, 08/01/17 ................ 1,045,000
1,000,000 Coca-Cola Enterprises, Inc.
6.70%, 10/15/36 ................ 1,037,500
1,100,000 Commercial Credit Co.
6.00%, 04/15/00 ................ 1,101,375
1,000,000 Commercial Credit Co.
5.75%, 07/15/00 ................ 995,000
1,000,000 Commercial Credit Co.
5.55%, 02/15/01 ................ 988,750
1,400,000 Commercial Credit Co.
6.50%, 08/01/04 ................ 1,407,000
2,000,000 Consolidated Natural Gas
6.80%, 12/15/27 ................ 2,012,500
2,000,000 Crown Cork & Seal Finance Plc
7.00%, 12/15/06 ................ 2,072,500
1,500,000 Deere (John) Capital Corp.
6.30%, 06/01/99 ................ 1,504,500
500,000 Disney (Walt) Co., Series A
6.38%, 03/30/01 ................ 506,875
CORPORATE NOTES AND BONDS (continued)
$ 1,500,000 Disney (Walt) Co., Series B
6.75%, 03/30/06 ................ $ 1,554,375
1,000,000 First Union Corp.
6.60%, 06/15/00 ................ 1,013,750
1,000,000 Ford Motor Credit Co.
7.75%, 10/01/99 ................ 1,021,810
1,000,000 Ford Motor Credit Co.
8.38%, 01/15/00 ................ 1,038,750
2,000,000 Ford Motor Credit Co.
6.38%, 10/06/00 ................ 2,017,500
1,000,000 Ford Motor Credit Co.
6.50%, 02/28/02 ................ 1,012,500
3,000,000 G.E. Capital Corp.,
Series A, MTN
5.76%, 04/24/00 ................ 2,996,250
1,000,000 G.E. Capital Corp.,
Series A, MTN
5.92%, 04/03/01 ................ 996,250
3,000,000 General Motors Acceptance Corp.
7.00%, 03/01/00 ................ 3,048,750
1,000,000 General Motors Acceptance Corp.
6.88%, 07/15/01 ................ 1,021,250
1,000,000 Georgia Power Co.
6.13%, 09/01/99 ................ 1,001,250
250,000 GTE Corp.
6.46%, 04/15/08 ................ 252,350
1,000,000 GTE North, Inc., Series D
6.90%, 11/01/08 ................ 1,038,750
1,425,000 GTE Corp.
6.84%, 04/15/18 ................ 1,423,218
3,000,000 Heinz (H.J.) Co., Euro Bond
5.75%, 02/03/03 ................ 2,947,200
750,000 Heinz (H.J.) Co.
6.88%, 01/15/03 ................ 773,437
1,000,000 Hershey Foods Corp.
6.70%, 10/01/05 ................ 1,042,500
1,300,000 Hershey Foods Corp.
7.20%, 08/15/27 ................ 1,387,750
1,000,000 Hertz Corp., Senior Note
7.00%, 04/15/01 ................ 1,021,250
1,000,000 Household Finance Corp.
7.75%, 06/01/99 ................ 1,016,480
2,000,000 Ingersoll-Rand, Senior Note
6.26%, 02/15/01 ................ 2,010,000
1,000,000 International Business
Machines Corp.
7.50%, 06/15/13 ................ 1,096,250
2,000,000 International Business
Machines Corp.
6.22%, 08/01/27 ................ 2,032,500
500,000 International Paper Co.
7.00%, 06/01/01 ................ 513,750
1,000,000 Keycorp Institutional
Capital Corp.
6.63%, 06/01/99 (B) ............ 1,005,800
1,500,000 Lockheed Martin Corp.
6.85%, 05/15/01 ................ 1,530,000
1,500,000 Lucent Technologies, Inc.
7.25%, 07/15/06 ................ 1,597,500
500,000 Masco Corp.
6.63%, 09/15/99 ................ 504,375
500,000 May Department Stores Co.
6.88%, 11/01/05 ................ 518,750
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
THE GALAXY FUND
Asset Allocation Fund
PORTFOLIO OF INVESTMENTS (continued)
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Par Value (Note 2)
--------- --------
CORPORATE NOTES AND BONDS (continued)
<S> <C> <C>
$ 2,025,000 McDonald's Corp., Senior MTN
5.95%, 01/15/08 ................ $ 1,987,030
500,000 McDonald's Corp.
8.88%, 04/01/11 ................ 608,750
500,000 Mead Corp.
6.84%, 03/01/37 ................ 521,875
1,450,000 Merck & Co.
6.40%, 03/01/28 ................ 1,438,255
2,500,000 Minnesota Mining & Manufacturing
6.38%, 02/15/28 ................ 2,456,250
1,000,000 Morgan Guaranty Trust Co.
of New York
5.75%, 10/08/99 ................ 996,250
1,000,000 National City Bank of Kentucky
6.30%, 02/15/11 ................ 971,250
1,000,000 National Rural Utilities
Cooperative Finance Corp.
6.38%, 10/15/04 ................ 1,007,500
1,500,000 National Rural Utilities,
Collective Trust
6.20%, 02/01/08 ................ 1,477,500
1,000,000 NationsBank Corp.
7.00%, 09/15/01 ................ 1,026,250
500,000 Northern Telecom, Ltd.
6.00%, 09/01/03 ................ 496,875
1,000,000 Paccar Financial Corp.,
Series H MTN
6.42%, 05/15/00 ................ 1,008,750
1,000,000 Paccar Financial Corp.,
Series H MTN
6.39%, 06/15/00 ................ 1,007,500
1,000,000 Penney (J.C.) & Co.
6.95%, 04/01/00 ................ 1,017,500
1,000,000 Pennsylvania Power & Light Co.
6.88%, 02/01/03 ................ 1,031,250
2,975,000 PepsiCo, Inc., Series 1, MTN
6.80%, 05/15/00 ................ 3,027,062
1,000,000 PepsiCo, Inc.
5.75%, 01/15/08 ................ 961,250
1,000,000 Philadelphia Electric Co.
7.50%, 01/15/99 ................ 1,010,000
2,100,000 Pitney Bowes Credit Corp.,
Series C, MTN
6.54%, 07/15/99 ................ 2,113,839
1,590,000 Pitney Bowes Credit Corp.
6.63%, 06/01/02 ................ 1,623,788
2,000,000 Potomac Electric Power Co.
6.25%, 10/15/07 ................ 2,025,000
325,000 Rite Aid Corp.
6.70%, 12/15/01 ................ 330,688
1,200,000 Sears Roebuck Acceptance Corp.
6.00%, 03/20/03 ................ 1,188,000
1,000,000 Service Corp. International
7.38%, 04/15/04 ................ 1,052,500
3,000,000 Sherwin-Williams Co.
6.50%, 02/01/02 ................ 3,037,500
2,000,000 Sherwin-Williams Co.
6.85%, 02/01/07 ................ 2,087,500
1,000,000 Southwest Airlines Co.
8.75%, 10/15/03 ................ 1,107,500
CORPORATE NOTES AND BONDS (continued)
$ 1,000,000 Suntrust Bank of Atlanta
7.25%, 09/15/06 ................ $ 1,048,750
500,000 Suntrust Bank of Central
Florida, MTN
6.90%, 07/01/07 ................ 515,000
1,000,000 Sysco Corp.
7.25%, 04/15/07 ................ 1,070,000
1,000,000 Texaco Capital, Inc.
6.88%, 07/15/99 ................ 1,011,250
1,000,000 Texaco Capital, Inc.
8.50%, 02/15/03 ................ 1,100,000
500,000 Texas Utilities Electric Co.
7.38%, 11/01/99 ................ 509,375
500,000 Transamerica Finance Corp.
Subordinated Note
6.75%, 06/01/00 ................ 506,875
1,000,000 Union Pacific Corp.
6.70%, 12/01/06 ................ 1,017,500
2,000,000 United Telecommunications, Inc.
9.50%, 04/01/03 ................ 2,272,500
500,000 Virginia Electric & Power
Co., Series B
8.88%, 06/01/99 ................ 515,000
2,000,000 Wachovia Bank
6.30%, 03/15/01 ................ 2,012,500
1,000,000 Xerox Corp.
9.75%, 03/15/00 ................ 1,066,250
600,000 Xerox Corp.
8.13%, 04/15/02 ................ 644,250
-----------
Total Corporate Notes and Bonds 122,262,633
(Cost $116,463,588) -----------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 13.98%
U.S. Treasury Bonds - 7.90%
1,500,000 7.63%, 02/15/07 ................ 1,590,135
730,000 12.00%, 08/15/13 ............... 1,070,363
10,350,000 7.50%, 11/15/16 ................ 12,046,572
1,000,000 8.13%, 08/15/19 ................ 1,247,780
750,000 8.50%, 02/15/20 ................ 970,710
6,200,000 7.88%, 02/15/21 ................ 7,588,428
500,000 8.13%, 08/15/21 ................ 628,610
3,500,000 7.25%, 08/15/22 ................ 4,030,495
3,250,000 7.63%, 11/15/22 ................ 3,899,903
2,850,000 7.13%, 02/15/23 ................ 3,244,440
3,200,000 6.38%, 08/15/27 ................ 3,377,920
1,900,000 6.13%, 11/15/27 ................ 1,945,904
-----------
41,641,260
-----------
U.S. Treasury Notes - 2.12%
3,000,000 7.50%, 01/15/01 ................ 3,176,610
3,000,000 6.25%, 02/28/02 ................ 3,059,790
2,000,000 5.50%, 03/31/03 ................ 1,987,980
500,000 7.50%, 02/15/05 ................ 549,135
2,000,000 5.63%, 02/15/06 ................ 1,984,260
400,000 7.00%, 07/15/06 ................ 431,748
-----------
11,189,523
-----------
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
THE GALAXY FUND
Asset Allocation Fund
PORTFOLIO OF INVESTMENTS (continued)
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Par Value (Note 2)
--------- --------
Federal National Mortgage Association - 1.92%
<S> <C> <C>
$ 1,000,000 6.74%, 09/19/01 ................ $ 1,028,100
1,000,000 6.49%, 01/19/06 ................ 1,001,330
936,291 6.00%, 01/01/09 ................ 927,218
954,060 6.00%, 04/01/11 ................ 940,941
2,500,000 6.00%, 04/01/13 ................ 2,463,275
791,948 10.00%, 05/01/22 ............... 876,931
2,000,000 8.18%, 04/15/24 ................ 2,035,900
294,645 6.50%, 01/01/26 ................ 292,250
591,980 6.50%, 11/01/27 ................ 585,871
------------
10,151,816
------------
Government National Mortgage Association - 1.38%
5,346,891 8.00%, 09/15/17 ................ 5,627,175
687,538 9.00%, 12/15/17 ................ 744,253
871,126 7.50%, 01/15/26 ................ 894,803
------------
7,266,231
------------
Federal Home Loan Mortgage Corporation - 0.61%
247,000 5.38%, 05/01/98(A) ............. 247,000
1,000,000 7.74%, 06/01/04 ................ 1,019,890
1,000,000 7.05%, 06/08/05 ................ 1,017,020
930,381 7.00%, 01/01/27 ................ 941,713
------------
3,225,623
------------
Federal Farm Credit Bank - 0.05%
250,000 6.40%, 12/11/00 ................ 250,150
------------
Total U.S. Government
and Agency Obligations ......... 73,724,603
(Cost $72,569,678) ------------
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES - 2.06%
4,500,000 California Infrastructure,
Southern California Edison
Series 1997-1, Class A-3
6.17%, 03/25/03 ................ 4,525,313
1,000,000 Chase Manhattan Auto Owner Trust
Series 1998-B, Class A4
5.80%, 02/17/03 ................ 995,039
1,000,000 Chemical Master Credit Card
Trust I Series 1996-1, Class A
5.55%, 09/15/03 ................ 988,430
738,901 Ford Credit Auto Owner Trust
Series 1996-A, Class A-3
6.50%, 11/15/99 ................ 740,749
992,854 NationsBank Auto Owner Trust
Series 1996-A, Class A-3
6.38%, 07/15/00 ................ 995,336
995,684 Premier Auto Trust
Series 1996-3, Class A-3
6.50%, 03/06/00 ................ 998,482
872,993 Prudential Home Mortgage
Securities Class 1996-7,
Series A-1, CMO
6.75%, 06/25/11 ................ 874,084
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES (continued)
$ 764,753 Rural Housing Trust
Series 1987-1, Class 1-D, CMO
6.33%, 04/01/26 ................ $ 763,154
------------
Total Asset-Backed and
Mortgage-Backed Securities ..... 10,880,587
(Cost $10,840,834) ------------
Shares
------
CONVERTIBLE PREFERRED STOCK - 0.47%
30,000 Loral Space and
Communications, Ltd., 6.00% (B) 2,490,000
------------
Total Convertible Preferred Stock 2,490,000
(Cost $1,627,725) ------------
Par Value
---------
REPURCHASE AGREEMENT - 13.99%
$73,797,812 Chase Manhattan Bank
5.45%, 05/01/98, dated 04/30/98
Repurchase Price $73,808,984
(Collateralized by U.S. Treasury Notes
6.25% & 8.75%, due 04/30/00;
Total Par $71,595,000;
Market Value $75,340,041) ...... 73,797,812
------------
Total Repurchase Agreement ..... 73,797,812
(Cost $73,797,812) ------------
Total Investments - 100.19% ...................... 528,352,810
(Cost $442,166,266) ------------
Net Other Assets and Liabilities - (0.19)% ....... (989,594)
------------
Net Assets - 100.00% ............................. $527,363,216
============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security.
(A) Discount yield at time of purchase.
(B) Securities exempt from registration pursuant to Rule 144A under the
Securities Act of 1933, as amended. These securities may be resold, in
transactions exempt from registration, to qualified institutional buyers.
At April 30, 1998, these securities amounted to $3,495,800, or 0.66% of
net assets.
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
See Notes to Financial Statements.
16
<PAGE>
THE GALAXY FUND
Equity Income Fund
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
-------- ---------
COMMON STOCKS - 83.10%
Consumer Staples - 19.00%
<S> <C> <C>
75,000 Becton Dickinson & Co. ......... $ 5,221,875
150,000 Bestfoods ...................... 8,231,250
52,000 Gillette Co. ................... 6,002,750
20,000 Johnson & Johnson .............. 1,427,500
100,000 Lilly (Eli) & Co. .............. 6,956,250
65,000 Merck & Co., Inc. .............. 7,832,500
200,000 PepsiCo, Inc. .................. 7,937,500
85,000 Pfizer, Inc. ................... 9,674,062
66,000 Procter & Gamble Co. ........... 5,424,375
43,000 Warner-Lambert Co. ............. 8,135,062
------------
66,843,124
------------
Finance - 17.69%
18,000 American International Group, Inc. 2,368,125
42,981 Associates First Capital Corp. . 3,212,852
60,000 BankBoston Corp. ............... 6,476,250
170,000 Fannie Mae ..................... 10,178,750
115,000 First Union Corp. .............. 6,943,125
90,000 Hartford Financial
Services Group, Inc. ........... 9,967,500
145,000 Highwoods Properties, Inc., REIT 4,930,000
160,000 Norwest Corp. .................. 6,350,000
130,000 Spieker Properties, Inc., REIT . 5,151,250
95,000 Washington Mutual, Inc. ........ 6,655,938
------------
62,233,790
------------
Energy - 9.62%
105,000 Atlantic Richfield Co. ......... 8,190,000
122,000 Exxon Corp. .................... 8,898,375
107,000 Mobil Corp. .................... 8,453,000
135,000 Texaco, Inc. ................... 8,302,500
------------
33,843,875
------------
Consumer Cyclical - 8.26%
164,000 Ford Motor Co. ................. 7,513,250
95,000 McDonald's Corp. ............... 5,878,125
217,000 Sherwin-Williams Co. ........... 7,730,625
230,000 Walgreen Co. ................... 7,935,000
------------
29,057,000
------------
Utilities - 8.64%
104,000 American Telephone
& Telegraph Corp. .............. $ 6,246,500
260,000 Baltimore Gas & Electric Co. ... 8,190,000
210,000 Frontier Corp. ................. 6,286,875
158,000 SBC Communications, Inc. ....... 6,547,125
115,000 Washington Gas Light Co. ....... 3,126,562
------------
30,397,062
------------
Technology - 7.85%
170,000 AMP, Inc. ...................... 6,683,125
160,000 Automatic Data Processing, Inc. 10,710,000
90,000 Xerox Corp. .................... 10,215,000
------------
27,608,125
------------
Capital Goods and Construction - 6.12%
110,000 Boeing Co. ..................... 5,506,875
115,000 Dresser Industries, Inc. ....... 6,080,625
105,000 General Electric Co. ........... 8,938,125
25,000 Thermo Electron Corp.* ......... 995,313
------------
21,520,938
------------
Basic Materials - 5.92%
138,000 Crown Cork & Seal Co., Inc. .... 7,184,625
65,000 Minnesota Mining &
Manufacturing Co. .............. 6,134,375
130,000 Weyerhaeuser Co. ............... 7,491,250
------------
20,810,250
------------
Total Common Stocks ............ 292,314,164
(Cost $196,945,935) ------------
Par Value
---------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 1.13%
U.S. Treasury Note - 0.57%
$ 2,000,000 5.50%, 04/15/00 ............... 1,997,720
------------
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
THE GALAXY FUND
Equity Income Fund
PORTFOLIO OF INVESTMENTS (continued)
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Par Value (Note 2)
--------- --------
U.S. Treasury Bond - 0.56%
<S> <C> <C>
$ 1,700,000 7.50%, 11/15/16 ................ $ 1,978,664
------------
Total U.S. Government
and Agency Obligations ......... 3,976,384
(Cost $3,662,781) ------------
REPURCHASE AGREEMENT - 15.43%
54,296,206 Chase Manhattan Bank 5.45%,
05/01/98, dated 04/30/98
Repurchase Price $54,304,426
(Collateralized by U.S. Treasury
Note 6.75%, due 04/30/00;
Total Par $53,125,000;
Market Value $55,458,299) ...... 54,296,206
------------
Total Repurchase Agreement ..... 54,296,206
(Cost $54,296,206) ------------
Total Investments - 99.66% ....................... 350,586,754
(Cost $254,904,922) ------------
Net Other Assets and Liabilities - 0.34% ......... 1,189,833
------------
Net Assets - 100.00% ............................. $351,776,587
============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security.
REIT Real Estate Investment Trust.
See Notes to Financial Statements.
18
<PAGE>
THE GALAXY FUND
Growth and Income Fund
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
-------- ---------
COMMON STOCKS - 90.33%
Consumer Staples - 19.49%
<S> <C> <C>
95,000 American Home Products Corp. ... $ 8,846,875
107,000 Anheuser-Busch Cos., Inc. ...... 4,901,938
72,000 Becton Dickinson & Co. ......... 5,013,000
187,000 Elan Corp. Plc, ADR* ........... 11,617,375
142,000 Forest Laboratories, Inc.* ..... 5,138,625
225,000 Genzyme Corp.* ................. 6,960,937
157,000 Hannaford Brothers Co. ......... 6,976,687
260,000 Humana, Inc.* .................. 7,020,000
121,000 International Flavors &
Fragances, Inc. ................ 5,921,437
92,000 Johnson & Johnson .............. 6,566,500
68,000 Merck & Co., Inc. .............. 8,194,000
165,000 PepsiCo, Inc. .................. 6,548,437
49,000 Pfizer, Inc. ................... 5,576,813
145,000 Pharmacia & Upjohn, Inc. ....... 6,099,063
115,000 Stryker Corp. .................. 5,175,000
124,000 United HealthCare Corp. ........ 8,711,000
------------
109,267,687
------------
Technology - 13.45%
148,000 AMP, Inc. ...................... 5,818,250
82,000 Avnet, Inc. .................... 5,058,375
160,000 Cabletron Systems, Inc.* ....... 2,120,000
95,000 Cisco Systems, Inc.* ........... 6,958,750
188,000 Compaq Computer Corp. .......... 5,275,750
88,000 Computer Sciences Corp.* ....... 4,642,000
190,000 Electronic Data Systems Corp. .. 8,170,000
112,000 Harris Corp. ................... 5,418,000
140,000 Hewlett-Packard Co. ............ 10,543,750
65,000 International Business
Machines Corp. ................. 7,531,875
130,000 Motorola, Inc. ................. 7,231,250
104,000 Texas Instruments, Inc. ........ 6,662,500
------------
75,430,500
------------
Finance - 12.65%
26,208 Associates First Capital Corp. . 1,959,048
148,000 Banc One Corp. ................. 8,704,250
50,000 Chase Manhattan Corp. .......... 6,928,125
70,000 Chubb Corp. .................... 5,525,625
110,000 Countrywide Credit
Industries, Inc. ............... 5,321,250
32,767 General Re Corp. ............... 7,377,563
57,000 Hartford Financial
Services Group, Inc. ........... 6,312,750
64,000 Lincoln National Corp. ......... 5,684,000
46,000 Morgan (J.P.) & Co., Inc. ...... 6,037,500
118,000 NationsBank Corp. .............. 8,938,462
22,000 Wells Fargo & Co. .............. 8,107,000
------------
70,895,573
------------
Consumer Cyclical - 11.91%
232,000 Cooper Tire & Rubber Co. ....... $ 5,539,000
47,000 Culligan Water Technologies, Inc.* 2,728,938
180,000 Dun & Bradstreet Corp. ......... 6,390,000
76,000 Eastman Kodak Co. .............. 5,486,250
100,000 Ford Motor Co. ................. 4,581,250
120,000 Lowe's Cos., Inc. .............. 8,392,500
95,000 McDonald's Corp. ............... 5,878,125
332,000 Office Depot, Inc.* ............ 10,997,500
92,000 Penney (J.C.) Co., Inc. ........ 6,537,750
148,000 Sherwin-Williams Co. ........... 5,272,500
180,000 Toys 'R' Us, Inc.* ............. 4,961,250
------------
66,765,063
------------
Capital Goods and Construction - 8.92%
110,000 Boeing Co. ..................... 5,506,875
140,000 Dresser Industries, Inc. ....... 7,402,500
67,000 General Electric Co. ........... 5,703,375
60,000 Honeywell, Inc. ................ 5,587,500
120,000 Hubbell, Inc., Class A ......... 5,617,500
172,000 Thermo Electron Corp.* ......... 6,847,750
166,000 US Filter Corp.* ............... 5,415,750
236,000 Waste Management, Inc. ......... 7,906,000
------------
49,987,250
------------
Energy - 7.96%
128,000 Amoco Corp. .................... 5,664,000
68,000 Atlantic Richfield Co. ......... 5,304,000
230,000 Baker Hughes, Inc. ............. 9,315,000
78,000 Kerr-McGee Corp. ............... 5,148,000
77,000 Mobil Corp. .................... 6,083,000
180,000 Occidental Petroleum Corp. ..... 5,298,750
94,000 Schlumberger, Ltd. ............. 7,790,250
------------
44,603,000
------------
Basic Materials - 7.33%
142,000 Goodrich (B.F.) Co. ............ 7,641,375
176,000 Lubrizol Corp. ................. 6,490,000
62,000 Minnesota Mining &
Manufacturing Co. .............. 5,851,250
150,000 Morton International, Inc. ..... 4,800,000
250,000 Pall Corp. ..................... 4,906,250
116,000 Praxair, Inc. .................. 5,836,250
140,000 Sigma Aldrich Corp. ............ 5,582,500
------------
41,107,625
------------
Utilities - 5.72%
182,000 Century Telephone Enterprises, Inc. 7,746,375
158,000 Entergy Corp. .................. 3,930,250
134,000 GTE Corp. ...................... 7,830,625
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
THE GALAXY FUND
Growth and Income Fund
PORTFOLIO OF INVESTMENTS (continued)
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
----------- ---------
Utilities (continued)
<S> <C> <C>
116,000 SBC Communications, Inc. ....... $ 4,806,750
182,000 WorldCom, Inc.* ................ 7,786,188
------------
32,100,188
------------
Transportation - 2.90%
59,000 British Airways Plc, ADR ....... 6,180,250
55,000 Burlington Northern
Santa Fe Corp. ................. 5,445,000
85,000 Union Pacific Corp. ............ 4,653,750
------------
16,279,000
------------
Total Common Stocks ............ 506,435,886
(Cost $400,631,362) ------------
CONVERTIBLE PREFERRED STOCKS - 2.29%
115,000 Crown Cork & Seal Co., Inc., 4.5% 5,555,938
88,000 Loral Space and
Communications, Ltd., 6.00% (A) 7,304,000
------------
Total Convertible Preferred Stocks 12,859,938
(Cost $9,826,659) ------------
Value
Par Value (Note 2)
- ----------- ---------
REPURCHASE AGREEMENT - 7.59%
$42,537,710 Chase Manhattan Bank
5.45%, 05/01/98, dated 04/30/98
Repurchase Price $42,544,150
(Collateralized by U.S. Treasury Note
6.75%, due 04/30/00;
Total Par $40,040,000;
Market Value $44,456,913) ...... $ 42,537,710
------------
Total Repurchase Agreement ..... 42,537,710
(Cost $42,537,710) ------------
Total Investments - 100.21% ...................... 561,833,534
(Cost $452,995,731) ------------
Net Other Assets and Liabilities - (0.21)% ....... (1,163,642)
------------
Net Assets - 100.00% $560,669,892
============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security.
