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GALAXY
FUNDS
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[graphic omitted]
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EQUITY FUNDS REPORT
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ASSET ALLOCATION FUND o EQUITY INCOME FUND o GROWTH AND INCOME FUND o
EQUITY VALUE FUND o EQUITY GROWTH FUND o SMALL CAP VALUE FUND o
SMALL COMPANY EQUITY FUND o INTERNATIONAL EQUITY FUND
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ANNUAL
REPORT
FOR THE YEAR ENDED
OCTOBER 31, 1997
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CHAIRMAN'S
MESSAGE
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Dear Shareholder:
Enclosed is your report for the Galaxy Equity Funds, for the fiscal year
ended October 31, 1997. For the third year in a row, stocks earned returns that
were significantly higher than their historical averages. This was due to
further economic growth and healthy gains in corporate earnings -- without
higher inflation or interest rates.
These returns became more attractive with passage of the Taxpayer Relief
Act of 1997 (the "Act"), which reduced tax rates for long-term capital gains.
Under the Act, the top tax rate fell from 28% to 20% for investments sold from
May 7, 1997 through July 28, 1997, that were held longer than 12 months. For
sales after July 28, 1997, the lower capital gains rate applies for investments
held more than 18 months. The rate for investors in the 15% income tax bracket
has fallen from 15% to 10%.
The new law also makes individual retirement accounts more attractive in
some circumstances. Starting in 1998, the law raises the income limits for
deductible contributions when you have a company retirement plan and allows,
when a couple's joint income is less than $150,000, one spouse to make
deductible contributions even if the other spouse has a company plan. If you
want to use money in a deductible IRA to pay college expenses or buy a first
home, you may do so without penalty even before age 59 1/2.
Two new IRAs may help you build savings from nondeductible contributions.
The Roth IRA allows up to $2,000 in after-tax contributions each year and
eliminates taxes on all distributions after age 59 1/2. You may remove up to
$10,000 before 59 1/2 to buy a first home. However, no tax-free distributions
may be made until at least five years after you establish a Roth IRA. The
education IRA allows up to $500 in after-tax contributions per year for each
child under age 18. You can remove earnings at any time, without tax or
penalties, to pay the child's college expenses. Both the Roth IRA and the
education IRA are subject to certain income limits.
To help you make the most of these changes, we have produced a guide to
the new legislation and added both a Roth IRA and an education IRA to our other
retirement products. Should you want information on using the Galaxy Funds in
your IRAs, or have questions about this report, 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
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Mutual Funds:
O ARE NOT BANK DEPOSITS
O ARE NOT FDIC-INSURED
O ARE NOT OBLIGATIONS OF FLEET BANK
O ARE NOT GUARANTEED BY FLEET BANK
O ARE SUBJECT TO INVESTMENT RISK INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED
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MARKET OVERVIEW
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"During the year we frequently took profits in stocks that performed well and
bought stocks with better potential for gains. In making our selections, we
emphasized high-quality companies with proven earnings and attractive
valuations."
EQUITY MARKET OVERVIEW
By Fleet Investment Advisors Inc.
Moderate economic growth, strong earnings, and tame inflation helped stock
prices rise sharply in the past year. Although investors were often uncertain
about the economy's direction, which caused stocks to weaken, the market quickly
rebounded from each downturn. For the third year in a row, stocks earned
double-digit returns that outpaced their historical averages.
For much of the year, stocks of large companies outperformed stocks of
small companies. This often happens when economic uncertainty drives investors
to the better liquidity and more reliable earnings of large firms. As the market
moved higher, however, investors sought stocks with the best valuations -- many
of which were in the small-cap sector.
During the year we frequently took profits in stocks that performed well
and bought stocks with better potential for gains. In making our selections, we
emphasized high-quality companies with proven earnings and attractive
valuations. This helped the Galaxy equity funds make the most of the rally. In
the majority of cases, the funds outpaced the average performance of funds in
groups with similar objectives and, in some cases, performance exceeded their
market benchmarks.
A NURTURING ENVIRONMENT
When the period began in November 1996, the annual rate of inflation was
about 3%, and interest rates were falling. With new hope for balancing the
federal budget, and signs of slowing economic growth, interest rates fell into
December. Stocks performed well in this climate -- boosted by further growth in
earnings, and a positive balance between equity demand and supply.
PERFORMANCE AT-A-GLANCE
Average Annual Returns as of October 31, 1997
Trust Shares
ASSET ALLOCATION FUND Inception Date 12/30/91
20.42% 1 Yr.
20.40% 3 Yrs.
13.98% 5 Yrs.
12.40% Life
EQUITY INCOME FUND Inception date 12/14/90
23.80% 1 Yr.
22.07% 3 Yrs.
15.95% 5 Yrs.
15.27% Life
GROWTH AND INCOME FUND Inception Date 12/14/92
30.43% 1 Yr.
23.23% 3 Yrs.
17.85% Life
EQUITY VALUE FUND Inception Date 9/1/88
29.87% 1 Yr.
24.35% 3 Yrs.
19.61% 5 Yrs.
15.11% Life
EQUITY GROWTH FUND Inception Date 12/14/90
32.16% 1 Yr.
26.01% 3 Yrs.
17.89% 5 Yrs.
17.40% Life
SMALL CAP VALUE FUND Inception Date 2/12/93
44.08% 1 Yr.
29.91% 3 Yrs.
20.70% Life
SMALL COMPANY EQUITY FUND Inception Date 12/30/91
19.59% 1 Yr.
26.18% 3 Yrs.
23.19% 5 Yrs.
16.95% Life
INTERNATIONAL EQUITY FUND Inception Date 12/30/91
16.60% 1 Yr.
9.14% 3 Yrs.
12.33% 5 Yrs.
9.83% Life
Stocks continued to advance in the first months of 1997, but prices became
more volatile. The gross domestic product (GDP), which measures U.S. goods and
services, rose from an annualized rate of 4.3% in the fourth quarter of 1996 to
an annualized rate of 4.9% in the first quarter of 1997. Although the rate of
inflation began to fall, investors became concerned that strong demand from
consumers and tight labor markets might push inflation higher and curb future
growth. Worried about inflation and an "irrational exuberance" in stock prices,
the Federal Reserve (the "Fed") raised short-term interest rates by 25 basis
points. This, plus the fear of further rate hikes, made stocks correct in March
and April.
"Stocks in foreign markets took sharply different paths during the year. Hope
for monetary union and improving economies helped European stocks in the Morgan
Stanley Europe, Asia, Far East (EAFE) Index to earn a total return of 25.98% in
U.S. dollars."
Because inflation remained moderate, and economic growth seemed to be
slowing, stocks quickly rebounded to new highs. GDP growth slowed to annualized
rates of 3.6% in the second quarter of 1997 and 3.4% in the third. This, plus
further gains in productivity, drove the annualized inflation rate to 2.2% and
sent interest rates lower. Growth was still higher than analysts expected,
however, which heightened inflation concerns and lowered stock prices in August
and September.
Once again, stocks rebounded quickly -- although they failed to reach
their August highs. After a strong performance in late September and early
October, stocks fell prey to currency problems in the Far East. Although
interest rates tumbled as foreign investors fled to U.S. bonds, investors
worried that the earnings of U.S. companies that trade abroad would suffer from
weak economies overseas. On October 27, stocks lost about 7% of their value in
the worst one-day point decline on record. With positive economic fundamentals
still in place, however, stocks roared back in the days that followed --
regaining half the one-day loss by October 31.
Stocks in foreign markets took sharply different paths during the year.
Hope for monetary union and improving economies helped European stocks in the
Morgan Stanley Europe, Asia, Far East (EAFE) Index to earn a total return of
23.91% in U.S. dollars. Over the same time, stocks in Japan had a negative
return of 18.69% in dollar terms -- hurt by a stagnant economy at home and
currency problems among its closest trading partners.
PERFORMANCE AT-A-GLANCE
Average Annual Returns as of October 31, 1997
Retail A Shares*
ASSET ALLOCATION FUND Inception Date 12/30/91
15.69% 1 Yr.
18.63% 3 Yrs.
12.95% 5 Yrs.
11.53% Life
EQUITY INCOME FUND Inception date 12/14/90
18.65% 1 Yr.
19.94% 3 Yrs.
14.73% 5 Yrs.
14.38% Life
GROWTH AND INCOME FUND Inception Date 2/12/93
25.20% 1 Yr.
21.31% 3 Yrs.
17.22% Life
EQUITY VALUE FUND Inception Date 9/1/88
24.64% 1 Yr.
22.29% 3 Yrs.
18.41% 5 Yrs.
14.48% Life
EQUITY GROWTH FUND Inception Date 12/14/90
26.70% 1 Yr.
23.89% 3 Yrs.
16.68% 5 Yrs.
16.52% Life
SMALL CAP VALUE FUND Inception Date 2/12/93
38.24% 1 Yr.
27.88% 3 Yrs.
20.22% Life
SMALL COMPANY VALUE FUND Inception Date 2/12/93
14.60% 1 Yr.
23.95% 3 Yrs.
21.86% 5 Yrs.
15.87% Life
INTERNATIONAL EQUITY FUND Inception Date 12/30/91
11.56% 1 Yr.
7.11% 3 Yrs.
11.07% 5 Yrs.
8.77% Life
*Return figures include the effect of the maximum 3.75% front-end sales charge.
CAREFUL SELECTION MAKES A DIFFERENCE
Because stock prices were historically expensive, and investors were
nervous about earnings, we gave extra attention to high-quality companies with
reliable earnings and attractive valuations. In addition, we concentrated
holdings in sectors that we felt investors would favor -- such as health care,
technology, energy, and finance. Each of the stocks that we chose, however, had
strong fundamentals of its own.
"When prices rose enough to make certain positions less attractive, we took
profits in those issues. We then purchased stocks whose prices and earnings
outlooks offered better appreciation potential."
When prices rose enough to make certain positions less attractive, we took
profits in those issues. We then purchased stocks whose prices and earnings
outlooks offered better appreciation potential. Where possible, we used the
temporary market dips to acquire new investments as cheaply as we could.
SLOWER GROWTH, MORE TURMOIL AHEAD
After the weakness in late October, stock prices have continued to rise.
Once again they are high by historical measures and vulnerable to new investor
concerns. As a result, we expect further market fluctuations in the months to
come.
We believe economic growth will remain healthy in the fourth quarter of
1997. If this rekindles fears of inflation, and stock prices continue to rise,
the Fed may have to raise interest rates again. Such an increase would likely be
modest, however, given the low levels of current inflation and the chance for
slower growth in 1998. At this point in the economic cycle, a slowdown in
inventory building and consumer spending seems unavoidable -- which could cut
the rate of GDP growth to 2.4% next year. Slower economic growth in the U.S.,
combined with lower exports overseas, would probably bring new disappointments
in corporate earnings and additional volatility in stock prices.
We believe the Galaxy equity funds are well-positioned for such a future.
If prices do fluctuate, investors should continue to favor the high-quality
stocks with proven earnings and strong valuations that we hold. As stock prices
become more attractive, we will look for opportunities to make new investments
with strong potential for appreciation over time.
PERFORMANCE AT-A-GLANCE
Average Annual Returns as of October 31, 1997
Retail B Shares*
ASSET ALLOCATION FUND
Inception Date 3/4/96
19.34% 1 Yr. Before contingent deferred sales charge deducted.
14.34% 1 Yr. After contingent deferred sales charge deducted
as if shares were redeemed at end of period.
16.33% Life Before contingent deferred sales charge deducted.
14.13% Life After contingent deferred sales charge deducted
as if shares were redeemed at end of period.
GROWTH AND INCOME FUND
Inception Date 3/4/96
29.11% 1 Yr. Before contingent deferred sales charge deducted.
24.11% 1 Yr. After contingent deferred sales charge deducted
as if shares were redeemed at end of period.
21.37% Life Before contingent deferred sales charge deducted.
19.24% Life After contingent deferred sales charge deducted
as if shares were redeemed at end of period.
EQUITY VALUE FUND
Inception Date 3/4/96
28.60% 1 Yr. Before contingent deferred sales charge deducted.
23.60% 1 Yr. After contingent deferred sales charge deducted
as if shares were redeemed at end of period.
22.43% Life Before contingent deferred sales charge deducted.
20.31% Life After contingent deferred sales charge deducted
as if shares were redeemed at end of period.
EQUITY GROWTH FUND
Inception Date 3/4/96
30.78% 1 Yr. Before contingent deferred sales charge deducted.
25.78% 1 Yr. After contingent deferred sales charge deducted
as if shares were redeemed at end of period.
23.08% Life Before contingent deferred sales charge deducted.
20.97% Life After contingent deferred sales charge deducted
as if shares were redeemed at end of period.
SMALL COMPANY EQUITY FUND
Inception Date 3/4/96
18.23% 1 Yr. Before contingent deferred sales charge deducted.
13.23% 1 Yr. After contingent deferred sales charge deducted
as if shares were redeemed at end of period.
20.54% Life Before contingent deferred sales charge deducted.
18.40% Life After contingent deferred sales charge deducted
as if shares were redeemed at end of period.
* 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.
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PORTFOLIO REVIEWS
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GALAXY ASSET ALLOCATION FUND
By Don Jones
Portfolio Manager
[Photo of Don Jones]
Don Jones
GALAXY ASSET
ALLOCATION FUND
Distribution of Total Net Assets
as of October 31, 1997
U.S. Government & Agency Obligations & Net Other Assets & Liabilities 29%
Asset-Backed and Mortgage-Backed Securities 2%
Corporate Notes & Bonds 21%
Common & Convertible Preferred Stocks 48%
GALAXY ASSET ALLOCATION FUND
Growth of $10,000 investment*
S&P Galaxy Galaxy Galaxy
500 Retail A Trust Retail B
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12/30/91 10,000 9,625 10,000
92 10,295 9,899 10,285
93 11,830 11,124 11,558
94 12,284 10,900 11,335
95 15,528 13,452` 14,019 10,000
96 19,270 15,728 16,429 10,271
10/31/97 25,458 18,911 19,785 12,454
* 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 500% contingent
deferred sales charge as if shares were redeemed on October 31, 1997. 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.
Because stock prices had become quite expensive, we shifted money from
stocks in the Galaxy Asset Allocation Fund to bonds in the past year. Finding
attractive values in corporate bonds, we increased their weighting in the
portfolio. This mix of securities -- including stocks that performed
particularly well -- helped the Fund earn solid returns that outpaced the
average fund with similar investment objectives.
For the 12 months ended October 31, 1997, the Fund's Trust Shares earned a
total return of 20.42%. For the same period, its Retail A Shares returned
20.23%, before deducting the maximum 3.75% front-end sales charge, and its
Retail B Shares returned 19.34%, 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 19.22% for the average flexible
fund tracked by Lipper Analytical Services ("Lipper"). During the same time, the
S&P 500 Composite Stock Price Index ("S&P 500 Index"), which tracks the
performance of stocks only, returned 32.11%.
SHIFTING TO BONDS
The addition of bonds began in the third quarter of 1996, when bond prices
were especially attractive. From the start of the reporting period in November
into the first quarter of 1997, we increased the portion of bonds in the Fund
from 31% to 40%. In making this shift, we exchanged Treasury issues for
high-grade asset backed securities and added high-quality corporate bonds that
could enhance the Fund's yield. When interest rates rose, and bond prices fell,
we bought longer-term issues to lock in the higher yields for more time.
To pay for the new bond investments, we took profits in certain
technology, consumer staples, and banking stocks. When we found attractive
prices, we added selectively to shares of telephone, technology-service, capital
goods, basic materials, and insurance firms. To enhance the equity portfolio's
performance further, we traded stocks of certain banking and consumer-related
firms for others in their sectors with better price potential.
We continued to increase the portion of corporate bonds in the second and
third quarters of 1997. We took profits in consumer staples and gas stocks that
had performed well and added stocks of technology, insurance, energy, and
cyclical firms. When stock prices slid in October, we used cash that had
accumulated in the Fund and profits from drug and oil stocks to increase shares
of existing positions and introduce shares of basic materials and capital goods
firms. When bond prices rose sharply in October, the Fund benefited particularly
from its greater weighting in income securities.
ADDING STOCKS BACK
The divergence of stock and bond prices in October may continue in coming
months if growth in the economy slows. If stock prices correct again, we would
probably add equities with attractive values -- using both cash reserves and
money from bonds. While we feel the Fund's mix of equity investments should
perform well in the long-term, we plan to be more defensive in our selection --
given the potential for short-term earnings disappointments.
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.
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PORTFOLIO REVIEWS
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GALAXY EQUITY INCOME FUND
By Ed Klisiewicz
Portfolio Manager
[Photo of Ed Klisiewicz]
Ed Klisiewicz
GALAXY EQUITY
INCOME FUND
Distribution of Total Net Assets
as of October 31, 1997
U.S. Government & Agency Obligations & Net Other Assets & Liabilities 15%
Consumer Cyclical 9%
Consumer Staples 19%
Utilities 10%
Capital Goods & Construction 7%
Energy 9%
Finance 13%
Technology 9%
Other Common Stocks 9%
GALAXY EQUITY
INCOME FUND
Growth of $10,000 investment*
S&P Galaxy Galaxy
500 Retail Trust
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12/14/90 10,000 9,625 10,000
91 12,358 11,127 11,561
92 13,589 12,207 12,683
93 15,615 13,654 14,186
94 16,215 14,055 14,615
95 20,497 17,179 17,948
96 25,437 20,445 21,475
10/31/97 33,605 25,204 26,585
* 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.
As interest rates fell in the past year and as investors searched for
better yields, stocks with strong dividends performed relatively well. During
the times that interest rates rose and stock prices fell, the extra income from
dividend-paying stocks helped to soften their price decline. Strong performances
by banking stocks, drug stocks and other consumer staples firms further enhanced
returns for the Galaxy Equity Income Fund.
For the 12 months ended October 31, 1997, the Fund's Trust Shares had a
total return of 23.80%. Over the same time, Retail A Shares had a total return
of 23.28%, 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.)
For much of the period, we held strong cash reserves. This helped to
buffer the price of Fund Shares when stock prices weakened and gave us the
resources to take advantage of new investment opportunities that occured when
prices were more attractive. However, this cash position caused the Fund to
underperform the average equity income fund tracked by Lipper, which had a total
rturn of 27.08% for the same period, as well as the S&P 500, which had a return
of 32.11%
OVERWEIGHTING IN HEALTH CARE A PLUS
When interest rates were falling at the end of 1996, the Fund enjoyed good
returns from its holdings in smaller regional banks which also benefited from
mergers and acquisitions in their industry. At this point we traded technology
and utility stocks that had performed well for energy and basic materials stocks
with better potential. As financial stocks continued to outperform in 1997, we
traded banking stocks with strong appreciation for others that were more
attractive and introduced a real estate investment trust to the portfolio. There
were also good returns from drug and health care companies, where the Fund was
overweighted compared to its benchmark, as well as from energy firms.
Health care stocks continued to outperform in the second quarter of 1997,
and energy stocks performed well in the third quarter. With additional gains in
banking shares, we made more trades within that sector to improve potential for
future appreciation. As before, we focused on high-quality companies with good
prospects for earnings over time. When stock prices dipped in August and
October, these issues held up relatively well. We used the Fund's sizeable cash
position at those times to add to existing positions at attractive prices.
LOOKING FOR NEW OPPORTUNITIES
We will watch for similar opportunities in the months to come. If economic
growth slows, and corporate earnings weaken, stocks may experience some of the
same volatility that they did in the previous year. Given the unsettled currency
and economic climate in the Far East, we will keep a close eye on positions in
the Fund that have international business exposure.
Ed Klisiewicz has been portfolio manager of the Galaxy Equity Income Fund since
its inception in December of 1990. He has managed portfolios for Fleet
Investment Advisors Inc. and its predecessors since 1970.
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PORTFOLIO REVIEWS
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GALAXY GROWTH AND INCOME FUND
By Brendan Henebry
Portfolio Manager
[Photo of Brendan Henebry]
Brendan Henebry
GALAXY GROWTH
AND INCOME FUND
Distribution of Total Net Assets as of October 31, 1997
Other Preferred & Common Stocks 17%
Consumer Staples 18%
Technology 12%
Finance 15%
Consumer Cyclical 12%
Energy 9%
Capital Goods & Construction 9%
U.S. Agency Obligation 8%
GALAXY GROWTH
AND INCOME FUND
Growth of $10,000 investment*
S&P Galaxy Galaxy Galaxy
500 Retail A Trust Retail B
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92 10,000 9,625 10,000
93 10,890 10,457 10,880
94 11,548 11,410 11,908
95 14,601 13,522 14,147 10,000
96 18,120 16,261 17,085 10,183
10/31/97 23,938 21,156 22,284 13,393
* 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 October
31, 1997. The S&P 500 is an unmanaged index in which investors cannot invest.
Results for the index do not reflect the investment mangement fees and other
expenses incurred by the Fund.
With further gains in stock prices during the past year, investors
continued to move among market sectors searching for stocks with the best
values. By taking profits in issues that performed well, building cash reserves
to deploy at attractive prices, and choosing sectors that appeared to be
undervalued, we helped the Galaxy Growth and Income Fund outpace other funds
with similar investment objectives.
For the 12 months ended October 31, 1997, the Fund's Trust Shares had a
total return of 30.43%. Over the same time Retail A Shares earned 30.10%, before
deducting the maximum 3.75% front-end sales charge, and Retail B Shares earned
29.11%, 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.)
For the same period, the average growth and income fund tracked by Lipper
had a return of 28.12%, and the S&P 500 had a return of 32.11%.
BARGAIN SHOPPING
At the end of 1996, shares of finance and consumer staples firms made
strong contributions to Fund returns -- benefiting from lower interest rates and
improvements in earnings. To enhance the potential for further gains, we traded
holdings that had performed well for banking and energy stocks. These sectors
delivered strong returns in the first months of 1997, along with the Fund's
retail investments.
After a period of strong performance, we reduced banking stocks in favor
of additional shares of insurance and financial services firms. Later, we took
profits in selected drug stocks that had performed well. This let us increase
the Fund's cash reserves. As stock prices corrected in March and April, we used
this cash to add stocks of technology, basic industry, consumer, chemical, and
insurance firms at attractive prices. After stocks rose strongly again in May
and June, we sold energy and health care shares with favorable appreciation for
stocks in those sectors with better promise, and swapped technology and drug
stocks for stocks of consumer staples and basic materials firms.
With further market gains in July, we rebuilt the Fund's cash reserves. We
used some of those reserves to buy finance, energy and transportation stocks
when prices weakened in August and September. In the final months of the period,
the Fund benefited from its overweighting in energy stocks and its
underweighting in technology stocks. In late September and early October we used
general market strength to build cash again. With the market correction in late
October, we used this cash to add technology shares at attractive prices.
GREATER FOCUS ON HEALTH CARE
If economic growth slows, and there are more disappointments in earnings,
stocks with reliable earnings should gain added favor with investors. Because of
their earnings predictability and appealing values, we have continued to
increase health care stocks to a moderately overweighted position. Although it
may be more difficult in 1998 to earn the high returns that the Fund has
experienced in recent years, we feel the Fund is well-positioned to provide
favorable returns that are competitive with other funds in its class.
Brendan Henebry has managed the Galaxy Growth and Income Fund and its
predecessors since its inception in 1993. He has managed equity portfolios since
1969.
<PAGE>
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PORTFOLIO REVIEWS
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GALAXY EQUITY VALUE FUND
By G. Jay Evans, CFA
Portfolio Manager
[Photo of G. Jay Evans]
G. Jay Evans
GALAXY EQUITY
VALUE FUND
Distribution of Total Net Assets
as of October 31, 1997
Other Common Stocks 6%
Technology 18%
Capital Goods & Construction 9%
Consumer Cyclical 18%
U.S. Agency Obligation & Net Other Assets & Liabilities 6%
Energy 7%
Consumer Staples 7%
Finance 20%
Utilities 9%
GALAXY EQUITY VALUE FUND
Growth of $10,000 investment*
S&P Galaxy Galaxy Galaxy
500 Retail A Trust Retail B
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87 10,000 9,625 10,000
88 10,731 10,019 10,410
89 13,552 11,441 11,887
90 12,537 10,362 10,766
91 16,737 13,517 14,045
92 18,404 14,282 14,839
93 21,148 17,307 17,982
94 21,960 18,167 18,889
95 27,760 21,948 22,915 10,000
96 34,450 26,663 27,968 10,380
10/31/97 45,512 34,524 36,321 13,592
* 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 October 31, 1997. The
S&P 500 is an unmanged index in which investors cannot invest. Results for
the index do not reflect the investment management fees and other expenses
incurred by the Fund.
As stock prices moved higher in the past year, the valuation model we use
to find stocks for the Galaxy Equity Value Fund identified many issues with a
strong capacity for gains. By investing selectively, and emphasizing sectors
with added potential for appreciation, we helped the Fund earn returns that
outpaced other funds with similar investment objectives.
For the 12 months ended October 31, 1997, Trust Shares of the Galaxy
Equity Value Fund earned a total return of 29.87%. For the same period, Retail A
Shares returned 29.48%, before deducting the maximum 3.75% front-end sales
charge, and Retail B Shares returned 28.60%, 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 12-month period, the average growth and income fund tracked
by Lipper earned a return of 28.12% and the S&P 500 returned 32.11%.