(A) Securities exempt from registration pursuant to Rule 144A under the
Securities Act of 1933, as amended. These securities may be resold, in
transactions exempt from registration, to qualified institutional buyers.
At April 30, 1998, these securities amounted to $7,304,000, or 1.30% of
net assets.
ADR American Depositary Receipt.
See Notes to Financial Statements.
20
<PAGE>
THE GALAXY FUND
Equity Value Fund
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
------ --------
COMMON STOCKS - 94.10%
Consumer Cyclical - 20.65%
<S> <C> <C>
102,500 Albertson's, Inc. .............. $ 5,125,000
176,800 Carnival Corp., Class A ........ 12,298,650
78,600 Chrysler Corp. ................. 3,158,737
93,800 CompUSA, Inc.* ................. 1,741,162
62,000 Family Dollar Stores, Inc. ..... 2,108,000
220,500 Fleetwood Enterprises, Inc. .... 10,184,343
102,500 Gap, Inc. ...................... 5,272,343
98,700 General Motors Corp. ........... 6,649,913
204,300 Harley-Davidson, Inc. .......... 7,354,800
90,000 Jones Apparel Group, Inc.* ..... 5,383,125
69,900 Kaufman & Broad Home Corp. ..... 2,031,469
138,500 Lowe's Cos., Inc. .............. 9,686,344
220,100 Mattel, Inc. ................... 8,432,581
341,700 Office Depot, Inc.* ............ 11,318,813
205,000 Pier 1 Imports, Inc. ........... 5,406,875
208,500 Ross Stores, Inc. .............. 9,656,155
214,200 TJX Cos., Inc. ................. 9,478,350
------------
115,286,660
------------
Finance - 17.97%
18,100 American International
Group, Inc. .................... 2,381,281
151,490 Banc One Corp. ................. 8,909,506
47,000 BankBoston Corp. ............... 5,073,062
63,000 Chase Manhattan Corp. .......... 8,729,438
23,300 Citicorp ....................... 3,506,650
76,300 Fannie Mae ..................... 4,568,463
138,700 First Union Corp. .............. 8,374,013
70,000 Marsh & McLennan Cos., Inc. .... 6,378,750
106,100 MBIA, Inc. ..................... 7,917,713
141,200 MBNA Corp. ..................... 4,783,150
118,400 Mellon Bank Corp. .............. 8,524,800
100,500 Merrill Lynch & Co., Inc. ...... 8,818,875
103,900 NationsBank Corp. .............. 7,870,425
199,850 SLM Holding Corp. .............. 8,531,097
110,000 UNUM Corp. ..................... 5,912,500
------------
100,279,723
------------
Technology - 15.38%
192,900 Altera Corp.* .................. 7,812,450
62,600 Boston Scientific Corp.* ....... 4,526,763
158,000 Cadence Design Systems, Inc.* .. 5,737,375
99,150 Cisco Systems, Inc.* ........... 7,262,738
281,700 Compaq Computer Corp. .......... 7,905,205
126,000 Computer Associates
International, Inc. ............ 7,378,875
Technology (continued)
117,800 Digital Equipment Corp.* ....... $ 6,552,625
41,400 Electronic Data Systems Corp. .. 1,780,200
332,700 EMC Corp.* ..................... 15,345,788
83,700 Intel Corp. .................... 6,764,005
23,300 International Business
Machines Corp. ................. 2,699,888
186,700 KLA-Tencor Corp.* .............. 7,526,344
132,800 3Com Corp.* .................... 4,548,400
------------
85,840,656
------------
Consumer Staples - 10.10%
136,100 Abbott Laboratories ............ 9,952,313
108,000 American Home Products Corp. ... 10,057,500
68,200 Becton Dickinson & Co. ......... 4,748,425
279,600 Biomet, Inc. ................... 8,388,000
80,000 Merck & Co., Inc. .............. 9,640,000
102,600 Schering-Plough Corp. .......... 8,220,825
74,500 Wellpoint Health Networks, Inc.* 5,373,313
------------
56,380,376
------------
Utilities - 9.91%
120,000 American Telephone &
Telegraph Corp. ................ 7,207,500
119,800 Bell Atlantic Corp. ............ 11,208,788
179,400 FPL Group, Inc. ................ 11,134,013
52,000 GTE Corp. ...................... 3,038,750
261,900 Public Service
Enterprise Group, Inc. ......... 8,790,019
208,800 SBC Communications, Inc. ....... 8,652,150
100,000 US WEST Communications Group ... 5,275,000
------------
55,306,220
------------
Capital Goods and Construction - 9.71%
139,200 Case Corp. ..................... 8,847,900
197,300 Clayton Homes, Inc. ............ 3,958,331
151,600 Ingersoll-Rand Co. ............. 6,983,075
44,400 Johnson Controls, Inc. ......... 2,636,250
46,200 Lockheed Martin Corp. .......... 5,145,525
140,000 Precision Castparts Corp. ...... 8,697,500
143,300 Sundstrand Corp. ............... 9,896,656
81,900 United Technologies Corp. ...... 8,062,031
------------
54,227,268
------------
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
THE GALAXY FUND
Equity Value Fund
PORTFOLIO OF INVESTMENTS (continued)
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------- --------
Energy - 7.08%
<S> <C> <C>
79,900 Coastal Corp. .................. $ 5,707,856
98,400 Diamond Offshore Drilling, Inc. 4,981,500
140,000 ENSCO International, Inc. ...... 3,955,000
40,000 Helmerich & Payne, Inc. ........ 1,220,000
80,100 Phillips Petroleum Co. ......... 3,969,956
210,000 Rowan Cos., Inc.* .............. 6,181,875
100,000 Schlumberger, Ltd. ............. 8,287,500
88,700 Smith International, Inc.* ..... 5,211,125
------------
39,514,812
------------
Transportation - 3.30%
44,600 AMR Corp.* ..................... 6,795,925
97,800 FDX Corp.* ..................... 6,650,400
94,700 Northwest Airlines Corp.,
Class A* ....................... 4,971,750
------------
18,418,075
------------
Total Common Stocks ............ 525,253,790
(Cost $409,138,381) ------------
Value
Par Value (Note 2)
- --------- --------
REPURCHASE AGREEMENT - 5.86%
$32,707,911 Chase Manhattan Bank
5.45%, 05/01/98, dated 04/30/98
Repurchase Price $32,712,863
(Collateralized by U.S. Treasury
Note 6.75%, due 04/30/00;
Total Par $32,710,000;
Market Value $34,509,050) ...... $ 32,707,911
------------
Total Repurchase Agreement ..... 32,707,911
(Cost $32,707,911) ------------
Total Investments - 99.96% ....................... 557,961,701
(Cost $441,846,292) ------------
Net Other Assets and Liabilities - 0.04% ......... 208,866
------------
Net Assets - 100.00% ............................. $558,170,567
============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security.
See Notes to Financial Statements.
22
<PAGE>
THE GALAXY FUND
Strategic Equity Fund
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
-------- ---------
COMMON STOCKS - 82.13%
Consumer Cyclical - 14.88%
<S> <C> <C>
1,800 Circuit City Stores ............ $ 73,125
12,000 CompUSA Inc.* .................. 222,750
6,000 Cooper Tire & Rubber Co. ....... 143,250
1,600 Eastman Kodak Co. .............. 115,500
1,900 Lowe's Cos., Inc. .............. 132,880
4,300 Pep Boys-Manny Moe & Jack ...... 93,525
2,700 Toys 'R' Us, Inc.* ............. 74,418
3,300 Wendy's International, Inc. .... 79,406
------------
934,854
------------
Consumer Staples - 14.48%
1,800 Albertsons, Inc. ............... 90,000
1,400 Becton Dickinson & Co. ......... 97,475
2,600 Elan Corp. Plc, ADR* ........... 161,525
3,000 Forest Laboratories, Inc.* ..... 108,562
2,500 Genzyme Corp.* ................. 77,344
1,500 Hannaford Brothers Co. ......... 66,656
1,500 Kimberly Clark Corp. ........... 76,125
600 Merck & Co., Inc. .............. 72,300
1,700 Stryker Corp. .................. 76,500
3,500 Sysco Corp. .................... 83,344
------------
909,831
------------
Technology - 14.17%
1,900 AMP Inc. ....................... 74,694
2,900 Andrew Corp.* .................. 66,338
2,500 Applied Materials, Inc.* ....... 90,312
1,400 Boston Scientific Corp.* ....... 101,237
2,100 Electronic Data Systems Co. .... 90,300
1,600 Hewlett Packard Co. ............ 120,500
700 Intel Corp. .................... 56,569
900 International Business
Machines Corp. ................. 104,287
1,600 Perkin Elmer Corp. ............. 109,400
2,100 Teradyne, Inc.* ................ 76,650
------------
890,287
------------
Energy - 9.89%
2,500 Baker Hughes, Inc. ............. 101,250
1,500 Burlington Resources, Inc. ..... 70,500
1,800 Cooper Cameron Corp.* .......... 119,588
2,000 National Fuel Gas Co. .......... 92,000
1,800 Noble Affiliates, Inc. ......... 77,625
1,200 Schlumberger, Ltd. ............. 99,450
1,500 Unocal Corp. ................... 61,406
------------
621,819
------------
Capital Goods and Construction - 9.84%
1,500 Boeing Co. ..................... $ 75,094
1,300 Case Corporation ............... 82,631
2,100 Dresser Industries, Inc. ....... 111,038
4,000 Molex, Inc., Class A ........... 107,500
2,000 Raychem Corp. .................. 80,375
2,700 United States Filter Corp.* .... 88,088
2,200 Waste Management, Inc. ......... 73,700
------------
618,426
------------
Finance - 7.32%
600 Chase Manhattan Corp. .......... 83,138
800 Hartford Financial
Services Group, Inc. ........... 88,600
1,400 MBIA, Inc. ..................... 104,475
1,300 Transatlantic Holdings, Inc. ... 99,856
1,200 Washington Mutual, Inc. ........ 84,075
------------
460,144
------------
Basic Materials - 6.55%
2,400 Crown Cork & Seal Co., Inc. .... 124,950
1,500 Goodrich (B.F.) Co. ............ 80,719
5,000 Pall Corp. ..................... 98,125
2,700 Sigma Aldrich Corp. ............ 107,663
------------
411,457
------------
Transportation - 3.71%
1,300 Burlington Northern
Santa Fe Corp. ................. 128,700
3,800 Southwest Airlines Co. ......... 104,263
------------
232,963
------------
Utilities - 1.29%
1,900 Century Telephone Enterprise,
Inc. ........................... 80,869
------------
Total Common Stocks ............ 5,160,650
(Cost $5,117,949) ------------
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
THE GALAXY FUND
Strategic Equity Fund
PORTFOLIO OF INVESTMENTS (continued)
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Par Value (Note 2)
--------- --------
U.S. AGENCY OBLIGATION (A) - 15.07%
Federal Home Loan Bank - 15.07%
<S> <C> <C>
$ 947,000 5.43%, 05/01/98 ................ $ 947,000
------------
Total U.S. Agency Obligation ... 947,000
(Cost $947,000) ------------
Total Investments - 97.20% ....................... 6,107,650
(Cost $6,064,949) ------------
Net Other Assets and Liabilities - 2.80% ......... 176,174
------------
Net Assets - 100.00% ............................. $ 6,283,824
============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security.
(A) Discount yield at time of purchase.
ADR American Depositary Receipt
See Notes to Financial Statements.
24
<PAGE>
THE GALAXY FUND
Equity Growth Fund
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
-------- ---------
COMMON STOCKS - 92.46%
Consumer Staples - 19.12%
<S> <C> <C>
225,000 Abbott Laboratories ............ $ 16,453,125
125,000 American Home Products Corp. ... 11,640,625
200,000 Becton Dickinson & Co. ......... 13,925,000
220,000 Bestfoods ...................... 12,072,500
165,000 Bristol-Myers Squibb Co. ....... 17,469,375
300,000 Elan Corp. Plc, ADR* ........... 18,637,500
100,000 Gillette Co. ................... 11,543,750
300,000 Guidant Corp. .................. 20,062,500
175,000 Johnson & Johnson .............. 12,490,625
225,000 Lilly (Eli) & Co. .............. 15,651,562
150,000 Merck & Co., Inc. .............. 18,075,000
300,000 PepsiCo, Inc. .................. 11,906,250
225,000 Pfizer, Inc. ................... 25,607,812
150,000 Procter & Gamble Co. ........... 12,328,125
75,000 Warner-Lambert Co. ............. 14,189,062
------------
232,052,811
------------
Technology - 16.84%
200,000 Adobe Systems, Inc. ............ 10,012,500
320,000 Applied Materials, Inc.* ....... 11,560,000
350,000 Automatic Data Processing, Inc. 23,428,125
275,000 CBS Corp. ...................... 9,796,875
115,000 Chancellor Media Corp.* ........ 5,455,312
275,000 Cisco Systems, Inc.* ........... 20,143,750
350,000 Compaq Computer Corp. .......... 9,821,875
300,000 EMC Corp.* ..................... 13,837,500
50,000 Ericsson (Lm) Tel-Sp, ADR ...... 2,571,875
85,000 Intel Corp. .................... 6,869,062
125,000 International Business
Machines Corp. ................. 14,484,375
120,000 Lucent Technologies, Inc. ...... 9,135,000
300,000 Maxim Integrated Products, Inc.* 12,112,500
100,000 Network Associates, Inc.* ...... 6,850,000
350,000 Teradyne, Inc.* ................ 12,775,000
200,000 Texas Instruments, Inc. ........ 12,812,500
200,000 Xerox Corp. .................... 22,700,000
------------
204,366,249
------------
Finance - 14.94%
240,000 Ahmanson (H.F.) & Co. .......... 18,300,000
150,000 American International
Group, Inc. .................... 19,734,375
278,625 Associates First Capital Corp. . 20,827,219
125,000 Chase Manhattan Corp. .......... 17,320,313
250,650 Cornerstone Properties,
Inc., REIT ..................... 4,511,700
300,000 Fannie Mae ..................... 17,962,500
400,000 Heller Financial, Inc. ......... 6,885,000
275,000 Norwest Corp. .................. 10,914,063
175,000 St. Paul Cos., Inc. ............ 14,831,250
250,000 SunAmerica, Inc. ............... 12,484,375
300,000 Travelers Group, Inc. .......... 18,356,250
275,000 Washington Mutual, Inc. ........ 19,267,188
------------
181,394,233
------------
Consumer Cyclical - 13.05%
225,000 CVS Corp. ...................... $ 16,593,750
135,000 Disney (Walt) Co. .............. 16,782,188
300,000 Ford Motor Co. ................. 13,743,750
240,000 Home Depot, Inc. ............... 16,710,000
136,000 Lowe's Cos., Inc. .............. 9,511,500
200,000 McDonald's Corp. ............... 12,375,000
200,000 Penny (J.C.) Co., Inc. ......... 14,212,500
325,000 Service Corp. International .... 13,406,250
375,000 Sherwin-Williams Co. ........... 13,359,375
100,000 Sinclair Broadcast Group, Inc.* 5,187,500
600,000 TJX Cos., Inc. ................. 26,550,000
------------
158,431,813
------------
Energy - 11.32%
250,000 Amoco Corp. .................... 11,062,500
240,000 Anadarko Petroleum Corp. ....... 17,580,000
360,000 Baker Hughes, Inc. ............. 14,580,000
275,000 Cooper Cameron Corp.* .......... 18,270,313
325,000 Halliburton Co. ................ 17,875,000
200,000 Mobil Corp. .................... 15,800,000
240,000 Schlumberger, Ltd. ............. 19,890,000
400,000 Transocean Offshore, Inc. ...... 22,350,000
------------
137,407,813
------------
Capital Goods and Construction - 10.90%
275,000 AlliedSignal, Inc. ............. 12,048,438
250,000 Boeing Co. ..................... 12,515,625
275,000 Deere & Co. .................... 16,070,313
275,000 General Electric Co. ........... 23,409,375
450,000 Thermo Electron Corp.* ......... 17,915,625
380,000 Tyco International, Ltd. ....... 20,710,000
500,000 United States Filter Corp.* .... 16,312,500
100,000 U.S.A. Waste Services, Inc.* ... 4,906,250
250,000 Waste Management, Inc. ......... 8,375,000
------------
132,263,126
------------
Utilities - 3.32%
300,000 MCI Communications Corp. ....... 15,093,750
300,000 SBC Communications, Inc. ....... 12,431,250
300,000 WorldCom, Inc.* ................ 12,834,375
------------
40,359,375
------------
Basic Materials - 1.88%
175,000 E.I. du Pont de Nemours & Co. .. 12,742,187
130,000 Georgia-Pacific Corp. .......... 10,034,375
------------
22,776,562
------------
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
THE GALAXY FUND
Equity Growth Fund
PORTFOLIO OF INVESTMENTS (continued)
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
------- ---------
Transportation - 1.09%
<S> <C> <C>
150,000 Northwest Airlines Corp.,
Class A* ...................... $ 7,875,000
75,000 US Airways Group, Inc.* ....... 5,334,375
--------------
13,209,375
--------------
Total Common Stocks ........... 1,122,261,357
(Cost $706,072,908) --------------
CONVERTIBLE PREFERRED STOCKS - 2.84%
140,000 AES Trust I, Series A ......... 11,611,250
275,000 Loral Space and
Communications (A) ............ 22,825,000
--------------
Total Convertible Preferred
Stocks ........................ 34,436,250
(Cost $20,750,000) --------------
Par Value
---------
REPURCHASE AGREEMENT - 5.88%
$71,362,302 Chase Manhattan Bank
5.45%, 05/01/98, dated 04/30/98
Repurchase Price $71,373,105
(Collateralized by U.S. Treasury
Note 6.75%, due 04/30/00;
Total Par $71,365,000;
Market Value $75,290,075) ..... 71,362,302
--------------
Total Repurchase Agreement .... 71,362,302
(Cost $71,362,302) --------------
Total Investments - 101.18% ..................... 1,228,059,909
(Cost $798,185,210) --------------
Net Other Assets and Liabilities - (1.18)% ...... (14,277,580)
--------------
Net Assets - 100.00% ............................ $1,213,782,329
==============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security.
(A) Securities exempt from registration pursuant to Rule 144A under the
Securities Act of 1933, as amended. These securities may be resold, in
transactions exempt from registration, to qualified institutional buyers.
At April 30, 1998, these securities amounted to $22,825,000, or 1.88% of
net assets.
ADR American Depositary Receipt.
REIT Real Estate Investment Trust.
See Notes to Financial Statements.
26
<PAGE>
THE GALAXY FUND
Small Cap Value Fund
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
-------- ---------
COMMON STOCKS - 87.54%
Technology - 20.11%
<S> <C> <C>
58,350 Advanced Technical Products,
Inc.* .......................... $ 816,900
56,200 Analogic Corp. ................. 2,620,325
24,000 Ardent Software, Inc.* ......... 339,000
43,600 Asia Electronics Holding Co.,
Inc.* .......................... 348,800
30,100 Axsys Technologies, Inc.* ...... 735,569
124,400 BancTec, Inc.* ................. 2,713,475
12,100 Barringer Technologies, Inc.* .. 145,200
140,100 Benchmark Electronics, Inc.* ... 3,143,494
89,800 Berg Electronics Corp.* ........ 2,138,363
24,900 Bioanalytical Systems, Inc.* ... 199,200
282,268 Boole & Babbage, Inc.* ......... 6,774,432
51,450 Burr-Brown Corp.* .............. 1,566,009
78,700 Chyron Corp.* .................. 265,613
145,000 Clare (C.P.) Corp.* ............ 1,866,875
123,300 Computer Task Group, Inc. ...... 4,793,288
49,200 Condor Technology Solutions,
Inc.* .......................... 857,925
52,600 Dunn Computer Corp.* ........... 460,250
15,000 Hadco Corp.* ................... 573,750
148,400 Hypercom Corp.* ................ 1,929,200
57,800 Infinium Software, Inc.* ....... 1,018,725
81,100 Instron Corp. .................. 1,561,175
25,100 Integrated Electrical
Services, Inc.* ................ 484,744
86,700 Intersolv, Inc.* ............... 1,333,013
39,100 ITI Technologies, Inc.* ........ 1,251,200
73,800 Keithley Instruments, Inc. ..... 613,462
76,000 Kroll-O'Gara Company* .......... 1,619,750
56,400 K-Tron International, Inc.* .... 1,071,600
37,200 Landmark Systems Corp.* ........ 288,300
139,200 MacNeal-Schwendler Corp.* ...... 1,522,500
103,400 MapInfo Corp.* ................. 1,292,500
106,020 May & Speh, Inc.* .............. 1,577,048
104,700 Mentor Graphics Corp.* ......... 1,099,350
87,800 Methode Electronics, Inc.,
Class A ........................ 1,404,800
53,500 Nashua Corp.* .................. 822,562
24,000 National Computer Systems, Inc. 600,000
25,100 ONIX Systems Inc.* ............. 360,812
74,580 Optek Technology, Inc.* ........ 1,696,695
20,800 Pasifik (P.T.) Satelit
Nusantara, ADR* ................ 314,600
94,500 Peerless Group, Inc.* .......... 401,625
38,900 Perceptron, Inc.* .............. 593,225
32,200 Performance Technologies, Inc.* 483,000
49,700 Pericom Semiconductor Corp.* ... 453,512
23,500 Phoenix Technologies, Ltd.* .... 274,656
54,500 Planar Systems, Inc.* .......... 667,625
54,300 Segue Software, Inc.* .......... 800,925
25,000 Summa Four, Inc.* .............. 253,125
115,100 Sybase, Inc.* .................. 981,947
35,800 Tegal Corp.* ................... 192,425
101,600 Teltrend, Inc.* ................ 1,676,400
50,100 Transmation, Inc.* ............. 350,700
40,000 Total Control Products, Inc.* .. 425,000
23,700 Ultratech Stepper, Inc.* ....... 582,130
Technology (continued)
189,000 Unitrode Corp.* ................ $ 3,024,000
50,100 Viasoft, Inc.* ................. 873,619
73,600 Viisage Technology, Inc.* ...... 363,400
69,900 Wood's (T.B.), Inc. ............ 1,564,012
------------
66,181,830
------------
Consumer Cyclical - 16.77%
54,250 ADVO, Inc.* .................... 1,552,906
86,000 American Business
Information, Inc., Class A* .... 1,161,000
66,400 American Business
Information, Inc., Class B* .... 946,200
75,000 American Homestar Corp.* ....... 1,556,250
32,100 American Skiing Corp.* ......... 497,550
23,700 Applebee's International, Inc. . 589,537
24,000 ASI Solutions, Inc.* ........... 249,000
70,050 Bassett Furniture Industries,
Inc. ........................... 2,189,062
61,300 Beazer Homes USA, Inc.* ........ 1,494,187
59,300 Cash America International, Inc. 1,008,100
22,600 CN Biosciences, Inc.* .......... 629,975
59,100 Cooker Restaurant Corp. ........ 694,425
12,500 Culp, Inc. ..................... 237,500
89,600 Eagle Hardware & Garden, Inc.* . 1,635,200
46,000 Execustay Corp.* ............... 638,250
55,400 Filene's Basement Corp.* ....... 308,162
68,700 Friendly Ice Cream Corp.* ...... 1,743,262
47,400 Galoob Toys, Inc.* ............. 512,512
22,600 Happy Kids, Inc.* .............. 302,275
1 Horton (D.R.), Inc. ............ 19
53,000 Houghton Mifflin Co. ........... 1,725,812
29,100 Iterim Services, Inc.* ......... 949,388
92,600 Jones Intercable, Inc., Class A* 1,863,575
55,800 K2, Inc. ....................... 1,265,962
8,000 Keystone Automotive
Industries, Inc.* .............. 206,500
40,000 Lazare Kaplan International,
Inc.* .......................... 440,000
54,870 O'Charley's, Inc.* ............. 1,104,259
16,500 Platinum Entertainment, Inc.* .. 214,500
76,320 Pluma, Inc.* ................... 548,550
95,400 Protection One, Inc. ........... 1,165,669
137,700 R & B, Inc.* ................... 1,738,462
74,300 Rival Co. ...................... 1,193,444
47,800 Rocky Shoes & Boots, Inc.* ..... 803,637
83,500 Ryan's Family Steak Houses,
Inc.* .......................... 835,000
93,800 SEI Investments Co ............. 6,929,475
35,600 Signature Eyewear, Inc.* ....... 302,600
65,500 Spaghetti Warehouse, Inc.* ..... 507,625
8,300 Star Buffet, Inc.* ............. 132,800
44,100 TCA Cable TV, Inc. ............. 2,723,175
8,000 Tefron, Ltd.* .................. 214,500
78,100 The York Group, Inc. ........... 1,425,325
20,000 Toll Brothers, Inc.* ........... 557,500
64,700 Toro Co. ....................... 2,450,512
135,000 Unifirst Corp. ................. 3,645,000
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
THE GALAXY FUND
Small Cap Value Fund
PORTFOLIO OF INVESTMENTS (continued)
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
-------- ---------
Consumer Cyclical (continued)
<S> <C> <C>
127,550 Unitog Co. ..................... $ 3,156,862
89,900 Worldtex, Inc.* ................ 685,487
23,314 WSMP, Inc.* .................... 460,452
------------
55,191,443
------------
Consumer Staples - 14.62%
74,100 Advanced Health Corp.* ......... 1,055,925
23,700 American Healthcorp, Inc.* ..... 238,480
2,184 Amsurg Corp., Class A* ......... 24,572
14,073 Amsurg Corp., Class B* ......... 147,767
83,250 Apple Orthodontix, Inc.* ....... 1,134,280
12,700 Ballard Medical Products ....... 319,087
37,500 Barrett Business Services, Inc.* 492,187
65,700 Bindley Western Industries, Inc. 2,554,087
10,500 Biosite Diagnostics, Inc.* ..... 158,156
12,100 Capital Senior Living Corp.* ... 180,744
100,000 Cephalon, Inc.* ................ 1,193,750
18,240 Cordiant Communications
Group, ADR ..................... 180,120
63,400 CTB International Corp.* ....... 951,000
113,200 Datascope Corp.* ............... 3,183,750
23,700 Enamelon, Inc.* ................ 234,037
36,000 Gish Biomedical, Inc.* ......... 131,625
153,800 Health Management Systems, Inc.* 1,634,125
63,700 Healthcare Financial
Partners, Inc.*, REIT(A) ....... 6,370,001
30,900 Hologic, Inc.* ................. 726,150
25,900 Horizon Medical Products, Inc.* 385,263
141,827 ICN Pharmaceuticals, Inc. ...... 6,984,955
25,100 Invacare Corp. ................. 699,663
94,300 Lifecore Biomedical, Inc.* ..... 1,850,638
32,800 Marquette Medical
Systems, Inc., Class A* ........ 885,600
79,875 Minntech Corp. ................. 1,118,250
80,933 Morrison Health Care, Inc. ..... 1,659,127
98,000 Northland Cranberries, Inc.,
Class A ........................ 1,635,375
58,000 Noven Pharmaceuticals, Inc.* ... 377,000
143,700 Paracelsus Healthcare Corp.* ... 655,631
27,500 Performance Food Group Co.* .... 556,875
71,089 Pilgrim's Pride Corp. .......... 1,208,513
59,100 PMR Corp.* ..................... 886,500
60,550 Res-Care, Inc.* ................ 2,369,019
23,921 Respironics, Inc.* ............. 399,182
48,000 Richfood Holdings, Inc. ........ 1,317,000
18,240 Saatchi & Saatchi, ADR* ........ 237,120
88,400 SOS Staffing Services, Inc.* ... 1,944,800
130,500 Unilab Corp.* .................. 391,500
25,000 U.S. Bioscience, Inc.* ......... 231,250
45,600 Warner Chilcott Laboratories,
ADR* ........................... 524,400
33,600 Western Staff Services, Inc.* .. 879,900
------------
48,107,404
------------
Finance - 12.09%
70,000 American Annuity Group, Inc. ... 1,649,375
43,620 Amerus Life Holdings, Inc.,
Class A ........................ 1,395,840
10,100 Annuity & Life Re (Holdings),
Ltd.* .......................... 241,138
51,800 Brandywine Realty Trust, REIT .. 1,178,450
Finance (continued)
80,300 Corporate Office
Properties Trust, Inc., REIT ... $ 848,169
172,370 D & N Financial Corp. .......... 5,020,276
64,000 Emergent Group, Inc.* .......... 584,000
26,100 First Alliance Corp.* .......... 430,650
43,750 FirstBank Puerto Rico .......... 2,482,813
11,500 GBC Bancorp .................... 733,125
32,667 Hanmi Bank* .................... 710,514
34,850 Healthcare Realty Trust, Inc.,
REIT ........................... 980,156
48,700 Highlands Insurance Group, Inc.* 1,320,988
47,400 Imperial Credit
Commercial Mortgage ............ 684,338
77,500 Innkeepers USA Trust, REIT ..... 1,172,188
50,000 Intercargo Corp. ............... 612,500
40,000 IRT Property Co., REIT ......... 465,000
12,200 Kansas City Life Insurance Co. . 1,037,000
25,000 LaSalle Re Holdings, Ltd. ...... 914,063
35,400 Life Financial Corp.* .......... 805,350
81,700 Matrix Capital Corp.* .......... 2,185,475
30,000 Ohio Casualty Corp. ............ 1,451,250
8,000 Penn-America Group, Inc. ....... 165,000
63,500 PICO Holdings, Inc.* ........... 333,375
53,450 Poe & Brown, Inc. .............. 2,104,594
77,500 Point West Capital Corp.* ...... 426,250
28,200 Prime Group Realty Trust, REIT . 590,438
25,100 Reliance Bancorp, Inc. ......... 991,450
13,800 Resources America, Inc., Class A 924,600
80,000 Selective Insurance Group, Inc. 2,200,000
15,500 SL Green Realty Corp., REIT .... 372,000
40,425 Southwest Securities Group, Inc. 1,076,316
20,000 Symons International Group, Inc.* 375,000
25,000 Terra Nova (Bermuda)
Holdings, Ltd., Class A ........ 765,625
21,700 Tower Realty Trust, Inc., REIT . 512,663
22,677 UMB Financial Corp. ............ 1,337,943
30,700 Willis Lease Finance Corp.* .... 725,288
------------
39,803,200
------------
Capital Goods and Construction - 11.96%
20,900 ABC Rail Products Corp.* ....... 365,750
22,600 Aeroflex, Inc.* ................ 307,925
61,500 Analysis & Technology, Inc. .... 1,353,000
22,000 Atchison Casting Corp.* ........ 416,625
123,900 Brown & Sharpe
Manufacturing Co., Class A* .... 1,695,881
20,328 Chemi-Trol Chemical Co. ........ 459,921
87,550 Chicago Bridge & Iron Co. N.V. . 1,422,688
77,300 Comptek Research, Inc.* ........ 705,363
47,400 Cuno, Inc.* .................... 930,225
79,100 Denison International Plc, ADR* 1,423,800
32,767 Engle Homes, Inc. .............. 507,375
92,000 Evans & Sutherland
Computer Corp.* ................ 2,656,500
97,250 Farr Co.* ...................... 2,066,563
73,700 Giga-Tronics, Inc.* ............ 497,475
55,500 Global Industrial Technologies,
Inc.* .......................... 995,531
46,500 Key Technology, Inc.* .......... 534,750
</TABLE>
See Notes to Financial Statements.
28
<PAGE>
THE GALAXY FUND
Small Cap Value Fund
PORTFOLIO OF INVESTMENTS (continued)
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
------ --------
Capital Goods and Construction (continued)
<S> <C> <C>
75,100 Ladish Co., Inc.* .............. $ 1,164,050
74,000 Layne Christensen, Inc.* ....... 1,285,750
117,300 LSI Industries, Inc. ........... 2,668,575
65,100 MPW Industrial
Services Group, Inc.* .......... 781,200
62,200 NCI Building Systems, Inc.* .... 3,234,400
21,400 Newmark Homes Corp.* ........... 219,350
15,000 Osmonics, Inc.* ................ 225,938
47,600 Reliance Steel & Aluminum Co. .. 1,921,850
88,550 Shaw Group, Inc.* .............. 2,080,925
15,000 Sun Hydraulics, Inc. ........... 221,250
33,500 SunSource Inc. ................. 973,594
87,744 Terex Corp.* ................... 2,687,160
47,700 TransTechnology Corp. .......... 1,425,038
18,800 Ultralife Batteries, Inc.* ..... 236,175
83,500 Valmont Industries, Inc. ....... 1,857,875
58,198 Varlen Corp. ................... 2,022,381
------------
39,344,883
------------
Energy - 4.73%
108,700 Bellwether Exploration Co.* .... 978,300
44,200 Berry Petroleum Co., Class A* .. 665,763
71,200 Callon Petroleum Co.* .......... 1,263,800
63,000 Cross Timbers Oil Co. .......... 1,204,875
2,600 Dawson Geophysical Co.* ........ 45,175
32,200 Devon Energy Corp. ............. 1,283,975
79,135 Domain Energy Corp.* ........... 1,028,755
198,000 Gulf Canada Resources, Ltd.* ... 1,051,875
72,400 Key Production Co., Inc.* ...... 891,425
30,000 MarkWest Hydrocarbon, Inc.* .... 570,000
69,120 Meridian Resource Corp.* ....... 626,400
40,000 Nuevo Energy Co.* .............. 1,425,000
18,800 Oceaneering International, Inc.* 431,225
14,200 Petroglyph Energy, Inc.* ....... 115,375
29,500 Pioneer Natural Resources Co. .. 706,156
39,800 Pogo Producing Co. ............. 1,276,088
18,700 Pride International, Inc.* ..... 454,644
80,000 Vintage Petroleum, Inc. ........ 1,560,000
------------
15,578,831
------------
Basic Materials - 4.27%
75,700 Dexter Corp. ................... 3,127,356
30,000 Elcor Corp. .................... 834,375
10,300 Fuller (H.B.) Co. .............. 646,325
54,700 Grief Brothers Corp., Class A .. 2,105,950
102,800 Northwest Pipe Co.* ............ 2,261,600
46,000 Novamerican Steel Inc.* ........ 552,000
76,650 Peak International, Ltd.* ...... 1,782,113
120,100 Sealright Co., Inc.* ........... 1,651,375
26,700 Steel of West Virginia, Inc.* .. 307,050
23,300 Sybron Chemicals, Inc.* ........ 771,813
------------
14,039,957
------------
Transportation - 1.99%
88,000 AirNet Systems, Inc.* .......... $ 2,376,000
40,000 Arnold Industries, Inc. ........ 640,000
38,875 Cannon Express, Inc.* .......... 349,875
28,200 Gulfmark Offshore, Inc.* ....... 874,200
16,000 Midwest Express Holdings, Inc.* 761,000
50,100 RailTex, Inc.* ................. 742,106
94,500 Simon Transportation Services,
Inc.* .......................... 797,344
------------
6,540,525
------------
Utilities - 1.00%
41,050 Atmos Energy Corp. ............. 1,208,409
41,950 Cascade Natural Gas Corp. ...... 673,822
20,000 Middlesex Water Co., Inc. ...... 400,000
43,300 Southwest Gas Corp. ............ 998,606
------------
3,280,837
------------
Total Common Stocks ............ 288,068,910
(Cost $215,878,531) ------------
Par Value
-----------
CORPORATE BOND - 0.11%
$ 369,900 MacNeal-Schwendler Corp.
Convertible Subordinated
Debenture 7.88%, 08/18/04 ...... 383,771
------------
Total Corporate Bond ........... 383,771
(Cost $369,900) ------------
REPURCHASE AGREEMENT - 14.20%
46,736,118 Chase Manhattan Bank 5.45%,
05/01/98, dated 04/03/98
Repurchase Price $46,743,193
(Collateralized by U.S. Treasury
Note 5.75%, due 10/31/00; Total
Par $47,555,000; Market Value
$49,085,677) ................... 46,736,118
------------
Total Repurchase Agreement ..... 46,736,118
(Cost $46,736,118) ------------
Total Investments - 101.85% ...................... 335,188,799
(Cost $262,984,549) ------------
Net Other Assets and Liabilities - (1.85)% ....... (6,104,283)
------------
Net Assets - 100.00% ............................. $329,084,516
============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security.
(A) Security exempt from registration under 144A of the Securities Act of 1933.
This security may be resold, in transactions exempt from registration, to
qualified institutional buyers. On April 30, 1998 this security amounted to
$6,370,001 or 1.95% of net assets.
REIT Real Estate Investment Trust
ADR American Depositary Receipt
See Notes to Financial Statements.
29
<PAGE>
THE GALAXY FUND
Small Company Equity Fund
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
------ --------
COMMON STOCKS - 93.95%
Technology - 37.90%
<S> <C> <C>
126,300 Actel Corp.* ................... $ 1,878,712
13,800 Advanced Radio Telecom Corp.* .. 201,825
84,500 Allen Telecom, Inc.* ........... 1,357,280
141,200 Altron, Inc.* .................. 2,047,400
24,675 ANADIGICS, Inc.* ............... 411,764
90,250 Arbor Software Corp.* .......... 4,247,391
91,200 Asesco Corp.* .................. 621,300
49,732 Aspen Technology, Inc.* ........ 2,430,652
14,000 Asyst Technologies, Inc.* ...... 294,875
87,600 Berg Electronics Corp.* ........ 2,085,975
36,200 Best Software, Inc.* ........... 696,850
65,200 Black Box Corp.* ............... 2,167,900
107,500 California Microwave, Inc.* .... 2,438,906
80,200 CerProbe Corp.* ................ 1,333,325
67,500 Cognex Corp.* .................. 1,632,656
106,000 Cognicase, Inc.* ............... 1,934,500
105,700 Coherent Communications
Systems Corp.* ................. 5,199,119
169,600 Condor Technology Solutions* ... 2,957,400
72,216 Cree Research, Inc.* ........... 1,205,105
123,700 Daou Systems, Inc.* ............ 2,226,600
37,700 Davox Corp.* ................... 843,537
126,600 Deltek Systems, Inc.* .......... 2,721,900
132,500 Discreet Logic, Inc.* .......... 2,368,438
47,444 DSP Communications, Inc.* ...... 791,722
106,600 Eidos Plc, ADR* ................ 1,705,600
83,500 Exar Corp.* .................... 2,097,937
133,600 Excel Technologies, Inc.* ...... 1,344,350
81,400 Extended Systems, Inc.* ........ 569,800
74,300 FactSet Research Systems, Inc.* 2,600,500
44,600 Forefront Group, Inc.* ......... 708,025
96,300 Forrester Research, Inc.* ...... 3,611,250
101,300 Great Plains Software, Inc.* ... 3,773,425
141,400 Harmonic Lightwaves, Inc.* ..... 2,474,500
66,164 Helix Technology Corp. ......... 1,323,280
110,100 HTE, Inc.* ..................... 3,082,800
48,800 ICG Communications, Inc.* ...... 1,708,000
54,600 IDT Corp.* ..................... 1,675,538
139,225 Information Management
Resources, Inc.* ............... 3,776,478
159,492 Inso Corp.* .................... 2,870,856
138,250 International Telecommunication
Data Systems, Inc.* ............ 4,182,062
42,000 JDA Software Group, Inc.* ...... 2,123,625
66,900 Komag, Inc.* ................... 1,036,950
66,800 Legato Systems, Inc.* .......... 2,112,550
176,150 Lightbridge, Inc.* ............. 2,113,800
130,400 Macromedia, Inc.* .............. 1,947,850
155,400 Made2Manage Systems, Inc.* ..... 2,243,588
67,850 May & Speh, Inc.* .............. 1,009,269
139,600 Mecon, Inc.* ................... 1,561,775
158,700 Melita International Corp.* .... 2,122,612
88,800 Mercury Interactive Corp.* ..... 3,596,400
45,900 Merix Corp.* ................... 645,469
100,100 META Group, Inc.* .............. 3,465,963
132,700 MetaCreations Corp.* ........... 1,393,350
71,400 Natural Microsystems Corp.* .... 2,302,650
Technology (continued)
165,800 Norstan, Inc.* ................. $ 3,979,200
94,650 Ortel Corp.* ................... 1,283,691
19,800 Pacific Gateway Exchange, Inc.* 1,128,600
79,900 P-Com, Inc.* ................... 1,573,031
76,900 Peritus Software Services, Inc.* 427,756
129,700 Pervasive Software, Inc.* ...... 1,767,162
530,300 Phonetel Technologies, Inc.* ... 464,012
112,100 Powerwave Technologies, Inc.* .. 2,115,887
66,098 PRI Automation, Inc.* .......... 1,768,122
50,900 Prism Solutions, Inc.* ......... 391,294
132,300 Quad Systems Corp.* ............ 620,156
45,200 Quickturn Design Systems, Inc.* 474,600
60,000 RadiSys Corp.* ................. 1,635,000
51,300 Renaissance Worldwide, Inc.* ... 920,194
259,900 RF Power Products, Inc.* ....... 714,725
72,100 Richey Electronics, Inc.* ...... 684,950
95,340 Saville Systems Ireland Plc, ADR* 4,755,082
66,600 Scopus Technology, Inc.* ....... 1,248,750
117,700 Seamed Corp.* .................. 1,934,693
130,400 Secure Computing Corp.* ........ 1,483,300
97,600 SEEC, Inc.* .................... 1,348,100
116,400 SIPEX Corp.* ................... 2,313,450
158,750 SmarTalk TeleServices, Inc.* ... 3,155,156
25,550 SpeedFam International, Inc.* .. 740,950
133,400 SPR, Inc.* ..................... 4,002,000
46,645 SPSS, Inc.* .................... 1,166,125
150,000 Standard Microsystems Corp.* ... 1,650,000
136,600 STB Systems, Inc.* ............. 1,955,087
77,800 Tekelec* ....................... 3,909,450
132,700 Template Software, Inc.* ....... 1,542,638
116,900 Tier Technologies, Inc.* ....... 2,352,612
133,500 Timberline Software Corp. ...... 2,403,000
105,100 Tollgrade Communications, Inc.* 2,377,887
69,100 Total Control Products, Inc.* .. 734,187
70,400 TriQuint Semiconductor, Inc.* .. 1,610,400
53,900 TSI International Software, Ltd.* 1,185,800
692,900 TSI Telsys Corp.* .............. 159,852
77,100 Unitrode Corp.* ................ 1,233,600
95,600 Vantive Corp.* ................. 3,059,200
49,800 Veeco Instruments, Inc.* ....... 2,010,675
145,050 Viisage Technology, Inc.* ...... 716,184
43,400 Visio Corp.* ................... 2,148,300
121,700 Voice Control Systems, Inc.* ... 669,350
131,000 Whittman-Hart, Inc.* ........... 5,747,625
22,400 YieldUP International Corp.* ... 226,800
133,100 Zygo Corp.* .................... 2,828,375
------------
189,892,392
------------
Consumer Staples - 16.65%
119,900 Anesta Corp.* .................. 2,068,275
109,100 Ascent Pediatrics, Inc.* ....... 422,762
122,650 Biofield Corp.* ................ 536,594
112,100 Brookdale Living
Communities, Inc.* ............. 3,110,775
100,054 Casey's General Stores, Inc. ... 1,638,384
81,300 Coast Dental Services* ......... 1,890,225
77,500 Cytyc Corp.* ................... 1,123,750
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
THE GALAXY FUND
Small Company Equity Fund
PORTFOLIO OF INVESTMENTS (continued)
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
------ --------
Consumer Staples (continued)
<S> <C> <C>
66,400 Digene Corp.* .................. $ 717,950
130,000 Endocardial Solutions, Inc.* ... 1,592,500
179,500 EndoSonics Corp.* .............. 1,166,750
194,900 FirstService Corp.* ............ 2,326,619
71,800 Geltex Pharmaceuticals, Inc.* .. 1,678,325
53,620 G & K Services, Inc., Class A .. 2,158,205
177,700 Hanger Orthopedic Group, Inc.* . 3,320,769
68,300 Heartport, Inc.* ............... 725,687
80,054 Hologic, Inc.* ................. 1,881,269
109,273 Horizon Health Corp.* .......... 2,595,234
68,927 Lunar Corp.* ................... 1,292,380
170,150 MedCath, Inc.* ................. 3,094,602
138,600 Merge Technologies, Inc.* ...... 589,050
93,375 National Surgery Centers, Inc.* 2,649,516
233,550 Nature's Sunshine Products, Inc. 5,721,975
65,000 NCS Healthcare Inc., Class A* .. 1,909,375
132,500 NeoPath, Inc.* ................. 1,846,719
6,200 Nutraceutical International
Corp.* ......................... 111,600
171,312 On Assignment, Inc.* ........... 5,524,812
257,800 OncorMed, Inc.* ................ 1,176,212
91,300 PMR Corp.* ..................... 1,369,500
35,900 Parexel International Corp.* ... 1,202,650
69,225 Patterson Dental Co.* .......... 2,037,810
113,600 Penederm, Inc.* ................ 1,278,000
144,000 Physicians Specialty Corp.* .... 1,566,000
130,200 Prime Medical Services, Inc.* .. 1,383,375
36,000 Renal Care Group, Inc.* ........ 1,377,000
224,760 Rexall Sundown, Inc.* .......... 7,178,272
168,164 Romac International, Inc.* ..... 4,456,346
148,000 Sheridan Healthcare, Inc.* ..... 2,386,500
65,900 Thomas Group, Inc.* ............ 576,625
143,650 Urologix, Inc.* ................ 1,346,719
197,000 Weider Nutrition International,
Inc. ........................... 2,794,938
26,251 Whole Foods Market, Inc.* ...... 1,624,250
------------
83,448,299
------------
Consumer Cyclical - 16.29%
119,528 ABR Information Services, Inc.* 3,458,842
67,600 Aftermarket Technology Corp.* .. 1,318,200
66,700 Ambassadors International, Inc.* 2,001,000
32,800 American Coin Merchandising* ... 688,800
183,400 ASI Solutions, Inc.* ........... 1,902,775
156,300 Barbeques Galore, Ltd., ADR* ... 1,504,388
103,050 Barnett, Inc.* ................. 2,086,763
118,300 Brass Eagle, Inc.* ............. 1,833,650
48,300 Carey International, Inc.* ..... 1,098,825
44,800 Carriage Services, Inc.* ....... 1,092,000
28,400 Data Processing Resources Corp.* 794,755
100,300 Dura Automotive Systems, Inc.* . 3,911,700
105,800 Eagle Hardware & Garden, Inc.* . 1,930,850
61,550 Equity Marketing, Inc.* ........ 1,484,894
199,000 Funco, Inc.* ................... 3,781,000
88,500 Hall Kinion & Associates, Inc.* 1,382,812
162,500 ILX Resorts, Inc.* ............. 1,117,188
143,200 Jones Inter Cable, Inc., Class A* 2,881,900
197,300 Just For Feet, Inc.* ........... 4,340,600
Consumer Cyclical (continued)
114,900 Keystone Automotive
Industries, Inc.* .............. $ 2,965,856
123,600 Kroll-O'Gara Co.* .............. 2,634,225
123,100 Lifeline Systems, Inc.* ........ 2,477,388
179,969 Lo-Jack Corp.* ................. 2,452,078
90,500 Newsedge Corp.* ................ 1,549,813
56,900 Papa John's International, Inc.* 2,375,575
130,100 Players International, Inc.* ... 691,156
30,120 Pre Paid Legal Services, Inc.* . 1,138,913
195,400 Rentrak Corp.* ................. 1,538,775
79,910 Rural/ Metro Corp.* ............ 2,597,075
145,250 Safety First, Inc.* ............ 1,289,094
65,000 Showbiz Pizza Time, Inc.* ...... 2,510,625
81,300 Silverleaf Resorts, Inc.* ...... 1,930,875
49,400 Source Information
Management Co.* ................ 327,275
153,000 SRS Labs, Inc.* ................ 1,300,500
58,900 Stein Mart, Inc.* .............. 2,076,225
153,250 The First Years, Inc. .......... 4,827,375
39,266 The Men's Wearhouse, Inc.* ..... 1,654,080
100,200 Travis Boats & Motors, Inc.* ... 2,705,400
56,500 West Marine, Inc.* ............. 1,416,031
107,600 Wilmar Industries* ............. 2,568,950
------------
81,638,226
------------
Capital Goods and Construction - 6.33%
32,400 Advanced Lighting
Technologies, Inc.* ............ 899,100
99,236 AFC Cable Systems, Inc.* ....... 3,448,451
158,700 Armor Holdings, Inc.* .......... 1,745,700
85,900 Cuno, Inc.* .................... 1,685,788
129,000 Firearms Training Systems* ..... 1,128,750
124,000 Group Maintenance
American Corp.* ................ 1,999,500
97,700 Hexcel Corp.* .................. 2,729,494
171,800 Maverick Tube Corp.* ........... 2,995,763
63,500 MSC Industrial Direct, Inc.,
Class A* ....................... 3,230,563
65,100 Motivepower Industries, Inc.* .. 1,676,325
65,200 Omniquip International, Inc. ... 1,524,050
224,710 PCD, Inc.* ..................... 4,508,244
132,100 Recycling Industries, Inc.* .... 990,750
133,200 Shaw Group, Inc.* .............. 3,130,200
2,500 Thermo Sentron, Inc.* .......... 29,063
------------
31,721,741
------------
Energy - 5.08%
80,700 Abraxas Petroleum Corp.* ....... 817,088
182,462 Bellwether Exploration Co.* .... 1,642,158
132,700 Cabot Oil & Gas Corp. .......... 3,110,156
253,750 Coho Energy, Inc.* ............. 1,918,984
146,920 Comstock Resources, Inc.* ...... 1,891,595
200,990 Dawson Production Services,
Inc.* .......................... 2,637,994
104,900 Domain Energy Corp.* ........... 1,363,700
41,540 HarCor Energy, Inc.* ........... 80,484
106,100 KCS Energy, Inc. ............... 1,644,550
</TABLE>
See Notes to Financial Statements.