SELECTIVITY KEY
For much of the period, the Fund was overweighted in financial and
technology stocks -- areas that had led the market's advance for several years.
Both sectors enhanced Fund returns in the most recent 12 months as well. As with
other sectors, stock selectivity played a key role in those contributions.
Within the financial sector, for example, the Fund benefited from its focus on
large regional banks -- rewarded for their management of credit risk,
technological efficiencies, cost-saving consolidations and share repurchases.
During the third quarter selectivity in the technology sector helped the Fund's
investments earn returns that were more than twice those for technology stocks
in the S&P 500.
When technology stocks corrected sharply early in 1997 and at the end of
October, the Fund enjoyed strong relative strength from investments in retail
stocks and other consumer cyclical shares. During the period we increased the
Fund's position in health care stocks, which also contributed to returns. As the
period ended, we were adding shares of technology, specialty retail and
insurance firms, while reducing shares of banking, financial service, electric
utility and consumer firms.
NEW OPPORTUNITIES
If economic growth slows in the months ahead, as we expect, the greatest
threat to stock prices will probably lie in disappointing earnings and tighter
profit margins. In this climate, our hard-nosed emphasis on stocks with lower
price/earnings ratios and supporting assets should serve shareholders well.
Meanwhile, our valuation models should help us find new investment
opportunities. We believe many of these opportunities may come from takeover
candidates, as large firms tap their high-priced stocks to buy earnings growth.
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.
<PAGE>
- -----------------
PORTFOLIO REVIEWS
- -----------------
GALAXY EQUITY GROWTH FUND
By Bob Armknecht
Portfolio Manager
[Photo of Bob Armknecht]
Bob Armknecht
GALAXY EQUITY
GROWTH FUND
Distribution of Total Net Assets
as of October 31, 1997
U.S. Agency Obligation 6%
Finance 15%
Energy 14%
Convertible Preferred & Other Common Stocks 11%
Consumer Staples 19%
Technology 16%
Capital Goods & Construction 10%
Consumer Cyclical 11%
Net Other Assets & Liabilities (2)%
GALAXY EQUITY
GROWTH FUND
Growth of $10,000 investment*
S&P Galaxy Galaxy Galaxy
500 Retail A Trust Retail B
- -------------------------------------------------------------------
90 10,000 9,625 10,000
91 12,358 11,683 12,139
92 13,589 12,747 13,244
93 15,615 13,840 14,380
94 16,215 14,494 15,070
95 20,497 18,051 18,849 10,000
96 23,319 21,753 22,813 10,295
10/31/97 30,807 28,629 30,151 13,717
* 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 October 31, 1997. The S&P
500 is an unmanged index in which investors cannot invest. Results for the
index do not reflect the investment management fees and other expenses
incurred by the Fund.
The Galaxy Equity Growth Fund performed strongly in the past year --
outpacing the average fund with similar investment objectives. In a climate of
rising, but volatile, stock prices, we stressed companies that we felt had
especially good potential for long-term earnings. When prices for these
investments met our expectations, we traded them for others with more attractive
valuations.
These strategies helped the Fund's Trust Shares earn a total return of
32.16% for the 12 months ended October 31, 1997. Over the same time, Retail A
Shares earned 31.61%, before deducting the 3.75% maximum front-end sales charge,
and Retail B Shares earned 30.78%, 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.)
Those returns compare with an average return of 27.28% for growth funds
tracked by Lipper, and a return of 32.11% for the S&P 500 Index during the same
period.
CORE HOLDINGS
During the period we focused on growth stocks of large companies in the
health care, energy, technology and financial sectors. As these issues performed
well at the end of 1996 -- offsetting lesser returns from capital goods shares
- -- we took profits in issues with the strongest gains and added shares of
energy-service firms.
At the start of 1997, with additional price gains and the chance of a
correction, we took profits in certain technology and consumer stocks and bought
shares of energy, telephone and retail companies. In making these purchases, we
gave special attention to stocks with strong dividends, feeling the added income
would help to buffer the Fund against rising interest rates and market
volatility. We enhanced income further by adding convertible bonds and raising
the Fund's cash reserves.
With the market weakness of March and April, we put the extra cash to work
in financial, energy, food, and drug stocks with attractive valuations. As stock
prices continued to rise, we reduced holdings in retail firms and traded strong
technology performers for others in the sector with better potential. During the
summer we sold some shares of large, high-profile stocks that had led the market
for several quarters. This helped protect returns when price weakness in July
and August hit high-profile stocks especially hard. With the proceeds from these
sales, we added shares of capital goods firms, which performed well in the
positive economic climate.
When stock prices fell in October, the Fund benefited from a smaller
position in technology stocks, which suffered more than stocks as a whole. Once
prices were more attractive, we rebuilt the Fund's technology position with
shares of semiconductor firms.
SPECIAL ATTENTION
We believe the investment strategies of the past year should serve the
Fund well if market volatility increases in months to come. We expect to keep
our focus on the same core sectors, with special attention to certain segments
of each sector. Currently, we are emphasizing oil service stocks in the energy
sector, insurance stocks in the financial sector, office equipment stocks in the
technology sector, and health care stocks in the consumer staples sector. With
less attention to high-profile stocks, and less exposure to "cyclical" issues,
we feel the Fund should weather slower economic growth and greater earnings
concerns relatively well.
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.
<PAGE>
- -----------------
PORTFOLIO REVIEWS
- -----------------
GALAXY SMALL CAP VALUE FUND
By Peter Larson
Portfolio Manager
[Photo of Peter Larson]
Peter Larson
GALAXY SMALL CAP
VALUE FUND
Distribution of Total Net Assets as of October 31, 1997
Corporate Bond & U.S. Agency Obligation & Net Other Assets & Liabilities 10%
Technology 21%
Finance 12%
Consumer Cyclical 20%
Energy 7%
Other Common Stocks 10%
Consumer Staples 11%
Capital Goods & Construction 9%
GALAXY SMALL CAP
VALUE FUND
Growth of $10,000 investment*
Russell Galaxy Galaxy
2000 Retail A Trust
- -------------------------------------------------------------
92 10,000 9,625 10,000
93 10,890 10,789 11,212
94 11,548 10,967 11,420
95 14,601 13,299 13,878
96 17,025 16,593 17,378
10/31/97 22,018 23,824 25,038
* 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 unmanged index in which
investors cannot invest. Results for the index do not reflect the investment
management fees and other expenses incurred by the Fund.
With continued gains in stocks over the past year, stocks representing
good value versus their potential for growth found increasing favor with
investors. This, plus portfolio strategies that made the most of rising prices,
helped the Galaxy Small Cap Value Fund far outpace its market benchmark and
other funds with similar investment objectives.
For the 12 months ended October 31, 1997, the Fund's Trust Shares earned a
total return of 44.08%. Over the same time, Retail A Shares earned 43.58%,
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 26.45% earned by the average small-company growth fund
tracked by Lipper and 29.33% earned by the Russell 2000 during the same period.
TRADING INTO VALUE
For the first six months of the period investors favored stocks of large
companies with proven earnings records -- due to ongoing uncertainty about the
economy. While small-company stocks generally underperformed during this time,
small company stocks priced at good values outpaced small company stocks with
traditionally strong growth potential. Later, when stocks of large companies
became so expensive that investors sought opportunities in the small-cap sector,
value-oriented investments continued to outperform.
In keeping with our focus on value, we continually trimmed stocks that had
appreciated strongly in price for stocks with better appreciation potential.
This was particularly true within the technology sector, which outperformed for
the year as a whole.
At the end of 1996, the Fund enjoyed solid returns from stocks of energy,
basic materials, consumer staples and specialty finance firms -- as well as from
stocks of technology companies. Technology stocks continued to perform well in
the first months of 1997.
During the summer the Fund's top performers included shares of specialty
finance firms and computer-services firms that reprogram for the year 2000.
These stocks continued to perform well in the fall -- along with other
technology stocks and energy issues.
VALUE SHOULD REMAIN IN FAVOR
Much of the demand for small-cap stocks seems to have come from individual
investors. While individual investors remained commited to stocks during recent
market weakness, their enthusiasm may wane if slower growth curbs company
earnings. We would expect small-cap stocks representing good value to outperform
other small-cap issues in such a climate.
If further weakness does occur, we would look for new opportunities to
purchase stocks with attractive values. In the meantime, we will continue to
sell stocks that have become overvalued and buy issues with further room for
price gains -- maintaining our focus on quality companies with good earnings
visibility.
Peter Larson has managed the Galaxy Small Cap Value Fund, and its predecessor,
since 1992. He has managed small company portfolios since 1981.
<PAGE>
- -----------------
PORTFOLIO REVIEWS
- -----------------
GALAXY SMALL COMPANY
EQUITY FUND
By Steve Barbaro
Portfolio Manager
[Photo of Steve Barbaro]
Steve Barbaro
GALAXY SMALL COMPANY
EQUITY FUND
Distribution of Total Net Assets
as of October 31, 1997
U.S. Agency Obligation & Net Other Assets & Liabilities 6%
Other Common Stocks 15%
Energy 13%
Technology 32%
Consumer Cyclical 13%
Consumer Staples 21%
GALAXY SMALL COMPANY
EQUITY FUND
Growth of $10,000 investment*
Russell Galaxy Galaxy Galaxy
2000 Retail A Trust Retail B
- ------------------------------------------------------------------------
91 10,000 9,625 10,000
92 10,650 8,460 8,790
93 14,101 11,944 12,410
94 14,058 11,937 12,413
95 16,638 15,997 16,723 10,000
96 19,400 19,832 20,862 11,040
10/31/97 25,090 23,616 24,937 13,237
* 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 October 31, 1997. 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.
Stocks of small companies earned strong returns for the 12 months ended
October 31, 1997. During that time Trust Shares of the Galaxy Small Company
Equity Fund had a total return of 19.59%. For the same period, Retail A Shares
earned 19.08%, before deducting the maximum 3.75% sales charge, and Retail B
Shares earned 18.23%, 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.)
At several points during the year, an expensive stock market and an
uncertain economic outlook caused investors to favor value-oriented stocks of
small companies over the growth-oriented stocks in which the Galaxy Small
Company Equity Fund focuses its investments. As a result, the Fund did not
perform as well as its market benchmark, the Russell 2000 Index (the "Russell
Index") that includes value oriented small company issues in its cross-section
of stocks. During the period, the Russell Index had a total return of 29.33%.
The Fund outperformed mutual funds investing in growth oriented small company
stocks that report to Morningstar, Inc., a mutual fund tracking service. This
peer group of mutual funds investing in growth oriented small company stocks is
a more appropriate peer group comparison for the Fund and had an average total
return of 14.10% for the period.
FOCUS ON QUALITY, EARNINGS AND PRICE
Given the concerns about economic growth and stock prices, we gave extra
attention throughout the period to high-quality investments with visible
earnings and reasonable valuations. This, plus a large weighting in energy
stocks, helped returns at the end of 1996 -- when investors favored large-cap
issues. During that time we took profits in technology stocks that had met our
expectations and bought shares of health care, financial services and airlines
firms that we believed to have better value.
At the start of 1997, as prices for bigger issues in the small-cap sector
rose sharply, we traded investments in those shares for stocks of smaller firms
whose prices became especially appealing. We continued to focus on stocks of
health care, energy and technology firms -- feeling their prices were attractive
compared to their potential for earnings growth.
When investors returned to small-cap stocks in the spring and summer, the
Fund benefitted further from its emphasis on visible earnings and reasonable
valuations -- as well as an overweighting in technology and energy issues. As
prices rose, we took profits in technology stocks and other shares that had
performed well. We used the proceeds from these sales to buy shares of
technology, energy and business-services firms at attractive prices.
Late in October, when stock prices corrected sharply, we had a greater
weighting in energy shares than the average small-company growth fund, and a
lesser weighting in technology shares. This helped the Fund weather the
correction relatively well. As prices became less expensive we added to many
existing positions and introduced several new names.
VALUATION TO REMAIN IMPORTANT
We expect to stay focused on stocks with reasonable valuations in coming months.
As a group, small-cap stocks represent better value than large-cap stocks and
could outperform them. However, if economic problems persist abroad, U.S.
economic growth slows, and stock prices become more volatile, we believe
investors will continue to favor small company stocks with the best values.
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.
<PAGE>
- -----------------
PORTFOLIO REVIEWS
- -----------------
GALAXY INTERNATIONAL EQUITY FUND
By Thomas M. O'Neill, Chief Investment Officer,
Fleet Investment Advisors Inc.
and Oechsle International Advisors, L.P.
Sub-Adviser
[Photo of Thomas M. O'Neill]
Thomas M. O'Neill
GALAXY INTERNATIONAL EQUITY FUND
Distribution of Total Net Assets as of October 31, 1997
Central & South America 4%
Far East 22%
U.S. Government & Agency Obligations & Net Other Assets & Liabilities 7%
Europe 47%
Australia 4%
United Kingdom 16%
GALAXY INTERNATIONAL EQUITY FUND
Growth of $10,000 investment*
Galaxy Galaxy
EAFE Retail A Trust
- --------------------------------------------------------------
91 10,000 9,625 10,000
92 8,680 9,297 9,660
93 11,970 11,748 12,207
94 13,134 12,795 13,294
95 13,125 12,713 13,291
96 14,499 14,093 14,820
10/31/97 15,212 16,332 17,280
* 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
Europe, Australia & Far East (EAFE) Index is an unmanaged index in which
investors cannot invest. Results for the index do not reflect the investment
mangement fees and other expenses incurred by the Fund.
Over the past year, the Galaxy International Equity Fund benefitted from
both its weightings in different stock markets and its selection of individual
issues. Taken as a whole, the investment strategy helped the Fund far outpace
its market benchmark, as well as other funds with similar investment objectives.
For the 12 months ended October 31, 1997, the Fund's Trust Shares earned a
total return of 16.60%. Over the same time, Retail A Shares earned 15.88%,
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.)
During this period, the average international fund tracked by Lipper had a
return of 10.39%, and the Morgan Stanley Europe, Australia, Far East (EAFE)
Index had a return of 4.92%.
HEAVY IN EUROPE, LIGHT IN JAPAN
For most of the period the Fund was overweighted in European stocks and
underweighted in stocks from Japan. Because markets in the Far East
underperformed substantially, these weightings added significantly to the Fund's
performance. Although Japanese stocks accounted for about 30% of investments in
the EAFE Index during the year, they represented about 20% of the Fund's
positions. The underweighting in Japan was particularly significant at the end
of the period, when currency problems in other Far Eastern markets sent Japanese
stocks plummeting.
Within Europe, the Fund benefitted for most of the year from an
overweighted position in Spain. An overweighting in Sweden improved returns in
the first half of the period, and overweightings in Italy, France and Spain
assisted in the second half. These contributions more than offset returns lost
from underweightings in Switzerland and Germany during the first half of the
period and an underweighting in the United Kingdom during the second half of the
period.
The Fund also benefitted during the year from its selection of individual
stocks. In Japan, we concentrated on stocks of blue-chip companies, which
outperformed as Japanese investors fled to quality. Strong performances from
individual issues in Switzerland, Germany, Spain, and Italy also enhanced Fund
returns.
ATTRACTIVE VALUES
The recent turmoil abroad has provided many new investment opportunities
among stocks that have been oversold. We have recently added investments in
Japan -- particularly in the financial sector, which should benefit from
deregulation and other government reforms. Because the problems in Asia may
effect earnings of companies around the world, we are reevaluating all the
Fund's holdings. Over the next few months we may trade issues whose earnings
potential has weakened for issues whose prices and earnings outlooks represent
good value. As before, we will concentrate on the fundamentals of individual
companies and maintain a well-diversified portfolio of quality investments.
Thomas M. O'Neill is Chief Investment Officer of Fleet Investment Advisors Inc.
Oesche International Advisors, L.P., has served as sub-adviser since August 1996
for the Fund. Oeschle International Advisors is dedicated to international
investing and manages approximately $9.4 billion in assets.
- -------------------------------------------------------------------------------
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.
<PAGE>
- ---------------------
SHAREHOLDER SERVICES
- ---------------------
"A well-balanced asset allocation plan may help to control your risk while
pursuing your goals."
AUTOMATIC INVESTMENT PROGRAM
The Golden Rule of investing is "pay yourself first." That is easy to do with
Galaxy's Automatic Investment Program. For as little as $50 per month deducted
directly from your checking, savings or bank money market account, you can
consistently and conveniently add to your Galaxy investment. When you establish
an Automatic Investment Program, the $2,500 initial investment requirement for
Galaxy is waived. Of course, such a program does not assure a profit and does
not protect against loss in a declining market.
DIVERSIFICATION
A fundamental investment practice is "diversification." A well-balanced asset
allocation plan may help to control your risk while pursuing your goals. Many
mutual funds offer a low-cost way to diversify your investments while you
benefit from professional management. Galaxy's comprehensive array of investment
choices can be used in combination to match the needs of nearly everyone.
EXCHANGE PRIVILEGES
As your investment needs change, you can conveniently exchange your shares in
one fund for shares in another fund.
QUARTERLY MAGAZINE
Service also means giving you the practical information you need, in language
you can understand, to make smart investment decisions. The quarterly magazine,
Galaxy Observer, brings news, strategies and simple, straight-forward
explanations of investment basics and terminology.
CONSOLIDATED STATEMENTS
Timely, comprehensive mutual fund account statements offer detailed information
on your individual account. If you have a Fleet One or a Fleet Private Banking
Account, your Galaxy Fund information can be added to these statements.
INVESTMENT SPECIALISTS
In many Fleet branch offices or in the convenience of your home or office, you
can visit one-on-one with an Investment Specialist* who can help you select the
investments that match your individual needs. This service is at no cost to you.
24-HOUR ACCESS TO REGISTERED REPRESENTATIVES
24 hours a day, seven days a week, 365 days a year, we are ready and available
to help. Our toll-free telephone lines offer round-the-clock access to Fund
information and service. Call 1-800-628-0414 for information on initial
purchases and current performance.
CUSTOMER SERVICE
Quality customer service is only a phone call away. Call 1-800-628-0414 between
9 a.m. and 5 p.m. to arrange bank wires, or to make telephone exchanges and
redemptions.
In addition, Galaxy's state-of-the-art InvestConnect automated voice response
system is available to serve you 24-hours a day, seven days a week by calling
1-800-FOR-GLXY (367-4599).
- ------------------------------------------------------------------------------
Certain shareholder services may not be available for Trust Share investors.
Please consult your Fund Prospectus.
* Shares of the Funds are distributed through First Data Distributors, Inc.,
member NASD and SIPC. Investment Specialists are registered representatives of
FIS-Securities, Inc., member NASD or Fleet Enterprises, Inc., member NASD and
SIPC.
<PAGE>
- --------------- ASSET ALLOCATION FUND
THE GALAXY FUND PORTFOLIO OF INVESTMENTS
- --------------- OCTOBER 31, 1997
VALUE
SHARES (NOTE 2)
------ -------------
COMMON STOCKS - 47.03%
CONSUMER STAPLES - 10.20%
30,000 Coca-Cola Enterprises, Inc. ........ $ 843,750
55,000 CPC International, Inc. ............ 5,445,000
50,000 Gillette Co. ....................... 4,453,125
80,000 Lilly (Eli) & Co. .................. 5,350,000
60,000 Merck & Co., Inc. .................. 5,355,000
145,000 PepsiCo, Inc. ...................... 5,337,813
80,000 Pfizer, Inc. ....................... 5,660,000
50,000 Procter & Gamble Co. ............... 3,400,000
20,000 Warner-Lambert Co. ................. 2,863,743
-------------
38,708,431
-------------
TECHNOLOGY - 7.69%
100,000 Automatic Data Processing, Inc. .... 5,112,500
70,000 Boston Scientific Corp.* ........... 3,185,000
90,000 Cisco Systems, Inc.* ............... 7,382,813
80,000 Hewlett-Packard Co. ................ 4,935,000
60,000 Intel Corp. ........................ 4,620,000
50,000 Xerox Corp. ........................ 3,965,625
-------------
29,200,938
-------------
FINANCE - 7.22%
50,000 American International Group, Inc. . 5,103,125
17,000 Chase Manhattan Corp. .............. 1,961,375
25,000 Citicorp ........................... 3,126,563
110,000 Fannie Mae ......................... 5,328,125
45,000 First Union Corp. .................. 2,207,813
50,000 Hartford Financial
Services Group, Inc. ............... 4,050,000
90,000 Norwest Corp. ...................... 2,885,625
40,000 Washington Mutual, Inc. ............ 2,737,500
-------------
27,400,126
-------------
CONSUMER CYCLICAL - 5.25%
130,000 Ford Motor Co. ..................... 5,679,375
120,000 Home Depot, Inc. ................... 6,675,000
60,000 McDonald's Corp. ................... 2,688,750
115,000 Sherwin-Williams Co. ............... 3,191,250
60,000 Walgreen Co. ....................... 1,687,500
-------------
19,921,875
-------------
CAPITAL GOODS AND CONSTRUCTION - 5.03%
50,000 AlliedSignal, Inc. ................. 1,800,000
110,000 Boeing Co. ......................... 5,266,250
50,000 Dresser Industries, Inc. ........... 2,106,250
60,000 General Electric Co. ............... 3,873,750
115,000 Thermo Electron Corp.* ............. 4,290,938
25,000 United Technologies Corp. .......... 1,750,000
-------------
19,087,188
-------------
ENERGY - 4.71%
30,000 Anadarko Petroleum Corp. ........... 2,197,500
35,000 Baker Hughes, Inc. ................. 1,607,813
50,000 Halliburton Co. .................... 2,981,250
70,000 Mobil Corp. ........................ 5,096,875
50,000 Noble Affiliates, Inc. ............. 2,053,125
45,000 Schlumberger, Ltd. ................. 3,937,500
-------------
17,874,063
-------------
BASIC MATERIALS - 3.81%
70,000 Crown Cork & Seal Co., Inc. ........ 3,154,375
50,000 Minnesota Mining &
Manufacturing Co. .................. 4,575,000
80,000 Nucor Corp. ........................ 4,180,000
80,000 Sonoco Products Co. ................ 2,575,000
-------------
14,484,375
-------------
UTILITIES - 2.15%
60,000 SBC Communications, Inc. ........... 3,817,500
130,000 WorldCom, Inc. ..................... 4,371,250
-------------
8,188,750
-------------
TRANSPORTATION - 0.97%
60,000 Union Pacific Corp. ................. 3,675,000
-------------
TOTAL COMMON STOCKS ................. 178,540,746
(Cost $126,534,557) -------------
PAR VALUE
- ---------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 28.36%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 12.34%
$ 43,827,000 5.65%, 11/03/97 (A) ................ 43,813,243
1,000,000 7.74%, 06/01/04 .................... 1,035,730
1,000,000 7.05%, 06/08/05 .................... 1,022,860
978,296 7.00%, 01/01/27 .................... 983,493
-------------
46,855,326
-------------
U.S. TREASURY BONDS - 8.50%
2,000,000 7.63%, 02/15/07 .................... 2,127,858
6,250,000 7.50%, 11/15/16 .................... 7,142,681
1,000,000 8.13%, 08/15/19 .................... 1,222,710
750,000 8.50%, 02/15/20 .................... 952,433
6,200,000 7.88%, 02/15/21 .................... 7,426,416
500,000 8.13%, 08/15/21 .................... 615,215
3,500,000 7.25%, 08/15/22 .................... 3,940,300
3,250,000 7.63%, 11/15/22 .................... 3,816,309
3,850,000 7.13%, 02/15/23 .................... 4,280,003
700,000 6.63%, 02/15/27 .................... 741,832
-------------
32,265,757
-------------
U.S. TREASURY NOTES - 4.07%
2,055,000 5.88%, 02/15/00 .................... 2,062,807
2,000,000 6.50%, 08/31/01 .................... 2,049,978
2,000,000 7.50%, 11/15/01 .................... 2,122,858
3,000,000 6.25%, 02/28/02 .................... 3,052,860
3,850,000 6.50%, 05/31/02 .................... 3,958,297
1,000,000 7.88%, 11/15/04 .................... 1,114,139
1,000,000 7.00%, 07/15/06 .................... 1,071,789
-------------
15,432,728
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.09%
1,000,000 6.74%, 09/19/01 .................... 1,029,689
1,000,000 6.49%, 01/19/06 .................... 1,001,759
1,013,825 6.00%, 01/01/09 .................... 996,084
988,204 6.00%, 04/01/11 .................... 970,911
912,074 10.00%, 05/01/22 ................... 1,001,001
2,000,000 8.18%, 04/15/24 .................... 2,025,300
307,681 6.50%, 01/01/26 .................... 302,489
625,227 6.50%, 01/01/26 .................... 614,677
-------------
7,941,910
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 1.27%
2,861,139 8.00%, 09/15/17 .................... 3,012,242
793,627 9.00%, 12/15/17 .................... 849,924
937,046 7.50%, 01/15/26 .................... 958,715
-------------
4,820,881
-------------
FEDERAL FARM CREDIT BANK - 0.09%
250,000 6.40%, 12/11/00 .................... 250,038
90,909 8.25%, 05/01/07 .................... 90,909
-------------
340,947
-------------
TOTAL U.S. GOVERNMENT
AND AGENCY OBLIGATIONS.............. 107,657,549
(Cost $104,967,718) -------------
CORPORATE NOTES AND BONDS - 21.39%
1,000,000 ABN-AMRO Bank NV
Subordinated Bond
7.55%, 06/28/06 .................... 1,066,250
1,000,000 American Express Co.