31
<PAGE>
THE GALAXY FUND
Small Company Equity Fund
PORTFOLIO OF INVESTMENTS (continued)
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
------ --------
Energy (continued)
<S> <C> <C>
447,500 Magin Energy, Inc.* ............ $ 782,096
114,500 Magnum Hunter Resources, Inc.* . 780,031
448,400 Mercantile International
Petroleum* ..................... 112,100
1 National-Oilwell, Inc.* ........ 38
41,200 Nuevo Energy Co.* .............. 1,467,750
106,100 Offshore Logistics, Inc.* ...... 2,506,613
78,633 Pride International, Inc.* ..... 1,911,765
139,378 Swift Energy Co.* .............. 2,778,843
------------
25,445,945
------------
Finance - 3.94%
90,100 ARM Financial Group, Inc.,
Class A ........................ 1,931,519
187,000 BankAtlantic Bancorp, Inc.,
Class A ........................ 2,559,563
157,922 Credit Acceptance Corp.* ....... 1,697,662
109,100 CRIIMI MAE, Inc. ............... 1,629,681
35,900 Enhance Financial Services Group 2,463,638
65,900 First Republic Bank* ........... 2,265,313
15,922 General Accept Corp.* .......... 14,330
86,785 HCC Insurance Holdings, Inc. ... 1,887,574
19,600 Meadowbrook Insurance Group .... 640,675
105,200 Prime Retail, Inc., REIT ....... 1,492,525
34,600 Redwood Trust, Inc., REIT ...... 852,025
79,600 Riggs National Corp. ........... 2,293,475
------------
19,727,980
------------
Transportation - 3.54%
148,400 Aaron Rents, Inc. .............. 3,014,375
80,000 AirNet Systems, Inc.* .......... 2,160,000
60,200 Alaska Air Group, Inc.* ........ 3,378,725
83,400 Atlas Air, Inc.* ............... 3,252,600
268,500 Dynamex, Inc.* ................. 3,322,688
23,325 Midwest Express Holdings* ...... 1,109,395
76,400 US Express Enterprises* ........ 1,489,800
------------
17,727,583
------------
Utilities - 2.14%
133,700 Arch Communications Group, Inc.* 760,419
130,200 CoreComm, Inc.* ................ 2,506,350
120,500 Davel Communication Corp.* ..... 3,253,500
94,200 HighwayMaster
Communications, Inc.* .......... 565,200
133,700 Metrocall, Inc.* ............... 944,256
100,200 Mobile Telecommunication
Technologies* .................. 2,555,100
6,500 Startec Global Communications* . 165,750
------------
10,750,575
------------
Basic Materials - 2.08%
229,050 AMCOL International Corp. ...... $ 3,135,122
117,000 Dunn Computer Corp.* ........... 1,023,750
281,988 Meridian Resource Corp.* ....... 2,555,516
53,091 OM Group, Inc. ................. 2,352,595
200,400 U.S. Home & Garden, Inc.* ...... 1,340,175
------------
10,407,158
------------
Total Common Stocks ............ 470,759,899
(Cost $398,092,802) ------------
Par Value
- ---------
REPURCHASE AGREEMENT - 5.23%
$26,235,907 Chase Manhattan Bank
5.45%, 05/01/98, dated 04/30/98
Repurchase Price $26,239,879
(Collateralized by U.S.
Treasury Note 6.375%, Due 2000
Total Par $25,670,000;
Market Value $26,797,450) ...... 26,235,907
------------
Total Repurchase Agreement ..... 26,235,907
(Cost $26,235,907) ------------
Total Investments - 99.18% ....................... 496,995,806
(Cost $424,328,709) ------------
Net Other Assets and Liabilities - 0.82% ......... 4,101,674
------------
Net Assets - 100.00% ............................. $501,097,480
============
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing security.
ADR American Depositary Receipt
REIT Real Estate Investment Trust
See Notes to Financial Statements.
32
<PAGE>
THE GALAXY FUND
International Equity Fund
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
------ --------
COMMON STOCKS - 96.84%
Australia - 2.53%
<S> <C> <C>
760,884 Australia & New Zealand
Banking Group Ltd. ............. $ 5,311,757
623,875 Coca-Cola Amatil, Ltd .......... 4,760,994
------------
10,072,751
------------
Belguim - 1.04%
7,370 Kredietbank .................... 4,158,299
------------
Brazil - 1.04%
34,128 Telebras, ADR .................. 4,157,217
------------
Canada - 1.72%
113,700 BCE, Inc. ...................... 4,841,004
141,700 MacMillan Bloedel, Ltd. ........ 2,016,007
------------
6,857,011
------------
France - 12.41%
45,550 Banque Nationale de Paris ...... 3,841,931
25,964 Groupe Danone .................. 6,133,568
5,171 LVMH ........................... 1,064,997
148,759 Renault SA* .................... 6,904,635
91,374 Schneider SA ................... 6,840,509
2,566 SEITA .......................... 115,259
79,630 Suez Lyonnaise ................. 13,512,327
78,967 Thomson CSF .................... 3,126,626
80,041 Valeo SA ....................... 7,962,821
------------
49,502,673
------------
Germany - 5.32%
70,872 Daimler-Benz AG* ............... 6,920,893
9,598 Mannesmann AG .................. 7,618,055
8,369 Volkswagen AG .................. 6,665,721
------------
21,204,669
------------
Hong Kong - 1.15%
262,000 Hutchison Whampoa Ltd. ......... $ 1,620,165
1,038,000 New World Development Co. Ltd. . 2,954,802
------------
4,574,967
------------
Hungary - 0.79%
29,470 Gedeon Richter, GDR* ........... 3,138,555
------------
India - 0.30%
60,700 Hindalco Industries Ltd., GDR* . 1,183,650
------------
Italy - 7.41%
81,000 Banca Popolare di Bergamo ...... 1,965,742
1,674,869 Credito Italiano SPA ........... 8,800,424
1,026,881 Mediaset SPA ................... 6,722,815
1,613,000 Telecom Italia SPA ............. 12,062,110
------------
29,551,091
------------
Japan - 13.79%
196,000 Canon Inc. ..................... 4,635,635
262,000 Denso Corp. .................... 4,503,929
98,000 Ito-Yokado Co., Ltd. ........... 5,072,540
354,000 Matsushita Electric
Industrial Co., Ltd. ........... 5,670,848
456,000 Mitsui Fudosan Co., Ltd. ....... 4,162,370
132,000 Murata Manufacturing Co., Ltd. . 3,870,032
590 Nippon Telegraph &
Telephone Corp. ................ 5,171,528
399,000 Nomura Securities Co., Ltd. .... 4,869,163
90,000 Rohm Co. Ltd. .................. 10,160,193
70,800 Sony Corp. ..................... 5,890,192
200,000 Sumitomo Realty &
Development Co., Ltd. .......... 959,649
------------
54,966,079
------------
</TABLE>
See Notes to Financial Statements.
33
<PAGE>
THE GALAXY FUND
International Equity Fund
PORTFOLIO OF INVESTMENTS (continued)
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 2)
------ --------
Mexico - 3.09%
<S> <C> <C>
111,700 Grupo Televisa SA* ............. $ 4,579,700
415,000 Kimberly-Clark de
Mexico S.A., Class A ........... 2,035,849
101,068 Telefonos de
Mexico S.A., Class L, ADR ...... 5,722,976
------------
12,338,525
------------
Netherlands - 13.07%
125,300 Gucci Group .................... 5,834,281
110,380 ING Groep ...................... 7,174,345
195,820 Koninklijke Ptt ................ 10,120,097
74,940 Philips Electronics ............ 6,603,297
119,332 Royal Dutch Petroleum .......... 6,586,564
53,880 Vendex International ........... 3,456,684
381,629 Verenigd Bezit ................. 12,355,100
------------
52,130,368
------------
New Zealand - 1.17%
614,181 Telecom Corp. of New Zealand* .. 1,647,888
633,465 Telecom Corp. of New Zealand
Ltd. ........................... 3,008,658
------------
4,656,546
------------
Philippines - 0.61%
177,720 Metropolitan Bank & Trust Co. .. 1,383,250
38,619 Philippine Long Distance Co. ... 1,034,008
------------
2,417,258
------------
Spain - 5.79%
112,610 Banco de Santander SA .......... $ 5,952,137
91,500 Corp Bancaria de Espana SA ..... 7,630,007
223,700 Telefonica de Espana SA ........ 9,341,642
223,700 Telefonica de Espana SA -
Rights* ........................ 176,257
------------
23,100,043
------------
Sweden - 2.22%
170,400 Hennes & Mauritz AB, Class B ... 8,869,956
------------
Switzerland - 5.69%
5,553 Nestle SA ...................... 10,767,795
4,031 Novartis AG, Registered ........ 6,661,480
517 Roche Holdings AG .............. 5,238,212
------------
22,667,487
------------
United Kingdom - 17.70%
413,162 B.A.T. Industries, Plc ......... 3,897,781
349,955 British Aerospace, Plc ......... 11,695,684
858,584 Diageo, Plc .................... 10,225,410
391,413 Glaxo Wellcome, Plc ............ 11,064,706
514,400 Imperial Chemical Industries,
Plc ............................ 9,344,342
2,136,154 LucasVarity .................... 9,549,227
1 PowerGen, Plc .................. 14
863,879 Vodafone Group, Plc ............ 9,493,716
938,329 Somerfield, Plc ................ 5,312,900
------------
70,583,780
------------
Total Common Stocks ............ 386,130,925
(Cost $296,824,689) ------------
</TABLE>
See Notes to Financial Statements.
34
<PAGE>
THE GALAXY FUND
International Equity Fund
PORTFOLIO OF INVESTMENTS (continued)
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Value
Par Value (Note 2)
---------- ---------
REPURCHASE AGREEMENT - 2.35%
<S> <C> <C>
$ 9,371,479 Chase Manhattan Bank
5.45%, 05/01/98, dated 04/30/98
Repurchase Price $9,372,898
(Collateralized by U.S.
Treasury Note 5.50%, Due 2000;
Total Par $9,430,000;
Market Value $9,590,141) ....... $ 9,371,479
------------
Total Repurchase Agreement ..... 9,371,479
(Cost $9,371,479)
------------
Total Investments - 99.19% ....................... 395,502,404
(Cost $306,196,168) ------------
Net Other Assets and Liabilities - 0.81% ......... 3,216,258
------------
Net Assets - 100.00% ............................. $398,718,662
============
</TABLE>
- --------------------------------------------------
* Non-income producing security.
ADR American Depositary Receipt
GDR Global Depositary Receipt
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING:
<TABLE>
<CAPTION>
Unrealized
Currency Contract To Settlement Contract Appreciation
Value Deliver Dates At Value (Depreciation)
- ------------- ----------- --------- ------------ --------------
<S> <C> <C> <C> <C>
3,518,000,000 JPY 05/27/98 $ 26,693,405 $ 1,141,076
120,804,909 JPY 05/06/98 913,444 983
34,026,723 JPY 05/07/98 257,116 309
9,123,000 NZD 07/01/98 5,039,497 (21,121)
------------ -----------
$ 32,903,462 $ 1,121,247
============ ===========
</TABLE>
- --------------------------------------------------
JPY Japanese Yen
NZD New Zealand Dollar
See Notes to Financial Statements.
35
<PAGE>
THE GALAXY FUND
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Growth
Asset Allocation Equity Income and Income
Fund Fund Fund
---------------- ------------- -------------
<S> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost................................................. $ 368,368,454 $ 200,608,716 $ 410,458,021
Repurchase Agreement................................................ 73,797,812 54,296,206 42,537,710
Net unrealized appreciation......................................... 86,186,544 95,681,832 108,837,803
------------- ------------- --------------
Total investments at value........................................ 528,352,810 350,586,754 561,833,534
Cash ................................................................ 4,091 -- --
Receivable for open forward foreign currency contracts (Note 2)....... -- -- --
Receivable for investments sold....................................... 3,683,413 -- 1,571,253
Receivable for shares sold............................................ 4,343,610 1,125,420 3,358,969
Interest and dividend receivable...................................... 3,405,071 547,759 554,123
Tax reclaim receivable................................................ -- -- --
Receivable from Investment Advisor (Note 4)........................... -- -- 14,684
Deferred organizational expense (Note 2).............................. -- -- --
------------- ------------- --------------
Total Assets...................................................... 539,788,995 352,259,933 567,332,563
------------- ------------- --------------
LIABILITIES:
Payable for written options (Note 2).................................. -- -- --
Payable for investments purchased..................................... 10,656,370 -- 4,072,227
Payable to custodian.................................................. -- 1,455 --
Payable for shares repurchased........................................ 1,142,784 112,947 1,937,705
Advisory fee payable (Note 3)......................................... 317,207 216,649 341,774
Payable to Fleet affiliates (Note 3).................................. 131,204 51,142 109,192
Payable to Administrator (Note 3)..................................... 80,891 52,784 85,533
Trustees' fees and expenses payable (Note 3).......................... 7,112 5,682 8,072
Accrued expenses and other payables................................... 90,211 42,687 108,168
------------- ------------- --------------
Total Liabilities................................................. 12,425,779 483,346 6,662,671
------------- ------------- --------------
NET ASSETS............................................................... $ 527,363,216 $ 351,776,587 $ 560,669,892
============= ============= ==============
NET ASSETS consists of:
Par value (Note 5).................................................... $ 31,323 $ 17,287 $ 34,611
Paid in capital in excess of par value................................ 425,533,374 234,971,458 418,730,850
Undistributed (overdistributed) net investment income (loss).......... 1,557,417 462,896 143,957
Accumulated net realized gain on investments sold and written options. 14,054,558 20,643,114 32,922,671
Net unrealized appreciation of investments, written options,
foreign currency and forward foreign currency contracts............. 86,186,544 95,681,832 108,837,803
------------- ------------- --------------
TOTAL NET ASSETS ....................................................... $ 527,363,216 $ 351,776,587 $ 560,669,892
============= ============= ==============
Retail A Shares:
Net Assets............................................................ $ 268,997,155 $ 215,567,310 $ 212,937,752
Shares of beneficial interest outstanding............................. 15,976,364 10,598,146 13,162,340
NET ASSET VALUE and redemption price per share........................ $ 16.84 $ 20.34 $ 16.18
Sales charge - 3.75% of offering price................................ 0.66 0.79 0.63
------------- ------------- --------------
Maximum offering price per share...................................... $ 17.50 $ 21.13 $ 16.81
============= ============= ==============
Retail B Shares:
Net Assets............................................................ $ 47,242,033 N/A $ 51,629,973
Shares of beneficial interest outstanding............................. 2,811,297 N/A 3,195,757
------------- ------------- --------------
NET ASSET VALUE and offering price per share* ........................ $ 16.80 N/A $ 16.16
============= ============= ==============
Trust Shares:
Net Assets............................................................ $ 211,124,028 $ 136,209,277 $ 296,102,167
Shares of beneficial interest outstanding............................. 12,535,350 6,689,150 18,252,848
------------- ------------- --------------
NET ASSET VALUE, offering and redemption price per share.............. $ 16.84 $ 20.36 $ 16.22
============= ============= ==============
</TABLE>
- --------------------------------------------------------------------------------
* Redemption price per share is equal to the Net Asset Value per share less
any applicable contingent deferred sales charge.
See Notes to Financial Statements.
36
<PAGE>
<TABLE>
<CAPTION>
Equity Value Strategic Equity Equity Growth Small Cap Small Company International
Fund Fund Fund Value Fund Equity Fund Equity Fund
------------- -------------- ------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
$ 409,138,381 $ 6,064,949 $ 726,822,908 $ 216,248,431 $ 398,092,802 $ 296,824,689
32,707,911 -- 71,362,302 46,736,118 26,235,907 9,371,479
116,115,409 42,701 429,874,699 72,204,250 72,667,097 89,306,236
------------- -------------- ------------- -------------- ------------- -------------
557,961,701 6,107,650 1,228,059,909 335,188,799 496,995,806 395,502,404
-- 893 -- -- -- --
-- -- -- -- -- 1,121,247
-- -- 4,724,957 2,244,339 10,897,591 1,233,684
2,189,282 449,966 3,403,118 1,684,810 1,430,807 883,459
624,735 6,707 1,204,414 69,698 92,882 729,865
-- -- -- -- -- 104,835
-- 14,475 5,451 6,772 1,918 --
-- 24,205 -- -- -- --
------------- -------------- ------------- -------------- ------------- -------------
560,775,718 6,603,896 1,237,397,849 339,194,418 509,419,004 399,575,494
------------- -------------- ------------- -------------- ------------- -------------
316,000 -- -- -- -- --
1,126,068 278,237 20,357,607 9,585,722 6,264,332 --
-- -- -- 3,063 -- --
572,410 -- 2,141,255 215,135 1,519,900 492,601
332,152 2,455 740,900 196,439 305,373 211,877
98,340 2,254 139,489 20,193 83,924 32,436
84,364 3,511 137,005 48,656 75,573 50,720
8,472 18 18,870 4,678 7,757 5,843
67,345 33,597 80,394 36,016 64,665 63,355
------------- -------------- ------------- -------------- ------------- -------------
2,605,151 320,072 23,615,520 10,109,902 8,321,524 856,832
------------- -------------- ------------- -------------- ------------- -------------
$ 558,170,567 $ 6,283,824 $1,213,782,329 $ 329,084,516 $ 501,097,480 $ 398,718,662
============= ============== ============= ============== ============= =============
$ 31,128 $ 618 $ 47,573 $ 19,237 $ 25,329 $ 22,114
409,798,874 6,193,871 720,585,315 237,107,336 402,657,035 296,748,435
11,520 1,789 380,145 103,327 (1,910,449) 1,023,445
32,223,116 44,845 62,894,597 19,650,366 27,658,468 10,524,675
116,105,929 42,701 429,874,699 72,204,250 72,667,097 90,399,993
------------- -------------- ------------- -------------- ------------- -------------
$ 558,170,567 $ 6,283,824 $1,213,782,329 $ 329,084,516 $ 501,097,480 $ 398,718,662
============= ============== ============= ============== ============= =============
$ 246,841,192 $ 1,064,046 $ 307,669,547 $ 97,447,336 $ 142,911,306 $ 66,243,935
13,765,489 104,578 12,066,975 5,718,287 7,330,273 3,710,396
$ 17.93 $ 10.17 $ 25.50 $ 17.04 $ 19.50 $ 17.85
0.70 0.40 0.99 0.66 0.76 0.70
------------- -------------- ------------- -------------- ------------- -------------
$ 18.63 $ 10.57 $ 26.49 $ 17.70 $ 20.26 $ 18.55
============= ============== ============= ============== ============= =============
$ 22,564,972 $ 132,757 $ 30,662,867 N/A $ 17,603,704 N/A
1,257,989 13,049 1,218,949 N/A 915,855 N/A
------------- -------------- ------------- -------------- ------------- -------------
$ 17.94 $ 10.17 $ 25.16 N/A $ 19.22 N/A
============= ============== ============= ============== ============= =============
$ 288,764,403 $ 5,087,021 $ 875,449,915 $ 231,637,180 $ 340,582,470 $ 332,474,727
16,104,125 500,002 34,287,388 13,519,069 17,082,372 18,403,987
------------- -------------- ------------- -------------- ------------- -------------
$ 17.93 $ 10.17 $ 25.53 $ 17.13 $ 19.94 $ 18.07
============= ============== ============= ============== ============= =============
</TABLE>
37
<PAGE>
THE GALAXY FUND
STATEMENTS OF OPERATIONS
For the six months ended April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Growth
Asset Allocation Equity Income and Income
Fund Fund Fund
------------- ------------- -------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend (Note 2) ............................................. $ 1,221,702 $ 2,783,277 $ 4,396,598
Interest (Note 2) ............................................. 7,171,923 1,322,033 1,002,840
Less: net foreign taxes withheld (Note 2) ..................... -- -- --
------------- ------------- -------------
Total investment income ..................................... 8,393,625 4,105,310 5,399,438
------------- ------------- -------------
EXPENSES:
Investment advisory fee (Note 3) .............................. 1,638,569 1,182,439 1,806,606
Administration fee (Note 3) ................................... 176,451 127,356 194,456
Custodian fee ................................................. 11,737 7,571 20,694
Fund accounting fee (Note 3) .................................. 36,526 31,126 31,729
Legal fee (Note 3) ............................................ 8,543 6,606 9,695
Audit fee ..................................................... 9,367 9,367 9,367
Transfer agent fee (Note 3) ................................... 358,942 137,949 297,305
12b-1 fee (Note 3)............................................. 176,281 -- 199,302
Shareholder servicing fee (Note 3) ............................ 317,004 283,478 253,167
Trustees' fees and expenses (Note 3) .......................... 4,254 3,288 4,828
Amortization of organization cost (Note 2) .................... -- -- --
Reports to shareholders ....................................... 41,444 35,954 45,196
Registration fee............................................... -- 8,200 15,100
Insurance ..................................................... 1,600 1,348 1,765
Miscellaneous ................................................. 23,165 6,554 9,598
------------- ------------- -------------
Total expenses before reimbursement/waiver................... 2,803,883 1,841,236 2,898,808
------------- ------------- -------------
Less:reimbursement/waiver (Note 4) .......................... -- -- (50,396)
------------- ------------- -------------
Total expenses net of reimbursement/waiver .................. 2,803,883 1,841,236 2,848,412
------------- ------------- -------------
NET INVESTMENT INCOME (LOSS)...................................... 5,589,742 2,264,074 2,551,026
------------- ------------- -------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS (Notes 2 & 6):
Net realized gainon investments sold .......................... 14,065,913 20,645,159 33,529,685
Net realized gain on written options........................... -- -- --
Net realized gain on forward foreign currency
contracts and foreign currency .............................. -- -- --
Net change in unrealized appreciation on
investments, written options, foreign currency and
forward foreign currency contracts .......................... 29,768,818 30,833,803 49,877,125
------------- ------------- -------------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS............................................ 43,834,731 51,478,962 83,406,810
------------- ------------- -------------
NET INCREASE IN NET
ASSETS RESULTING FROM OPERATIONS .............................. $ 49,424,473 $ 53,743,036 $ 85,957,836
============= ============= =============
</TABLE>
- --------------------------------------------------------------------------------
(1) The Strategic Equity Fund commenced operations on March 4, 1998.