Senior Bond
6.75%, 06/23/04 .................... 1,025,000
500,000 American General Finance Corp.
Senior Note
8.50%, 08/15/98 .................... 510,390
200,000 American Telephone & Telegraph Corp.
7.00%, 05/15/05 .................... 207,500
500,000 Archer-Daniels-Midland Co.
Debenture
8.13%, 06/01/12 .................... 573,750
1,000,000 Arizona Public Service Co.
First Mortgage
7.63%, 06/15/99 .................... 1,023,750
1,000,000 Associates Corp. of North America
6.00%, 03/15/99 .................... 1,002,500
1,000,000 Associates Corp. of North America
Senior Note
7.25%, 09/01/99 .................... 1,022,500
1,000,000 Bank One Milwaukee, MTN
6.35%, 03/19/01 .................... 1,007,500
1,000,000 Borg-Warner Automotive, Inc.
Senior Note
7.00%, 11/01/06 .................... 1,031,250
500,000 Carnival Corp.
7.05%, 05/15/05 .................... 516,250
1,080,000 Carolina Power & Light Co., MTN
5.06%, 09/13/98 .................... 1,073,250
1,000,000 Caterpillar Financial Services Corp., MTN
6.84%, 09/15/99 .................... 1,015,000
1,000,000 Caterpillar Financial Services Corp.
Series F, MTN
6.40%, 04/16/01 .................... 1,012,500
500,000 Chrysler Financial Corp.
5.63%, 01/15/99 .................... 499,375
500,000 CIT Group Holdings, Inc., Senior MTN
6.20%, 06/17/99 .................... 501,875
1,200,000 Citicorp, Senior MTN
8.63%, 11/01/04 .................... 1,258,500
1,000,000 Coca-Cola Enterprises, Inc.
7.13%, 08/01/17 .................... 1,023,750
1,000,000 Coca-Cola Enterprises, Inc.
6.70%, 10/15/36 .................... 1,035,000
500,000 Comerica Bank
7.25%, 06/15/07 .................... 521,875
1,400,000 Commercial Credit Co.
6.50%, 08/01/04 .................... 1,412,250
1,000,000 Crown Cork & Seal Co., Inc.
5.88%, 04/15/98 .................... 1,000,060
1,500,000 Deere (John) Capital Corp.
6.30%, 06/01/99 .................... 1,509,375
500,000 Disney (Walt) Co., Series A
6.38%, 03/30/01 .................... 506,250
1,500,000 Disney (Walt) Co., Series B
6.75%, 03/30/06 .................... 1,531,875
1,000,000 First Union Corp.
6.60%, 06/15/00 .................... 1,015,000
1,000,000 Ford Motor Credit Co.
8.00%, 01/15/99 .................... 1,025,000
1,000,000 Ford Motor Credit Co.
8.38%, 01/15/00 .................... 1,048,750
1,000,000 General Motors Acceptance Corp., MTN
7.65%, 01/16/98 .................... 1,004,119
1,000,000 General Motors Acceptance Corp.
6.88%, 07/15/01 .................... 1,025,000
1,000,000 Georgia Power Co.
6.13%, 09/01/99 .................... 1,002,500
1,000,000 GTE North, Inc., Series D
6.90%, 11/01/08 .................... 1,030,000
1,300,000 Hershey Foods Corp.
7.20%, 08/15/27 .................... 1,353,625
1,000,000 Hertz Corp., Senior Note
7.00%, 04/15/01 .................... 1,023,750
1,000,000 Household Finance Corp., MTN
5.80%, 03/09/98 .................... 1,001,389
1,000,000 Household Finance Corp.
7.75%, 06/01/99 .................... 1,026,250
1,000,000 International Business Machines Corp.
7.50%, 06/15/13 .................... 1,081,250
2,000,000 International Business Machines Corp.
6.22%, 08/01/27 .................... 2,020,000
500,000 International Lease Finance Corp. MTN
5.55%, 02/16/98 .................... 499,700
500,000 International Lease Finance Corp. MTN
8.35%, 10/01/98 .................... 512,200
500,000 International Paper Co.
7.00%, 06/01/01 .................... 514,375
1,000,000 Keycorp Institutional Capital Corp.
Coupon Adjusted Pass-Through
6.63%, 06/15/29 (B) ................ 1,006,900
1,325,000 KFW International Finance, Inc.
7.00%, 03/01/13 .................... 1,361,438
1,500,000 Lockheed Martin Corp.
6.85%, 05/15/01 .................... 1,537,500
1,500,000 Lucent Technologies, Inc.
7.25%, 07/15/06 .................... 1,593,750
500,000 Masco Corp.
6.63%, 09/15/99 .................... 506,250
500,000 May Department Stores Co.
6.88%, 11/01/05 .................... 515,000
500,000 McDonald's Corp.
8.88%, 04/01/11 .................... 606,875
500,000 Mead Corp.
6.84%, 03/01/37 .................... 520,000
1,000,000 Morgan Guaranty Trust Co.
of New York
5.75%, 10/08/99 .................... 997,500
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 .................... 1,002,500
1,000,000 NationsBank Corp.
7.00%, 09/15/01 .................... 1,030,000
500,000 Northern Telecom, Ltd.
6.00%, 09/01/03 .................... 493,750
2,000,000 Norwest Corp., MTN
6.25%, 04/15/99 .................... 2,012,500
1,000,000 Paccar Financial Corp., Series H MTN
6.42%, 05/15/00 .................... 1,010,000
1,000,000 Paccar Financial Corp., Series H MTN
6.39%, 06/15/00 .................... 1,010,000
1,000,000 Pennsylvania Power & Light Co.
6.88%, 02/01/03 .................... 1,030,000
2,000,000 PepsiCo, Inc., Series 1, MTN
6.80%, 05/15/00 .................... 2,040,000
1,000,000 Philadelphia Electric Co.
7.50%, 01/15/99 .................... 1,016,250
1,000,000 Pitney Bowes Credit Corp., Series C
MTN
6.54%, 07/15/99 .................... 1,011,250
2,000,000 Potomac Electric Power Co.
6.25%, 10/15/07 .................... 2,012,500
325,000 Rite Aid Corp.
6.70%, 12/15/01 .................... 331,094
1,000,000 Sears Roebuck & Co., MTN
7.82%, 02/23/98 .................... 1,005,649
1,000,000 Sears Roebuck Acceptance Corp.
Series II, MTN
6.38%, 02/16/99 .................... 1,007,500
1,000,000 Sears Roebuck Acceptance Corp.
Series III, MTN
6.74%, 10/09/02 .................... 1,022,500
1,000,000 Service Corp. International
7.38%, 04/15/04 .................... 1,050,000
2,000,000 Sherwin-Williams Co.
6.85%, 02/01/07 .................... 2,077,500
1,000,000 Southwest Airlines Co.
8.75%, 10/15/03 .................... 1,110,000
500,000 Suntrust Bank of Central Florida
MTN
6.90%, 07/01/07 .................... 513,750
1,000,000 Sysco Corp.
7.25%, 04/15/07 .................... 1,066,250
1,000,000 Texaco Capital, Inc.
8.50%, 02/15/03 .................... 1,103,750
500,000 Texas Utilities Electric Co.
7.38%, 11/01/99 .................... 511,875
500,000 Transamerica Finance Corp.
Subordinated Note
6.75%, 06/01/00 .................... 507,500
1,000,000 Union Pacific Corp.
6.70%, 12/01/06 .................... 1,012,500
500,000 Union Pacific Resources Group, Inc.
7.00%, 10/15/06 .................... 519,375
2,000,000 United Telecommunications, Inc.
9.50%, 04/01/03 .................... 2,285,000
500,000 Virginia Electric & Power Co., Series B
8.88%, 06/01/99 .................... 522,500
2,000,000 Wachovia Bank
6.30%, 03/15/01 .................... 2,017,500
1,000,000 Xerox Corp.
9.75%, 03/15/00 .................... 1,080,000
100,000 Xerox Corp.
8.13%, 04/15/02 .................... 107,750
-------------
TOTAL CORPORATE NOTES AND BONDS .... 81,207,689
(Cost $79,779,272) -------------
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES - 2.10%
2,000,000 Chase Credit Card Master Trust
Class A
6.30%, 04/15/03 .................... 2,017,510
1,000,000 Chemical Master Credit Card Trust I
Class A
5.55%, 09/15/03 .................... 989,212
1,000,000 Ford Credit Auto Owner Trust
Class A3
6.50%, 11/15/99 .................... 1,018,226
1,000,000 Green Tree Financial Corp., Class A3
6.23%, 03/15/28 .................... 1,000,938
1,000,000 NationsBank Auto Owner Trust
Class A3, 6.38%, 07/15/00 .......... 1,004,910
1,100,000 Premier Auto Trust, Class A3
6.50%, 03/06/00 .................... 1,109,917
853,458 Rural Housing Trust, Series 1, Class D
6.33%, 04/01/26 .................... 853,457
TOTAL ASSET-BACKED AND
MORTGAGE-BACKED SECURITIES ......... 7,994,170
(Cost $7,903,156)
SHARES
------
CONVERTIBLE PREFERRED STOCK - 0.48%
30,000 Loral Space and
Communications, Ltd., 6.00% (B) .... 1,830,000
-------------
TOTAL CONVERTIBLE PREFERRED STOCK .. 1,830,000
(Cost $1,627,725) -------------
TOTAL INVESTMENTS - 99.36% ........................... 377,230,154
(Cost $320,812,428)
NET OTHER ASSETS AND LIABILITIES - 0.64% ............. 2,437,597
-------------
NET ASSETS - 100.00% ................................. $ 379,667,751
=============
- -------------------------------------------------------------------------------
* 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 October 31, 1997, these securities amounted to $2,836,900, or 0.75% of
net assets.
MTN Medium Term Note
See Notes to Financial Statements.
<PAGE>
- --------------- EQUITY INCOME FUND
THE GALAXY FUND PORTFOLIO OF INVESTMENTS
- --------------- OCTOBER 31, 1997
VALUE
SHARES (NOTE 2)
-------- ---------
COMMON STOCKS - 85.13%
CONSUMER STAPLES - 18.88%
50,000 Becton Dickinson & Co. ............. $ 2,303,121
74,000 CPC International, Inc. ............ 7,326,000
55,000 Gillette Co. ....................... 4,898,438
50,000 Johnson & Johnson .................. 2,868,750
100,000 Lilly (Eli) & Co. .................. 6,687,500
65,000 Merck & Co., Inc. .................. 5,801,250
200,000 PepsiCo, Inc. ...................... 7,362,500
90,000 Pfizer, Inc. ....................... 6,367,500
70,000 Procter & Gamble Co. ............... 4,760,000
43,000 Warner-Lambert Co. ................. 6,157,063
-------------
54,532,122
-------------
FINANCE - 13.06%
22,500 American International Group, Inc. . 2,296,406
35,000 Citicorp ........................... 4,377,188
150,000 Fannie Mae ......................... 7,265,625
90,000 First Union Corp. .................. 4,415,625
90,000 Hartford Financial
Services Group, Inc. ............... 7,290,000
120,000 Norwest Corp. ...................... 3,847,500
90,000 Spieker Properties, Inc., REIT ..... 3,431,250
70,000 Washington Mutual, Inc. ............ 4,790,625
-------------
37,714,219
-------------
UTILITIES - 10.42%
260,000 Baltimore Gas & Electric Co. ....... 7,133,750
75,000 BellSouth Corp. .................... 3,548,438
135,000 GTE Corp. .......................... 5,729,063
100,000 SBC Communications, Inc. ........... 6,362,500
285,000 Washington Gas Light Co. ........... 7,320,938
-------------
30,094,689
-------------
ENERGY - 9.20%
100,000 Atlantic Richfield Co. ............. 8,231,250
100,000 Exxon Corp. ........................ 6,143,750
90,000 Mobil Corp. ........................ 6,553,125
100,000 Occidental Petroleum Corp. ......... 2,787,500
50,000 Texaco, Inc. ....................... 2,846,875
-------------
26,562,500
-------------
TECHNOLOGY - 9.01%
200,000 AMP, Inc. .......................... 9,000,000
170,000 Automatic Data Processing, Inc. .... 8,691,250
105,000 Xerox Corp. ........................ 8,327,813
-------------
26,019,063
-------------
CONSUMER CYCLICAL - 8.53%
25,000 Dayton-Hudson Corp. ................ 1,570,313
170,000 Ford Motor Co. ..................... 7,426,875
110,000 McDonald's Corp. ................... 4,929,375
25,000 Rite Aid Corp. ..................... 1,484,375
150,000 Sherwin-Williams Co. ............... 4,162,500
180,000 Walgreen Co. ....................... 5,062,500
-------------
24,635,938
-------------
CAPITAL GOODS AND CONSTRUCTION - 7.12%
110,000 Boeing Co. ......................... 5,266,250
100,000 Dresser Industries, Inc. ........... 4,212,500
115,000 General Electric Co. ............... 7,424,688
42,000 Thermo Electron Corp.* ............. 1,567,125
30,000 United Technologies Corp. .......... 2,100,000
-------------
20,570,563
-------------
BASIC MATERIALS - 6.47%
135,000 Crown Cork & Seal Co., Inc. ........ 6,083,438
75,000 Minnesota Mining &
Manufacturing Co. .................. 6,862,500
120,000 Weyerhaeuser Co. ................... 5,730,000
-------------
18,675,938
-------------
TRANSPORTATION - 2.44%
115,000 Union Pacific Corp. ................ 7,043,750
-------------
Total Common Stocks ................ 245,848,782
(Cost $181,270,758) -------------
PAR VALUE
---------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 14.66%
FEDERAL HOME LOAN MORTGAGE
CORPORATION (A) - 12.60%
$ 36,401,000 5.65%, 11/03/97 .................... $ 36,389,574
-------------
U.S. TREASURY NOTES - 1.38%
2,000,000 5.13%, 03/31/98 .................... 1,997,738
2,000,000 5.50%, 04/15/00 .................... 1,992,240
-------------
3,989,978
-------------
U.S. TREASURY BOND - 0.68%
1,700,000 7.50%, 11/15/16 .................... 1,942,809
-------------
TOTAL U.S. GOVERNMENT
AND AGENCY OBLIGATIONS ............. 42,322,361
(Cost $42,052,356) -------------
TOTAL INVESTMENTS - 99.79% ........................... 288,171,143
(Cost $223,323,114) -------------
NET OTHER ASSETS AND LIABILITIES - 0.21% ............. 609,356
-------------
NET ASSETS - 100.00% ................................. $ 288,780,499
=============
- ------------------------------------------------------------------------------
* Non-income producing security.
(A) Discount yield at time of purchase.
REIT Real Estate Investment Trust
See Notes to Financial Statements.
<PAGE>
- --------------- GROWTH AND INCOME FUND
THE GALAXY FUND PORTFOLIO OF INVESTMENTS
- --------------- OCTOBER 31, 1997
VALUE
SHARES (NOTE 2)
-------- ---------
COMMON STOCKS - 90.84%
CONSUMER STAPLES - 17.92%
128,000 American Home Products Corp. ....... $ 9,488,000
99,000 Anheuser-Busch Cos., Inc. .......... 3,953,813
96,000 Becton Dickinson & Co. ............. 4,421,995
155,000 Elan Corp. Plc, ADR* ............... 7,730,625
116,000 Hannaford Brothers Co. ............. 4,386,250
174,000 Humana, Inc.* ...................... 3,654,000
80,000 International Flavors &
Fragances, Inc. .................... 3,870,000
92,000 Johnson & Johnson .................. 5,278,500
67,000 Lilly (Eli) & Co. .................. 4,480,625
86,000 Merck & Co., Inc. .................. 7,675,500
118,000 PepsiCo, Inc. ...................... 4,343,875
70,000 Pfizer, Inc. ....................... 4,952,500
114,000 Pharmacia & Upjohn, Inc. ........... 3,619,500
114,000 Stryker Corp. ...................... 4,239,375
96,000 Sysco Corp. ........................ 3,840,000
-------------
75,934,558
-------------
FINANCE - 14.96%
126,000 Banc One Corp. ..................... 6,567,750
75,000 Barnett Banks, Inc. ................ 5,175,000
42,000 Chase Manhattan Corp. .............. 4,845,750
50,000 Chubb Corp. ........................ 3,312,500
145,000 Countrywide Credit Industries, Inc. 4,975,314
70,000 Exel, Ltd. ......................... 4,230,625
94,000 Fannie Mae ......................... 4,553,125
26,000 General Re Corp. ................... 5,126,875
57,000 Hartford Financial Services
Group, Inc ......................... 4,617,000
55,000 Lincoln National Corp. ............. 3,781,250
39,000 Morgan (J.P.) & Co., Inc. .......... 4,280,250
36,000 National City Corp. ................ 2,151,000
130,000 Nationwide Financial
Services, Inc., Class A ............ 3,956,875
20,000 Wells Fargo & Co. .................. 5,827,500
-------------
63,400,814
-------------
TECHNOLOGY - 12.28%
93,000 AMP, Inc. .......................... 4,185,000
68,000 Avnet, Inc. ........................ 4,279,750
150,000 Cabletron Systems, Inc.* ........... 4,350,000
62,000 Cisco Systems, Inc.* ............... 5,085,938
74,000 Computer Sciences Corp.* ........... 5,249,375
176,000 Electronic Data Systems Corp. ...... 6,809,000
122,000 Harris Corp. ....................... 5,322,250
119,000 Hewlett-Packard Co. ................ 7,340,813
52,000 International Business
Machines Corp. ..................... 5,099,250
70,000 Motorola, Inc. ..................... 4,322,500
-------------
52,043,876
-------------
CONSUMER CYCLICAL - 11.92%
255,000 Cooper Tire & Rubber Co. ........... 5,402,813
162,000 Dun & Bradstreet Corp. ............. 4,627,125
70,000 Eastman Kodak Co. .................. 4,191,250
104,000 Ford Motor Co. ..................... 4,543,500
146,000 Lowe's Cos., Inc. .................. 6,077,250
96,000 McDonald's Corp. ................... 4,302,000
350,000 Office Depot, Inc.* ................ 7,218,750
100,000 Penney (J.C.) Co., Inc. ............ 5,868,750
140,000 Pep Boys-Manny, Moe & Jack ......... 3,526,250
72,000 Reuters Holdings Plc, ADR .......... 4,734,000
-------------
50,491,688
-------------
ENERGY - 9.12%
45,000 Amoco Corp. ........................ 4,125,938
72,000 Atlantic Richfield Co. ............. 5,926,500
146,000 Baker Hughes, Inc. ................. 6,706,875
48,000 Chevron Corp. ...................... 3,981,000
70,000 Kerr-McGee Corp. ................... 4,729,375
60,000 Mobil Corp. ........................ 4,368,750
184,000 Occidental Petroleum Corp. ......... 5,129,000
42,000 Schlumberger, Ltd. ................. 3,675,000
-------------
38,642,438
-------------
CAPITAL GOODS AND CONSTRUCTION - 8.91%
86,000 Boeing Co. ......................... 4,117,250
118,000 Dresser Industries, Inc. ........... 4,970,750
120,000 Foster Wheeler Corp. ............... 3,937,500
71,000 General Electric Co. ............... 4,583,938
78,000 Honeywell, Inc. .................... 5,308,875
112,000 Hubbell, Inc., Class A ............. 5,054,000
130,000 Thermo Electron Corp.* ............. 4,850,625
210,000 Waste Management, Inc. ............. 4,908,750
-------------
37,731,688
-------------
UTILITIES - 5.91%
150,000 Century Telephone Enterprises, Inc. 6,365,625
166,000 Entergy Corp. ...................... 4,056,625
138,000 GTE Corp. .......................... 5,856,375
72,000 SBC Communications, Inc. ........... 4,581,000
76,000 Vodafone Group Plc, ADR ............ 4,170,500
-------------
25,030,125
-------------
BASIC MATERIALS - 5.31%
125,000 Goodrich (B.F.) Co. ................ 5,570,313
100,000 Lubrizol Corp. ..................... 3,850,000
183,000 Pall Corp. ......................... 3,785,813
115,000 Praxair, Inc. ...................... 5,009,688
122,000 Sigma Aldrich Corp. ................ 4,285,250
-------------
22,501,064
-------------
TRANSPORTATION - 4.51%
56,000 British Airways Plc, ADR ........... 5,495,000
40,000 Burlington Northern Santa Fe Corp. . 3,800,000
46,000 GATX Corp. ......................... 2,969,875
112,000 Union Pacific Corp. ................ 6,860,000
-------------
19,124,875
-------------
TOTAL COMMON STOCKS ................ 384,901,126
(Cost $326,790,448) -------------
CONVERTIBLE PREFERRED STOCK - 1.15%
80,000 Loral Space and
Communications, Ltd., 6.00% (B) .... 4,880,000
-------------
TOTAL CONVERTIBLE PREFERRED STOCK .. 4,880,000
(Cost $4,030,000) -------------
PAR VALUE
---------
U.S. AGENCY OBLIGATION (A) - 8.11%
Federal Home Loan Mortgage Corporation - 8.11%
$ 34,357,000 5.65%, 11/03/97 .................... 34,346,216
-------------
TOTAL U.S. AGENCY OBLIGATION ....... 34,346,216
(Cost $34,346,216) -------------
TOTAL INVESTMENTS - 100.10% .......................... 424,127,342
(Cost $365,166,664) -------------
NET OTHER ASSETS AND LIABILITIES - (0.10)% ........... (411,938)
-------------
NET ASSETS - 100.00% ................................. $ 423,715,404
=============
- -------------------------------------------------------------------------------
* 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 October 31, 1997, these securities amounted to $4,880,000, or 1.15% of
net assets.
ADR American Depositary Receipt
See Notes to Financial Statements.
<PAGE>
- --------------- EQUITY VALUE FUND
THE GALAXY FUND PORTFOLIO OF INVESTMENTS
- --------------- OCTOBER 31, 1997
VALUE
SHARES (NOTE 2)
-------- ---------
COMMON STOCKS - 93.73%
FINANCE - 19.66%
66,650 AFLAC, Inc. ........................ $ 3,390,819
27,600 American International Group, Inc. . 2,816,925
120,400 Banc One Corp. ..................... 6,275,850
81,600 BankBoston Corp. ................... 6,614,700
60,800 Beneficial Corp. ................... 4,662,600
56,800 Chase Manhattan Corp. .............. 6,553,300
83,300 Citicorp ........................... 10,417,706
151,300 Conseco, Inc. ...................... 6,600,463
79,300 Fannie Mae ......................... 3,841,087
147,700 First Union Corp. .................. 7,246,531
88,000 MBIA, Inc. ......................... 5,258,000
83,400 Mellon Bank Corp. .................. 4,300,313
50,000 Merrill Lynch & Co., Inc. .......... 3,381,250
22,900 National City Corp. ................ 1,368,275
102,900 NationsBank Corp. .................. 6,161,138
53,100 SLM Holding Corp. .................. 7,453,913
-------------
86,342,870
-------------
TECHNOLOGY - 18.43%
116,900 Cabletron Systems, Inc.* ........... 3,390,100
164,200 Cadence Design Systems, Inc.* ...... 8,743,650
32,100 Cisco Systems, Inc.* ............... 2,633,203
121,750 Compaq Computer Corp.* ............. 7,761,563
103,000 Computer Associates
International, Inc. ................ 7,679,938
129,000 EMC Corp.* ......................... 7,224,000
120,400 Intel Corp. ........................ 9,270,800
83,300 International Business
Machines Corp. ..................... 8,168,606
77,400 Microsoft Corp.* ................... 10,062,000
112,600 Parametric Technology Corp.* ....... 4,968,475
112,000 Quantum Corp.* ..................... 3,542,000
180,300 3Com Corp.* ........................ 7,471,181
-------------
80,915,516
-------------
CONSUMER CYCLICAL - 17.86%
93,900 Armstrong World Industries, Inc. ... 6,250,219
125,800 Carnival Corp., Class A ............ 6,101,300
104,300 Chrysler Corp. ..................... 3,676,575
129,500 Consolidated Stores Corp.* ......... 5,163,813
69,400 Echlin, Inc. ....................... 2,272,850
70,000 Family Dollar Stores, Inc. ......... 1,645,000
140,000 Fleetwood Enterprises, Inc. ........ 4,243,750
146,400 Gap, Inc. .......................... 7,786,650
230,600 Harley-Davidson, Inc. .............. 6,399,150
89,300 Kaufman & Broad Home Corp. ......... 1,903,206
145,900 Lowe's Cos., Inc. .................. 6,073,088
145,900 Mattel, Inc. ....................... 5,671,863
299,300 Office Depot, Inc.* ................ 6,173,063
200,500 Ross Stores, Inc. .................. 7,493,688
256,200 TJX Cos., Inc. ..................... 7,589,925
-------------
78,444,140
-------------
UTILITIES - 8.99%
38,317 Bell Atlantic Corp. ................ 3,060,570
148,300 FPL Group, Inc. .................... 7,665,256
118,000 GTE Corp. .......................... 5,007,625
476,300 PECO Energy Co. .................... 10,806,056
243,700 Public Service Enterprise
Group, Inc. ........................ 6,320,969
104,100 SBC Communications, Inc. ........... 6,623,363
-------------
39,483,839
-------------
CAPITAL GOODS AND CONSTRUCTION - 8.92%
101,600 Case Corp. ......................... 6,076,950
122,900 Caterpillar, Inc. .................. 6,298,625
51,100 Cincinnati Milacron, Inc. .......... 1,418,025
16,000 Harnischfeger Industries, Inc. ..... 630,000
163,700 Ingersoll-Rand Co. ................. 6,374,069
48,400 Johnson Controls, Inc. ............. 2,171,950
51,200 Lockheed Martin Corp. .............. 4,867,200
74,000 Sundstrand Corp. ................... 4,023,750
104,100 United Technologies Corp. .......... 7,287,000
-------------
39,147,569
-------------
CONSUMER STAPLES - 7.15%
69,500 Abbott Laboratories ................ 4,261,219
126,000 American Home Products Corp. ....... 9,339,750
67,500 Becton Dickinson & Co. ............. 3,109,219
237,600 Biomet, Inc. ....................... 5,925,150
100,500 Olsten Corp., Class B .............. 1,532,625
99,800 Philip Morris Cos., Inc. ........... 3,954,575
58,600 Schering-Plough Corp. .............. 3,285,263
-------------
31,407,801
-------------
ENERGY - 6.75%
52,232 British Petroleum Co. Plc, ADR ..... 4,583,358
111,600 Coastal Corp. ...................... 6,709,950
78,300 Diamond Offshore Drilling, Inc. .... 4,874,175
106,100 Phillips Petroleum Co. ............. 5,132,588
50,000 Smith International, Inc.* ......... 3,812,500
84,400 Union Pacific Resources Group, Inc. 2,078,350
108,300 Union Texas Petroleum
Holdings, Inc. ..................... 2,463,825
-------------
29,654,746
-------------
TRANSPORTATION - 3.49%
53,800 AMR Corp.* ......................... 6,264,338
10,600 British Airways Plc, ADR ........... 1,040,125
79,800 Illinois Central Corp. ............. 2,842,875
114,700 Northwest Airlines Corp., Class A* . 5,161,500
-------------
15,308,838
-------------
BASIC MATERIALS - 2.48%
28,400 Nalco Chemical Co. ................. 1,136,000
113,500 Nucor Corp. ........................ 5,930,375
112,900 USX-U.S. Steel Group, Inc. ......... 3,838,600
-------------
10,904,975
-------------
TOTAL COMMON STOCKS ................ 411,610,294
(Cost $349,275,911) -------------
PAR VALUE
---------
U.S. AGENCY OBLIGATION (A) - 2.70%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 2.70%
$ 11,837,000 5.65%, 11/03/97 .................... 11,833,285
-------------
TOTAL U.S. AGENCY OBLIGATION ....... 11,833,285
(Cost $11,833,285) -------------
TOTAL INVESTMENTS - 96.43% .......................... 423,443,579
(Cost $361,109,196) -------------
NET OTHER ASSETS AND LIABILITIES - 3.57% ............. 15,687,743
-------------
NET ASSETS - 100.00% ................................. $ 439,131,322
=============
- -------------------------------------------------------------------------------
* Non-income producing security.
(A) Discount yield at time of purchase.
ADR American Depositary Receipt
See Notes to Financial Statements.
<PAGE>
- --------------- EQUITY GROWTH FUND
THE GALAXY FUND PORTFOLIO OF INVESTMENTS
- --------------- OCTOBER 31, 1997
VALUE
SHARES (NOTE 2)
-------- ---------
COMMON STOCKS - 91.72%
CONSUMER STAPLES - 18.96%
212,700 Abbott Laboratories ................ $ 13,041,169
120,000 American Home Products Corp. ....... 8,895,000
200,000 Becton Dickinson & Co. ............. 9,212,497
150,100 Bristol-Myers Squibb Co. ........... 13,171,275
300,000 ConAgra, Inc. ...................... 9,037,500
110,000 CPC International, Inc. ............ 10,890,000
275,000 Elan Corp. Plc, ADR* ............... 13,715,625
200,000 Forest Laboratories, Inc.* ......... 9,250,000
100,000 Gillette Co. ....................... 8,906,250
300,000 Guidant Corp. ...................... 17,250,000
150,000 Johnson & Johnson .................. 8,606,250
209,800 Lilly (Eli) & Co. .................. 14,030,375
137,100 Merck & Co., Inc. .................. 12,236,175
300,000 PepsiCo, Inc. ...................... 11,043,750
251,200 Pfizer, Inc. ....................... 17,772,400
150,000 Procter & Gamble Co. ............... 10,200,000
30,000 Tricon Global Restaurants, Inc.* ... 909,375
-------------
188,167,641
-------------
TECHNOLOGY - 15.58%
100,000 Adobe Systems, Inc. ................ 4,775,000
225,000 Applied Materials, Inc.* ........... 7,509,375
350,000 Automatic Data Processing, Inc. .... 17,893,750
200,000 Cisco Systems, Inc.* ............... 16,406,250
300,000 Compaq Computer Corp.* ............. 19,125,000
350,000 DSC Communications Corp.* .......... 8,531,250
100,000 Intel Corp. ........................ 7,700,000
100,000 International Business
Machines Corp. ..................... 9,806,250
150,000 Lucent Technologies, Inc. .......... 12,365,625
100,000 Maxim Integrated Products, Inc.* ... 6,625,000
337,500 Oracle Corp.* ...................... 12,076,172
275,000 Teradyne, Inc.* .................... 10,295,313
75,000 Texas Instruments, Inc. ............ 8,001,563
170,000 Xerox Corp. ........................ 13,483,125
-------------
154,593,673
-------------
FINANCE - 15.06%
250,000 Ahmanson (H.F.) & Co. .............. 14,750,000
165,000 American International Group, Inc. . 16,840,313
250,000 Associates First Capital Corp. ..... 15,906,250
270,000 Barnett Banks, Inc. ................ 18,630,000
175,000 Chase Manhattan Corp. .............. 20,190,625
250,000 Conseco, Inc. ...................... 10,906,250
400,000 Fannie Mae ......................... 19,375,000
200,000 First Union Corp. .................. 9,812,500
300,000 SunAmerica, Inc. ................... 10,781,250
175,000 Travelers Group, Inc. .............. 12,250,000
-------------
149,442,188
-------------
ENERGY - 14.10%
110,000 Amoco Corp. ........................ $ 10,085,625
250,000 Anadarko Petroleum Corp. ........... 18,312,500
300,000 Baker Hughes, Inc. ................. 13,781,250
225,000 Cooper Cameron Corp.* .............. 16,256,250
250,000 Halliburton Co. .................... 14,906,250
200,000 Mobil Corp. ........................ 14,562,500
375,000 Oryx Energy Co.* ................... 10,335,938
260,000 Schlumberger, Ltd. ................. 22,750,000
350,000 Transocean Offshore, Inc. .......... 18,900,000
-------------
139,890,313
-------------
CONSUMER CYCLICAL - 11.04%
400,000 Cooper Tire & Rubber Co. ........... 8,475,000
175,000 CVS Corp. .......................... 10,729,688
125,000 Disney (Walt) Co. .................. 10,281,250
300,000 Ford Motor Co. ..................... 13,106,250
200,000 Home Depot, Inc. ................... 11,125,000
200,000 McDonald's Corp. ................... 8,962,500
175,000 Penney (J.C.) Co., Inc. ............ 10,270,313
300,000 Service Corp. International ........ 9,131,250
350,000 Sherwin-Williams Co. ............... 9,712,500
333 Siebel Systems, Inc.* .............. 13,458
600,000 TJX Cos., Inc. ..................... 17,775,000
-------------
109,582,209
-------------
CAPITAL GOODS AND CONSTRUCTION - 9.99%
250,000 AlliedSignal, Inc. ................. 9,000,000
250,000 Boeing Co. ......................... 11,968,750
250,000 Deere & Co. ........................ 13,156,250
275,000 General Electric Co. ............... 17,754,688
450,000 Thermo Electron Corp.* ............. 16,790,625
250,000 Tyco International, Ltd. ........... 9,437,500
350,000 United States Filter Corp.* ........ 14,043,750
300,000 Waste Management, Inc. ............. 7,012,500
-------------
99,164,063
-------------
UTILITIES - 3.68%
250,000 MCI Communications Corp. ........... 8,875,000
275,000 SBC Communications, Inc. ........... 17,496,875
300,000 WorldCom, Inc. ..................... 10,087,500
-------------
36,459,375
-------------
TRANSPORTATION - 2.75%
125,000 Delta Air Lines, Inc. .............. 12,593,750
250,000 KLM Royal Dutch Air Lines NV ....... 8,531,250
100,000 Union Pacific Corp. ................ 6,125,000
-------------
27,250,000
-------------
BASIC MATERIALS - 0.56%
65,400 Georgia-Pacific Corp. .............. 5,546,738
-------------
TOTAL COMMON STOCKS ................ 910,096,200
(Cost $616,001,642) -------------
CONVERTIBLE PREFERRED STOCKS - 4.13%
140,000 AES Trust I, Series A .............. 8,960,000
275,000 Loral Space and
Communications, Ltd., 6.00% (B) .... 16,775,000
300,000 QUALCOMM
Financial Trust, 5.75% (B) ......... 15,262,500
-------------
TOTAL CONVERTIBLE PREFERRED STOCKS . 40,997,500
(Cost $35,750,000) -------------
PAR VALUE
---------
U.S. AGENCY OBLIGATION (A) - 5.74%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 5.74%
$ 56,886,000 5.65%, 11/03/97 .................... 56,868,144
-------------
TOTAL U.S. AGENCY OBLIGATION ....... 56,868,144
(Cost $56,868,144) -------------
TOTAL INVESTMENTS - 101.59%........................... 1,007,961,844
(Cost $708,619,786) -------------
NET OTHER ASSETS AND LIABILITIES - (1.59)% .......... (15,732,135)
-------------
NET ASSETS - 100.00% ................................. $ 992,229,709
=============
- -------------------------------------------------------------------------------
* 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 October 31, 1997, these securities amounted to $32,037,500, or 3.23%
of net assets.
ADR American Depositary Receipt
See Notes to Financial Statements.
<PAGE>
- --------------- SMALL CAP VALUE FUND
THE GALAXY FUND PORTFOLIO OF INVESTMENTS
- --------------- OCTOBER 31, 1997
VALUE
SHARES (NOTE 2)
-------- ---------
COMMON STOCKS - 90.10%
TECHNOLOGY - 21.11%
56,200 Analogic Corp. ..................... $ 2,079,400
23,700 Asia Electronics Holding Co., Inc.* 299,213
30,100 Axsys Technologies, Inc.* .......... 658,438
109,400 BancTec, Inc.* ..................... 2,502,525
120,100 Benchmark Electronics, Inc.* ....... 2,994,994
74,800 Berg Electronics Corp.* ............ 1,748,450
69,000 BGS Systems, Inc. .................. 2,242,500
182,112 Boole & Babbage, Inc.* ............. 5,281,248
41,700 Burr-Brown Corp.* .................. 1,261,425
72,200 Clare (C.P.) Corp.* ................ 1,218,375
13,500 Communications Central, Inc.* ...... 119,813
111,200 Computer Task Group, Inc. .......... 3,141,400
23,700 Concentric Network Corp.* .......... 276,994
18,610 Deltek Systems, Inc.* .............. 348,938
10,000 Doncasters Plc, ADR* ............... 269,375
24,700 Flextronics International, Ltd.* ... 938,600
30,000 Fluke Corp. ........................ 721,875
15,000 Hadco Corp.* ....................... 830,625
56,600 Hyperion Software Corp.* ........... 2,157,875
45,300 Infinium Software, Inc.* ........... 724,800
81,100 Instron Corp. ...................... 1,338,150
41,700 Intersolv, Inc.* ................... 531,675
67,900 Keithley Instruments, Inc. ......... 704,463
41,400 K-Tron International, Inc.* ........ 740,025
119,200 MacNeal-Schwendler Corp.* .......... 1,333,550
72,500 MapInfo Corp.* ..................... 670,625
117,520 May & Speh, Inc.* .................. 1,483,690
40,000 Mentor Graphics Corp.* ............. 437,500
53,500 Nashua Corp.* ...................... 728,938
24,000 National Computer Systems, Inc. .... 912,000
36,980 Optek Technology, Inc.* ............ 670,263
25,000 Pasifik (P.T.)
Satelit Nusantara, ADR* ............ 443,750
94,500 Peerless Group, Inc.* .............. 448,875
72,000 Perceptron, Inc.* .................. 1,737,000
41,300 Performance Technologies, Inc.* .... 702,100
23,500 Phoenix Technologies, Ltd.* ........ 361,313
54,500 Planar Systems, Inc.* .............. 606,313
20,100 Power-One, Inc.* ................... 374,363
45,800 Segue Software, Inc.* .............. 383,575
25,000 Summa Four, Inc.* .................. 284,375
50,000 Sybase, Inc.* ...................... 815,625
19,600 Symix Systems, Inc.* ............... 325,850
23,700 Tegal Corp.* ....................... 162,938
39,500 Teltrend, Inc.* .................... 671,500
40,000 Total Control Products, Inc.* ...... 505,000
23,700 Ultratech Stepper, Inc.* ........... 645,825
96,200 Unitrode Corp.* .................... 2,579,362
36,000 Viewlogic Systems, Inc.* ........... 873,000
73,600 Viisage Technology, Inc.* .......... 616,400
24,000 VMARK Software, Inc.* .............. 192,000
69,900 Wood's (T.B.), Inc. ................ 1,293,150
-------------
53,390,056
-------------
CONSUMER CYCLICAL - 20.28%
82,450 ADVO, Inc.* ........................ 1,849,972
49,000 American Business
Information, Inc., Class A* ........ 514,500
49,000 American Business
Information, Inc., Class B* ........ 637,000
50,000 American Homestar Corp.* ........... 1,125,000
23,700 Applebee's International, Inc. ..... 525,844
24,000 ASI Solutions, Inc.* ............... 243,000
59,050 Bassett Furniture Industries, Inc. . 1,653,400
66,900 Beazer Homes USA, Inc.* ............ 1,279,463
59,300 Cash America International, Inc. ... 700,481
22,600 CN Biosciences, Inc.* .............. 525,450
43,000 Cooker Restaurant Corp. ............ 430,000
12,500 Culp, Inc. ......................... 237,500
71,100 Eagle Hardware & Garden, Inc.* ..... 1,208,700
48,600 El Chico Restaurants, Inc.* ........ 540,675
35,800 Execustay Corp.* ................... 375,900
71,000 Fieldcrest Cannon, Inc.* ........... 2,374,063
55,400 Filene's Basement Corp.* ........... 408,575
47,400 Galoob Toys, Inc.* ................. 625,088
32,242 Harte-Hanks Communications, Inc. ... 1,120,410
72,025 Horton (D.R.), Inc. ................ 1,080,375
53,000 Houghton Mifflin Co. ............... 1,881,500
68,300 Interim Services, Inc.* ............ 1,788,606
55,800 K2, Inc. ........................... 1,412,438
8,000 Keystone Automotive Industries, Inc. 177,000
40,000 Lazare Kaplan International, Inc.* . 610,000
78,500 Metromail Corp.* ................... 1,555,281
20,700 Monaco Coach Corp.* ................ 494,213
54,870 O'Charley's, Inc.* ................. 1,015,095
45,000 Platinum Entertainment, Inc.* ...... 286,875
64,220 Pluma, Inc.* ....................... 626,145
95,400 Protection One, Inc.* .............. 1,717,200
114,500 R & B, Inc.* ....................... 1,094,906
61,800 Rival Co. .......................... 957,900
17,800 Rocky Shoes & Boots, Inc.* ......... 309,275
83,500 Ryan's Family Steak Houses, Inc.* .. 720,188
61,000 Sagebrush, Inc.* ................... 373,625
120,600 SEI Investments Co. ................ 5,133,038
35,600 Signature Eyewear, Inc.* ........... 338,200
65,500 Spaghetti Warehouse, Inc.* ......... 450,313
8,300 Star Buffet, Inc.* ................. 118,794
44,100 TCA Cable TV, Inc. ................. 1,819,125
8,000 Tefron, Ltd.* ...................... 153,500
76,000 The O'Gara Co.* .................... 1,292,000
78,100 The York Group, Inc. ............... 1,815,825
20,000 Toll Brothers, Inc.* ............... 442,500
52,600 Toro Co. ........................... 2,248,650
60,000 Unifirst Corp. ..................... 1,507,500
110,750 Unitog Co. ......................... 2,741,063
89,900 Worldtex, Inc.* .................... 752,913
-------------
51,289,064
-------------
FINANCE - 12.26%
70,000 American Annuity Group, Inc. ....... 1,408,750
50,000 AmVestors Financial Corp. .......... 1,006,250
47,400 Brandywine Realty Trust, REIT ...... 1,110,938
8,975 BSB Bancorp, Inc. .................. 258,031
10,700 Coastal Bancorp, Inc. .............. 300,938
58,000 Colonial Downs
Holdings, Inc., Class A* ........... 377,000
60,800 Cordiant Plc, ADR .................. 387,600
116,700 D & N Financial Corp. .............. 2,932,088
64,000 Emergent Group, Inc.* .............. 976,000
24,000 First Alliance Corp.* .............. 792,000
56,350 FirstBank Puerto Rico .............. 1,894,769
11,500 GBC Bancorp ........................ 621,000
29,970 Hanmi Bank* ........................ 569,430
34,850 Healthcare Realty Trust, Inc., REIT 969,266
47,400 Imperial Credit
Commerical Mortgage* ............... 782,100
77,500 Innkeepers USA Trust, REIT ......... 1,293,281
40,000 Intercargo Corp. ................... 550,000
807 Investors Financial
Services Corp., Class A ............ 35,508
30,000 IRT Property Co., REIT ............. 367,500
12,200 Kansas City Life Insurance Co. ..... 1,073,600
25,000 LaSalle Re Holdings, Ltd. .......... 837,500
31,900 Life Financial Corp.* .............. 566,225
69,000 Matrix Capital Corp.* .............. 1,052,250
3,500 ML Bancorp, Inc. ................... 96,250
25,000 Ohio Casualty Corp. ................ 1,106,250
8,000 Penn-America Group, Inc. ........... 147,500
42,600 PICO Holdings, Inc.* ............... 266,250
41,500 Poe & Brown, Inc. .................. 1,711,875
77,500 Point West Capital Corp.* .......... 198,594
5,800 Prime Bancshares, Inc.* ............ 110,563
10,800 RedFed Bancorp, Inc.* .............. 209,250
40,000 Selective Insurance Group, Inc. .... 2,165,000
15,500 SL Green Realty Corp., REIT* ....... 388,469
40,425 Southwest Securities Group, Inc. ... 899,456
20,000 Symons International Group, Inc.* .. 405,000
25,000 Terra Nova (Bermuda)
Holdings, Ltd., Class A ............ 646,875
21,700 Tower Realty Trust, Inc., REIT* .... 547,925
21,598 UMB Financial Corp. ................ 1,112,297
12,700 USBANCORP, Inc. .................... 825,500
-------------
30,999,078
-------------
CONSUMER STAPLES - 11.46%
34,100 Advanced Health Corp.* ............. 601,013
23,700 American Healthcorp, Inc.* ......... 248,850
17,300 American/Italian
Pasta Co., Class A* ................ 363,300
63,250 Apple Orthodontix, Inc.* ........... 885,500
31,800 Ballard Medical Products ........... 717,488
17,500 Barrett Business Services, Inc.* ... 220,938
65,700 Bindley Western Industries, Inc. ... 1,847,813
10,500 Biosite Diagnostics, Inc.* ......... 103,688
12,100 Capital Senior Living Corp.* ....... 202,675
47,400 CTB International Corp.* ........... 811,725
23,700 Enamelon, Inc.* .................... 367,350
16,100 Fine Host Corp.* ................... 450,777
36,000 Gish Biomedical, Inc.* ............. 175,500
71,100 Health Management Systems, Inc.* ... 462,150
8,700 Healthdyne Technologies, Inc.* ..... 174,000
105,151 ICN Pharmaceuticals, Inc. .......... 5,060,392
60,100 Kinetic Concepts, Inc. ............. 1,141,900
89,300 Lifecore Biomedical, Inc.* ......... 1,852,975
10,700 Marquette Medical
Systems, Inc., Class A* ............ 275,525
69,875 Minntech Corp. ..................... 794,828
70,733 Morrison Health Care, Inc. ......... 1,171,515
98,000 Northland Cranberries, Inc., Class A 1,512,875
58,000 Noven Pharmaceuticals, Inc.* ....... 413,250
143,700 Paracelsus Healthcare Corp.* ....... 889,144
31,100 Paragon Trade Brands, Inc.* ........ 592,844
71,089 Pilgrim's Pride Corp. .............. 933,043
16,600 PMR Corp.* ......................... 381,800
100,150 Res-Care, Inc.* .................... 2,403,600
15,900 Respironics, Inc.* ................. 447,188
48,000 Richfood Holdings, Inc. ............ 1,158,000
43,600 SOS Staffing Services, Inc.* ....... 899,250
130,500 Unilab Corp.* ...................... 269,156
1,400 United American Healthcare Corp.* .. 5,250
25,000 U.S. Bioscience, Inc.* ............. 254,688
22,700 Warner Chilcott Laboratories, ADR* . 320,638
40,000 Western Staff Services, Inc.* ...... 577,500
-------------
28,988,128
-------------
CAPITAL GOODS AND CONSTRUCTION - 9.19%
20,900 ABC Rail Products Corp.* ........... 418,000
53,800 Aeroflex, Inc.* .................... 554,813
41,000 Analysis & Technology, Inc. ........ 891,750
22,000 Atchison Casting Corp.* ............ 452,375
84,500 Brown & Sharpe
Manufacturing Co., Class A* ........ 998,156
20,328 Chemi-Trol Chemical Co. ............ 284,592
31,950 Chicago Bridge & Iron Co. N.V ...... 565,116
65,200 Comptek Research, Inc.* ............ 464,550
47,400 Cuno, Inc.* ........................ 805,800
46,000 Denison International Plc, ADR* .... 868,250
77,000 Evans & Sutherland
Computer Corp.* .................... 2,310,000
75,250 Farr Co.* .......................... 1,166,375
73,700 Giga-Tronics, Inc.* ................ 718,575
43,000 Global Industrial Technologies, Inc. 733,688
50,400 Greenfield Industries, Inc. ........ 1,908,900
34,600 Key Technology, Inc.* .............. 506,025
74,000 Layne, Inc.* ....................... 1,470,750
90,800 LSI Industries, Inc. ............... 1,668,450
20,500 Lunn Industries, Inc.* ............. 30,750
29,100 NCI Building Systems, Inc.* ........ 1,060,331
10,700 Newpark Resources, Inc.* ........... 444,050
15,000 Osmonics, Inc.* .................... 237,188
20,000 Salient 3 Communications,
Inc., Class A ...................... 232,500
48,550 Shaw Group, Inc.* .................. 1,013,481
15,000 Sun Hydraulics, Inc. ............... 172,500
35,544 Terex Corp.* ....................... 748,646
46,000 Valmont Industries, Inc. ........... 1,052,250
38,799 Varlen Corp. ....................... 1,464,662
-------------
23,242,523
-------------
ENERGY - 6.52%
108,700 Bellwether Exploration Co.* ........ 1,358,750
44,200 Berry Petroleum Co., Class A ....... 831,513
64,000 Cairn Energy USA, Inc.* ............ 896,000
8,200 Cliffs Drilling Co.* ............... 596,038
42,000 Cross Timbers Oil Co. .............. 1,120,875
2,600 Dawson Geophysical Co.* ............ 55,575
32,200 Devon Energy Corp. ................. 1,440,950
41,535 Domain Energy Corp.* ............... 716,479
198,000 Gulf Canada Resources, Ltd.* ....... 1,658,250
30,000 MarkWest Hydrocarbon, Inc.* ........ 603,750
25,000 Nuevo Energy Co.* .................. 1,035,938
18,800 Oceaneering International, Inc.* ... 466,475
14,200 Petroglyph Energy, Inc.* ........... 157,975
29,500 Pioneer Natural Resources Co. ...... 1,181,844
39,800 Pogo Producing Co. ................. 1,440,263
18,700 Pride International, Inc.* ......... 617,100
11,962 Tejas Gas Corp.* ................... 716,972
70,000 Vintage Petroleum, Inc. ............ 1,601,250
-------------
16,495,997
-------------
BASIC MATERIALS - 4.94%
75,700 Dexter Corp. ....................... 2,971,225
20,000 Elcor Corp. ........................ 731,250
10,300 Fuller (H.B.) Co. .................. 486,675
54,700 Greif Brothers Corp., Class A ...... 1,907,663
64,900 Northwest Pipe Co.* ................ 1,573,825
46,650 Peak International, Ltd.* .......... 1,049,625
111,400 Sealright Co., Inc.* ............... 1,476,050
26,700 Steel of West Virginia, Inc.* ...... 283,688
62,600 Sybron Chemicals, Inc.* ............ 2,003,200
-------------
12,483,201
-------------
TRANSPORTATION - 2.83%
80,700 AirNet Systems, Inc.* .............. 1,654,350
30,000 Arnold Industries, Inc. ............ 637,500
25,800 Budget Group, Inc., Class A* ....... 903,000
28,875 Cannon Express, Inc.* .............. 274,313
28,200 Gulfmark Offshore, Inc.* ........... 1,025,775
29,700 Midwest Express Holdings,
Inc.* .............................. 954,113
77,000 Simon Transportation Services, Inc.* 1,713,250
-------------
7,162,301
-------------
UTILITIES - 1.51%
41,050 Atmos Energy Corp. ................. $ 1,036,513
41,950 Cascade Natural Gas Corp. .......... 700,041
20,000 Middlesex Water Co., Inc. .......... 361,250
33,333 NTL, Inc.* ......................... 904,158
43,300 Southwest Gas Corp. ................ 814,581
-------------
3,816,543
-------------
Total Common Stocks 227,866,891
(Cost $164,023,276) -------------
PAR VALUE
- ---------
CORPORATE BOND - 0.15%
$ 369,900 MacNeal-Schwendler Corp.