See Notes to Financial Statements.
38
<PAGE>
<TABLE>
<CAPTION>
Equity Value Strategic Equity Equity Growth Small Cap Small Company International
Fund Fund(1) Fund Value Fund Equity Fund Equity Fund
------------- -------------- ------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
$ 3,347,688 $ 8,757 $ 5,807,038 $ 1,514,837 $ 275,753 $ 2,211,574
868,082 4,306 2,127,345 1,006,317 540,331 255,906
-- -- -- -- -- (226,019)
------------- -------------- ------------- -------------- ------------- -------------
4,215,770 13,063 7,934,383 2,521,154 816,084 2,241,461
------------- -------------- ------------- -------------- ------------- -------------
1,801,298 6,263 3,999,427 1,020,684 1,700,931 1,548,608
193,886 672 430,575 109,873 183,173 137,773
10,672 2,579 14,215 15,347 15,445 159,012
31,609 6,163 57,469 35,250 35,132 45,922
9,912 216 22,446 5,489 9,909 7,161
9,367 3,002 9,367 9,367 9,367 10,558
318,843 4,447 481,580 91,110 418,129 192,096
85,255 34 115,826 -- 74,000 --
309,819 76 382,209 112,045 195,834 85,739
4,931 93 11,164 2,732 4,931 3,561
-- 795 -- -- -- --
49,707 716 60,898 18,223 51,192 22,966
11,986 -- -- 7,410 -- 9,332
1,937 44 4,489 938 1,855 1,439
9,852 4,613 37,504 5,438 27,417 7,286
------------- -------------- ------------- -------------- ------------- -------------
2,849,074 29,713 5,627,169 1,433,906 2,727,315 2,231,453
------------- -------------- ------------- -------------- ------------- -------------
-- (18,439) -- (28,648) (782) (426,304)
------------- -------------- ------------- -------------- ------------- -------------
2,849,074 11,274 5,627,169 1,405,258 2,726,533 1,805,149
------------- -------------- ------------- -------------- ------------- -------------
1,366,696 1,789 2,307,214 1,115,896 (1,910,449) 436,312
------------- -------------- ------------- -------------- ------------- -------------
32,098,228 44,845 62,969,380 19,650,454 27,805,992 9,467,014
192,710 -- -- -- -- --
-- -- -- -- -- 1,059,941
53,771,546 42,701 130,532,641 8,350,463 2,460,851 58,371,717
------------- -------------- ------------- -------------- ------------- -------------
86,062,484 87,546 193,502,021 28,000,917 30,266,843 68,898,672
------------- -------------- ------------- -------------- ------------- -------------
$ 87,429,180 $ 89,335 $ 195,809,235 $ 29,116,813 $ 28,356,394 $ 69,334,984
============= ============== ============= ============== ============= =============
</TABLE>
39
<PAGE>
THE GALAXY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Asset Allocation Fund
------------------------------------------
Six months ended Year ended
April 30, 1998 October 31,
(unaudited) 1997
-------------- -------------
<S> <C> <C>
NET ASSETS at beginning of the period.................................. $ 379,667,751 $ 244,011,978
------------- -------------
Increase in Net Assets resulting from operations:
Net investment income............................................... 5,589,742 8,414,727
Net realized gain on investments sold and written options........... 14,065,913 28,959,256
Net change in unrealized appreciation on investments................ 29,768,818 19,025,147
------------- -------------
Net increase in net assets resulting from operations.............. 49,424,473 56,399,130
------------- -------------
Dividends to shareholders from:
Retail A Shares:
Net investment income .............................................. (2,569,366) (3,460,283)
Net realized gain on investments and written options................ (13,560,204) (4,172,278)
------------- -------------
Total Dividends................................................... (16,129,570) (7,632,561)
------------- -------------
Retail B Shares:
Net investment income .............................................. (338,661) (264,937)
Net realized gain on investments and written options................ (2,342,924) (156,296)
------------- -------------
Total Dividends................................................... (2,681,585) (421,233)
------------- -------------
Trust Shares:
Net investment income .............................................. (2,496,976) (3,952,828)
Net realized gain on investments and written options................ (13,004,072) (4,447,875)
------------- -------------
Total Dividends................................................... (15,501,048) (8,400,703)
------------- -------------
Total Dividends to shareholders................................... (34,312,203) (16,454,497)
------------- -------------
Net increase from share transactions(1) .............................. 132,583,195 95,711,140
------------- -------------
Net increase in net assets.......................................... 147,695,465 135,655,773
------------- -------------
NET ASSETS at end of the period (including line A)..................... $ 527,363,216 $ 379,667,751
============= =============
(A) Undistributed net investment income ............................... $ 1,557,417 $ 1,372,678
============= =============
</TABLE>
- -----------------------------------------------------------------------------
(1) For detail on share transactions by series, see Statements of Changes in
Net Assets - Capital Stock Activity on pages 46-47.
See Notes to Financial Statements.
40
<PAGE>
<TABLE>
<CAPTION>
Equity Income Fund Growth and Income Fund
------------------------------------------ ------------------------------------------
Six months ended Year ended Six months ended Year ended
April 30, 1998 October 31, April 30, 1998 October 31,
(unaudited) 1997 (unaudited) 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C>
$ 288,780,499 $ 233,045,808 $ 423,715,404 $ 269,046,012
------------- ------------- ------------- -------------
2,264,074 4,996,322 2,551,026 4,623,605
20,645,159 24,383,465 33,529,685 71,281,727
30,833,803 25,153,634 49,877,125 12,928,084
------------- ------------- ------------- -------------
53,743,036 54,533,421 85,957,836 88,833,416
------------- ------------- ------------- -------------
(1,235,061) (2,509,541) (893,452) (1,420,690)
(14,397,057) (10,947,176) (24,191,677) (6,955,593)
------------- ------------- ------------- -------------
(15,632,118) (13,456,717) (25,085,129) (8,376,283)
------------- ------------- ------------- -------------
N/A N/A (88,866) (84,981)
N/A N/A (5,994,237) (514,691)
------------- ------------- ------------- -------------
N/A N/A (6,083,103) (599,672)
------------- ------------- ------------- -------------
(1,071,813) (2,407,552) (1,750,240) (3,399,485)
(9,987,624) (8,963,175) (41,422,902) (15,545,258)
------------- ------------- ------------- -------------
(11,059,437) (11,370,727) (43,173,142) (18,944,743)
------------- ------------- ------------- -------------
(26,691,555) (24,827,444) (74,341,374) (27,920,698)
------------- ------------- ------------- -------------
35,944,607 26,028,714 125,338,026 93,756,674
------------- ------------- ------------- -------------
62,996,088 55,734,691 136,954,488 154,669,392
------------- ------------- ------------- -------------
$ 351,776,587 $ 288,780,499 $ 560,669,892 $ 423,715,404
============= ============= ============= =============
$ 462,896 $ 505,696 $ 143,957 $ 325,489
============= ============== ============= =============
</TABLE>
41
<PAGE>
THE GALAXY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Equity Value Fund
------------------------------------------
Six months ended Year ended
April 30, 1998 October 31,
(unaudited) 1997
-------------- -------------
<S> <C> <C>
NET ASSETS at beginning of the period.................................. $ 439,131,322 $ 328,740,298
------------- -------------
Increase in Net Assets resulting from operations:
Net investment income............................................... 1,366,696 3,139,247
Net realized gain on investments sold and written options........... 32,290,938 77,944,828
Net change in unrealized appreciation on investments and written
options .......................................................... 53,771,546 16,520,748
------------- -------------
Net increase in net assets resulting from operations.............. 87,429,180 97,604,823
------------- -------------
Dividends to shareholders from:
Retail A Shares:
Net investment income .............................................. (440,409) (1,106,478)
Dividends in excess of net investment income........................ -- --
Net realized gain on investments.................................... (32,768,242) (15,644,273)
------------- -------------
Total Dividends................................................... (33,208,651) (16,750,751)
------------- -------------
Retail B Shares:
Net investment income .............................................. -- (4,176)
Net realized gain on investments.................................... (2,708,059) (266,616)
------------- -------------
Total Dividends................................................... (2,708,059) (270,792)
------------- -------------
Trust Shares:
Net investment income .............................................. (926,097) (2,305,587)
Dividends in excess of net investment income........................ -- --
Net realized gain on investments.................................... (42,454,539) (23,060,210)
------------- -------------
Total Dividends................................................... (43,380,636) (25,365,797)
------------- -------------
Total Dividends to shareholders................................... (79,297,346) (42,387,340)
------------- -------------
Net increase (decrease) from share transactions(1) .................... 110,907,411 55,173,541
------------- -------------
Net increase in net assets.......................................... 119,039,245 110,391,024
------------- -------------
NET ASSETS at end of the period (including line A)..................... $ 558,170,567 $ 439,131,322
============= =============
(A) Undistributed net investment income................................ $ 11,520 $ 11,330
============= =============
</TABLE>
- -----------------------------------------------------------------------------
(1) For detail on share transactions by series, see Statements of Changes in
Net Assets - Capital Stock Activity on pages 48-49.
* The Strategic Equity Fund commenced operations on March 4, 1998.
See Notes to Financial Statements.
42
<PAGE>
<TABLE>
<CAPTION>
Strategic Equity Fund Equity Growth Fund
-------------------- ---------------------------------
Period ended Six months ended Year ended
April 30, 1998* April 30, 1998 October 31,
(unaudited) (unaudited) 1997
------------- -------------- -------------
<S> <C> <C>
$ 30 $ 992,229,709 $ 727,214,473
------------- -------------- -------------
1,789 2,307,214 5,354,689
44,845 62,969,380 152,556,524
42,701 130,532,641 83,141,716
------------- -------------- -------------
89,335 195,809,235 241,052,929
------------- -------------- -------------
-- (255,943) (576,083)
-- -- --
-- (35,424,489) (10,203,437)
------------- -------------- -------------
-- (35,680,432) (10,779,520)
------------- -------------- -------------
-- -- --
-- (3,245,295) (297,157)
------------- -------------- -------------
-- (3,245,295) (297,157)
------------- -------------- -------------
-- (2,144,394) (4,700,379)
-- -- --
-- (113,959,378) (35,183,098)
------------- -------------- -------------
-- (116,103,772) (39,883,477)
------------- -------------- -------------
-- (155,029,499) (50,960,154)
------------- -------------- -------------
6,194,459 180,772,886 74,922,461
------------- -------------- -------------
6,283,794 221,552,622 265,015,236
------------- -------------- -------------
$ 6,283,824 $1,213,782,331 $ 992,229,709
============= ============== =============
$ 1,789 $ 380,145 $ 473,268
============= ============== =============
</TABLE>
43
<PAGE>
THE GALAXY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Small Cap Value Fund
----------------------------------------
Six months ended Year ended
April 30, 1998 October 31,
(unaudited) 1997
--------------- -------------
<S> <C> <C>
NET ASSETS at beginning of the period.................................. $ 252,915,472 $ 171,743,742
------------- -------------
Increase (Decrease) in Net Assets resulting from operations:
Net investment income gain (loss)................................... 1,115,896 27,874
Net realized gain on investments sold............................... 19,650,454 38,132,709
Net realized gain on forward foreign currency
contracts and foreign currency.................................... -- --
Net change in unrealized appreciation on investments,
foreign currency and forward foreign currency contracts........... 8,350,463 34,941,572
------------- -------------
Net increase in net assets resulting from operations.............. 29,116,813 73,102,155
------------- -------------
Dividends to shareholders from:
Retail A Shares:
Net investment income .............................................. (288,953) --
Dividends in excess of net investment income........................ -- --
Net realized gain on investments and forward foreign currency ...... (9,778,431) (4,993,083)
------------- -------------
Total Dividends................................................... (10,067,384) (4,993,083)
------------- -------------
Retail B Shares:
Net realized gain on investments and forward foreign currency ...... N/A N/A
------------- -------------
Total Dividends................................................... N/A N/A
------------- -------------
Trust Shares:
Net investment income .............................................. (1,097,772) --
Dividends in excess of net investment income........................ -- --
Net realized gain on investments and forward foreign currency ...... (28,007,227) (20,583,646)
------------- -------------
Total Dividends................................................... (29,104,999) (20,583,646)
------------- -------------
Total Dividends to shareholders................................... (39,172,383) (25,576,729)
------------- -------------
Net increase from share transactions(1) ............................... 86,224,614 33,646,304
------------- -------------
Net increase in net assets.......................................... 76,169,044 81,171,730
------------- -------------
NET ASSETS at end of the period (including line A)..................... $ 329,084,516 $ 252,915,472
============= =============
(A) Undistributed (overdistributed) net investment income ............. $ 103,327 $ 374,156
============= =============
</TABLE>
- -----------------------------------------------------------------------------
(1) For detail on share transactions by series, see Statements of Changes in
Net Assets - Capital Stock Activity on pages 50-51.
See Notes to Financial Statements.
44
<PAGE>
<TABLE>
<CAPTION>
Small Company Equity Fund International Equity Fund
----------------------------------------- -----------------------------------------
Six months ended Year ended Six months ended Year ended
April 30, 1998 October 31, April 30, 1998 October 31,
(unaudited) 1997 (unaudited) 1997
------------- -------------- ------------- -------------
<S> <C> <C> <C>
$ 461,077,407 $ 289,749,249 $ 321,715,516 $ 207,704,676
------------- ------------- ------------- -------------
(1,910,449) (2,866,390) 436,312 1,350,172
27,805,992 51,415,977 9,467,014 7,500,231
-- -- 1,059,941 1,589,424
2,460,851 21,261,937 58,371,717 26,058,877
------------- ------------- ------------- -------------
28,356,394 69,811,524 69,334,984 36,498,704
------------- ------------- ------------- -------------
-- -- (239,531) (451,614)
-- -- -- --
(13,859,080) (13,205,190) (1,235,651) (1,728,957)
------------- ------------- ------------- -------------
(13,859,080) (13,205,190) (1,475,182) (2,180,571)
------------- ------------- ------------- -------------
(1,648,140) (511,664) N/A N/A
------------- ------------- ------------- -------------
(1,648,140) (511,664) N/A N/A
------------- ------------- ------------- -------------
-- -- (1,544,939) (2,613,586)
-- -- -- --
(33,030,610) (21,205,020) (6,265,777) (8,813,614)
------------- ------------- ------------- -------------
(33,030,610) (21,205,020) (7,810,716) (11,427,200)
------------- ------------- ------------- -------------
(48,537,830) (34,921,874) (9,285,898) (13,607,771)
------------- ------------- ------------- -------------
60,201,509 136,438,508 16,954,060 91,119,907
------------- ------------- ------------- -------------
40,020,073 171,328,158 77,003,146 114,010,840
------------- ------------- ------------- -------------
$ 501,097,480 $ 461,077,407 $ 398,718,662 $ 321,715,516
============= ============= ============= =============
$ (1,910,449) $ -- $ 1,023,445 $ 2,371,603
============= ============= ============= =============
</TABLE>
45
<PAGE>
THE GALAXY FUND
STATEMENTS OF CHANGES IN NET ASSETS -
Capital Stock Activity
<TABLE>
<CAPTION>
Asset Allocation Fund
------------------------------------------
Six months ended Year ended
April 30, 1998 October 31,
(unaudited) 1997
-------------- -------------
<S> <C> <C>
DOLLAR AMOUNTS
Retail A Shares:
Sold .............................................................. $ 86,088,315 $ 57,713,278
Issued to shareholders in reinvestment of dividends................. 15,781,164 7,455,587
Repurchased......................................................... (17,929,669) (22,927,516)
-------------- -------------
Net increase in shares outstanding.................................. $ 83,939,810 $ 42,241,349
============= =============
Retail B Shares:
Sold .............................................................. $ 14,577,356 $ 26,811,230
Issued to shareholders in reinvestment of dividends................. 2,623,062 406,160
Repurchased......................................................... (2,057,276) (2,154,383)
------------- -------------
Net increase in shares outstanding.................................. $ 15,143,142 $ 25,063,007
============= =============
Trust Shares:
Sold .............................................................. $ 42,420,308 $ 61,687,598
Issued to shareholders in reinvestment of dividends................. 13,893,881 7,057,551
Repurchased......................................................... (22,813,946) (40,338,365)
------------- -------------
Net increase in shares outstanding.................................. $ 33,500,243 $ 28,406,784
============= =============
SHARE ACTIVITY
Retail A Shares:
Sold .............................................................. 5,282,783 3,704,322
Issued to shareholders in reinvestment of dividends................. 1,023,520 503,522
Repurchased......................................................... (1,098,027) (1,486,276)
------------- -------------
Net increase in shares outstanding.................................. 5,208,276 2,721,568
============= =============
Retail B Shares:
Sold .............................................................. 900,602 1,735,659
Issued to shareholders in reinvestment of dividends................. 170,409 26,813
Repurchased......................................................... (127,005) (140,353)
------------- -------------
Net increase in shares outstanding.................................. 944,006 1,622,119
============= =============
Trust Shares:
Sold ............................................................. 2,608,543 4,054,008
Issued to shareholders in reinvestment of dividends................. 904,571 476,312
Repurchased......................................................... (1,408,325) (2,608,229)
------------- -------------
Net increase in shares outstanding.................................. 2,104,789 1,922,091
============= =============
</TABLE>
See Notes to Financial Statements.
46
<PAGE>
<TABLE>
<CAPTION>
Equity Income Fund Growth and Income Fund
------------------------------------------ ------------------------------------------
Six months ended Year ended Six months ended Year ended
April 30, 1998 October 31, April 30, 1998 October 31,
(unaudited) 1997 (unaudited) 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C>
$ 27,579,675 $ 35,539,246 $ 56,466,916 $ 54,774,958
15,084,335 12,956,963 24,779,372 8,237,158
(12,730,986) (23,174,748) (15,129,211) (17,102,549)
------------- ------------- ------------- -------------
$ 29,933,024 $ 25,321,461 $ 66,117,077 $ 45,909,567
============= ============= ============= =============
N/A N/A $ 11,186,013 $ 28,282,666
N/A N/A 5,978,776 589,505
N/A N/A (1,985,320) (1,499,015)
------------- ------------- ------------- -------------
N/A N/A $ 15,179,469 $ 27,373,156
============= ============= ============= =============
$ 7,901,804 $ 15,795,464 $ 34,786,182 $ 88,184,425
6,588,334 6,452,967 40,978,674 17,190,899
(8,478,555) (21,541,178) (31,723,376) (84,901,373)
------------- ------------- ------------- -------------
$ 6,011,583 $ 707,253 $ 44,041,480 $ 20,473,951
============= ============= ============= =============
1,425,828 2,004,408 3,646,915 3,629,393
838,731 792,968 1,765,598 605,724
(660,032) (1,309,795) (985,030) (1,143,729)
------------- ------------- ------------- -------------
1,604,527 1,487,581 4,427,483 3,091,388
============= ============= ============= =============
N/A N/A 730,894 1,890,792
N/A N/A 425,935 43,421
N/A N/A (128,860) (97,779)
------------- ------------- ------------- -------------
N/A N/A 1,027,969 1,836,434
============= ============= ============= =============
413,962 894,132 2,253,144 6,029,540
368,089 399,074 2,867,027 1,268,797
(436,595) (1,217,787) (2,021,145) (5,677,998)
------------- ------------- ------------- -------------
345,456 75,419 3,099,026 1,620,339
============= ============= ============= =============
</TABLE>
47
<PAGE>
THE GALAXY FUND
STATEMENTS OF CHANGES IN NET ASSETS -
Capital Stock Activity (continued)
<TABLE>
<CAPTION>
Equity Value Fund
------------------------------------------
Six months ended Year ended
April 30, 1998 October 31,
(unaudited) 1997
-------------- -------------
<S> <C> <C>
DOLLAR AMOUNTS
Retail A Shares:
Sold .............................................................. $ 40,825,951 $ 34,972,818
Issued to shareholders in reinvestment of dividends................. 32,667,827 16,568,831
Repurchased......................................................... (13,661,805) (23,738,345)
-------------- -------------
Net increase in shares outstanding.................................. $ 59,831,973 $ 27,803,304
============= =============
Retail B Shares:
Sold .............................................................. $ 5,123,610 $ 11,894,526
Issued to shareholders in reinvestment of dividends................. 2,698,279 267,372
Repurchased......................................................... (742,020) (609,174)
------------- -------------
Net increase in shares outstanding.................................. $ 7,079,869 $ 11,552,724
============= =============
Trust Shares:
Sold .............................................................. $ 31,545,734 $ 66,639,995
Issued to shareholders in reinvestment of dividends................. 34,604,648 19,386,069
Repurchased......................................................... (22,154,813) (70,208,551)
------------- -------------
Net increase in shares outstanding.................................. $ 43,995,569 $ 15,817,513
============= =============
SHARE ACTIVITY
Retail A Shares:
Sold .............................................................. 2,392,239 2,092,664
Issued to shareholders in reinvestment of dividends................. 2,146,074 1,097,361
Repurchased......................................................... (799,783) (1,432,364)
------------- -------------
Net increase in shares outstanding.................................. 3,738,530 1,757,661
============= =============
Retail B Shares:
Sold .............................................................. 304,310 717,960
Issued to shareholders in reinvestment of dividends................. 177,052 17,751
Repurchased......................................................... (43,546) (35,314)
------------- -------------
Net increase in shares outstanding.................................. 437,816 700,397
============= =============
Trust Shares:
Sold .............................................................. 1,880,357 4,120,116
Issued to shareholders in reinvestment of dividends................. 2,265,710 1,282,399
Repurchased......................................................... (1,304,070) (4,347,383)
-------------- -------------
Net increase in shares outstanding.................................. 2,841,997 1,055,132
============== =============
</TABLE>
See Notes to Financial Statements.