Convertible Subordinated Debenture
7.88%, 08/18/04 .................... 380,072
-------------
TOTAL CORPORATE BOND ............... 380,072
(Cost $369,900) -------------
U.S. AGENCY OBLIGATION (A) - 9.60%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 9.60%
24,286,000 5.65%, 11/03/97 .................... 24,278,377
-------------
TOTAL U.S. AGENCY OBLIGATION ....... 24,278,377
(Cost $24,278,377) -------------
TOTAL INVESTMENTS - 99.85% ........................... 252,525,340
(Cost $188,671,553) -------------
NET OTHER ASSETS AND LIABILITIES - 0.15% ............. 390,132
-------------
NET ASSETS - 100.00% ................................. $ 252,915,472
=============
- -------------------------------------------------------------------------------
* Non-income producing security.
(A) Discount yield at time of purchase.
REIT Real Estate Investment Trust
ADR American Depositary Receipt
See Notes to Financial Statements.
<PAGE>
- --------------- SMALL COMPANY EQUITY FUND
THE GALAXY FUND PORTFOLIO OF INVESTMENTS
- --------------- OCTOBER 31, 1997
VALUE
SHARES (NOTE 2)
-------- ---------
COMMON STOCKS - 94.16%
TECHNOLOGY - 32.16%
126,300 Actel Corp.* ....................... $ 1,886,606
71,200 Allen Telecom, Inc.* ............... 1,348,350
141,200 Altron, Inc.* ...................... 2,241,550
24,675 ANADIGICS, Inc.* ................... 912,975
90,250 Arbor Software Corp.* .............. 3,299,766
91,200 Aseco Corp.* ....................... 1,208,400
49,732 Aspen Technology, Inc.* ............ 1,871,167
9,800 Asyst Tecnologies, Inc.* ........... 274,400
17,750 Aware, Inc.* ....................... 215,219
74,000 Berg Electronics Corp.* ............ 1,729,750
20,350 Broadband Technologies, Inc.* ...... 125,280
107,500 California Microwave, Inc.* ........ 1,726,719
80,200 CerProbe Corp.* .................... 1,453,625
15,800 CFI ProServices, Inc.* ............. 193,550
67,500 Cognex Corp.* ...................... 1,805,625
65,900 Cognicase, Inc.* ................... 831,988
105,700 Coherent Communications
Systems Corp.* ..................... 3,197,425
54,831 Concord EFS, Inc.* ................. 1,627,795
72,216 Cree Research, Inc.* ............... 1,814,427
35,450 CyberCash, Inc.* ................... 558,338
33,300 CyberMedia, Inc.* .................. 990,675
126,600 Deltek Systems, Inc.* .............. 2,373,750
178,944 DSP Communications, Inc.* .......... 3,310,464
89,700 Eidos Plc, ADR* .................... 1,065,188
64,100 Eltron International, Inc.* ........ 1,866,913
83,500 Exar Corp.* ........................ 2,004,000
74,300 FactSet Research Systems, Inc.* .... 1,982,881
76,300 Forrester Research, Inc.* .......... 1,969,494
101,300 Great Plains Software, Inc.* ....... 2,418,538
141,400 Harmonic Lightwaves, Inc.* ......... 1,767,500
33,082 Helix Technology Corp. ............. 1,488,690
117,500 HTE, Inc.* ......................... 1,982,813
66,600 ICG Communications, Inc.* .......... 1,531,800
113,200 IDT Corp.* ......................... 2,037,600
108,150 Information Management
Resources, Inc.* ................... 2,784,863
159,492 Inso Corp.* ........................ 1,933,841
77,700 International Telecommunication
Data Systems Inc.* ................. 2,059,050
42,000 JDA Software Group, Inc.* .......... 1,312,500
99,500 Kofax Image Products, Inc.* ........ 1,001,219
66,900 Komag, Inc.* ....................... 1,158,206
33,400 Legato Systems, Inc.* .............. 1,427,850
176,150 Lightbridge, Inc.* ................. 2,554,175
67,850 May & Speh, Inc.* .................. 856,606
135,100 Melita International Corp.* ........ 1,435,438
121,600 Mercury Interactive Corp.* ......... 2,736,000
45,900 Merix Corp.* ....................... 699,975
100,100 META Group, Inc.* .................. 2,164,663
132,700 MetaCreations Corp.* ............... 1,924,150
36,000 ModaCAD, Inc.* ..................... 783,000
71,400 Natural Microsystems Corp.* ........ 3,409,350
165,800 Norstan, Inc.* ..................... 3,730,500
94,650 Ortel Corp.* ....................... 2,212,444
79,900 P-Com, Inc.* ....................... 1,607,988
530,300 Phonetel Technologies, Inc.* ....... 1,557,756
232,820 Polycom, Inc.* ..................... 1,345,991
66,098 PRI Automation, Inc.* .............. 2,528,249
132,300 Quad Systems Corp.* ................ 926,100
60,000 RadiSys Corp.* ..................... 2,790,000
38,000 Registry, Inc.* .................... 1,577,000
137,050 Restrac, Inc.* ..................... 839,431
72,100 Richey Electronics, Inc.* .......... 702,975
47,670 Saville Systems Ireland Plc, ADR* .. 2,848,283
66,600 Scopus Technology, Inc.* ........... 986,513
116,400 SIPEX Corp.* ....................... 3,826,650
109,950 SmarTalk TeleServices, Inc.* ....... 2,370,797
25,550 SpeedFam International, Inc.* ...... 948,544
40,200 SPR, Inc.* ......................... 693,450
46,645 SPSS, Inc.* ........................ 1,049,513
150,000 Standard Microsystems Corp.* ....... 1,734,375
102,876 SystemSoft Corp.* .................. 816,578
111,700 Tekelec* ........................... 4,677,438
128,000 Teknor Industrial Computers, Inc.* . 454,221
72,100 Teltrend, Inc.* .................... 1,225,700
132,700 Template Software, Inc.* ........... 1,426,525
82,989 The Learning Company, Inc.* ........ 1,566,417
105,100 Tollgrade Communications, Inc.* .... 2,588,088
69,100 Total Control Products, Inc.* ...... 872,388
70,400 TriQuint Semiconductor, Inc.* ...... 1,724,800
53,900 TSI International Software, Ltd.* .. 586,163
692,900 TSI Telesys Corp.* ................. 417,957
27,600 Unitrode Corp.* .................... 740,025
50,000 Vantive Corp.* ..................... 1,262,500
49,800 Veeco Instruments, Inc.* ........... 1,973,325
145,050 Viisage Technology, Inc.* .......... 1,214,794
43,400 Visio Corp.* ....................... 1,613,938
188,470 VMARK Software, Inc.* .............. 1,507,760
121,700 Voice Control Systems, Inc.* ....... 410,738
131,000 Whittman-Hart, Inc.* ............... 3,799,000
65,600 Zygo Corp.* ........................ 1,787,600
-------------
148,296,661
-------------
CONSUMER STAPLES - 21.30%
119,900 Anesta Corp.* ...................... 2,607,825
49,750 Arterial Vascular Engineering, Inc.* 2,642,942
109,100 Ascent Pediatrics, Inc.* ........... 995,538
122,650 Biofield Corp.* .................... 551,925
66,900 Biosite Diagnostics, Inc.* ......... 660,638
64,300 Boston Biomedica, Inc.* ............ 486,269
112,100 Brookdale Living
Communities, Inc.* ................. 2,129,900
82,677 Casey's General Stores, Inc. ....... 1,994,583
159,097 Chad Therapeutics, Inc.* ........... 1,690,406
7,700 ClinTrials Research, Inc.* ......... 68,819
43,757 Concentra Managed Care, Inc.* ...... 1,427,572
77,500 Cytyc Corp.* ....................... 1,840,625
66,400 Digene Corp.* ...................... 664,000
179,500 EndoSonics Corp. ................... 2,064,250
53,620 G & K Services, Inc., Class A ...... 1,930,320
71,800 GelTex Pharmaceuticals, Inc.* ...... 2,118,100
107,800 Gulf South Medical Supply, Inc.* ... 3,557,400
177,700 Hanger Orthopedic Group, Inc.* ..... 2,310,100
68,300 Heartport, Inc.* ................... 1,716,038
136,354 Hologic, Inc.* ..................... 3,494,071
109,273 Horizon Health Corp.* .............. 2,554,270
68,927 Lunar Corp.* ....................... 1,313,921
170,150 MedCath, Inc.* ..................... 2,679,863
93,375 National Surgery Centers, Inc.* .... 2,334,375
361,450 Nature's Sunshine Products, Inc. ... 8,358,531
132,500 NeoPath, Inc.* ..................... 2,401,563
171,312 On Assignment, Inc.* ............... 4,175,730
257,800 OncorMed, Inc.* .................... 1,869,050
95,650 Opta Food Ingredients, Inc.* ....... 538,031
35,900 Parexel International Corp.* ....... 1,296,888
46,150 Patterson Dental Co.* .............. 1,846,000
113,600 Penederm, Inc.* .................... 1,476,800
144,000 Physicians Specialty Corp.* ........ 1,800,000
91,300 PMR Corp.* ......................... 2,099,900
112,400 Prime Medical Services, Inc.* ...... 1,489,300
353,860 Rexall Sundown, Inc.* .............. 7,740,688
118,364 Romac International, Inc.* ......... 2,367,280
57,119 RTW, Inc.* ......................... 378,413
116,700 Sano Corp.* ........................ 2,421,525
138,700 Sheridan Healthcare, Inc.* ......... 2,045,825
73,500 Spine-Tech, Inc.* .................. 2,287,688
146,900 Tecnol Medical Products, Inc.* ..... 3,158,350
143,650 Urologix, Inc.* .................... 2,998,694
147,400 Weider Nutrition International, Inc. 1,704,313
48,851 Whole Foods Market, Inc.* .......... 1,917,382
-------------
98,205,701
-------------
CONSUMER CYCLICAL - 13.42%
119,528 ABR Information Services, Inc.* .... 2,808,908
85,900 AnnTaylor Stores Corp.* ............ 1,229,444
81,650 Applied Graphics
Technologies, Inc.* ................ 4,368,275
87,100 ASI Solutions, Inc.* ............... 881,888
103,050 Barnett, Inc.* ..................... 2,125,406
22,947 CDW Computer Centers, Inc.* ........ 1,422,714
64,800 Dendrite International, Inc.* ...... 1,255,500
90,500 Desktop Data, Inc.* ................ 936,109
132,500 Discreet Logic, Inc.* .............. 2,592,031
66,900 Eagle Hardware & Garden, Inc.* ..... 1,137,300
61,550 Equity Marketing, Inc.* ............ 1,758,022
153,250 First Years, Inc. .................. 3,831,250
45,300 FirstService Corp.* ................ 377,972
199,000 Funco, Inc.* ....................... 4,079,500
88,500 Hall, Kinion & Associates, Inc.* ... 1,382,813
44,500 Harman International
Industries, Inc. ................... 2,403,000
197,300 Just For Feet, Inc.* ............... 2,922,506
114,900 Keystone Automotive
Industries, Inc.* .................. 2,542,163
87,300 Lifeline Systems, Inc.* ............ 1,811,475
179,969 Lo-Jack Corp.* ..................... 2,497,070
39,266 Men's Wearhouse, Inc.* ............. 1,521,558
56,900 Papa John's International, Inc.* ... 1,682,106
84,820 Pre-Paid Legal Services, Inc.* ..... 2,565,805
79,910 Rural/Metro Corp.* ................. 2,776,873
145,250 Safety 1st, Inc.* .................. 907,813
153,000 SRS Labs, Inc.* .................... 1,128,375
123,600 The O'Gara Co.* .................... 2,101,200
178,200 Travis Boats & Motors, Inc.* ....... 3,408,075
51,100 Ugly Duckling Corp.* ............... 606,813
107,600 Wilmar Industries, Inc.* ........... 2,824,500
-------------
61,886,464
-------------
ENERGY - 12.82%
38,000 Abraxas Petroleum Corp.* ........... 707,750
41,390 American Oilfield Divers, Inc.* .... 703,630
182,462 Bellwether Exploration Co.* ........ 2,280,775
49,358 Brown (Tom), Inc.* ................. 1,221,611
132,700 Cabot Oil & Gas Corp., Class A ..... 3,184,800
48,900 Cairn Energy USA, Inc.* ............ 684,600
139,550 Chieftain International, Inc.* ..... 3,418,975
163,350 Coho Energy, Inc.* ................. 1,919,363
357,320 Comstock Resources, Inc.* .......... 5,985,110
200,990 Dawson Production Services, Inc.* .. 4,874,008
170,400 Domain Energy Corp.* ............... 2,939,400
21,000 Friede Goldman International, Inc.* 836,063
41,540 HarCor Energy, Inc.* ............... 171,353
106,100 KCS Energy, Inc. ................... 2,791,756
532,600 Magin Energy, Inc.* ................ 1,134,012
114,500 Magnum Hunter Resources, Inc.* ..... 808,656
93,300 Marine Drilling Co., Inc.* ......... 2,764,013
448,400 Mercantile International
Petroleum, Inc.* ................... 358,720
51,893 National-Oilwell, Inc.* ............ 3,973,027
41,200 Nuevo Energy Co.* .................. 1,707,225
105,000 Offshore Logistics, Inc.* .......... 2,205,000
78,633 Pride International, Inc.* ......... 2,594,889
94,900 Stone Energy Corp.* ................ 3,167,288
139,378 Swift Energy Co.* .................. 3,615,109
177,800 Titan Exploration, Inc.* ........... 2,244,725
124,000 Vintage Petroleum, Inc. ............ 2,836,500
-------------
59,128,358
-------------
CAPITAL GOODS AND CONSTRUCTION - 5.07%
99,236 AFC Cable Systems, Inc.* ........... 2,815,822
108,000 Armor Holdings, Inc.* .............. 1,188,000
85,900 Cuno, Inc.* ........................ 1,460,300
129,000 Firearms Training Systems, Inc.* ... 838,500
131,000 Hexcel Corp.* ...................... 3,512,438
171,800 Maverick Tube Corp.* ............... 6,055,950
63,500 MSC Industrial
Direct Co., Inc., Class A* ......... 2,643,188
204,610 PCD, Inc.* ......................... 4,143,353
30,268 Tetra Technologies, Inc.* .......... 698,056
-------------
23,355,607
-------------
TRANSPORTATION - 3.59%
118,800 AirNet Systems, Inc.* .............. 2,435,400
92,000 Alaska Air Group, Inc.* ............ 3,070,500
83,400 Atlas Air, Inc.* ................... 2,314,350
268,500 Dynamex, Inc.* ..................... 2,584,313
34,300 Eagle USA Airfreight, Inc.* ........ 1,037,575
77,225 Midwest Express Holdings, Inc.* .... 2,480,853
71,800 Trico Marine Services, Inc.* ....... 2,638,650
-------------
16,561,641
-------------
FINANCE - 2.43%
90,100 ARM Financial Group, Inc., Class A . 1,948,413
157,922 Credit Acceptance Corp.* ........... 873,506
35,900 Enhance Financial
Services Group, Inc. ............... 1,895,969
73,922 General Acceptance Corp.* .......... 203,286
86,785 HCC Insurance Holdings, Inc. ....... 2,028,599
105,200 Prime Retail, Inc., REIT ........... 1,571,425
34,600 Redwood Trust, Inc., REIT .......... 869,325
79,600 Riggs National Corp. ............... 1,830,800
-------------
11,221,323
-------------
BASIC MATERIALS - 1.73%
143,900 AMCOL International Corp. .......... 2,967,938
229,176 Meridian Resource Corp.* ........... 2,993,612
53,091 OM Group, Inc. ..................... 2,004,185
-------------
7,965,735
-------------
UTILITIES - 1.64%
133,700 Arch Communications Group, Inc.* ... 1,019,462
120,500 Davel Communications Group, Inc.* .. 3,087,813
94,200 HighwayMaster
Communications, Inc.* .............. 859,575
133,700 Metrocall, Inc.* ................... 902,475
100,200 Mobile Telecommunication
Technologies* ...................... 1,665,825
-------------
7,535,150
-------------
TOTAL COMMON STOCKS ................ 434,156,640
(Cost $363,950,394) -------------
PAR VALUE
---------
U.S. AGENCY OBLIGATION (A) - 4.22%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 4.22%
$ 19,478,000 5.65%, 11/03/97 .................... 19,471,886
-------------
Total U.S. Agency Obligation ....... 19,471,886
(Cost $19,471,886) -------------
TOTAL INVESTMENTS - 98.38% ........................... 453,628,526
(Cost $383,422,280) -------------
Net Other Assets and Liabilities - 1.62% ............. 7,448,881
-------------
Net Assets - 100.00% ................................. $ 461,077,407
=============
- -------------------------------------------------------------------------------
* Non-income producing security.
(A) Discount yield at time of purchase.
ADR American Depositary Receipt
REIT Real Estate Investment Trust
See Notes to Financial Statements.
<PAGE>
- --------------- INTERNATIONAL EQUITY FUND
THE GALAXY FUND PORTFOLIO OF INVESTMENTS
- --------------- OCTOBER 31, 1997
VALUE
SHARES (NOTE 2)
-------- ---------
COMMON STOCKS - 92.60%
Australia - 3.86%
541,884 Australia & New Zealand Banking .... $ 3,789,054
623,875 Coca-Cola Amatil, Ltd .............. 4,705,374
819,635 News Corp., Ltd .................... 3,934,417
-------------
12,428,845
-------------
BRAZIL - 1.11%
35,128 Telebras, ADR ...................... 3,565,492
-------------
FRANCE - 9.80%
208,759 Renault* ........................... 5,820,987
91,374 Schneider S.A ...................... 4,889,334
84,122 Suez Lyonnaise ..................... 8,754,125
60,485 Total S.A., Class B ................ 6,725,181
80,041 Valeo .............................. 5,349,473
-------------
31,539,100
-------------
GERMANY - 7.47%
86,660 Daimler-Benz AG* ................... 5,906,055
165,569 Hoechst AG ......................... 6,373,026
10,535 Mannesmann AG ...................... 4,468,257
12,238 Volkswagen AG ...................... 7,273,892
-------------
24,021,230
-------------
HONG KONG - 2.67%
603,000 Hutchison Whampoa, Ltd ............. 4,173,684
1,038,000 New World Development Co., Ltd ..... 3,652,706
104,000 Sun Hung Kai Properties, Ltd ....... 766,933
-------------
8,593,323
-------------
HUNGARY - 0.21%
7,270 Gedeon Richter, GDR* ............... 676,110
-------------
INDIA - 1.24%
60,700 Hindalco Industries, Ltd, GDR* ..... 1,754,230
39,600 Reliance Industries, Ltd, GDR ...... 831,600
15,500 Reliance Industries Ltd, GDR (B) ... 325,500
104,800 Tata Engineering
& Locomotive Co., GDR .............. 1,089,920
-------------
4,001,250
-------------
ITALY - 8.26%
1,630,069 Credito Italiano SPA* .............. 4,354,501
917,600 Fiat SPA ........................... 2,923,572
1,026,881 Mediaset* .......................... 4,666,122
2,217,900 Pirelli SPA ........................ 5,622,993
1,434,000 Telecom Italia SPA ................. 9,002,005
-------------
26,569,193
-------------
JAPAN - 16.72%
196,000 Canon Inc. ......................... 4,758,625
48,000 Ito-Yokado Co., Ltd ................ 2,386,630
266,000 Mitsui Fudosan ..................... 3,007,897
110,000 Murata Manufacturing Co., Ltd ...... 4,463,290
444 Nippon Telegraph
& Telephone Corp. .................. 3,765,527
262,000 Nippondenso Co. .................... 5,663,922
399,000 Nomura Securities .................. 4,644,549
94 NTT Data Corp. ..................... 4,494,054
70,000 Rohm Corp. ......................... 6,926,082
198,000 Sharp Corp. ........................ 1,539,286
53,200 Sony Corp. ......................... 4,418,957
469,000 Sumitomo Bank ...................... 4,991,435
371,000 Sumitomo Realty
& Development Co., Ltd ............. 2,711,474
-------------
53,771,728
-------------
MALAYSIA - 0.45%
1,592,000 Renong Berhad ...................... 1,454,189
-------------
MEXICO - 3.04%
367,219 Grupo Financiero Banamex Accival* .. 723,970
111,700 Grupo Televisa, ADR* ............... 3,462,700
415,000 Kimberly-Clark de Mexico S.A.,
Class A ............................ 1,813,777
87,168 Telefonos de Mexico S.A.,
Class L, ADR ....................... 3,770,016
-------------
9,770,463
-------------
NETHERLANDS - 8.00%
62,343 Koninklijke Ptt .................... $ 2,383,569
101,930 Philips Electronics ................ 7,983,289
119,332 Royal Dutch Petroleum .............. 6,314,858
381,629 Vnu-Verenigd Bezit ................. 9,045,559
-------------
25,727,275
-------------
PHILLIPINES - 0.38%
177,720 Metro Bank & Trust ................. 1,230,853
-------------
SPAIN - 3.73%
210,410 Banco de Santander S.A ............. 5,898,601
223,700 Telefonica de Espana S.A ........... 6,109,583
-------------
12,008,184
-------------
SWEDEN - 2.17%
170,400 Hennes & Mauritz AB, Class B ....... 6,978,356
-------------
SWITZERLAND - 7.21%
5,553 Nestle SA .......................... 7,846,018
5,058 Novartis AG, Registered ............ 7,943,501
839 Roche Holdings AG .................. 7,393,296
-------------
23,182,815
-------------
THAILAND - 0.18%
169,200 Bangkok Bank Public Co., Ltd ....... 577,403
-------------
UNITED KINGDOM - 16.10%
302,500 Boc Group, Plc ..................... 5,072,627
349,955 British Aerospace, Plc ............. 9,301,414
423,369 British Petroleum, Plc ............. 6,215,595
346,413 Glaxo Wellcome, Plc ................ 7,400,671
439,300 Imperial Chemical Industries ....... 6,372,133
1,904,798 Lucasvarity ........................ 6,492,127
1 Powergen, Plc ...................... 11
633,839 Safeway, Plc ....................... 4,137,282
1,247,979 Vodafone Group, Plc ................ 6,811,861
-------------
51,803,721
-------------
TOTAL COMMON STOCKS ................ 297,899,530
(Cost $265,345,506) -------------
PAR VALUE
---------
U.S. AGENCY OBLIGATION (A) - 7.13%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 7.13%
$ 22,950,000 5.65%, 11/03/97 .................... 22,942,796
Total U.S. Agency Obligation ....... 22,942,796
(Cost $22,942,796)
TOTAL INVESTMENTS - 99.73% ........................... 320,842,326
(Cost $288,288,302) -------------
NET OTHER ASSETS AND LIABILITIES - 0.27% ............. 873,190
-------------
NET ASSETS - 100.00% ................................ $ 321,715,516
=============
- ------------------------------------------------------------------------------
* 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 October 31, 1997, these securities amounted to $325,500, or 0.10% of
net assets.
ADR American Depositary Receipt
GDR Global Depositary Receipt
FORWARD FOREIGN CURRENCY CONTRACT OUTSTANDING:
CURRENCY CONTRACT TO SETTLEMENT CONTRACT UNREALIZED
VALUE DELIVER DATES AT VALUE (DEPRECIATION)
------- ----------- ---------- ----------- --------------
30,710,000 DEM 12/17/97 $17,851,102 $(628,404)
- -----------------------------------------------------------------------------
DEM Deutsche Marks
See Notes to Financial Statements.
<PAGE>
--------------------
STATEMENTS OF ASSETS AND LIABILITIES
THE GALAXY FUND OCTOBER 31, 1997
--------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION EQUITY INCOME GROWTH AND INCOME
FUND FUND FUND
------------- ------------ -----------------
<S> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost ............................................ $ 320,812,428 $ 223,323,114 $ 365,166,664
Net unrealized appreciation .................................... 56,417,726 64,848,029 58,960,678
------------- ------------- ------------
Total investments at value ................................... 377,230,154 288,171,143 424,127,342
Cash ............................................................. 173 107 810
Receivable for forward foreign currency contracts - closed ....... -- -- --
Receivable for investments sold .................................. 3,291,884 -- 1,644,986
Receivable for shares sold ....................................... 2,469,092 520,882 2,010,255
Interest and dividend receivable ................................. 2,786,980 563,460 402,870
Tax reclaim receivable ........................................... -- -- --
Receivable from Investment Advisor (Note 4) ...................... -- 40,613 4,923
-------------- -------------- ------------
Total Assets ................................................. 385,778,283 289,296,205 428,191,186
-------------- -------------- ------------
LIABILITIES:
Payable for open forward foreign currency contracts (Note 2) ..... -- -- --
Payable for investments purchased ................................ 5,119,615 -- 2,476,788
Payable to custodian ............................................. -- -- --
Payable for shares repurchased ................................... 497,071 159,461 1,449,123
Advisory fee payable (Note 3) .................................... 240,411 188,139 275,821
Payable to Fleet affiliates (Note 3) ............................. 112,379 52,135 143,913
Payable to Administrator (Note 3) ................................ 49,428 44,970 68,866
Trustees' fees and expenses payable (Note 3) ..................... 3,992 3,756 4,953
Accrued expenses and other payables .............................. 87,636 67,245 56,318
-------------- ------------- ------------
Total Liabilities ............................................ 6,110,532 515,706 4,475,782
-------------- ------------- ------------
NET ASSETS .......................................................... $ 379,667,751 $ 288,780,499 $423,715,404
============== ============= ============
NET ASSETS CONSISTS OF:
Par value (Note 5) ............................................... $ 23,066 $ 15,337 $ 26,056
Paid in capital in excess of par value ........................... 292,958,436 199,028,800 293,401,379
Undistributed (overdistributed) net investment income (loss) ..... 1,372,678 505,696 325,489
Accumulated net realized gain on investments sold and written options 28,895,845 24,382,637 71,001,802
Net unrealized appreciation (depreciation) of investments,
foreign currency and forward foreign currency contracts ........ 56,417,726 64,848,029 58,960,678
------------- ------------- ------------
TOTAL NET ASSETS $ 379,667,751 $ 288,780,499 $423,715,404
============= ============= ============
Retail A Shares:
Net Assets ....................................................... $ 177,238,812 $ 169,275,775 $141,884,090
Shares of beneficial interest outstanding ........................ 10,768,088 8,993,619 8,734,857
NET ASSET VALUE and redemption price per share ................... $ 16.46 $ 18.82 $ 16.24
Sales charge - 3.75% of offering price ........................... 0.64 0.73 0.63
------------- ------------- ------------
Maximum offering price per share ................................. $ 17.10 $ 19.55 $ 16.87
============= ============= ============
Retail B Shares:
Net Assets ....................................................... $ 30,687,831 N/A $ 35,177,602
Shares of beneficial interest outstanding ........................ 1,867,291 N/A 2,167,788
------------- ------------- ------------
NET ASSET VALUE and offering price per share* .................... $ 16.43 N/A $ 16.23
============= ============= ============
Trust Shares:
Net Assets ....................................................... $ 171,741,108 $119,504,724 $246,653,712
Shares of beneficial interest outstanding ........................ 10,430,561 6,343,694 15,153,822
------------- ------------- -----------
NET ASSET VALUE, offering and redemption price per share ......... $ 16.47 $ 18.84 $ 16.28
============= ============= ============
- -------------------------------------------------------------------------------------------------------------------------------
* Redemption price per share is equal to the Net Asset Value per share less any applicable contingent deferred sales charge.
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
EQUITY VALUE EQUITY GROWTH SMALL CAP SMALL COMPANY INTERNATIONAL
FUND FUND VALUE FUND EQUITY FUND EQUITY FUND
------------- -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
$361,109,196 $ 708,619,786 $188,671,553 $383,422,280 $288,288,302
62,334,383 299,342,058 63,853,787 70,206,246 32,554,024
------------ -------------- ------------ ------------ ------------
423,443,579 1,007,961,844 252,525,340 453,628,526 320,842,326
976 851 36,343 -- 19,676
-- -- -- -- 56,405
18,057,030 -- 249,632 1,167,961 1,602,994
1,108,717 1,271,236 1,560,956 11,627,837 9,739,976
375,119 1,118,175 52,393 53,511 130,713
-- -- -- -- 153,032
4,081 -- 23,780 2,000 18,689
------------ -------------- ------------ ------------ ------------
442,989,502 1,010,352,106 254,448,444 466,479,835 332,563,811
------------ -------------- ------------ ------------ ------------
-- -- -- -- 628,404
3,047,697 15,958,600 919,081 4,528,752 9,714,573
-- -- -- 2,923 --
314,104 1,235,168 325,484 314,110 159,477
288,470 656,219 164,726 300,708 197,810
77,257 97,331 27,022 68,516 33,303
69,631 117,929 38,317 72,085 39,151
5,380 11,000 3,825 4,878 2,401
55,641 46,150 54,517 110,456 73,176
------------ -------------- ------------ ------------ ------------
3,858,180 18,122,397 1,532,972 5,402,428 10,848,295
------------ -------------- ------------ ------------ ------------
$439,131,322 $ 992,229,709 $252,915,472 $461,077,407 $321,715,516
============ ============== ============ ============ ============
$ 24,109 $ 39,435 $ 13,784 $ 21,760 $ 21,023
298,898,482 539,820,568 150,888,175 342,461,095 279,795,466
11,330 473,268 374,156 -- 2,371,603
77,863,018 152,554,380 37,785,570 48,388,306 7,499,148
62,334,383 299,342,058 63,853,787 70,206,246 32,028,276
------------ -------------- ------------ ------------ ------------
$439,131,322 $ 992,229,709 $252,915,472 $461,077,407 $321,715,516
============ ============== ============ ============ ============
$182,640,599 $ 226,330,087 $ 63,658,475 $135,593,454 $56,591,796
10,026,959 9,001,376 3,480,451 6,475,217 3,728,334
$ 18.21 $ 25.14 $ 18.29 $ 20.94 $ 15.18
0.71 0.98 0.71 0.82 0.59
------------ -------------- ------------ ------------ ------------
$ 18.92 $ 26.12 $ 19.00 $ 21.76 $ 15.77
============ ============== ============ ============ ============
$ 14,958,270 $ 20,362,960 N/A $ 14,733,367 N/A
820,173 817,350 N/A 710,574 N/A
------------ -------------- ------------ ------------ ------------
$ 18.24 $ 24.91 N/A $ 20.73 N/A
============ ============== ============ ============ ============
$241,532,453 $ 745,536,662 $189,256,997 $310,750,586 $265,123,720
13,262,128 29,616,016 10,303,620 14,574,149 17,294,517
------------ -------------- ------------ ------------ ------------
$ 18.21 $ 25.17 $ 18.37 $ 21.32 $ 15.33
============ ============== ============ ============ ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
--------------------
STATEMENTS OF OPERATIONS
THE GALAXY FUND FOR THE YEAR ENDED OCTOBER 31, 1997
--------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION EQUITY INCOME GROWTH AND INCOME
FUND FUND FUND
------------- ------------ -----------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend (Note 2) ............................................... $ 2,446,710 $ 5,438,603 $ 6,880,145
Interest (Note 2) ............................................... 10,112,548 2,747,235 1,864,272
Less: net foreign taxes withheld (Note 2) ....................... -- -- --
------------ ------------ ------------
Total investment income ....................................... 12,559,258 8,185,838 8,744,417
------------ ------------ ------------
EXPENSES:
Investment advisory fee (Note 3) ................................ 2,333,117 1,986,090 2,668,193
Administration fee (Note 3) ..................................... 253,881 216,835 290,324
Custodian fee ................................................... 21,025 17,457 61,493
Fund accounting fee (Note 3) .................................... 69,770 69,234 57,393
Legal fee (Note 3) .............................................. 12,589 11,395 13,963
Audit fee ....................................................... 20,224 21,486 16,870
Transfer agent fee (Note 3) ..................................... 719,415 289,381 672,330
12b-1 fee (Note 3)............................................... 143,512 -- 176,346
Shareholder servicing fee (Note 3) .............................. 412,384 434,674 324,069
Trustees' fees and expenses (Note 3) ............................ 6,103 5,203 7,234
Amortization of organization cost (Note 2) ...................... 576 -- --
Reports to shareholders ......................................... 103,514 110,537 112,550
Registration fee................................................. 41,341 25,389 15,115
Insurance ....................................................... 2,622 960 3,756
Miscellaneous ................................................... 23,712 39,173 7,471
----------- ------------ ------------
Total expenses before reimbursement/waiver..................... 4,163,785 3,227,814 4,427,107
----------- ------------ ------------
Less:reimbursement/waiver (Note 4) ............................ (19,254) (38,298) (306,295)
----------- ------------ ------------
Total expenses net of reimbursement/waiver .................... 4,144,531 3,189,516 4,120,812
----------- ------------ ------------
NET INVESTMENT INCOME (LOSS)........................................ 8,414,727 4,996,322 4,623,605
----------- ------------ ------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS (NOTES 2 &6):
Net realized gainon investments sold ............................ 28,959,256 24,383,465 71,256,834
Net realized gain on written options............................. -- -- 24,893
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 ............................................ 19,025,147 25,153,634 12,928,084
----------- ----------- ------------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS.............................................. 47,984,403 49,537,099 84,209,811
----------- ----------- ------------
NET INCREASE IN NET
ASSETS RESULTING FROM OPERATIONS ................................ $56,399,130 $54,533,421 $$88,833,416
=========== =========== ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
EQUITY VALUE EQUITY GROWTH SMALL CAP SMALL COMPANY INTERNATIONAL
FUND FUND VALUE FUND EQUITY FUND EQUITY FUND
------------- --------------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
$ 6,057,068 $ 11,530,165 $ 998,520 $ 579,426 $ 4,295,589
1,711,805 3,109,437 1,080,568 1,030,533 777,816
-- -- -- -- (601,192)
------------ -------------- ----------- ------------ ------------
7,768,873 14,639,602 2,079,088 1,609,959 4,472,213
------------ -------------- ----------- ------------ ------------
2,887,334 6,582,078 1,473,550 2,728,549 2,544,408
314,236 716,320 160,350 296,886 222,620
22,843 26,178 33,913 29,858 281,126
64,297 94,273 48,326 78,185 101,765
15,884 38,095 8,499 19,574 10,129
16,870 22,473 26,834 22,406 31,368
628,674 931,196 207,374 754,304 359,888
72,096 109,940 -- 78,927 --
440,920 558,695 130,739 287,068 102,465
8,202 18,312 4,658 9,024 5,263
-- -- -- 457 586
164,703 148,493 43,009 161,777 66,471
14,600 37,429 2,121 92,461 54,730
3,799 7,982 2,555 6,805 2,452
2,092 20,482 12,387 28,186 39,141
------------ -------------- ----------- ------------ ------------
4,656,550 9,311,946 2,154,315 4,594,467 3,822,412
------------ -------------- ----------- ------------ ------------
(26,924) (27,033) (103,101) (118,118) (700,371)
------------ -------------- ----------- ------------ ------------
4,629,626 9,284,913 2,051,214 4,476,349 3,122,041
------------ -------------- ----------- ------------ ------------
3,139,247 5,354,689 27,874 (2,866,390) 1,350,172
------------ -------------- ----------- ------------ ------------
77,944,828 152,556,524 38,132,709 51,415,977 7,500,231
-- -- -- -- --
-- -- -- -- 1,589,424
16,520,748 83,141,716 34,941,572 21,261,937 26,058,877
------------ -------------- ----------- ------------ ------------
94,465,576 235,698,240 73,074,281 72,677,914 35,148,532
------------ -------------- ----------- ------------ ------------
$ 97,604,823 $ 241,052,929 $73,102,155 $ 69,811,524 $ 36,498,704
============ ============== =========== ============ ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
--------------------
STATEMENTS OF CHANGES IN NET ASSETS
THE GALAXY FUND OCTOBER 31, 1997
--------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
----------------------------------------
YEARS ENDED OCTOBER 31,
----------------------------------------
1997 1996
------------- -------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF THE PERIOD ............................... $ 244,011,978 $ 153,138,605
------------- -------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income ............................................ 8,414,727 4,675,780
Net realized gain on investments sold and written options ........ 28,959,256 8,828,444
Net change in unrealized appreciation on investments ............. 19,025,147 17,143,392
------------- -------------
Net increase in net assets resulting from operations ........... 56,399,130 30,647,616
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
RETAIL A SHARES:
Net investment income ............................................ (3,460,283) (2,124,795)
Net realized gain on investments and written options ............. (4,172,278) (805,180)
------------- -------------
Total Dividends ................................................ (7,632,561) (2,929,975)
------------- -------------
RETAIL B SHARES:
Net investment income ............................................ (264,937) (15,152)
Net realized gain on investments and written options ............. (156,296) --
------------- -------------
Total Dividends ................................................ (421,233) (15,152)
------------- -------------
TRUST SHARES:
Net investment income ............................................ (3,952,828) (2,323,359)
Net realized gain on investments and written options ............. (4,447,875) (791,001)
------------- -------------
Total Dividends ................................................ (8,400,703) (3,114,360)
------------- -------------
Total Dividends to shareholders ................................ (16,454,497) (6,059,487)
------------- -------------
NET INCREASE FROM SHARE TRANSACTIONS(1) ............................. 95,711,140 66,285,244
------------- -------------
Net increase in net assets ....................................... 135,655,773 90,873,373
------------- -------------
NET ASSETS AT END OF THE PERIOD (INCLUDING LINE A) .................. $ 379,667,751 $ 244,011,978
============= =============
(A) Undistributed net investment income ............................. $ 1,372,678 $ 622,447
============= =============
- ----------------------------------------------------------------------------------------------------------------------
(1) For detail on share transactions by series, see Statements of Changes in Net assets - Capital Stock Activity on pages 44-45.
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
EQUITY INCOME FUND GROWTH AND INCOME FUND
----------------------------------------- ---------------------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
----------------------------------------- ---------------------------------------
1997 1996 1997 1996
-------------- -------------- ------------- -------------
<S> <C> <C> <C>
$ 233,045,808 $ 169,620,776 $ 269,046,012 $ 240,089,195
-------------- -------------- -------------- -------------
4,996,322 4,254,491 4,623,605 4,970,763
24,383,465 19,910,652 71,281,727 25,439,278
25,153,634 10,612,766 12,928,084 17,120,059
-------------- -------------- -------------- -------------
54,533,421 34,777,909 88,833,416 47,530,100
-------------- -------------- -------------- -------------
(2,509,541) (1,939,416) (1,420,690) (1,026,722)
(10,947,176) (3,071,779) (6,955,593) (3,122,453)
-------------- -------------- -------------- -------------
(13,456,717) (5,011,195) (8,376,283) (4,149,175)
-------------- -------------- -------------- -------------
N/A N/A (84,981) (12,819)
N/A N/A (514,691) --
-------------- -------------- -------------- -------------
N/A N/A (599,672) (12,819)
-------------- -------------- -------------- -------------
(2,407,552) (2,274,333) (3,399,485) (3,688,324)
(8,963,175) (3,159,136) (15,545,258) (10,955,643)
-------------- -------------- -------------- -------------
(11,370,727) (5,433,469) (18,944,743) (14,643,967)
-------------- -------------- -------------- -------------
(24,827,444) (10,444,664) (27,920,698) (18,805,961)
-------------- -------------- -------------- -------------
26,028,714 39,091,787 93,756,674 232,678
-------------- -------------- -------------- -------------
55,734,691 63,425,032 154,669,392 28,956,817
-------------- -------------- -------------- -------------
$ 288,780,499 $ 233,045,808 $ 423,715,404 $ 269,046,012
============== ============== ============== =============
$ 505,696 $ 425,338 $ 325,489 $ 607,040
============== ============== ============== =============
</TABLE>
<PAGE>
--------------------
STATEMENTS OF CHANGES IN NET ASSETS
THE GALAXY FUND OCTOBER 31, 1997
--------------------
<TABLE>
<CAPTION>
EQUITY VALUE FUND
--------------------------------------------
YEARS ENDED OCTOBER 31,
--------------------------------------------
1997 1996
------------- -------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF THE PERIOD ................................. $ 328,740,298 $ 261,884,877
------------- -------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income ................................................ 3,139,247 3,736,661
Net realized gain on investments sold ................................ 77,944,828 38,931,940
Net change in unrealized appreciation on investments ................. 16,520,748 15,119,614
------------- -------------
Net increase in net assets resulting from operations .............. 97,604,823 57,788,215
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
RETAIL A SHARES:
Net investment income ................................................ (1,106,478) (1,097,197)
Dividends in excess of net investment income ......................... -- --
Net realized gain on investments ..................................... (15,644,273) (7,667,373)
------------- -------------
Total Dividends ................................................... (16,750,751) (8,764,570)
------------- -------------
RETAIL B SHARES:
Net investment income ................................................ (4,176) (1,799)
Net realized gain on investments ..................................... (266,616) --
------------- -------------
Total Dividends ................................................... (270,792) (1,799)
------------- -------------
TRUST SHARES:
Net investment income ................................................ (2,305,587) (2,569,302)
Dividends in excess of net investment income ......................... -- --
Net realized gain on investments ..................................... (23,060,210) (12,767,986)
------------- -------------
Total Dividends ................................................... (25,365,797) (15,337,288)
------------- -------------
Total Dividends to shareholders ................................... (42,387,340) (24,103,657)
------------- -------------
NET INCREASE (DECREASE) FROM SHARE TRANSACTIONS(1) ..................... 55,173,541 33,170,863
------------- -------------
Net increase in net assets ........................................... 110,391,024 66,855,421
------------- -------------
NET ASSETS AT END OF THE PERIOD (INCLUDING LINE A) .................... $ 439,131,322 $ 328,740,298
============= =============
(A) Undistributed net investment income ................................ $ 11,330 $ 288,324
============= =============
- -------------------------------------------------------------------------------------------------------------------------
(1) For detail on share transactions by series, see Statements of Changes in Net Assets - Capital Stock Activity on
pages 45-46.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITY GROWTH FUND SMALL CAP VALUE FUND
---------------------------------------- ----------------------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
---------------------------------------- ----------------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- -------------
<S> <C> <C> <C>
$ 727,214,473 $ 518,927,133 $ 171,743,742 $ 148,910,020
------------- -------------- -------------- -------------
5,354,689 5,258,877 27,874 631,542
152,556,524 48,132,075 38,132,709 25,576,246
83,141,716 69,078,894 34,941,572 9,455,938
-------------- -------------- -------------- -------------
241,052,929 122,469,846 73,102,155 35,663,726
-------------- -------------- -------------- -------------
(576,083) (745,079) -- (48,278)
-- -- -- (8,276)
(10,203,437) (1,757,610) (4,993,083) (1,894,554)
-------------- -------------- -------------- -------------
(10,779,520) (2,502,689) (4,993,083) (1,951,108)
-------------- -------------- -------------- -------------
-- -- N/A N/A
(297,157) -- N/A N/A
-------------- -------------- -------------- -------------
(297,157) -- N/A N/A
-------------- -------------- -------------- -------------
(4,700,379) (4,784,442) -- (564,833)
-- -- -- (96,746)
(35,183,098) (7,280,310) (20,583,646) (8,656,766)
-------------- -------------- -------------- -------------
(39,883,477) (12,064,752) (20,583,646) (9,318,345)
-------------- -------------- -------------- -------------
(50,960,154) (14,567,441) (25,576,729) (11,269,453)
-------------- -------------- -------------- -------------
74,922,461 100,384,935 33,646,304 (1,560,551)
-------------- -------------- -------------- -------------
265,015,236 208,287,340 81,171,730 22,833,722
-------------- -------------- -------------- -------------
$ 992,229,709 $ 727,214,473 $ 252,915,472 $ 171,743,742
============== ============== ============== =============
$ 473,268 $ 395,041 $ 374,156 $ --
============== ============== ============== =============
</TABLE>
<PAGE>
--------------------
STATEMENTS OF CHANGES IN NET ASSETS
THE GALAXY FUND OCTOBER 31, 1997
--------------------
<TABLE>
<CAPTION>
SMALL COMPANY EQUITY FUND
----------------------------------------
YEARS ENDED OCTOBER 31,
----------------------------------------
1997 1996
-------------- -------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF THE PERIOD ..................................... $ 289,749,249 $ 140,499,013
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income gain (loss) ........................................ (2,866,390) (1,593,544)
Net realized gain on investments sold .................................... 51,415,977 36,017,542
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 ............... 21,261,937 5,841,537
-------------- --------------
Net increase in net assets resulting from operations .................. 69,811,524 40,265,535
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
RETAIL A SHARES:
Net investment income .................................................... -- --
Net realized gain on investments and forward foreign currency ............ (13,205,190) (513,596)
-------------- --------------
Total Dividends ....................................................... (13,205,190) (513,596)
-------------- --------------
RETAIL B SHARES:
Net realized gain on investments and forward foreign currency ............ (511,664) --
-------------- --------------
Total Dividends ....................................................... (511,664) --
-------------- --------------
TRUST SHARES:
Net investment income .................................................... -- --
Net realized gain on investments and forward foreign currency ............ (21,205,020) (1,014,801)
-------------- --------------
Total Dividends ....................................................... (21,205,020) (1,014,801)
-------------- --------------
Total Dividends to shareholders ....................................... (34,921,874) (1,528,397)
-------------- --------------
NET INCREASE FROM SHARE TRANSACTIONS(1) .................................... 136,438,508 110,513,098
-------------- --------------
Net increase in net assets ............................................... 171,328,158 149,250,236
-------------- --------------
NET ASSETS AT END OF THE PERIOD (INCLUDING LINE A) ......................... $ 461,077,407 $ 289,749,249
============== ==============
(A) Undistributed net investment income .................................... $ -- $ --
=============== ==============
- ----------------------------------------------------------------------------------------------
(1) For detail on share transactions by series, see Statements of Changes in Net Assets - Capital Stock Activity on page 47.
See Notes to Financial Statements.