48
<PAGE>
<TABLE>
<CAPTION>
Strategic Equity Fund Equity Growth Fund
-------------------- ---------------------------------
Period ended Six months ended Year ended
April 30, 1998* April 30, 1998 October 31,
(unaudited) (unaudited) 1997
------------- -------------- -------------
<S> <C> <C>
$ 1,061,749 $ 52,537,695 $ 40,088,595
-- 35,118,108 10,643,227
-- (17,355,849) (26,731,145)
------------- -------------- -------------
$ 1,061,749 $ 70,299,954 $ 24,000,677
============= ============== =============
$ 132,700 $ 6,986,464 $ 14,432,259
-- 3,228,334 296,380
-- (1,106,823) (1,016,169)
------------- -------------- -------------
$ 132,700 $ 9,107,975 $ 13,712,470
============= ============== =============
$ 5,000,010 $ 64,583,121 $ 164,574,450
-- 92,709,053 27,032,380
-- (55,927,217) (154,397,516)
------------- -------------- -------------
$ 5,000,010 $ 101,364,957 $ 37,209,314
============= ============== =============
104,578 2,172,663 1,782,044
-- 1,623,677 523,825
-- (730,741) (1,197,990)
------------- -------------- -------------
104,578 3,065,599 1,107,879
============= ============== =============
13,049 296,526 649,862
-- 150,997 14,753
-- (45,924) (44,450)
------------- -------------- -------------
13,049 401,599 620,165
============= ============== =============
500,002 2,740,633 7,599,518
-- 4,276,099 1,322,142
-- (2,345,360) (6,885,796)
------------- -------------- -------------
500,002 4,671,372 2,035,864
============= ============== =============
</TABLE>
49
<PAGE>
THE GALAXY FUND
STATEMENTS OF CHANGES IN NET ASSETS -
Capital Stock Activity (continued)
<TABLE>
<CAPTION>
Small Cap Value Fund
----------------------------------------
Six months ended Year ended
April 30, 1998 October 31,
(unaudited) 1997
-------------- -------------
<S> <C> <C>
DOLLAR AMOUNTS
Retail A Shares:
Sold .............................................................. $ 54,992,609 $ 31,357,694
Issued to shareholders in reinvestment of dividends................. 10,017,687 4,980,153
Repurchased......................................................... (29,540,108) (18,434,665)
-------------- -------------
Net increase (decrease) in shares outstanding....................... $ 35,470,188 $ 17,903,182
============= =============
Retail B Shares:
Sold .............................................................. N/A N/A
Issued to shareholders in reinvestment of dividends................. N/A N/A
Repurchased......................................................... N/A N/A
------------- -------------
Net increase in shares outstanding.................................. N/A N/A
============= =============
Trust Shares:
Sold .............................................................. $ 35,390,800 $ 59,290,339
Issued to shareholders in reinvestment of dividends................. 25,066,996 20,272,927
Repurchased......................................................... (9,703,370) (63,820,144)
------------- -------------
Net increase in shares outstanding.................................. $ 50,754,426 $ 15,743,122
============= =============
SHARE ACTIVITY
Retail A Shares:
Sold .............................................................. 3,394,263 1,881,873
Issued to shareholders in reinvestment of dividends................. 662,706 368,084
Repurchased......................................................... (1,819,133) (1,101,834)
-------------- -------------
Net increase (decrease) in shares outstanding....................... 2,237,836 1,148,123
============= =============
Retail B Shares:
Sold .............................................................. N/A N/A
Issued to shareholders in reinvestment of dividends................. N/A N/A
Repurchased......................................................... N/A N/A
------------- -------------
Net increase in shares outstanding.................................. N/A N/A
============= =============
Trust Shares:
Sold .............................................................. 2,152,695 3,798,315
Issued to shareholders in reinvestment of dividends................. 1,635,851 1,496,157
Repurchased......................................................... (573,097) (4,295,147)
------------- -------------
Net increase in shares outstanding.................................. 3,215,449 999,325
============= =============
</TABLE>
See Notes to Financial Statements.
50
<PAGE>
<TABLE>
<CAPTION>
Small Company Equity Fund International Equity Fund
----------------------------------------- -----------------------------------------
Six months ended Year ended Six months ended Year ended
April 30, 1998 October 31, April 30, 1998 October 31,
(unaudited) 1997 (unaudited) 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C>
$ 263,476,189 $ 375,986,702 $ 97,408,184 $ 82,857,874
13,427,430 12,695,841 1,450,467 2,141,590
(265,300,973) (372,674,895) (99,888,954) (67,026,314)
------------- ------------- ------------- -------------
$ 11,602,646 $ 16,007,648 $ (1,030,303) $ 17,973,150
============= ============= ============= =============
$ 4,539,748 $ 10,578,874 N/A N/A
1,616,879 507,890 N/A N/A
(2,544,718) (1,427,627) N/A N/A
------------- ------------- ------------- -------------
$ 3,611,909 $ 9,659,137 N/A N/A
============= ============= ============= =============
$ 153,106,902 $ 286,798,732 $ 105,556,078 $ 185,357,231
24,548,356 14,295,814 4,418,249 6,098,028
(132,668,304) (190,322,823) (91,989,964) (118,308,502)
------------- ------------- ------------- -------------
$ 44,986,954 $ 110,771,723 $ 17,984,363 $ 73,146,757
============= ============= ============= =============
14,110,515 19,924,624 6,136,310 5,189,678
787,533 724,649 95,890 159,107
(14,042,992) (19,741,525) (6,250,138) (4,142,407)
------------- ------------- ------------- -------------
855,056 907,748 (17,938) 1,206,378
============= ============= ============= =============
246,108 572,164 N/A N/A
96,014 29,089 N/A N/A
(136,841) (74,427) N/A N/A
------------- ------------- ------------- -------------
205,281 526,826 N/A N/A
============= ============= ============= =============
7,889,598 15,273,312 6,464,972 12,280,035
1,410,015 804,039 289,630 450,372
(6,791,390) (10,166,105) (5,645,132) (7,749,015)
------------- ------------- ------------- -------------
2,508,223 5,911,246 1,109,470 4,981,392
============= ============= ============= =============
</TABLE>
51
<PAGE>
THE GALAXY FUND
Asset Allocation Fund
FINANCIAL HIGHLIGHTS
For a Share outstanding throughout each period.
Retail A Shares
<TABLE>
<CAPTION>
Six months ended Years ended October 31,
April 30, 1998 -----------------------------------------------------
(unaudited) 1997 1996 1995 1994 1993(1)
-------------- -------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ................ $ 16.46 $ 14.52 $ 12.82 $ 10.67 $ 11.15 $ 10.16
-------- -------- -------- ------- ------- -------
Income from Investment Operations:
Net investment income (C)......................... 0.20 0.40 0.30 0.30 0.27 0.25
Net realized and unrealized gain (loss) on
investments .................................... 1.60 2.43 1.83 2.16 (0.49) 0.99
-------- -------- -------- ------- ------- -------
Total from Investment Operations: .............. 1.80 2.83 2.13 2.46 (0.22) 1.24
-------- -------- -------- ------- ------- -------
Less Dividends:
Dividends from net investment income ............. (0.21) (0.38) (0.30) (0.31) (0.26) (0.25)
Dividends from net realized capital gains ........ (1.21) (0.51) (0.13) -- -- --
-------- -------- -------- ------- ------- -------
Total Dividends: ............................... (1.42) (0.89) (0.43) (0.31) (0.26) (0.25)
-------- -------- -------- ------- ------- -------
Net increase (decrease) in net asset value........... 0.38 1.94 1.70 2.15 (0.48) 0.99
-------- -------- -------- ------- ------- -------
Net Asset Value, End of Period ...................... $ 16.84 $ 16.46 $ 14.52 $ 12.82 $ 10.67 $ 11.15
======== ======== ======== ======= ======= =======
Total Return (B)..................................... 11.75%** 20.23% 16.92% 23.42% (2.02)% 12.37%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ................... $268,997 $177,239 $116,852 $76,368 $73,574 $92,348
Ratios to average net assets:
Net investment income including
reimbursement/waiver ........................... 2.53%* 2.66% 2.29% 2.52% 2.66% 2.59%
Operating expenses including reimbursement/waiver. 1.31%* 1.37% 1.42% 1.48% 1.21% 1.14%
Operating expenses excluding reimbursement/waiver. 1.31%* 1.37% 1.42% 1.50% 1.22% 1.25%
Portfolio Turnover Rate ............................. 52%** 58% 48% 41% 23% 7%
Average Commission Rate Paid (A)..................... $ 0.0613 $ 0.0609 $ 0.0635 N/A N/A N/A
</TABLE>
- -----------------------------------------------------
* Annualized
** Not Annualized
(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 A and
Trust Shares.
(2) The Fund began issuing Retail B Shares on March 4, 1996.
(A) For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for which
commissions are charged.
(B) Calculation does not include the effect of any sales charge for Retail A
Shares and Retail B Shares.
(C) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail A Shares for the six
months ended April 30, 1998 (unaudited) and the years ended October 31,
1997, 1996, 1995, 1994 and 1993 were $0.20, $0.40, $0.30, $0.30, $0.27 and
$0.24, respectively. Net investment income per share before
reimbursement/waiver of fees by the Investment Advisor and/or Administrator
for Trust Shares for the six months ended April 30, 1998 (unaudited) and
the years ended October 31, 1997, 1996, 1995, 1994 and 1993 were $0.21,
$0.43, $0.33, $0.32, $0.28 and $0.24, respectively. Net investment income
per share before reimbursement/waiver of fees by the Investment Advisor
and/or Administrator for Retail B Shares for the six months ended April 30,
1998 (unaudited), the year ended October 31, 1997 and the period ended
October 31, 1996 were $0.16, $0.28 and $0.12, respectively.
See Notes to Financial Statements.
52
<PAGE>
<TABLE>
<CAPTION>
Trust Shares Retail B Shares
Years ended
Six months ended October 31, Six months ended Year ended Period ended
April 30, 1998 ----------------------------------------------------- April 30, 1998 October 31, October 31,
(unaudited) 1997 1996 1995 1994 1993(1) (unaudited) 1997 1996(2)
------------- --------- --------- --------- --------- --------- ------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 16.47 $ 14.53 $ 12.83 $ 10.68 $ 11.15 $ 10.16 $ 16.43 $ 14.51 $ 13.59
--------- --------- --------- -------- ------- -------- --------- --------- --------
0.21 0.43 0.33 0.32 0.28 0.25 0.16 0.29 0.13
1.59 2.42 1.83 2.16 (0.49) 0.99 1.58 2.42 0.91
--------- --------- --------- -------- ------- -------- --------- --------- --------
1.80 2.85 2.16 2.48 (0.21) 1.24 1.74 2.71 1.04
--------- --------- --------- -------- ------- -------- --------- --------- --------
(0.22) (0.40) (0.33) (0.33) (0.26) (0.25) (0.16) (0.28) (0.12)
(1.21) (0.51) (0.13) -- -- -- (1.21) (0.51) --
--------- --------- --------- -------- ------- -------- --------- --------- --------
(1.43) (0.91) (0.46) (0.33) (0.26) (0.25) (1.37) (0.79) (0.12)
--------- --------- --------- -------- ------- -------- --------- --------- --------
0.37 1.94 1.70 2.15 (0.47) 0.99 0.37 1.92 0.92
--------- --------- --------- -------- ------- -------- --------- --------- --------
$ 16.84 $ 16.47 $ 14.53 $ 12.83 $ 10.68 $ 11.15 $ 16.80 $ 16.43 $ 14.51
========== ========= ========= ======== ======= ======== ========= ========= ========
11.78%** 20.42% 17.19% 23.68% (1.93)% 12.37% 11.36%** 19.34% 7.71%**
$ 211,124 $ 171,741 $ 123,603 $ 76,771 $65,464 $ 92,348 $ 47,242 $ 30,688 $ 3,557
2.73%* 2.82% 2.52% 2.74% 2.70% 2.59% 1.85%* 1.95% 1.73%*
1.11%* 1.21% 1.19% 1.26% 1.18% 1.14% 1.99%* 2.10% 1.95%*
1.11%* 1.22% 1.21% 1.30% 1.18% 1.25% 1.99%* 2.19% 2.15%*
52%** 58% 48% 41% 23% 7% 52%** 58% 48%
$ 0.0613 $ 0.0609 $ 0.0635 N/A N/A N/A $ 0.0613 $ 0.0609 $ 0.0635
</TABLE>
53
<PAGE>
THE GALAXY FUND
Equity Income Fund
FINANCIAL HIGHLIGHTS
For a Share outstanding throughout each period.
Retail A Shares
<TABLE>
<CAPTION>
Six months ended Years ended October 31,
April 30, 1998 ---------------------------------------
(unaudited) 1997 1996 1995 1994 1993(1)
-------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ................ $ 18.82 $ 16.91 $ 14.98 $ 12.74 $ 12.85 $ 11.85
-------- --------- --------- --------- --------- --------
Income from Investment Operations:
Net investment income (C)......................... 0.12 0.30 0.30 0.28 0.30 0.30
Net realized and unrealized gain on investments .. 3.11 3.35 2.47 2.47 0.07 1.09
-------- --------- --------- --------- --------- --------
Total from Investment Operations: ............ 3.23 3.65 2.77 2.75 0.37 1.39
-------- --------- --------- --------- --------- --------
Less Dividends:
Dividends from net investment income ............. (0.13) (0.30) (0.30) (0.30) (0.29) (0.28)
Dividends from net realized capital gains ........ (1.58) (1.44) (0.54) (0.21) (0.19) (0.11)
-------- --------- --------- --------- --------- --------
Total Dividends:.............................. (1.71) (1.74) (0.84) (0.51) (0.48) (0.39)
-------- --------- --------- --------- --------- --------
Net increase (decrease) in net asset value .......... 1.52 1.91 1.93 2.24 (0.11) 1.00
-------- --------- --------- --------- --------- --------
Net Asset Value, End of Period ...................... $ 20.34 $ 18.82 $ 16.91 $ 14.98 $ 12.74 $ 12.85
======== ========= ========= ========= ========= ========
Total Return (B)..................................... 18.38%** 23.28% 19.01% 22.23% 2.94% 11.85%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ................... $215,567 $ 169,276 $ 126,952 $ 81,802 $ 63,532 $123,970
Ratios to average net assets:
Net investment income including
reimbursement/waiver ........................... 1.27%* 1.70% 1.86% 2.08% 2.45% 2.34%
Operating expenses including reimbursement/waiver. 1.34%* 1.39% 1.40% 1.49% 1.11% 1.16%
Operating expenses excluding reimbursement/waiver. 1.34%* 1.41% 1.40% 1.51% 1.12% 1.22%
Portfolio Turnover Rate ............................. 22%** 37% 45% 21% 31% 27%
Average Commission Rate Paid (A)..................... $ 0.0571 $ 0.0598 $ 0.0620 N/A N/A N/A
</TABLE>
- --------------------------------------------------------------------------------
* Annualized
** Not Annualized
(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 A and
Trust Shares.
(A) For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for which
commissions are charged.
(B) Calculation does not include the effect of any sales charge for Retail A
Shares.
(C) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail A Shares for the six
months ended April 30, 1998 (unaudited) and the years ended October 31,
1997, 1996, 1995, 1994 and 1993 were $0.12, $0.30, $0.30, $0.28, $0.30 and
$0.29, respectively. Net investment income per share before
reimbursement/waiver of fees by the Investment Advisor and/or Administrator
for Trust Shares for the six months ended April 30, 1998 (unaudited) and
the years ended October 31, 1997, 1996, 1995, 1994 and 1993 were $0.16,
$0.38, $0.37, $0.36, $0.31 and $0.29, respectively.
See Notes to Financial Statements.
54
<PAGE>
Trust Shares
<TABLE>
<CAPTION>
Years ended
Six months ended October 31,
April 30, 1998 -----------------------------------------------------
(unaudited) 1997 1996 1995 1994 1993(1)
------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 18.84 $ 16.93 $ 14.99 $ 12.75 $ 12.85 $ 11.85
--------- -------- --------- --------- --------- ----------
0.16 0.38 0.37 0.36 0.31 0.30
3.10 3.35 2.48 2.45 0.07 1.09
--------- -------- --------- --------- --------- ----------
3.26 3.73 2.85 2.81 0.38 1.39
--------- -------- --------- --------- --------- ----------
(0.16) (0.38) (0.37) (0.36) (0.29) (0.28)
(1.58) (1.44) (0.54) (0.21) (0.19) (0.11)
--------- -------- --------- --------- --------- ----------
(1.74) (1.82) (0.91) (0.57) (0.48) (0.39)
--------- -------- --------- --------- --------- ----------
1.52 1.91 1.94 2.24 (0.10) 1.00
--------- -------- --------- --------- --------- ----------
$ 20.36 $ 18.84 $ 16.93 $ 14.99 $ 12.75 $ 12.85
========= ======== ========= ========= ========= ==========
18.58%** 23.80% 19.65% 22.81% 3.02% 11.85%
$ 136,209 $ 119,505 $106,094 $ 87,819 $ 78,880 $ 123,970
1.69%* 2.14% 2.32% 2.60% 2.49% 2.34%
0.92%* 0.95% 0.94% 0.98% 1.07% 1.16%
0.92%* 0.97% 0.94% 1.00% 1.07% 1.22%
22%** 37% 45% 21% 31% 27%
$ 0.0571 $ 0.0598 $ 0.0620 N/A N/A N/A
</TABLE>
55
<PAGE>
THE GALAXY FUND
Growth and Income Fund
FINANCIAL HIGHLIGHTS
For a Share outstanding throughout each period.
The Galaxy Fund
Retail A Shares
<TABLE>
<CAPTION>
Six months ended Years ended October 31,
April 30, 1998 -----------------------------------------------------
(unaudited) 1997 1996(3) 1995 1994 1993(1)(2)
-------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................. $ 16.24 $ 13.78 $ 12.35 $ 11.15 $ 10.69 $ 10.23
-------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (C & D)..................... 0.07 0.18 0.21 0.24 0.22 0.15
Net realized and unrealized gain on investments... 2.63 3.67 2.16 1.70 0.72 0.48
-------- --------- --------- --------- --------- ---------
Total from Investment Operations:............... 2.70 3.85 2.37 1.94 0.94 0.63
-------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income.............. (0.08) (0.20) (0.21) (0.25) (0.20) (0.17)
Dividends from net realized capital gains......... (2.68) (1.19) (0.73) (0.49) (0.28) --
-------- --------- --------- --------- --------- ---------
Total Dividends:................................ (2.76) (1.39) (0.94) (0.74) (0.48) (0.17)
-------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value........... (0.06) 2.46 1.43 1.20 0.46 0.46
-------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period....................... $ 16.18 $ 16.24 $ 13.78 $ 12.35 $ 11.15 $ 10.69
======== ========= ========= ========= ========= =========
Total Return (B)..................................... 19.26%** 30.10% 20.25% 18.52% 9.12% 6.20%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's).................... $219,938 $ 141,884 $ 77,776 $ 51,078 $ 22,244 $ 16,280
Ratios to average net assets:
Net investment income including
reimbursement/waiver ........................... 0.96%* 1.18% 1.65% 2.10% 2.06% 1.77%*
Operating expenses including reimbursement/waiver. 1.28%* 1.27% 1.34% 1.32% 1.29% 1.25%*
Operating expenses excluding reimbursement/waiver. 1.34%* 1.45% 1.45% 1.77% 1.74% 1.78%*
Portfolio Turnover Rate.............................. 18%** 93% 59% 51% 73% 38%**
Average Commission Rate Paid (A)..................... $ 0.0648 $ 0.0618 $ 0.0654 N/A N/A N/A
</TABLE>
- ----------------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on December 14, 1992 as a separate investment
portfolio (the "Predecessor Fund") of The Shawmut Funds.
(2) The Predecessor Fund began offering Investment Shares on February 12, 1993.
(3) On December 4, 1995, the Predecessor Fund was reorganized as a new
portfolio of the Trust. Prior to the reorganization, the Predecessor Fund
offered and sold two series of shares, Investment Shares and Trust Shares,
that were similar to the Fund's Retail A and Trust Shares, respectively.
In connection with the reorganization, shareholders of the Predecessor
Fund exchanged Investment Shares and Trust Shares for Retail A Shares and
Trust Shares, respectively, in the Galaxy Growth and Income Fund.
(4) The Fund began issuing Retail B Shares on March 4, 1996.
(A) For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for which
commissions are charged.
(B) Calculation does not include the effect of any sales charge for Retail A
Shares and Retail B Shares.
(C) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail A Shares for the six
months ended April 30, 1998 (unaudited) and the years ended October 31,
1997, 1996, 1995 (unaudited) and 1994 (unaudited) and the period ended
October 31, 1993 (unaudited) were $0.06, $0.18, $0.19, $0.22, $0.18 and
$0.18, respectively. Net investment income per share before
reimbursement/waiver of fees by the Investment Advisor and/or Administrator
for Trust Shares for the six months ended April 30, 1998 (unaudited) and
the years ended October 31, 1997, 1996, 1995 (unaudited) and 1998
(unaudited) and the period ended October 31, 1993 (unaudited) were $0.09,
$0.21, $0.27, $0.25, $0.22 and $0.15, respectively. Net investment income
per share before reimbursement/waiver of fees by the Investment Advisor
and/or Administrator for Retail B Shares for the six months ended April
30, 1998 (unaudited), the year ended October 31, 1997 and for the period
ended October 31, 1996 were $0.02, $0.08 and $0.05, respectively.
(D) Net investment income per share does not reflect the tax reclassifications
arising in the current period.
See Notes to Financial Statements.
56
<PAGE>
<TABLE>
<CAPTION>
Trust Shares Retail B Shares
Years ended
Six months ended October 31, Six months ended Year ended Period ended
April 30, 1998 ----------------------------------------------------- April 30, 1998 October 31, October 31,
(unaudited) 1997 1996(3) 1995 1994 1993(1)(2) (unaudited) 1997 1996(4)
------------- --------- --------- --------- --------- --------- ------------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 16.28 $ 13.80 $ 12.35 $ 11.15 $ 10.69 $ 10.00 $ 16.23 $ 13.77 $ 12.97
-------- --------- --------- --------- --------- --------- ---------- --------- --------
0.09 0.22 0.27 0.28 0.25 0.18 0.02 0.10 0.07
2.63 3.68 2.16 1.69 0.72 0.69 2.62 3.65 0.81
-------- --------- --------- --------- --------- --------- ---------- --------- --------
2.72 3.90 2.43 1.97 0.97 0.87 2.64 3.75 0.88
-------- --------- --------- --------- --------- --------- ---------- --------- --------
(0.10) (0.23) (0.25) (0.28) (0.23) (0.18) (0.03) (0.10) (0.08)
(2.68) (1.19) (0.73) (0.49) (0.28) -- (2.68) (1.19) --
-------- --------- --------- --------- --------- --------- ---------- --------- --------
(2.78) (1.42) (0.98) (0.77) (0.51) (0.18) (2.71) (1.29) (0.08)
-------- --------- --------- --------- --------- --------- ---------- --------- --------
(0.06) 2.48 1.45 1.20 0.46 0.69 (0.07) 2.46 0.80
-------- --------- --------- --------- --------- --------- ---------- --------- --------
$ 16.22 $ 16.28 $ 13.80 $ 12.35 $ 11.15 $ 10.69 $ 16.16 $ 16.23 $ 13.77
======== ========= ========= ========= ========= ========= ========== ========= ========
19.36%** 30.43% 20.77% 18.80% 9.45% 8.80%* 18.80%** 29.11% 6.83%**
$296,102 $ 246,654 $ 186,708 $ 189,011 $ 156,827 $ 147,090 $ 51,630 $ 35,178 $ 4,562
1.25%* 1.44% 2.01% 2.42% 2.31% 2.11%* 0.25%* 0.31% 0.79%*
1.00%* 1.03% 1.02% 1.07% 1.04% 0.98%* 1.99%* 2.05% 1.96%*
1.00%* 1.06% 1.03% 1.27% 1.24% 1.25%* 1.99%* 2.28% 2.11%*
18%** 93% 59% 51% 73% 38%** 18%** 93% 59%
$ 0.0648 $ 0.0618 $ 0.0654 N/A N/A N/A $ 0.0648 $ 0.0618 $ 0.0654
</TABLE>
57
<PAGE>
THE GALAXY FUND
Equity Value Fund
FINANCIAL HIGHLIGHTS
For a Share outstanding throughout each period.