</TABLE>
<PAGE>
INTERNATIONAL EQUITY FUND
----------------------------------------
YEARS ENDED OCTOBER 31,
----------------------------------------
1997 1996
-------------- --------------
$ 207,704,676 $ 119,717,837
-------------- --------------
1,350,172 2,133,246
7,500,231 10,933,936
1,589,424 477,968
26,058,877 1,358,635
-------------- --------------
36,498,704 14,903,785
-------------- --------------
(451,614) (271,437)
(1,728,957) (538,170)
-------------- --------------
(2,180,571) (809,607)
-------------- --------------
N/A N/A
-------------- --------------
N/A N/A
-------------- --------------
(2,613,586) (1,437,075)
(8,813,614) (1,766,390)
-------------- --------------
(11,427,200) (3,203,465)
-------------- --------------
(13,607,771) (4,013,072)
-------------- --------------
91,119,907 77,096,126
-------------- --------------
114,010,840 87,986,839
-------------- --------------
$ 321,715,516 $ 207,704,676
============== ==============
$ 2,371,603 $ 2,497,207
============== ==============
<PAGE>
--------------------
STATEMENTS OF CHANGES IN NET ASSETS -
THE GALAXY FUND CAPITAL STOCK ACTIVITY
--------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND EQUITY INCOME FUND
----------------------------------------- -----------------------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
----------------------------------------- -----------------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
DOLLAR AMOUNTS
Retail A Shares:
<S> <C> <C> <C> <C>
Sold ...................... $ 57,713,278 $ 41,468,535 $ 35,539,246 $ 43,450,662
Issued to shareholders in
reinvestment of dividends 7,455,587 2,837,001 12,956,963 4,801,918
Repurchased ............... (22,927,516) (15,903,019) (23,174,748) (15,665,697)
-------------- -------------- -------------- --------------
Net increase in
shares outstanding ...... $ 42,241,349 $ 28,402,517 $ 25,321,461 $ 32,586,883
============== ============= ============== =============
Retail B Shares:
Sold ...................... $ 26,811,230 $ 3,509,640 N/A N/A
Issued to shareholders in
reinvestment of dividends 406,160 14,490 N/A N/A
Repurchased ............... (2,154,383) (121,309) N/A N/A
-------------- ------------- -------------- -------------
Net increase in
shares outstanding ...... $ 25,063,007 $ 3,402,821 N/A N/A
============== ============= ============== ==============
Trust Shares:
Sold ...................... $ 61,687,598 $ 67,329,259 $ 15,795,464 $ 15,153,962
Issued to shareholders in
reinvestment of dividends 7,057,551 2,461,350 6,452,967 2,551,413
Repurchased ............... (40,338,365) (35,310,703) (21,541,178) (11,200,471)
-------------- ------------- -------------- --------------
Net increase in
shares outstanding ...... $ 28,406,784 $ 34,479,906 $ 707,253 $ 6,504,904
============== ============= ============== ==============
SHARE ACTIVITY
Retail A Shares:
Sold ...................... 3,704,322 3,042,746 2,004,408 2,714,966
Issued to shareholders in
reinvestment of dividends 503,522 210,404 792,968 308,813
Repurchased ............... (1,486,276) (1,161,408) (1,309,795) (976,982)
-------------- ------------- -------------- --------------
Net increase in
shares outstanding ...... 2,721,568 2,091,742 1,487,581 2,046,797
============== ============= ============== ==============
Retail B Shares:
Sold 1,735,659 252,898 N/A N/A
Issued to shareholders in
reinvestment of dividends 26,813 1,036 N/A N/A
Repurchased ............... (140,353) (8,762) N/A N/A
-------------- ------------- -------------- --------------
Net increase in
shares outstanding ...... 1,622,119 245,172 N/A N/A
============== ============= ============== ==============
Trust Shares:
Sold ...................... 4,054,008 4,908,780 894,132 942,247
Issued to shareholders in
reinvestment of dividends 476,312 182,572 399,074 166,080
Repurchased ............... (2,608,229) (2,565,189) (1,217,787) (696,629)
-------------- ------------- -------------- --------------
Net increase in
shares outstanding ...... 1,922,091 2,526,163 75,419 411,698
============== ============= ============== ==============
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
--------------------
STATEMENTS OF CHANGES IN NET ASSETS -
THE GALAXY FUND CAPITAL STOCK ACTIVITY (CONTINUED)
--------------------
GROWTH AND INCOME FUND EQUITY VALUE FUND
---------------------------------------- ----------------------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
---------------------------------------- ----------------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
DOLLAR AMOUNTS
Retail A Shares:
<S> <C> <C> <C> <C>
Sold ...................... $ 54,774,958 $ 26,575,675 $ 34,972,818 $ 30,226,307
Issued to shareholders in
reinvestment of dividends 8,237,158 4,114,650 16,568,831 8,656,906
Repurchased ............... (17,102,549) (11,113,016) (23,738,345) (16,887,461)
-------------- -------------- -------------- --------------
Net increase in
shares outstanding ...... $ 45,909,567 $ 19,577,309 $ 27,803,304 $ 21,995,752
============== ============== ============== ==============
Retail B Shares:
Sold ...................... $ 28,282,666 $ 4,475,967 $ 11,894,526 $ 1,841,623
Issued to shareholders in
reinvestment of dividends 589,505 12,313 267,372 1,761
Repurchased ............... (1,499,015) (63,831) (609,174) (32,058)
-------------- -------------- -------------- --------------
Net increase in
shares outstanding ...... $ 27,373,156 $ 4,424,449 $ 11,552,724 $ 1,811,326
============== ============== ============== =============
Trust Shares:
Sold ...................... $ 88,184,425 $ 45,240,851 $ 66,639,995 $ 46,072,552
Issued to shareholders in
reinvestment of dividends 17,190,899 11,235,662 19,386,069 12,028,475
Repurchased ............... (84,901,373) (80,245,593) (70,208,551) (48,737,242)
-------------- -------------- -------------- --------------
Net increase (decrease) in
shares outstanding ...... $ 20,473,951 $ (23,769,080) $ 15,817,513 $ 9,363,785
============== ============== ============== =============
SHARE ACTIVITY
Retail A Shares:
Sold ...................... 3,629,393 2,022,637 2,092,664 2,045,357
Issued to shareholders in
reinvestment of dividends 605,724 333,718 1,097,361 624,668
Repurchased ............... (1,143,729) (849,811) (1,432,364) (1,139,827)
-------------- -------------- -------------- --------------
Net increase in
shares outstanding ...... 3,091,388 1,506,544 1,757,661 1,530,198
============== ============== ============== ==============
Retail B Shares:
Sold ...................... 1,890,792 334,965 717,960 121,818
Issued to shareholders in
reinvestment of dividends 43,421 913 17,751 114
Repurchased ............... (97,779) (4,524) (35,314) (2,156)
-------------- -------------- -------------- --------------
Net increase in
shares outstanding ...... 1,836,434 331,354 700,397 119,776
============== ============== ============== ==============
Trust Shares:
Sold ...................... 6,029,540 3,456,356 4,120,116 3,112,141
Issued to shareholders in
reinvestment of dividends 1,268,797 924,527 1,282,399 866,812
Repurchased ............... (5,677,998) (6,147,255) (4,347,383) (3,306,476)
-------------- -------------- -------------- --------------
Net increase (decrease) in
shares outstanding ...... 1,620,339 (1,766,372) 1,055,132 672,477
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements.
<PAGE>
--------------------
STATEMENTS OF CHANGES IN NET ASSETS -
THE GALAXY FUND CAPITAL STOCK ACTIVITY (CONTINUED)
--------------------
<TABLE>
<CAPTION>
EQUITY GROWTH FUND SMALL CAP VALUE FUND
--------------------------------------- ----------------------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
--------------------------------------- ----------------------------------------
1997 1996 1997 1996
------------- ------------- -------------- -------------
DOLLAR AMOUNTS
Retail A Shares:
<S> <C> <C> <C> <C>
Sold ...................... $ 40,088,595 $ 47,189,209 $ 31,357,694 $ 5,161,336
Issued in connection with
acquisition (Note 8) .... -- 10,225,316 -- --
Issued to shareholders in
reinvestment of dividends 10,643,227 2,454,356 4,980,153 1,944,464
Repurchased ............... (26,731,145) (20,716,176) (18,434,665) (5,148,767)
------------- ------------- ------------- --------------
Net increase in
shares outstanding ...... $ 24,000,677 $ 39,152,705 $ 17,903,182 $ 1,957,033
============= ============= ============= ==============
Retail B Shares:
Sold ...................... $ 14,432,259 $ 3,960,553 N/A N/A
Issued to shareholders in
reinvestment of dividends 296,380 -- N/A N/A
Repurchased ............... (1,016,169) (173,837) N/A N/A
------------- ------------- ------------- --------------
Net increase in
shares outstanding ...... $ 13,712,470 $ 3,786,716 N/A N/A
============= ============= ============= ==============
Trust Shares:
Sold ...................... $ 164,574,450 $ 131,387,247 $ 59,290,339 $ 28,375,657
Issued in connection with
acquisition (Note 8) .... -- 19,288,050 -- --
Issued to shareholders in
reinvestment of dividends 27,032,380 7,869,807 20,272,927 8,667,254
Repurchased ............... (154,397,516) (101,099,590) (63,820,144) (40,560,495)
------------- ------------- ------------- --------------
Net increase (decrease) in
shares outstanding ...... $ 37,209,314 $ 57,445,514 $ 15,743,122 $ (3,517,584)
============= ============= ============= =============
SHARE ACTIVITY
Retail A Shares:
Sold ...................... 1,782,044 2,555,583 1,881,873 380,571
Issued in connection with
acquisition (Note 8) .... 578,307 -- --
Issued to shareholders in
reinvestment of dividends 523,825 136,463 368,084 157,870
Repurchased ............... (1,197,990) (1,097,610) (1,101,834) (379,218)
------------- ------------- ------------- --------------
Net increase in
shares outstanding ...... 1,107,879 2,172,743 1,148,123 159,223
============= ============= ============= =============
Retail B Shares:
Sold ...................... 649,862 206,085 N/A N/A
Issued to shareholders in
reinvestment of dividends 14 753 -- N/A N/A
Repurchased ............... (44,450) (8,900) N/A N/A
------------- ------------- ------------- --------------
Net increase in
shares outstanding ...... 620,165 197,185 N/A N/A
============= ============= ============= ==============
Trust Shares:
Sold ...................... 7,599,518 7,179,412 3,798,315 2,090,020
Issued in connection with
acquisition (Note 8) .... -- 1,090,562 -- --
Issued to shareholders in
reinvestment of dividends 1,322,142 436,189 1,496,157 705,170
Repurchased ............... (6,885,796) (5,400,445) (4,295,147) (3,036,094)
------------- ------------- ------------- --------------
Net increase (decrease) in
shares outstanding ...... 2,035,864 3,305,718 999,325 (240,904)
============= ============= ============= ==============
</TABLE>
See Notes to Financial Statements.
<PAGE>
--------------------
STATEMENTS OF CHANGES IN NET ASSETS -
THE GALAXY FUND CAPITAL STOCK ACTIVITY (CONTINUED)
--------------------
<TABLE>
<CAPTION>
SMALL COMPANY EQUITY FUND INTERNATIONAL EQUITY FUND
----------------------------------------- ----------------------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
----------------------------------------- ----------------------------------------
1997 1996 1997 1996
--------------- --------------- -------------- --------------
DOLLAR AMOUNTS
Retail A Shares:
<S> <C> <C> <C> <C>
Sold ...................... $ 375,986,702 $ 397,053,745 $ 82,857,874 $ 13,188,755
Issued to shareholders in
reinvestment of dividends 12,695,841 502,766 2,141,590 774,929
Repurchased ............... (372,674,895) (346,365,223) (67,026,314) (11,262,073)
------------- ------------- ------------- --------------
Net increase in
shares outstanding ...... $ 16,007,648 $ 51,191,288 $ 17,973,150 $ 2,701,611
============= ============= ============= ==============
Retail B Shares:
Sold ...................... $ 10,578,874 $ 3,690,344 N/A N/A
Issued to shareholders in
reinvestment of dividends 507,890 -- N/A N/A
Repurchased ............... (1,427,627) (92,260) N/A N/A
------------- ------------- ------------- --------------
Net increase in
shares outstanding ...... $ 9,659,137 $ 3,598,084 N/A N/A
============= ============= ============= ==============
Trust Shares:
Sold ...................... $ 286,798,732 $ 140,211,402 $ 185,357,231 $ 114,166,862
Issued to shareholders in
reinvestment of dividends 14,295,814 652,265 6,098,028 1,580,379
Repurchased ............... (190,322,823) (85,139,941) (118,308,502) (41,352,726)
------------- ------------- ------------- --------------
Net increase in
shares outstanding ...... $ 110,771,723 $ 55,723,726 $ 73,146,757 $ 74,394,515
============= ============= ============= ==============
SHARE ACTIVITY
Retail A Shares:
Sold ...................... 19,924,624 21,317,981 5,189,678 957,795
Issued to shareholders in
reinvestment of dividends 724,649 30,882 159,107 58,885
Repurchased ............... (19,741,525) (18,586,441) (4,142,407) (825,685)
------------- ------------- ------------- --------------
Net increase in
shares outstanding ...... 907,748 2,762,422 1,206,378 190,995
============= ============= ============= =============
Retail B Shares:
Sold 572,164 187,682 N/A N/A
Issued to shareholders in
reinvestment of dividends 29,089 -- N/A N/A
Repurchased ............... (74,427) (3,934) N/A N/A
------------- ------------- ------------- -------------
Net increase in
shares outstanding ...... 526,826 183,748 N/A N/A
============= ============= ============= =============
Trust Shares:
Sold ...................... 15,273,312 7,215,898 12,280,035 8,260,799
Issued to shareholders in
reinvestment of dividends 804,039 39,743 450,372 120,090
Repurchased ............... (10,166,105) (4,383,755) (7,749,015) (2,973,379)
------------- ------------- ------------- -------------
Net increase in
shares outstanding ...... 5,911,246 2,871,886 4,981,392 5,407,510
============= ============= ============= =============
</TABLE>
See Notes to Financial Statements.
<PAGE>
--------------------
ASSET ALLOCATION FUND
THE GALAXY FUND FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
--------------------
<TABLE>
<CAPTION>
RETAIL A SHARES
YEARS ENDED OCTOBER 31,
-------------------------------------------------------------
1997 1996 1995 1994 1993(1)
------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ................. $ 14.52 $ 12.82 $ 10.67 $ 11.15 $ 10.16
--------- --------- --------- --------- --------
Income from Investment Operations:
Net investment income (C).......................... 0.40 0.30 0.30 0.27 0.25
Net realized and unrealized gain (loss)
on investments .................................. 2.43 1.83 2.16 (0.49) 0.99
--------- --------- --------- --------- --------
Total from Investment Operations: ............... 2.83 2.13 2.46 (0.22) 1.24
--------- --------- --------- --------- --------
Less Dividends:
Dividends from net investment income .............. (0.38) (0.30) (0.31) (0.26) (0.25)
Dividends from net realized capital gains ......... (0.51) (0.13) -- -- --
--------- --------- --------- --------- --------
Total Dividends: ................................ (0.89) (0.43) (0.31) (0.26) (0.25)
--------- --------- --------- --------- --------
Net increase (decrease) in net asset value ........... 1.94 1.70 2.15 (0.48) 0.99
--------- --------- --------- --------- --------
Net Asset Value, End of Period ....................... $ 16.46 $ 14.52 $ 12.82 $ 10.67 $ 11.15
========= ========= ========= ========= =========
Total Return (B)...................................... 20.23% 16.92% 23.42% (2.02)% 12.37%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .................... $ 177,239 $ 116,852 $ 76,368 $ 73,574 $ 92,348
Ratios to average net assets:
Net investment income including
reimbursement/waiver............................. 2.66% 2.29% 2.52% 2.66% 2.59%
Operating expenses including reimbursement/waiver.. 1.37% 1.42% 1.48% 1.21% 1.14%
Operating expenses excluding reimbursement/waiver.. 1.37% 1.42% 1.50% 1.22% 1.25%
Portfolio Turnover Rate .............................. 58% 48% 41% 23% 7%
Average Commission Rate Paid (A)...................... $ 0.0609 $ 0.0635 N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
* 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 years ended October 31, 1997, 1996, 1995, 1994, and 1993(1) were $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 years ended October 31, 1997, 1996, 1995, 1994, and 1993(1) were $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 year ended October 31, 1997 and for the period ended
October 31, 1996 were $0.28 and $0.12, respectively.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRUST SHARES RETAIL B SHARES
YEARS ENDED OCTOBER 31,
---------------------------------------------------------- YEAR ENDED PERIOD ENDED
1997 1996 1995 1994 1993(1) OCTOBER 31,1997 OCTOBER 31,1996(2)
------ ------ ------ ------ -------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
$ 14.53 $ 12.83 $ 10.68 $ 11.15 $ 10.16 $ 14.51 $ 13.59
-------- -------- ------- -------- ------- ------- -------
0.43 0.33 0.32 0.28 0.25 0.29 0.13
2.42 1.83 2.16 (0.49) 0.99 2.42 0.91
-------- -------- ------- -------- ------- ------- -------
2.85 2.16 2.48 (0.21) 1.24 2.71 1.04
-------- -------- ------- -------- ------- ------- -------
(0.40) (0.33) (0.33) (0.26) (0.25) (0.28) (0.12)
(0.51) (0.13) -- -- -- (0.51) --
-------- -------- ------- -------- ------- ------- -------
(0.91) (0.46) (0.33) (0.26) (0.25) (0.79) (0.12)
-------- -------- ------- -------- ------- ------- -------
1.94 1.70 2.15 (0.47) 0.99 1.92 0.92
-------- -------- ------- -------- ------- ------- -------
$ 16.47 $ 14.53 $ 12.83 $ 10.68 $ 11.15 $ 16.43 $ 14.51
======== ======== ======= ======== ======= ======= =======
20.42% 17.19% 23.68% (1.93)% 12.37% 19.34% 7.71%**
$171,741 $123,603 $76,771 $ 65,464 $92,348 $30,688 $ 3,557
2.82% 2.52% 2.74% 2.70% 2.59% 1.95% 1.73%*
1.21% 1.19% 1.26% 1.18% 1.14% 2.10% 1.95%*
1.22% 1.21% 1.30% 1.18% 1.25% 2.19% 2.15%*
58% 48% 41% 23% 7% 58% 48%
$ 0.0609 $ 0.0635 N/A N/A N/A $0.0609 $0.0635
</TABLE>
<PAGE>
--------------------
EQUITY INCOME FUND
THE GALAXY FUND FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
--------------------
RETAIL A SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
------------------------------------------------------------
1997 1996 1995 1994 1993(1)
---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .................. $ 16.91 $ 14.98 $ 12.74 $ 12.85 $ 11.86
--------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (C)........................... 0.30 0.30 0.28 0.30 0.30
Net realized and unrealized gain
on investments ................................... 3.35 2.47 2.47 0.07 1.09
--------- --------- --------- --------- ---------
Total from Investment Operations: .............. 3.65 2.77 2.75 0.37 1.39
--------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income ............... (0.30) (0.30) (0.30) (0.29) (0.28)
Dividends from net realized capital gains .......... (1.44) (0.54) (0.21) (0.19) (0.11)
--------- --------- --------- --------- ---------
Total Dividends:................................ (1.74) (0.84) (0.51) (0.48) (0.39)
--------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ............ 1.91 1.93 2.24 (0.11) 1.00
--------- --------- --------- --------- ---------
Net Asset Value, End of Period ........................ $ 18.82 $ 16.91 $ 14.98 $ 12.74 $ 12.85
========= ========= ========= ========= ========
Total Return (B)....................................... 23.28% 19.01% 22.23% 2.94% 11.85%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ..................... $ 169,276 $ 126,952 $ 81,802 $ 63,532 $ 123,970
Ratios to average net assets:
Net investment income
including reimbursement/waiver.................... 1.70% 1.86% 2.08% 2.45% 2.34%
Operating expenses including reimbursement/waiver... 1.39% 1.40% 1.49% 1.11% 1.16%
Operating expenses excluding reimbursement/waiver... 1.41% 1.40% 1.51% 1.12% 1.22%
Portfolio Turnover Rate ............................... 37% 45% 21% 31% 27%
Average Commission Rate Paid (A)....................... $ 0.0598 $ 0.0620 N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
(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 years ended October 31, 1997, 1996, 1995, 1994 and 1993(1) were $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 years ended October 31, 1997, 1996, 1995, 1994 and 1993(1) were $0.38, $0.37,
$0.36, $0.31 and $0.29, respectively.
See Notes to Financial Statements.
</TABLE>
<PAGE>
TRUST SHARES
YEARS ENDED OCTOBER 31,
-----------------------------------------------------------------
1997 1996 1995 1994 1993(1)
------ ------ ------ ------ --------
$ 16.93 $ 14.99 $ 12.75 $ 12.85 $ 11.85
-------- -------- ------- -------- --------
0.38 0.37 0.36 0.31 0.30
3.35 2.48 2.45 0.07 1.09
-------- -------- ------- -------- --------
3.73 2.85 2.81 0.38 1.39
-------- -------- ------- -------- --------
(0.38) (0.37) (0.36) (0.29) (0.28)
(1.44) (0.54) (0.21) (0.19) (0.11)
-------- -------- ------- -------- --------
(1.82) (0.91) (0.57) (0.48) (0.39)
-------- -------- ------- -------- --------
1.91 1.94 2.24 (0.10) 1.00
-------- -------- ------- -------- --------
$ 18.84 $ 16.93 $ 14.99 $ 12.75 $ 12.85
======== ======== ======= ======== ========
23.80% 19.65% 22.81% 3.02% 11.85%
$119,505 $106,094 $87,819 $ 78,880 $123,970
2.14% 2.32% 2.60% 2.49% 2.34%
0.95% 0.94% 0.98% 1.07% 1.16%
0.97% 0.94% 1.00% 1.07% 1.22%
37% 45% 21% 31% 27%
$ 0.0598 $0.0620 N/A N/A N/A
<PAGE>
--------------------
GROWTH AND INCOME FUND
THE GALAXY FUND FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
--------------------
RETAIL A SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
------------------------------------------------------------
1997 1996(3) 1995 1994 1993(1)
---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .................. $ 13.78 $ 12.35 $ 11.15 $ 10.69 $ 10.23
--------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (C & D)....................... 0.18 0.21 0.24 0.22 0.15
Net realized and unrealized gain on investments..... 3.67 2.16 1.70 0.72 0.48
--------- --------- --------- --------- ---------
Total from Investment Operations:................. 3.85 2.37 1.94 0.94 0.63
--------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income................ (0.20) (0.21) (0.25) (0.20) (0.17)
Dividends from net realized capital gains........... (1.19) (0.73) (0.49) (0.28) --
--------- --------- --------- --------- ---------
Total Dividends:.................................. (1.39) (0.94) (0.74) (0.48) (0.17)
--------- --------- --------- --------- ---------
Net increase in net asset value........................ 2.46 1.43 1.20 0.46 0.46
--------- --------- --------- --------- ---------
Net Asset Value, End of Period......................... $ 16.24 $ 13.78 $ 12.35 $ 11.15 $ 10.69
========= ========= ========= ========= =========
Total Return (B)....................................... 30.10% 20.25% 18.52% 9.12% 6.20%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)...................... $141,884 $ 77,776 $ 51,078 $ 22,244 $ 16,280
Ratios to average net assets:
Net investment income including
reimbursement/waiver.............................. 1.18% 1.65% 2.10% 2.06% 1.77%*
Operating expenses including reimbursement/waiver... 1.27% 1.34% 1.32% 1.29% 1.25%*
Operating expenses excluding reimbursement/waiver... 1.45% 1.45% 1.77% 1.74% 1.78%*
Portfolio Turnover Rate................................ 93% 59% 51% 73% 38%**
Average Commission Rate Paid (A)......................... $ 0.0618 $ 0.0654 N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
* 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. (See Note 8).
(4) The Fund began issuing Retail B Shares on March 4, 1996. (5) Unaudited.