Retail A Shares
<TABLE>
<CAPTION>
Six months ended Years ended October 31,
April 30, 1998 -----------------------------------------------------
(unaudited) 1997 1996 1995 1994 1993(1)
-------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ................ $ 18.21 $ 15.96 $ 14.33 $ 13.31 $ 13.12 $ 11.41
-------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (loss) (C).................. 0.04 0.11 0.14 0.22 0.18 0.19
Net realized and unrealized gain on investments .. 2.92 4.16 2.74 2.24 0.45 2.14
-------- --------- --------- --------- --------- ---------
Total from Investment Operations: ............ 2.96 4.27 2.88 2.46 0.63 2.33
-------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income ............. (0.04) (0.12) (0.14) (0.23) (0.16) (0.20)
Dividends from net realized capital gains......... (3.20) (1.90) (1.11) (1.21) (0.28) (0.42)
-------- --------- --------- --------- --------- ---------
Total Dividends:.............................. (3.24) (2.02) (1.25) (1.44) (0.44) (0.62)
-------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value .......... (0.28) 2.25 1.63 1.02 0.19 1.71
-------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ...................... $ 17.93 $ 18.21 $ 15.96 $ 14.33 $ 13.31 $ 13.12
======== ========= ========= ========= ========= =========
Total Return (B)..................................... 19.38%** 29.48% 21.49% 20.81% 4.97% 21.18%
Ratios/Supplemental Data:
Net Assets, End of Period (000's).................... $246,841 $ 182,641 $ 131,998 $ 96,555 $ 74,001 $ 176,107
Ratios to average net assets:
Net investment income (loss) including
reimbursement/waiver ........................... 0.42%* 0.63% 1.00% 1.62% 1.45% 1.52%
Operating expenses
including reimbursement/waiver.................. 1.34%* 1.38% 1.45% 1.49% 1.08% 0.97%
Operating expenses
excluding reimbursement/waiver.................. 1.34%* 1.38% 1.45% 1.50% 1.11% 0.97%
Portfolio Turnover Rate.............................. 49%** 111% 116% 76% 71% 50%
Average Commission Rate Paid (A)..................... $ 0.0557 $ 0.0601 $ 0.0605 N/A N/A N/A
</TABLE>
- --------------------------------------------------------------------------------
* Annualized
** Not Annualized
(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 A and Trust
Shares.
(2) The Fund began issuing Retail B Shares on March 4, 1996.
(A) For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for which
commissions are charged.
(B) Calculation does not include the effect of any sales charge for Retail A
Shares and Retail B Shares.
(C) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail A Shares for the six
months ended April 30, 1998 (unaudited) and the years ended October 31,
1997, 1996, 1995, 1994 and 1993 were $0.04, $0.11, $0.14, $0.22, $0.18 and
$0.19, respectively. Net investment income per share before
reimbursement/waiver of fees by the Investment Advisor and/or Administrator
for Trust Shares for the six months ended April 30, 1998 (unaudited) and
the years ended October 31, 1997, 1996, 1995, 1994 and 1993 were $0.06,
$0.17, $0.21, $0.28, $0.19 and $0.19, respectively. Net investment income
(loss) per share before reimbursement/waiver of fees by the Investment
Advisor and/or Administrator for Retail B Shares for the six months ended
April 30, 1998 (unaudited), the year ended October 31, 1997 and the period
ended October 31, 1996 were $(0.02), $(0.03) and $0.01, respectively.
See Notes to Financial Statements.
58
<PAGE>
<TABLE>
<CAPTION>
Trust Shares Retail B Shares
Years ended
Six months ended October 31, Six months ended Year ended Period ended
April 30, 1998 ----------------------------------------------------- April 30, 1998 October 31, October 31,
(unaudited) 1997 1996 1995 1994 1993(1) (unaudited) 1997 1996(2)
------------- --------- --------- --------- --------- --------- ------------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 18.21 $ 15.96 $ 14.33 $ 13.32 $ 13.12 $ 11.41 $ 18.24 $ 15.99 $ 14.74
-------- --------- --------- --------- --------- --------- -------- --------- -------
0.06 0.17 0.21 0.28 0.19 0.19 (0.02) -- 0.04
2.92 4.16 2.74 2.24 0.45 2.14 2.92 4.17 1.25
-------- --------- --------- --------- --------- --------- -------- --------- -------
2.98 4.33 2.95 2.52 0.64 2.33 2.90 4.17 1.29
-------- --------- --------- --------- --------- --------- -------- --------- -------
(0.06) (0.18) (0.21) (0.30) (0.16) (0.20) -- (0.02) (0.04)
(3.20) (1.90) (1.11) (1.21) (0.28) (0.42) (3.20) (1.90) --
-------- --------- --------- --------- --------- --------- -------- --------- -------
(3.26) (2.08) (1.32) (1.51) (0.44) (0.62) (3.20) (1.92) (0.04)
-------- --------- --------- --------- --------- --------- -------- --------- -------
(0.28) 2.25 1.63 1.01 0.20 1.71 (0.30) 2.25 1.25
-------- --------- --------- --------- --------- --------- -------- --------- -------
$ 17.93 $ 18.21 $ 15.96 $ 14.33 $ 13.32 $ 13.12 $ 17.94 $ 18.24 $ 15.99
======== ========= ========= ========= ========= ========= ======== ========= =======
19.64%** 29.87% 22.05% 21.31% 5.05% 21.18% 18.96%** 28.60% 8.80%**
$288,764 $ 241,532 $ 194,827 $ 165,330 $ 154,403 $ 176,107 $ 22,565 $ 14,958 $ 1,916
0.75%* 0.98% 1.42% 2.10% 1.46% 1.52% (0.25)%* (0.13)% 0.43%*
1.01%* 1.04% 1.03% 1.02% 1.06% 0.97% 2.01%* 2.07% 1.94%*
1.01%* 1.04% 1.03% 1.02% 1.06% 0.97% 2.01%* 2.38% 2.24%*
49%** 111% 116% 76% 71% 50% 49%** 111% 116%
$0.0557 $ 0.0601 $ 0.0605 N/A N/A N/A $ 0.0557 $ 0.0601 $ 0.0605
</TABLE>
59
<PAGE>
THE GALAXY FUND
Strategic Equity Fund
FINANCIAL HIGHLIGHTS
For a Share outstanding throughout each period.
Retail A Shares
<TABLE>
<CAPTION>
Period ended
April 30, 1998
(unaudited)(1)
--------------
<S> <C>
Net Asset Value, Beginning of Period ......................... $ 10.00
-------
Income from Investment Operations:
Net investment income (C).................................. --(2)
Net realized and unrealized gain on investments ........... 0.17
-------
Total from Investment Operations: ..................... 0.17
-------
Less Dividends:
Dividends from net investment income ...................... --
Dividends from net realized capital gains.................. --
-------
Total Dividends:....................................... --
-------
Net increase in net asset value .............................. 0.17
-------
Net Asset Value, End of Period ............................... $ 10.17
=======
Total Return (B).............................................. 1.70%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)............................. $ 1,064
Ratios to average net assets:
Net investment income (loss) including reimbursement/waiver 0.21%*
Operating expenses including reimbursement/waiver.......... 1.35%*
Operating expenses excluding reimbursement/waiver.......... 10.73%*
Portfolio Turnover Rate....................................... 9%**
Average Commission Rate Paid (A).............................. $0.0741
</TABLE>
- --------------------------------------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on March 4, 1998.
(2) Net investment income per share is less than $0.005.
(A) For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for which
commissions are charged.
(B) Calculation does not include the effect of any sales charge for Retail A
Shares and Retail B Shares.
(C) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail A Shares, Trust Shares
and Retail B Shares for the period ended April 30, 1998 (unaudited) were
$0.00, $0.00 and $0.00 respectively.
See Notes to Financial Statements.
60
<PAGE>
<TABLE>
<CAPTION>
Trust Shares Retail B Shares
Period ended Period ended
April 30, 1998 April 30, 1998
(unaudited)(1) (unaudited)(1)
------------- -------------
<S> <C>
$ 10.00 $ 10.00
--------- ---------
--(2) --(2)
0.17 0.17
--------- ---------
0.17 0.17
--------- ---------
-- --
-- --
--------- ---------
-- --
--------- ---------
0.17 0.17
--------- ---------
$ 10.17 $ 10.17
========= =========
1.70%** 1.70%**
$ 5,087 $ 133
0.21%* 0.22%*
1.35%* 1.35%*
3.28%* 15.59%*
9%** 9%**
$ 0.0741 $ 0.0741
</TABLE>
61
<PAGE>
THE GALAXY FUND
Equity Growth Fund
FINANCIAL HIGHLIGHTS
For a Share outstanding throughout each period.
Retail A Shares
<TABLE>
<CAPTION>
Six months ended Years ended October 31,
April 30, 1998 -----------------------------------------------------
(unaudited) 1997 1996 1995 1994 1993(1)
-------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ................ $ 25.14 $ 20.37 $ 17.29 $ 14.18 $ 13.76 $ 12.90
-------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (loss) (C).................. 0.02 0.07 0.10 0.14 0.17 0.15
Net realized and unrealized gain
on investments ................................. 4.20 6.05 3.39 3.28 0.47 0.95
-------- --------- --------- --------- --------- ---------
Total from Investment Operations:............. 4.22 6.12 3.49 3.42 0.64 1.10
-------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income ............. (0.02) (0.07) (0.11) (0.14) (0.16) (0.15)
Dividends from net realized capital gains ........ (3.84) (1.28) (0.30) (0.17) (0.06) (0.09)
-------- --------- --------- --------- --------- ---------
Total Dividends: ............................... (3.86) (1.35) (0.41) (0.31) (0.22) (0.24)
-------- --------- --------- --------- --------- ---------
Net increase in net asset value ..................... 0.36 4.77 3.08 3.11 0.42 0.86
-------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period....................... $ 25.50 $ 25.14 $ 20.37 $ 17.29 $ 14.18 $ 13.76
======== ========= ========= ========= ========= =========
Total Return (B)..................................... 19.54%** 31.61% 20.51% 24.54% 4.72% 8.58%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ................... $307,670 $ 226,330 $ 160,800 $ 98,911 $ 70,338 $ 427,298
Ratios to average net assets:
Net investment income (loss)
including reimbursement/waiver.................. 0.17%* 0.30% 0.50% 0.85% 1.22% 1.20%
Operating expenses
including reimbursement/waiver.................. 1.32%* 1.37% 1.40% 1.45% 0.98% 0.97%
Operating expenses
excluding reimbursement/waiver.................. 1.32%* 1.37% 1.40% 1.47% 0.99% 0.97%
Portfolio Turnover Rate ............................. 26%** 66% 36% 14% 18% 16%
Average Commission Rate Paid (A)..................... $ 0.0604 $ 0.0601 $ 0.0615 N/A N/A N/A
</TABLE>
- --------------------------------------------------------------------------------
* Annualized
** Not Annualized
(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 A and
Trust Shares.
(2) The Fund began issuing Retail B Shares on March 4, 1996.
(3) The selected per share data was calculated using the weighted average
shares outstanding method for the year.
(A) For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for which
commissions are charged.
(B) Calculation does not include the effect of any sales charge for Retail A
Shares and Retail B Shares.
(C) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail A Shares for the six
months ended April 30, 1998 (unaudited) and the years ended October 31,
1997, 1996, 1995, 1994 and 1993 were $0.02, $0.07, $0.10, $0.13, $0.17 and
$0.15, respectively. Net investment income per share before
reimbursement/waiver of fees by the Investment Advisor and/or Administrator
for Trust Shares for the six months ended April 30, 1998 (unaudited) and
the years ended October 31, 1997, 1996, 1995, 1994 and 1993 were $0.07,
$0.16, $0.17, $0.20, $0.18 and $0.15, respectively. Net investment income
(loss) per share before reimbursement/waiver of fees by the Investment
Advisor and/or Administrator for Retail B Shares for the six months ended
April 30, 1998 (unaudited), the year ended October 31, 1997 and for the
period ended October 31, 1996 were $(0.03), $(0.14)(3) and $(0.03),
respectively.
See Notes to Financial Statements.
62
<PAGE>
<TABLE>
<CAPTION>
Trust Shares Retail B Shares
Years ended
Six months ended October 31, Six months ended Year ended Period ended
April 30, 1998 ----------------------------------------------------- April 30, 1998 October 31, October 31,
(unaudited) 1997 1996 1995 1994 1993(1) (unaudited) 1997 1996(2)
------------- --------- --------- --------- --------- --------- ------------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 25.17 $ 20.39 $ 17.30 $ 14.19 $ 13.76 $ 12.90 $ 24.91 $ 20.26 $ 18.77
---------- --------- --------- --------- --------- --------- ---------- --------- --------
0.07 0.16 0.17 0.20 0.18 0.15 (0.03) (0.09)(3) (0.01)
4.20 6.06 3.40 3.28 0.47 0.95 4.12 6.02 1.50
---------- --------- --------- --------- --------- --------- ---------- --------- --------
4.27 6.22 3.57 3.48 0.65 1.10 4.09 5.93 1.49
---------- --------- --------- --------- --------- --------- ---------- --------- --------
(0.07) (0.16) (0.18) (0.20) (0.16) (0.15) -- -- --
(3.84) (1.28) (0.30) (0.17) (0.06) (0.09) 3.84 (1.28) --
---------- --------- --------- --------- --------- --------- ---------- --------- --------
(3.91) (1.44) (0.48) (0.37) (0.22) (0.24) 3.84 (1.28) --
---------- --------- --------- --------- --------- --------- ---------- --------- --------
0.36 4.78 3.09 3.11 0.43 0.86 0.25 4.65 1.49
---------- --------- --------- --------- --------- --------- ---------- --------- --------
$ 25.53 $ 25.17 $ 20.39 $ 17.30 $ 14.19 $ 13.76 $ 25.16 $ 24.91 $ 20.26
========== ========= ========= ========= ========= ========= ========== ========= ========
19.73%** 32.16% 21.03% 25.08% 4.80% 8.58% 19.09%** 30.78% 7.95%**
$ 875,450 $ 745,537 $ 562,419 $ 420,016 $ 362,094 $ 427,298 $ 30,663 $ 20,363 $3,995
0.55%* 0.72% 0.92% 1.31% 1.27% 1.20% (0.52)%* (0.40)% (0.16)%*
0.94%* 0.95% 0.98% 1.00% 0.93% 0.97% 2.01%* 2.07% 1.92%*
0.94%* 0.95% 0.98% 1.00% 0.93% 0.97% 2.01%* 2.30% 2.29%*
26%** 66% 36% 14% 18% 16% 26%** 66% 36%
$ 0.0604 $ 0.0601 $ 0.0615 N/A N/A N/A $ 0.0604 $ 0.0601 $ 0.0615
</TABLE>
63
<PAGE>
THE GALAXY FUND
Small Cap Value Fund
FINANCIAL HIGHLIGHTS
For a Share outstanding throughout each period.
Retail A Shares
<TABLE>
<CAPTION>
Six months ended Years ended October 31,
April 30, 1998 -------------------------------------------------------
(unaudited) 1997 1996(3) 1995 1994 1993(1)(2)
-------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................. $ 18.29 $ 14.75 $ 12.68 $ 11.06 $ 11.21 $ 10.52
------- --------- --------- --------- --------- ----------
Income from Investment Operations:
Net investment income (loss) (C, D & E)........... 0.06 (0.04)(4) 0.01 (0.02) (0.01) (0.01)
Net realized and unrealized gain on investments... 1.44 5.72 2.95 2.21 0.18 0.70
------- --------- --------- --------- --------- ----------
Total from Investment Operations:............... 1.50 5.68 2.96 2.19 0.17 0.69
------- --------- --------- --------- --------- ----------
Less Dividends:
Dividends from net investment income (C).......... (0.07) -- (0.02) -- -- --
Dividends in excess of net investment income...... -- -- -- -- -- --
Dividends from net realized capital gains......... (2.68) (2.14) (0.87) (0.57) (0.32) --
------- --------- --------- --------- --------- ----------
Total Dividends (C):............................ (2.75) (2.14) (0.89) (0.57) (0.32) --
------- --------- --------- --------- --------- ----------
Net increase (decrease) in net asset value........... (1.25) 3.54 2.07 1.62 (0.15) 0.69
------- --------- --------- --------- --------- ----------
Net Asset Value, End of Period....................... $ 17.04 $ 18.29 $ 14.75 $ 12.68 $ 11.06 $ 11.21
======= ========= ========= ========= ========= ==========
Total Return (B)..................................... 10.12%** 43.58% 24.77% 21.27% 1.64% 6.56%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's).................... $97,447 $ 63,658 $ 34,402 $ 27,546 $ 19,764 $ 15,014
Ratios to average net assets:
Net investment income (loss) including
reimbursement/waiver............................ 0.54%* (0.25)% 0.08% (0.19)% (0.10)% (0.19)%*
Operating expenses including reimbursement/waiver. 1.31%* 1.30% 1.40% 1.35% 1.31% 1.33%*
Operating expenses excluding reimbursement/waiver. 1.38%* 1.52% 1.55% 1.85% 1.84% 1.87%*
Portfolio Turnover Rate.............................. 20%** 52% 39% 32% 29% 29%*
Average Commission Rate Paid (A)..................... $0.0530 $ 0.0577 $ 0.0559 N/A N/A N/A
</TABLE>
- --------------------------------------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on December 14, 1992 as a separate investment
portfolio (the "Predecessor Fund") of The Shawmut Funds.
(2) The Predecessor Fund began offering Investment Shares on February 12, 1993.
(3) On December 4, 1995, the Predecessor Fund was reorganized as a new
portfolio of the Trust. Prior to the reorganization, the Predecessor Fund
offered and sold two series of shares, Investment Shares and Trust Shares,
that were similar to the Fund's Retail A and Trust Shares, respectively. In
connection with the reorganization, shareholders of the Predecessor Fund
exchanged Investment Shares and Trust Shares for Retail A Shares and Trust
Shares, respectively, in the Galaxy Small Cap Value Fund.
(4) The selected per share data was calculated using the weighted average
shares outstanding method for the year.
(A) For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for which
commissions are charged.
(B) Calculation does not include the effect of any sales charge for Retail A
Shares.
(C) Represents less than $0.01 per Trust Share for year 1993.
(D) Net investment income (loss) per share before reimbursement/waiver of fees
by the Investment Advisor and/or Administrator for Retail A Shares for the
six months ended April 30, 1998 (unaudited), the years ended October 31,
1997, 1996, 1995 (unaudited) and 1994 (unaudited) and for the period ended
October 31, 1993 (unaudited) were $0.05, $(0.02), $0.01, $(0.08), $(0.06)
and $(0.05), respectively. Net investment income (loss) per share before
reimbursement/waiver of fees by the Investment Advisor and/or Administrator
for Trust Shares for the six months ended April 30, 1998 (unaudited), the
years ended October 31, 1997, 1996, 1995 (unaudited) and 1994 (unaudited)
and for the period ended October 31, 1993 (unaudited) were $0.08, $0.05,
$0.05, $(0.03), $(0.01) and $0.00, respectively.
(E) Net investment income per share does not reflect the tax reclassifications
arising in the current period.
See Notes to Financial Statements.
64
<PAGE>
Trust Shares
<TABLE>
<CAPTION>
Years ended
Six months ended October 31,
April 30, 1998 --------------------------------------------------------
(unaudited) 1997 1996(3) 1995 1994 1993(1)(2)
------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 18.37 $ 14.76 $ 12.71 $ 11.07 $ 11.21 $ 10.00
-------- --------- --------- --------- --------- ---------
0.08 0.01(4) 0.05 0.01 0.02 --
1.46 5.74 2.97 2.21 0.17 1.21
-------- --------- --------- --------- --------- ---------
1.54 5.75 3.02 2.22 0.19 1.21
-------- --------- --------- --------- --------- ---------
(0.10) -- (0.05) (0.01) (0.01) --
-- -- (0.01) -- -- --
(2.68) (2.14) (0.91) (0.57) (0.32) --
-------- --------- --------- --------- --------- ---------
(2.78) (2.14) (0.97) (0.58) (0.33) --
-------- --------- --------- --------- --------- ---------
(1.24) 3.61 2.05 1.64 (0.14) 1.21
-------- --------- --------- --------- --------- ---------
$ 17.13 $ 18.37 $ 14.76 $ 12.71 $ 11.07 $ 11.21
======== ========= ========= ========= ========= =========
10.33%** 44.08% 25.22% 21.52% 1.86% 12.12%**
$231,637 $ 189,257 $ 137,341 $ 121,364 $ 101,905 $ 100,382
0.92%* 0.09% 0.45% 0.07% 0.15% 0.02%*
0.93%* 0.96% 1.05% 1.10% 1.06% 1.01%*
0.93%* 0.96% 1.06% 1.35% 1.34% 1.29%*
20%** 52% 39% 32% 29% 29%**
$ 0.0530 $ 0.0577 $ 0.0559 N/A N/A N/A
</TABLE>
65
<PAGE>
THE GALAXY FUND
Small Company Equity Fund
FINANCIAL HIGHLIGHTS
For a Share outstanding throughout each period.
Retail A Shares
<TABLE>
<CAPTION>
Six months ended Years ended October 31,
April 30, 1998 -----------------------------------------------------
(unaudited) 1997 1996 1995 1994 1993(1)
-------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ................ $ 20.94 $ 19.96 $ 16.28 $ 12.35 $ 12.41 $ 8.79
-------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment (loss) (C) ........................ (0.10) (0.18) (0.14) (0.09) (0.01) (0.04)
Net realized and unrealized gain on investments .. 0.92 3.54 3.99 4.21 -- 3.66
-------- --------- --------- --------- --------- ---------
Total from Investment Operations: ............ 0.82 3.36 3.85 4.12 (0.01) 3.62
-------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income ............. -- -- -- -- -- --
Dividends from net realized capital gains ........ (2.26) (2.38) (0.17) (0.19) (0.05) --
-------- --------- --------- --------- --------- ---------
Total Dividends: ............................. (2.26) (2.38) (0.17) (0.19) (0.05) --
-------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value.......... (1.44) 0.98 3.68 3.93 (0.06) 3.62
-------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ...................... $ 19.50 $ 20.94 $ 19.96 $ 16.28 $ 12.35 $ 12.41
======== ========= ========= ========= ========= =========
Total Return (B)..................................... 5.49%** 19.08% 23.97% 34.01% (0.06)% 41.18%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ................... $142,911 $ 135,593 $ 111,101 $ 45,668 $ 30,845 $ 55,683
Ratios to average net assets:
Net investment (loss)
including reimbursement/waiver.................. (1.08)%* (1.02)% (1.03)% (0.85)% (0.40)% (0.66)%
Operating expenses including reimbursement/waiver. 1.45%* 1.46% 1.57% 1.60% 1.31% 1.18%
Operating expenses excluding reimbursement/waiver. 1.45%* 1.48% 1.57% 1.64% 1.34% 1.22%
Portfolio Turnover Rate ............................. 26%** 69% 82% 54% 35% 57%
Average Commission Rate Paid (A)..................... $ 0.0535 $ 0.0576 $ 0.0531 N/A N/A N/A
</TABLE>
- --------------------------------------------------------------------------------
* Annualized
** Not Annualized
(1) 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 A and
Trust Shares.
(2) The Fund began issuing Retail B Shares on March 4, 1996.
(3) The selected per share data was calculated using the weighted average
shares outstanding method for the period.
(A) For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for which
commissions are charged.
(B) Calculation does not include the effect of any sales charge for Retail A
Shares and Retail B Shares.
(C) Net investment income (loss) per share before reimbursement/waiver of fees
by the Investment Advisor and/or Administrator for Retail A Shares for the
six months ended April 30, 1998 (unaudited) and the years ended October 31,
1997, 1996, 1995, 1994 and 1993 were $(0.10), $(0.18), $(0.14), $(0.09),
$(0.01) and $(0.04), respectively. Net investment income (loss) per share
before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Trust Shares for the six months ended April 30, 1998
(unaudited) and the years ended October 31, 1997, 1996, 1995, 1994 and 1993
were $(0.06), $(0.11), $(0.09), $(0.04), $0.00 and $(0.04), respectively.
Net investment income (loss) per share before reimbursement/waiver of fees
by the Investment Advisor and/or Administrator for Retail B Shares for the
six months ended April 30, 1998 (unaudited), the year ended October 31,
1997 and the period ended October 31, 1996 were $(0.16), $(0.24) and
$(0.24), respectively.
See Notes to Financial Statements.
66
<PAGE>
<TABLE>
<CAPTION>
Trust Shares Retail B Shares
Years ended
Six months ended October 31, Six months ended Year ended Period ended
April 30, 1998 --------------------------------------------------------- April 30, 1998 October 31, October 31,
(unaudited) 1997 1996 1995 1994 1993(1) (unaudited) 1997 1996(2)
------------- --------- --------- --------- --------- --------- ------------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 21.32 $ 20.20 $ 16.38 $ 12.36 $ 12.41 $ 8.79 $ 20.73 $ 19.91 $ 17.27
-------- --------- --------- --------- --------- --------- --------- --------- --------
(0.06) (0.11) (0.09) (0.04) -- (0.04) (0.15) (0.21) (0.19)(3)
0.94 3.61 4.08 4.25 -- 3.66 0.90 3.41 2.83
-------- --------- --------- --------- --------- --------- --------- --------- --------
0.88 3.50 3.99 4.21 -- 3.62 0.75 3.20 2.64
-------- --------- --------- --------- --------- --------- --------- --------- --------
-- -- -- -- -- -- -- -- --
(2.26) (2.38) (0.17) (0.19) (0.05) -- (2.26) (2.38) --
-------- --------- --------- --------- --------- --------- --------- --------- --------
(2.26) (2.38) (0.17) (0.19) (0.05) -- (2.26) (2.38) --
-------- --------- --------- --------- --------- --------- --------- --------- --------
(1.38) 1.12 3.82 4.02 (0.05) 3.62 (1.51) 0.82 2.64
-------- --------- --------- --------- --------- --------- --------- --------- --------
$ 19.94 $ 21.32 $ 20.20 $ 16.38 $ 12.36 $ 12.41 $ 19.22 $ 20.73 $ 19.91
======== ========= ========= ========= ========= ========= ========= ========= ========
5.69%** 19.59% 24.69% 34.73% 0.02% 41.18% 5.18%** 18.23% 15.34%**
$340,582 $ 310,751 $ 174,990 $ 94,831 $ 66,462 $ 55,683 $ 17,604 $ 14,731 $ 3,659
(0.69)%* (0.65)% (0.60)% (0.37)% (0.35)% (0.66)% (1.71)%* (1.76)% (1.50)%*
1.06%* 1.09% 1.14% 1.12% 1.27% 1.18% 2.07%* 2.20% 2.04%*
1.06%* 1.12% 1.14% 1.12% 1.27% 1.22% 2.08%* 2.44% 2.44%*
26%** 69% 82% 54% 35% 57% 26%** 69% 82%
$ 0.0535 $ 0.0576 $ 0.0531 N/A N/A N/A $ 0.0535 $ 0.0576 $ 0.0531
</TABLE>
67
<PAGE>
THE GALAXY FUND
International Equity Fund
FINANCIAL HIGHLIGHTS
For a Share outstanding throughout each period.
Retail A Shares
<TABLE>
<CAPTION>
Six months ended Years ended October 31,
April 30, 1998 ------------------------------------------------------
(unaudited) 1997 1996 1995 1994 1993(1)
-------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ................ $ 15.18 $ 13.94 $ 12.92 $ 13.20 $ 12.13 $ 9.66
---------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (loss) (C).................. (0.01) 0.01 0.11 0.11 0.06 0.02
Net realized and unrealized gain (loss)
on investments ................................. 3.11 2.09 1.27 (0.21) 1.02 2.51
---------- --------- --------- --------- --------- ---------
Total from Investment Operations:............. 3.10 2.10 1.38 (0.10) 1.08 2.53
---------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income ............. (0.07) (0.18) (0.12) (0.02) (0.01) (0.06)
Dividends from net realized capital gains ........ (0.36) (0.68) (0.24) (0.16) -- --
---------- --------- --------- --------- --------- ---------
Total Dividends: ............................. (0.43) (0.86) (0.36) (0.18) (0.01) (0.06)
---------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value .......... 2.67 1.24 1.02 (0.28) 1.07 2.47
---------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ...................... $ 17.85 $ 15.18 $ 13.94 $ 12.92 $ 13.20 $ 12.13
========== ========= ========= ========= ========= =========
Total Return (B)..................................... 21.10%** 15.88% 10.86% (0.64)% 8.91% 26.36%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ................... $ 66,244 $ 56,592 $ 35,144 $ 30,104 $ 32,887 $ 39,246
Ratios to average net assets:
Net investment income (loss) including
reimbursement/waiver............................ (0.19)%* 0.03% 0.78% 0.84% 0.69% 0.37%
Operating expenses including reimbursement/waiver. 1.50%* 1.60% 1.70% 1.76% 1.49% 1.57%
Operating expenses excluding reimbursement/waiver. 1.75%* 1.85% 1.98% 2.03% 1.79% 2.04%
Portfolio Turnover Rate ............................. 29%** 45% 146% 48% 39% 29%
Average Commission Rate Paid (A)..................... $ 0.0343 $ 0.0214 $ 0.0381 N/A N/A N/A
</TABLE>
- --------------------------------------------------------------------------------
* Annualized
** Not Annualized
(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 A and
Trust Shares.
(A) For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for which
commissions are charged.
(B) Calculation does not include the effect of any sales charge for Retail A
Shares.
(C) Net investment income (loss) per share before reimbursement/waiver of fees
by the Investment Advisor and/or Administrator for Retail A Shares for the
six months ended April 30, 1998 (unaudited) and the years ended October 31,
1997, 1996, 1995, 1994 and 1993 were $(0.02), $(0.01), $0.07, $0.08, $0.03
and $0.00, respectively. Net investment income per share before
reimbursement/waiver of fees by the Investment Advisor and/or Administrator
for Trust Shares for the six months ended April 30, 1998 (unaudited) and
the years ended October 31, 1997, 1996, 1995, 1994 and 1993 were $0.01,
$0.04, $0.13, $0.13, $0.04 and $0.00, respectively.
See Notes to Financial Statements.
68
<PAGE>
Trust Shares
<TABLE>
<CAPTION>
Years ended
Six months ended October 31,
April 30, 1998 ------------------------------------------------------
(unaudited) 1997 1996 1995 1994 1993(1)
------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 15.33 $ 14.01 $ 12.98 $ 13.20 $ 12.13 $ 9.66
-------- --------- --------- --------- --------- ---------
0.02 0.08 0.17 0.16 0.06 0.02
3.17 2.12 1.30 (0.18) 1.02 2.51
-------- --------- --------- --------- --------- ---------
3.19 2.20 1.47 (0.02) 1.08 2.53
-------- --------- --------- --------- --------- ---------
(0.09) (0.20) (0.20) (0.04) (0.01) (0.06)
(0.36) (0.68) (0.24) (0.16) -- --
-------- --------- --------- --------- --------- ---------
(0.45) (0.88) (0.44) (0.20) (0.01) (0.06)
-------- --------- --------- --------- --------- ---------
2.74 1.32 1.03 (0.22) 1.07 2.47
-------- --------- --------- --------- --------- ---------
$ 18.07 $ 15.33 $ 14.01 $ 12.98 $ 13.20 $ 12.13
======== ========= ========= ========= ========= =========
21.51%** 16.60% 11.51% (0.02)% 8.91% 26.36%
$332,475 $ 265,124 $ 172,561 $ 89,614 $ 82,350 $ 39,246
0.34%* 0.57% 1.40% 1.36% 0.74% 0.37%
0.97%* 1.06% 1.08% 1.22% 1.43% 1.57%
1.22%* 1.32% 1.36% 1.48% 1.72% 2.04%
29%** 45% 146% 48% 39% 29%
$ 0.0343 $ 0.0214 $ 0.0381 N/A N/A N/A
</TABLE>
69
<PAGE>
THE GALAXY FUND
NOTES TO FINANCIAL STATEMENTS (unaudited)
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-six managed investment portfolios. The accompanying financial
statements and financial highlights are those of the Asset Allocation, Equity
Income, Growth and Income, Equity Value, Strategic Equity, Equity Growth, Small
Cap Value, Small Company Equity and International Equity Funds (individually, a
"Fund," collectively, the "Funds") only.
The Asset Allocation, Growth and Income, Equity Value, Strategic Equity,
Equity Growth and Small Company Equity Funds are authorized to issue three
series of shares (Trust Shares, Retail A Shares and Retail B Shares). The Equity
Income, Small Cap Value and International Equity Funds are authorized to issue
two series of shares (Trust Shares and Retail A Shares). Trust Shares, Retail A
Shares and Retail B Shares are substantially the same, except that (i) Retail A
Shares are subject to a maximum 3.75% front-end sales charge, (ii) Retail B
Shares are subject to a maximum 5.00% contingent deferred sales charge, and
(iii) each series of shares bears the following series specific expenses:
distribution fees and/or shareholder servicing fees and transfer agency
expenses. Six years after purchase, Retail B Shares will convert automatically
to Retail A Shares.
2. Significant Accounting Policies
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. 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 approximates 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 of a Fund 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 buy or 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.
Options: The Funds may engage in writing covered call options and may enter
into closing purchase transactions with respect to such options. During the six
months ended April 30, 1998, the Equity Value Fund was party to the following
option contracts:
70
<PAGE>
THE GALAXY FUND
NOTES TO FINANCIAL STATEMENTS (continued) (unaudited)
<TABLE>
<CAPTION>
Number
of Contracts Premium
----------- -----------
<S> <C> <C>
Balance as of October 31, 1997 0 $ 0
Written 6,473 1,450,972
Closed and Expired (3,427) (797,145)
Exercised (1,466) (347,307)
Balance as of April 30, 1998 1,580 306,520
</TABLE>
Dividends to Shareholders: Dividends from net investment income are determined
separately for each series of a Fund and are declared and paid quarterly, with
the exception of the International Equity Fund which declares and pays dividends
annually. 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
princples.
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 or excise tax
provision is recorded. Withholding taxes on foreign dividends have been paid or
provided for in accordance with the applicable country's tax rules and rates.
Repurchase Agreements: Each Fund may engage in repurchase agreement
transactions with institutions that the Trust's investment advisor has
determined are creditworthy pursuant to guidelines established by the Trust's
Board of Trustees. Each repurchase agreement transaction is recorded at cost
plus accrued interest. Each Fund requires that the securities collateralizing a
repurchase agreement transaction be transferred to the Trust's custodian in a
manner that is intended to enable the Fund to obtain those securities in the
event of a counterparty default. The value of the collateral securities is
monitored daily to ensure that the value of the collateral, including accrued
interest, equals or exceeds the repurchase price. 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 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.
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 have been fully amortized using the straight-line method over a
period of five years beginning with the commencement of each Fund's operations.
3. Investment Advisory, Administration, Shareholder Services, Distribution and
Other Fees
The Trust and Fleet Investment Advisors Inc. (the "Investment Advisor" or
"Fleet"), an indirect wholly-owned subsidiary of Fleet Financial Group, Inc.,
are parties to an investment advisory agreement under which the Investment
Advisor 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, Growth and Income, Equity Value, Strategic Equity, Equity Growth,
Small Cap Value and Small Company Equity Funds (See Note 4).
The Trust pays the Investment Advisor 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 Advisor entered into a sub-advisory agreement with Oechsle
International Advisors, L.P. ("Oechsle") with respect to the International
Equity Fund pursuant to which the Investment Advisor pays fees to Oechsle,
computed daily and paid quarterly, at the annual rate of 0.40% of the first $50
million of the Fund's aver-
71
<PAGE>
THE GALAXY FUND
NOTES TO FINANCIAL STATEMENTS (continued) (unaudited)
age daily net assets, plus 0.35% of net assets in excess of $50 million.
The Trust and First Data Investor Services Group, Inc. ("Investor Services
Group"), a wholly-owned subsidiary of First Data Corporation, are parties to an
administration agreement under which Investor Services Group (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 (whose
financial statements are provided in separate reports), 0.085% of the next $2.5
billion of combined average daily net assets and 0.075% of combined average
daily net assets over $5 billion.
In addition, Investor Services Group also provides certain fund accounting,
custody administration and transfer agency services pursuant to certain fee
arrangements. Pursuant to such fee arrangements, Investor Services Group
compensates the Trust's custodian bank, The Chase Manhattan Bank, N.A. for its
services.
Retail A Shares, Retail B Shares and Trust Shares of the Funds each bear
series specific transfer agent charges based upon the number of shareholder
accounts for each series. In addition, Trust Shares also bear additional
transfer agency fees in order to compensate Investor Services Group for payments
made to Fleet Bank, an affiliate of the Investment Advisor, 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 period ended
April 30, 1998, transfer agent charges for each series were as follows:
<TABLE>
<CAPTION>
Retail A Retail B Trust
-------- -------- -----
<S> <C> <C> <C>
Asset Allocation $ 123,272 $ 26,741 $ 208,929
Equity Income 126,704 N/A 11,245
Growth and Income 122,390 30,453 144,462
Equity Value 154,393 15,152 149,298
Strategic Equity 1,878 415 2,154
Equity Growth 187,329 23,148 271,103
Small Cap Value 67,423 N/A 23,687
Small Company Equity 160,390 18,154 239,585
International Equity 87,975 N/A 104,121
</TABLE>
First Data Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary
of Investor Services Group and an indirect wholly-owned subsidiary of First Data
Corporation, serves as the distributor of the Trust's Shares.
The Trust has adopted a shareholder services plan (the "Services Plan") with
respect to Retail A and Trust 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 A Shares, at an aggregate annual
rate not to exceed 0.50% of the average daily net asset value of the outstanding
Retail A 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 aggregate annual rate
not to exceed 0.30% of the average daily net asset value of the outstanding
Retail A Shares beneficially owned by such customers.
The Trust has adopted a distribution and shareholder services plan (the "12b-1
Plan") with respect to Retail B Shares of the Asset Allocation, Growth and
Income, Equity Value, Equity Growth and Small Company Equity Funds. Under the
12b-1 Plan, the Trust may pay (i) the Distributor or another person for expenses
and activities primarily intended to result in the sale of Retail B Shares, (ii)
institutions for shareholder liaison services and (iii) institutions for
administrative support services. Currently, payments under the 12b-1 Plan for
distribution services are being made solely to broker-dealer affiliates of Fleet
Bank and payments under the 12b-1 Plan for shareholder liaison and
administrative support services are being made solely to Fleet Bank and its
affilitates. Payments for distribution expenses may not exceed an annual rate of
0.65% of the average daily net assets attributable to each Fund's outstanding
Retail B Shares. The fees paid for shareholder liaison services and/or
administrative support services may not exceed the annual rates of 0.25% and
0.25%, respectively, of the average daily net assets attributable to each Fund's
outstanding Retail B
72
<PAGE>
THE GALAXY FUND
NOTES TO FINANCIAL STATEMENTS (continued) (unaudited)
Shares owned of record or beneficially by customers of institutions. The Trust
is currently limiting each Fund's payments for shareholder liaison and
administrative support services under the 12b-1 Plan to an aggregate fee of not
more than 0.30% of the average daily net asset value of Retail B Shares of the
Fund owned of record or beneficially by customers of institutions. For the
period ended April 30, 1998, the Funds paid fees under the Services Plan and
12b-1 Plan as follows:
<TABLE>
<CAPTION>
Services 12b-1 Plan
-------- ----------
Plan Services Distribution
---- -------- ------------
<S> <C> <C> <C>
Asset Allocation $ 317,004 $ 55,668 $ 120,613
Equity Income 283,478 N/A N/A
Growth and Income 253,167 62,937 136,365
Equity Value 309,819 26,923 58,332
Strategic Equity 76 11 23
Equity Growth 382,209 36,577 79,249
Small Cap Value 112,045 N/A N/A
Small Company Equity 195,834 23,368 50,632
International Equity 85,739 N/A N/A
</TABLE>
Certain officers of the Trust may be officers of the Administrator. Such
officers receive no compensation from the Trust for serving in their respective
roles. No officer, director or employee of the Investment Advisor serves as an
officer, trustee or employee of the Trust. Effective March 5, 1998, each Trustee
is entitled to receive for services as a trustee of the Trust, The Galaxy VIP
Fund ("VIP") and Galaxy Fund II ("Galaxy II") an aggregate fee of $40,000 per
annum plus certain other fees for attending or participating in meetings as well
as reimbursement for expenses incurred in attending meetings. Prior to March 5,
1998, each Trustee was entitled to receive for services as a trustee of the
Trust, VIP and Galaxy II an aggregate fee of $29,000 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 and the President and Treasurer of the Trust, VIP and Galaxy II are
also entitled to additional fees for their services in these capacities. These
fees are allocated among the funds of the Trust, VIP and Galaxy II, based on
their relative net assets.
Each Trustee is eligible to participate in The Galaxy Fund/The Galaxy VIP
Fund/Galaxy II Deferred Compensation Plan (the "Plan"), an unfunded,
non-qualified deferred compensation plan. The Plan allows each Trustee to defer
receipt of all or a percentage of fees which otherwise would be payable for
services performed.
Expenses for the period ended April 30, 1998 include legal fees paid to
Drinker Biddle & Reath LLP. A partner of that firm is Secretary to the Trust.
4. Waiver of Fees and Reimbursement of Expenses
Fleet and/or its affiliates and/or Investor Services Group voluntarily agreed
to waive a portion of their fees and/or reimburse the Funds for certain expenses
so that total expenses would not exceed certain expense limitations established
for each Fund. The respective parties, at their discretion, may revise or
discontinue the voluntary waivers and/or expense reimbursements at any time. For
the period ended April 30, 1998, the waived fees and/or reimbursed expenses with
respect to the Funds are as follows:
<TABLE>
<CAPTION>
Fund Fees Waived Expenses Reimbursed
- -------- ------------- -------------------
<S> <C> <C>
Growth and Income $ -- $50,396
Strategic Equity 3,964 14,475
Small Cap Value -- 28,648
Small Company Equity -- 782
International Equity 426,304 --
</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-seven classes of shares, each
consisting of one or more series including: Class N-Series 1 Shares (Trust
Shares), Class N-Series 2 Shares (Retail A Shares) and Class N-Series 3 Shares
(Retail B Shares) -Asset Allocation Fund; Class I-Series 1 Shares (Trust Shares)
and Class I-Series 2 Shares (Retail A Shares) -Equity Income Fund; Class
U-Series 1 Shares (Trust Shares), Class U-Series 2 Shares (Retail A Shares)
73
<PAGE>
THE GALAXY FUND
NOTES TO FINANCIAL STATEMENTS (continued) (unaudited)
and Class U-Series 3 Shares (Retail B Shares)-Growth and Income Fund; Class C
Shares (Trust Shares), Class C-Special Series 1 Shares (Retail A Shares) and
Class C-Special Series 2 Shares (Retail B Shares)-Equity Value Fund; Class AA -
Series 1 shares (Trust Shares), Class AA - Series 2 shares (Retail A Shares) and
Class AA - Series 3 shares (Retail B Shares) - Strategic Equity Fund; Class
H-Series 1 Shares (Trust Shares), Class H-Series 2 Shares (Retail A Shares) and
Class H-Series 3 Shares (Retail B Shares)-Equity Growth Fund; Class X-Series 1
Shares (Trust Shares) and Class X-Series 2 Shares (Retail A Shares)-Small Cap
Value Fund; Class K-Series 1 Shares (Trust Shares), Class K-Series 2 Shares
(Retail A Shares) and Class K-Series 3 Shares (Retail B Shares) - Small Company
Equity Fund; and Class G-Series 1 Shares (Trust Shares) and Class G-Series 2
Shares (Retail A Shares) - International Equity Fund.
Each share represents an equal proportionate interest in the respective Fund,
bears the same fees and expenses (except that Retail A Shares bear the expense
of payments under the Services Plan, Retail B Shares bear the expense of
payments under the 12b-1 Plan and Trust Shares, Retail A Shares and Retail B
Shares each 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.
6. Purchases and Sales of Securities
The cost of purchases and proceeds from sales of securities, excluding
short-term investments, for the period ended April 30, 1998 were as follows:
<TABLE>
<CAPTION>
Purchases Sales
------------------------------ -------------------------------
Fund U.S. Government Other U.S. Government Other
- ----- --------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C>
Asset Allocation....................... $120,872,458 $157,345,168 $110,970,824 $ 90,201,951
Equity Income.......................... -- 53,297,696 -- 58,256,447
Growth and Income...................... -- 160,575,247 -- 80,937,674
Equity Value........................... -- 250,978,792 -- 223,150,634
Strategic Equity....................... -- 5,511,345 -- 438,241
Equity Growth.......................... -- 271,611,865 -- 259,509,978
Small Cap Value........................ -- 79,724,487 -- 47,519,686
Small Company Equity................... -- 122,353,444 -- 116,017,028
International Equity................... -- 118,200,442 -- 96,188,267
</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 April 30, 1998 for each Fund is as follows:
<TABLE>
<CAPTION>
Fund Appreciation (Depreciation) Net Cost
- ----- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Asset Allocation....................... $ 87,627,709 $(1,441,165) $ 86,186,544 $442,166,266
Equity Income.......................... 97,648,566 (1,966,734) 95,681,832 254,904,922
Growth and Income...................... 116,740,970 (7,903,167) 108,837,803 452,995,731
Equity Value.......................... 120,304,755 (4,189,346) 116,115,409 441,846,292
Strategic Equity....................... 228,230 (185,529) 42,701 6,064,949
Equity Growth.......................... 437,065,449 (7,190,750) 429,874,699 798,179,210
Small Cap Value........................ 88,374,599 (16,170,349) 72,204,250 262,984,549
Small Company Equity................... 116,390,712 (43,723,615) 72,667,097 424,328,709
International Equity................... 103,282,995 (13,976,759) 89,306,236 306,196,168
</TABLE>
7. Foreign Securities
Each Fund may 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 possible revaluation
of currencies, less complete financial information about companies and possible
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.
74
<PAGE>
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<PAGE>
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<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
Jylanne Dunne
Vice President &
Assistant Treasurer
INVESTMENT ADVISOR
Fleet Investment
Advisors Inc.
75 State Street
Boston, MA
02109
DISTRIBUTOR
First Data
Distributors, Inc.
4400 Computer Drive
Westborough,
Massachusetts 01581
ADMINISTRATOR
First Data Investor Services
Group, Inc.
4400 Computer Drive
Westborough,
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 government 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 LOGO]
This report was printed on recycled paper.
<PAGE>
[Back cover]
[GALAXY FUNDS LOGO]
4400 Computer Drive
Box 5108
Westborough, MA 01581-5108
[INDICIA]
BULK RATE
U. S. POSTAGE PAID
PERMIT NO. 105
NORTH READING, MA
FN-081 (6/98) Date of first use 7/1/98