(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 years ended October 31, 1997, 1996, 1995(5), 1994(5) and for the period ended October 31,
1993(2)(5) were $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 years ended October
31, 1997, 1996, 1995(5), 1994(5) and for the period ended October 31,1993(2)(5) were $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 year ended October 31, 1997 and for the period ended October 31, 1996 were
$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.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRUST SHARES
YEARS ENDED OCTOBER 31, RETAIL B SHARES
----------------------------------------------------- YEAR ENDED PERIOD ENDED
1997 1996(3) 1995 1994 1993(1(2) OCTOBER 31,1997 OCTOBER 31,1996(2)
------ ------ ------ ------ -------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
$ 13.80 $ 12.35 $ 11.15 $ 10.69 $ 10.00 $ 13.77 $ 12.97
-------- -------- -------- -------- -------- ------- -------
0.22 0.27 0.28 0.25 0.18 0.10 0.07
3.68 2.16 1.69 0.72 0.69 3.65 0.81
-------- -------- -------- -------- -------- ------- -------
3.90 2.43 1.97 0.97 0.87 3.75 0.88
-------- -------- -------- -------- -------- ------- -------
(0.23) (0.25) (0.28) (0.23) (0.18) (0.10) (0.08)
(1.19) (0.73) (0.49) (0.28) -- (1.19) --
-------- -------- -------- -------- -------- ------- -------
(1.42) (0.98) (0.77) (0.51) (0.18) (1.29) (0.08)
-------- -------- -------- -------- -------- ------- -------
2.48 1.45 1.20 0.46 0.69 2.46 0.80
-------- -------- -------- -------- -------- ------- -------
$ 16.28 $ 13.80 12.35 $ 11.15 $ 10.69 $ 16.23 $ 13.77
======== ======= ======== ======== ======== ======= =======
30.43% 20.77% 18.80% 9.45% 8.80%** 29.11% 6.83%**
$246,654 $186,708 $189,011 $156,827 $147,090 $35,178 $ 4,562
1.44% 2.01% 2.42% 2.31% 2.11%* 0.31% 0.79%*
1.03% 1.02% 1.07% 1.04% 0.98%* 2.05% 1.96%*
1.06% 1.03% 1.27% 1.24% 1.25%* 2.28% 2.11%*
93% 59% 51% 73% 38%** 93% 59%
$ 0.0618 $ 0.0654 N/A N/A N/A $0.0618 $0.0654
</TABLE>
<PAGE>
--------------------
EQUITY VALUE FUND
THE GALAXY FUND FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
--------------------
RETAIL A SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
------------------------------------------------------------
1997 1996 1995 1994 1993(1)
---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .................. $ 15.96 $ 14.33 $ 13.31 $ 13.12 $ 11.41
--------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (C) .......................... 0.11 0.14 0.22 0.18 0.19
Net realized and unrealized gain
on investments ................................... 4.16 2.74 2.24 0.45 2.14
--------- --------- --------- --------- ---------
Total from Investment Operations: .............. 4.27 2.88 2.46 0.63 2.33
--------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income ............... (0.12) (0.14) (0.23) (0.16) (0.20)
Dividends from net realized capital gains .......... (1.90) (1.11) (1.21) (0.28) (0.42)
--------- --------- --------- --------- ---------
Total Dividends: ............................... (2.02) (1.25) (1.44) (0.44) (0.62)
--------- --------- --------- --------- ---------
Net increase in net asset value ...................... 2.25 1.63 1.02 0.19 1.71
--------- --------- --------- --------- ---------
Net Asset Value, End of Period ....................... $ 18.21 $ 15.96 $ 14.33 $ 13.31 $ 13.12
========= ========= ========= ========= =========
Total Return (B) 29.48% 21.49% 20.81% 4.97% 21.18%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .................... $ 182,641 $ 131,998 $ 96,555 $ 74,001 $ 176,107
Ratios to average net assets:
Net investment income (loss)
including reimbursement/waiver ................... 0.63% 1.00% 1.62% 1.45% 1.52%
Operating expenses
including reimbursement/waiver ................... 1.38% 1.45% 1.49% 1.08% 0.97%
Operating expenses
excluding reimbursement/waiver ................... 1.38% 1.45% 1.50% 1.11% 0.97%
Portfolio Turnover Rate .............................. 111% 116% 76% 71% 50%
Average Commission Rate Paid (A) ...................... $ 0.0601 $ 0.0605 N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
* 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 years ended October 31, 1997, 1996, 1995, 1994 and 1993(1) were $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 years ended October 31, 1997, 1996, 1995, 1994 and 1993(1) were $0.17, $0.21,
$0.28, $0.19 and $0.19, respectively. Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail B Shares for the year ended October 31, 1997 and for the period ended
October 31, 1996 were $(0.03) and $0.01, respectively.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRUST SHARES
YEARS ENDED OCTOBER 31, RETAIL B SHARES
----------------------------------------------------- YEAR ENDED PERIOD ENDED
1997 1996 1995 1994 1993(1) OCTOBER 31,1997 OCTOBER 31,1996(2)
------ ------ ------ ------ -------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
$ 15.96 $ 14.33 $ 13.32 $ 13.12 $ 11.41 $ 15.99 $ 14.74
-------- -------- -------- -------- -------- -------- ----------
0.17 0.21 0.28 0.19 0.19 -- 0.04
4.16 2.74 2.24 0.45 2.14 4.17 1.25
-------- -------- -------- -------- -------- -------- ----------
4.33 2.95 2.52 0.64 2.33 4.17 1.29
-------- -------- -------- --------- -------- -------- ----------
(0.18) (0.21) (0.30) (0.16) (0.20) (0.02) (0.04)
(1.90) (1.11) (1.21) (0.28) (0.42) (1.90) --
-------- -------- -------- --------- -------- -------- ----------
(2.08) (1.32) (1.51) (0.44) (0.62) (1.92) (0.04)
-------- -------- -------- --------- -------- -------- ----------
2.25 1.63 1.01 0.20 1.71 2.25 1.25
-------- -------- -------- --------- -------- -------- ----------
$ 18.21 $ 15.96 $ 14.33 $ 13.32 $ 13.12 $ 18.24 $ 15.99
======== ======== ======== ========= ======== ======== ==========
29.87% 22.05% 21.31% 5.05% 21.18% 28.60% 8.80%**
$241,532 $194,827 $165,330 $ 154,403 $176,107 $ 14,958 $ 1,916
0.98% 1.42% 2.10% 1.46% 1.52% (0.13)% 0.43%*
1.04% 1.03% 1.02% 1.06% 0.97% 2.07% 1.94%*
1.04% 1.03% 1.02% 1.06% 0.97% 2.38% 2.24%*
111% 116% 76% 71% 50% 111% 116%
$ 0.0601 $ 0.0605 N/A N/A N/A $ 0.0601 $ 0.0605
</TABLE>
<PAGE>
--------------------
EQUITY GROWTH FUND
THE GALAXY FUND FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
--------------------
RETAIL A SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31
------------------------------------------------------------
1997 1996 1995 1994 1993(1)
---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .................. $ 20.37 $ 17.29 $ 14.18 $ 13.76 $ 12.90
--------- ---------- -------- --------- ----------
Income from Investment Operations:
Net investment income (loss) (C).................... 0.07 0.10 0.14 0.17 0.15
Net realized and unrealized gain
on investments ................................... 6.05 3.39 3.28 0.47 0.95
--------- ---------- -------- --------- ----------
Total from Investment Operations:............... 6.12 3.49 3.42 0.64 1.10
--------- ---------- -------- --------- ----------
Less Dividends:
Dividends from net investment income ............... (0.07) (0.11) (0.14) (0.16) (0.15)
Dividends from net realized capital gains .......... (1.28) (0.30) (0.17) (0.06) (0.09)
--------- ---------- -------- --------- ----------
Total Dividends: ................................. (1.35) (0.41) (0.31) (0.22) (0.24)
--------- ---------- -------- --------- ----------
Net increase in net asset value ....................... 4.77 3.08 3.11 0.42 0.86
--------- ---------- -------- --------- ----------
Net Asset Value, End of Period......................... $ 25.14 $ 20.37 $ 17.29 $ 14.18 $ 13.76
========= ========== ======== ========= =========
Total Return (B)...................................... 31.61% 20.51% 24.54% 4.72% 8.58%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ..................... $ 226,330 $ 160,800 $ 98,911 $ 70,338 $ 427,298
Ratios to average net assets:
Net investment income (loss)
including reimbursement/waiver.................... 0.30% 0.50% 0.85% 1.22% 1.20%
Operating expenses
including reimbursement/waiver.................... 1.37% 1.40% 1.45% 0.98% 0.97%
Operating expenses
excluding reimbursement/waiver.................... 1.37% 1.40% 1.47% 0.99% 0.97%
Portfolio Turnover Rate ............................... 66% 36% 14% 18% 16%
Average Commission Rate Paid (A)....................... $ 0.0601 $ 0.0615 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------
* 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 years ended October 31, 1997, 1996, 1995, 1994 and 1993(1) were $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 years ended October 31, 1997, 1996, 1995, 1994 and 1993(1) were $0.16, $0.17,
$0.20, $0.18 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 year ended October 31, 1997 and for the period ended
October 31, 1996 were $(0.14)(3) and $(0.03), respectively.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRUST SHARES
YEARS ENDED OCTOBER 31, RETAIL B SHARES
----------------------------------------------------- YEAR ENDED PERIOD ENDED
1997 1996 1995 1994 1993(1) OCTOBER 31,1997 OCTOBER 31,1996(2)
------ ------ ------ ------ -------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
$ 20.39 $ 17.30 $ 14.19 $ 13.76 $ 12.90 $ 20.26 $ 18.77
-------- -------- -------- -------- -------- -------- ---------
0.16 0.17 0.20 0.18 0.15 (0.09)(3) (0.01)
6.06 3.40 3.28 0.47 0.95 6.02 1.50
-------- -------- -------- -------- -------- -------- ---------
6.22 3.57 3.48 0.65 1.10 5.93 1.49
-------- -------- -------- -------- -------- -------- ---------
(0.16) (0.18) (0.20) (0.16) (0.15) -- --
(1.28) (0.30) (0.17) (0.06) (0.09) (1.28) --
-------- -------- -------- --------- -------- -------- ---------
(1.44) (0.48) (0.37) (0.22) (0.24) (1.28) --
-------- -------- -------- --------- -------- -------- ---------
4.78 3.09 3.11 0.43 0.86 4.65 1.49
-------- -------- -------- --------- -------- -------- ---------
$ 25.17 $ 20.39 $ 17.30 $ 14.19 $ 13.76 $ 24.91 $ 20.26
======== ======== ======== ========= ======== ======== =========
32.16% 21.03% 25.08% 4.80% 8.58% 30.78% 7.95%**
$745,537 $562,419 $420,016 $ 362,094 $427,298 $ 20,363 $ 3,995
0.72% 0.92% 1.31% 1.27% 1.20% (0.40)% (0.16)%*
0.95% 0.98% 1.00% 0.93% 0.97% 2.07% 1.92%*
0.95% 0.98% 1.00% 0.93% 0.97% 2.30% 2.29%*
66% 36% 14% 18% 16% 66% 36%
$ 0.0601 $ 0.0615 N/A N/A N/A $ 0.0601 $ 0.0615
</TABLE>
<PAGE>
--------------------
SMALL CAP VALUE FUND
THE GALAXY FUND FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
--------------------
RETAIL A SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31
------------------------------------------------------------
1997 1996(3) 1995 1994 1993(1)(2)
---- ------- ---- ---- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .................. $ 14.75 $ 12.68 $ 11.06 $ 11.21 $ 10.52
--------- ---------- -------- --------- ----------
Income from Investment Operations:
Net investment income (loss) (C, D & E)............. (0.04)(4) 0.01 (0.02) (0.01) (0.01)
Net realized and unrealized gain on investments..... 5.72 2.95 2.21 0.18 0.70
--------- ---------- -------- --------- ----------
Total from Investment Operations:................. 5.68 2.96 2.19 0.17 0.69
--------- ---------- -------- --------- ----------
Less Dividends:
Dividends from net investment income (C)............ -- (0.02) -- -- --
Dividends in excess of net investment income........ -- -- -- -- --
Dividends from net realized capital gains........... (2.14) (0.87) (0.57) (0.32) --
--------- ---------- -------- --------- ----------
Total Dividends (C):.............................. (2.14) (0.89) (0.57) (0.32) --
--------- ---------- -------- --------- ----------
Net increase (decrease) in net asset value............. 3.54 2.07 1.62 (0.15) 0.69
--------- ---------- -------- --------- ----------
Net Asset Value, End of Period......................... $ 18.29 $ 14.75 $ 12.68 $ 11.06 $ 11.21
========= ========== ======== ========= ==========
Total Return (B)....................................... 43.58% 24.77% 21.27% 1.64% 6.56%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)...................... $ 63,658 $ 34,402 $ 27,546 $ 19,764 $ 15,014
Ratios to average net assets:
Net investment income (loss) including
reimbursement/waiver....,,,,,,,,,,,,,,,,,,,,,,.... (0.25)% 0.08% (0.19)% (0.10)% (0.19)%*
Operating expenses including reimbursement/waiver... 1.30% 1.40% 1.35% 1.31% 1.33%*
Operating expenses excluding reimbursement/waiver... 1.52% 1.55% 1.85% 1.84% 1.87%*
Portfolio Turnover Rate................................ 52% 39% 32% 29% 29%*
Average Commission Rate Paid (A)....................... $ 0.0577 $ 0.0559 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------
* 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. (See Note 8).
(4) The selected per share data was calculated using the weighted average shares outstanding method for the year.
(5) Unaudited.
(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 per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for
Retail A Shares for the years ended October 31, 1997, 1996, 1995(5), 1994(5) and for the period ended October 31,
1993(2)(5) were $(0.02), $0.01, $(0.08), $(0.06) and $(0.05), respectively. Net investment income per share before
reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Trust Shares for the years ended October
31, 1997, 1996, 1995(5), 1994(5) and for the period ended October 31,1993(2)(5) were $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.
</TABLE>
<PAGE>
TRUST SHARES
YEARS ENDED OCTOBER 31,
---------------------------------------------------------
1997 1996(3) 1995 1994 1993(1)(2)
$ 14.76 $ 12.71 $ 11.07 $ 11.21 $ 10.00
-------- -------- -------- --------- --------
0.01(4) 0.05 0.01 0.02 --
5.74 2.97 2.21 0.17 1.21
5.75 3.02 2.22 0.19 1.21
-- (0.05) (0.01) (0.01) --
-- (0.01) -- -- --
(2.14) (0.91) (0.57) (0.32) --
(2.14) (0.97) (0.58) (0.33) --
3.61 2.05 1.64 (0.14) 1.21
$ 18.37 $ 14.76 $ 12.71 $ 11.07 $ 11.21
44.08% 25.22% 21.52% 1.86% 12.12%**
$189,257 $137,341 $121,364 $ 101,905 $100,382
0.09% 0.45% 0.07% 0.15% 0.02%*
0.96% 1.05% 1.10% 1.06% 1.01%*
0.96% 1.06% 1.35% 1.34% 1.29%*
52% 39% 32% 29% 29%**
$ 0.0577 $ 0.0559 N/A N/A N/A
<PAGE>
--------------------
SMALL COMPANY EQUITY FUND
THE GALAXY FUND FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
--------------------
RETAIL A SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
------------------------------------------------------------
1997 1996 1995 1994 1993(1)
---- ------- ---- ---- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .................. $ 19.96 $ 16.28 $ 12.35 $ 12.41 $ 8.79
--------- ---------- -------- --------- ----------
Income from Investment Operations:
Net investment income (loss) (C) ................... (0.18) (0.14) (0.09) (0.01) (0.04)
Net realized and unrealized gain
on investments ................................... 3.54 3.99 4.21 -- 3.66
--------- ---------- -------- --------- ----------
Total from Investment Operations: .............. 3.36 3.85 4.12 (0.01) 3.62
--------- ---------- -------- --------- ----------
Less Dividends:
Dividends from net investment income ............... -- -- -- -- --
Dividends from net realized capital gains .......... (2.38) (0.17) (0.19) (0.05) --
--------- ---------- -------- --------- ----------
Total Dividends: ............................... (2.38) (0.17) (0.19) (0.05) --
--------- ---------- -------- --------- ----------
Net increase (decrease) in net asset value ............ 0.98 3.68 3.93 (0.06) 3.62
--------- ---------- -------- --------- ----------
Net Asset Value, End of Period ........................ $ 20.94 $ 19.96 $ 16.28 $ 12.35 $ 12.41
========= ========== ======== ========= ==========
Total Return (B) ...................................... 19.08% 23.97% 34.01% (0.06)% 41.18%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ..................... $ 135,593 $ 111,101 $ 45,668 $ 30,845 $ 55,683
Ratios to average net assets:
Net investment income (loss)
including reimbursement/waiver ................... (1.02)% (1.03)% (0.85)% (0.40)% (0.66)%
Operating expenses
including reimbursement/waiver ................... 1.46% 1.57% 1.60% 1.31% 1.18%
Operating expenses
excluding reimbursement/waiver ................... 1.48% 1.57% 1.64% 1.34% 1.22%
Portfolio Turnover Rate ............................... 69% 82% 54% 35% 57%
Average Commission Rate Paid (A) ...................... $ 0.0576 $ 0.0531 N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
* 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 per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for
Retail A Shares for the years ended October 31, 1997, 1996, 1995, 1994 and 1993(1) were $(0.18), $(0.14), $(0.09),
$(0.01) and $(0.04), respectively. Net investment income per share before reimbursement/waiver of fees by the Investment
Advisor and/or Administrator for Trust Shares for the years ended October 31, 1997, 1996, 1995, 1994 and 1993(1) were
$(0.11), $(0.09), $(0.04), $0.00 and $(0.04), respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for Retail B Shares for the year ended October 31, 1997 and for
the period ended October 31, 1996 were $(0.24) and $(0.24), respectively.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRUST SHARES
YEARS ENDED OCTOBER 31, RETAIL B SHARES
----------------------------------------------------- YEAR ENDED PERIOD ENDED
1997 1996 1995 1994 1993(1) OCTOBER 31,1997 OCTOBER 31,1996(2)
------ ------ ------ ------ -------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
$ 20.20 $ 16.38 $ 12.36 $ 12.41 $ 8.79 $ 19.91 $ 17.27
-------- -------- -------- -------- -------- -------- ---------
(0.11) (0.09) (0.04) -- (0.04) (0.21) (0.19)(3)
3.61 4.08 4.25 -- 3.66 3.41 2.83
-------- -------- -------- -------- -------- -------- ---------
3.50 3.99 4.21 -- 3.62 3.20 2.64
-------- -------- -------- -------- -------- -------- ---------
-- -- -- -- -- -- --
(2.38) (0.17) (0.19) (0.05) -- (2.38) --
-------- -------- -------- --------- -------- -------- ---------
(2.38) (0.17) (0.19) (0.05) -- (2.38) --
-------- -------- -------- --------- --------- -------- ---------
1.12 3.82 4.02 (0.05) 3.62 0.82 2.64
-------- -------- -------- -------- -------- -------- ---------
$ 21.32 $ 20.20 $ 16.38 $ 12.36 $ 12.41 $ 20.73 $ 19.91
======== ======== ======== ========= ======== ======== =========
19.59% 24.69% 34.73% 0.02% 41.18% 18.23% 15.34%**
$310,751 $174,990 $ 94,831 $ 66,462 $ 55,683 $ 14,731 $ 3,659
(0.65)% (0.60)% (0.37)% (0.35)% (0.66)% (1.76) (1.50)%*
1.09% 1.14% 1.12% 1.27% 1.18% 2.20% 2.04%*
1.12% 1.14% 1.12% 1.27% 1.22% 2.44% 2.44%*
69% 82% 54% 35% 57% 69% 82%
$ 0.0576 $ 0.0531 N/A N/A N/A $ 0.0576 $ 0.0531
</TABLE>
<PAGE>
--------------------
International Equity Fund
THE GALAXY FUND FINANCIAL HIGHLIGHTS
For a Share outstanding throughout each period.
--------------------
RETAIL A SHARES
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
------------------------------------------------------------
1997 1996 1995 1994 1993(1)
---- ------- ---- ---- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .................. $ 13.94 $ 12.92 $ 13.20 $ 12.13 $ 9.66
--------- ---------- -------- --------- ----------
Income from Investment Operations:
Net investment income (C)........................... 0.01 0.11 0.11 0.06 0.02
Net realized and unrealized gain (loss)
on investments ................................... 2.09 1.27 (0.21) 1.02 2.51
--------- ---------- -------- --------- ----------
Total from Investment Operations:............... 2.10 1.38 (0.10) 1.08 2.53
--------- ---------- -------- --------- ----------
Less Dividends:
Dividends from net investment income ............... (0.18) (0.12) (0.02) (0.01) (0.06)
Dividends from net realized capital gains .......... (0.68) (0.24) (0.16) -- --
--------- ---------- -------- --------- ----------
Total Dividends: ............................... (0.86) (0.36) (0.18) (0.01) (0.06)
--------- ---------- -------- --------- ----------
Net increase (decrease) in net asset value ............ 1.24 1.02 (0.28) 1.07 2.47
--------- ---------- -------- --------- ----------
Net Asset Value, End of Period ........................ $ 15.18 $ 13.94 $ 12.92 $ 13.20 $ 12.13
========= ========== ======== ========= ==========
Total Return (B)....................................... 15.88% 10.86% (0.64)% 8.91% 26.36%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ..................... $ 56,592 $ 35,144 $ 30,104 $ 32,887 $ 39,246
Ratios to average net assets:
Net investment income including
reimbursement/waiver.............................. 0.03% 0.78% 0.84% 0.69% 0.37%
Operating expenses including reimbursement/waiver... 1.60% 1.70% 1.76% 1.49% 1.57%
Operating expenses excluding reimbursement/waiver... 1.85% 1.98% 2.03% 1.79% 2.04%
Portfolio Turnover Rate ............................... 45% 146% 48% 39% 29%
Average Commission Rate Paid (A)....................... $ 0.0214 $ 0.0381 N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
(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 years ended October 31, 1997, 1996, 1995, 1994 and 1993(1) were $(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 years ended October 31, 1997, 1996, 1995, 1994 and 1993(1) were $0.04, $0.13,
$0.13, $0.04 and $0.00, respectively.
See Notes to Financial Statements.
</TABLE>
<PAGE>
TRUST SHARES
YEARS ENDED OCTOBER 31,
1997 1996 1995 1994 1993(1)
$ 14.01 $ 12.98 $ 13.20 $ 12.13 $ 9.66
-------- -------- -------- --------- --------
0.08 0.17 0.16 0.06 0.02
2.12 1.30 (0.18) 1.02 2.51
-------- -------- -------- --------- --------
2.20 1.47 (0.02) 1.08 2.53
-------- -------- -------- --------- --------
(0.20) (0.20) (0.04) (0.01) (0.06)
(0.68) (0.24) (0.16) -- --
-------- -------- -------- --------- --------
(0.88) (0.44) (0.20) (0.01) (0.06)
-------- -------- -------- --------- --------
1.32 1.03 (0.22) 1.07 2.47
-------- -------- -------- --------- --------
$ 15.33 $ 14.01 $ 12.98 $ 13.20 $ 12.13
======== ======== ======== ========= ========
16.60% 11.51% (0.02)% 8.91% 26.36%
$265,124 $172,561 $ 89,614 $ 82,350 $ 39,246
0.57% 1.40% 1.36% 0.74% 0.37%
1.06% 1.08% 1.22% 1.43% 1.57%
1.32% 1.36% 1.48% 1.72% 2.04%
45% 146% 48% 39% 29%
$ 0.0214 $ 0.0381 N/A N/A N/A
<PAGE>
--------------------
THE GALAXY FUND NOTES TO FINANCIAL STATEMENTS
--------------------
1. ORGANIZATION
The Galaxy Fund, a Massachusetts business trust (the "Trust"), is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. As of the date of this report, the Trust offered
twenty-four managed investment portfolios. The accompanying financial statements
and financial highlights are those of the Asset Allocation, Equity Income,
Growth and Income, Equity Value, 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, 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) series specific
expenses (distribution and/or shareholder servicing fees and transfer agent
fees) are borne by the specific series of shares to which they relate. 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
the 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 year
ended October 31, 1997, the Growth and Income Fund was party to the following
option contracts:
NUMBER
OF CONTRACTS PREMIUM
------------ -------
Balance as of October 31, 1996 0 $ 0
Written ...................... 73 302,731
Closed and Expired ........... (73) (302,731)
Exercised .................... 0 0
Balance as of October 31, 1997 0 0
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
principles.
FEDERAL INCOME TAXES: The Trust treats each Fund as a separate entity for
federal income tax purposes. Each Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended. By so qualifying, each Fund will not be subject to federal
income taxes to the extent that it distributes substantially all of its taxable
or tax-exempt income, if any, for its tax year ending October 31. In addition,
by distributing in each calendar year substantially all of its net investment
income, capital gains and certain other amounts, if any, each Fund will not be
subject to a federal excise tax. Therefore, no federal income 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.
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, 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.
Effective August 12, 1996, 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 average daily net assets,
plus 0.35% of all net assets in excess of $50 million.
Prior to August 12, 1996, the Investment Advisor had a sub-advisory
agreement with Wellington Management Company ("Wellington Management") with
respect to the International Equity Fund pursuant to which the Investment
Advisor paid fees to Wellington Management, computed daily and paid quarterly,
at the annual rate of 0.50% of the first $50 million of the Fund's average daily
net assets, plus 0.30% of the next $50 million of such assets, plus 0.20% of net
assets in excess of $100 million.
Prior to December 4, 1995, Shawmut Bank, N.A., ("Shawmut Bank") provided
investment advisory services to the Shawmut Growth and Income Equity and Shawmut
Small Capitalization Equity Funds, predecessor funds of the Galaxy Growth and
Income and Galaxy Small Cap Value Funds (collectively, the "Predecessor
Funds,")( see Note 8). Shawmut Bank was paid a fee for its services at the
annual rate of 1.00% of each Predecessor Fund's average daily net assets.
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.
Prior to September 5, 1996, Investor Services Group was entitled to receive
administration fees, computed daily and paid monthly, at the annual rate of
0.09% of the first $2.5 billion of the combined average daily net assets of the
Funds and the other funds offered by the Trust, 0.085% of the next $2.5 billion
of combined average daily net assets and 0.08% of combined average daily net
assets over $5 billion.
In addition, 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 compensates
the Trust's custodian bank, Chase Manhattan Bank, N.A. for its services.
Prior to December 4, 1995, Federated Administrative Services ("FAS")
provided certain administrative and other services to the Predecessor Funds. The
fee paid to FAS was based on the average aggregate net assets of The Shawmut
Funds. In addition, prior to December 4, 1995, Federated Services Company
("FSC") provided transfer agency and dividend disbursing services to the
Predecessor Funds in return for fees at rates based on the size, type and number
of accounts and transactions made by shareholders. FSC also maintained
accounting records for the Predecessor Funds and was paid fees based on each
Predecessor Fund's average net assets plus out-of-pocket expenses.
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 year ended
October 31, 1997, transfer agent charges for each series were as follows:
RETAIL A RETAIL B TRUST
-------- -------- -----
Asset Allocation .... $ 228,891 $ 50,632 $ 439,892
Equity Income ....... 260,985 N/A 28,396
Growth and Income ... 262,119 79,661 330,550
Equity Value ........ 300,430 42,966 285,278
Equity Growth ....... 382,302 56,001 492,893
Small Cap Value ..... 134,208 N/A 73,166
Small Company Equity 301,437 47,760 405,107
International Equity 162,553 N/A 197,335
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.
Prior to December 4, 1995, Federated Securities Corp. (the "Shawmut
Distributor") served as the principal distributor of the Predecessor Funds. The
Predecessor Funds had adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. Under the terms of the Plan, the Predecessor Funds
compensated the Shawmut Distributor, from the net assets of the Predecessor
Funds, to finance activities primarily intended to result in the sale of the
Predecessor Funds' Investment Shares. The Plan permitted the Predecessor Funds
to incur distribution expenses of up to 1/2 of 1% of the average daily net
assets of a Predecessor Fund's Investment 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 Shares owned of record or beneficially by the
Institution's Customers. 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 the
Institution's Customers. For the year ended October 31, 1997, the Funds paid
fees under the Services Plan and 12b-1 Plan as follows:
12B-1 PLAN
SERVICES ------------------------------------
PLAN SERVICES DISTRIBUTION
-------- -------- ------------
Asset Allocation .... $ 412,384 $ 44,293 $ 99,219
Equity Income ....... 434,674 N/A N/A
Growth andIncome .... 324,069 54,046 122,300
Equity Value ........ 440,920 21,199 50,897
Equity Growth ....... 558,695 34,034 75,906
Small Cap Value ..... 130,739 N/A N/A
Small Company Equity 287,068 23,556 55,371
International Equity 102,465 N/A N/A
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 November 1, 1996, 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
$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. Prior to November 1, 1996,
each Trustee was entitled to receive for services as a trustee of the Trust and
VIP an aggregate fee of $18,000 per annum plus certain other fees for attending
or participating in meetings as well as reimbursement for expenses incurred in
attending meetings. The Chairman of the Boards of Trustees of the Trust and
VIPand the President and Treasurer of the Trust and VIP were entitled to
additional annual fees for their services in these capacities.
Each Trustee is eligible to participate in the Trust's 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. On January 1,
1997, the Plan was merged into a combined Deferred Compensation Plan for the
Trust, VIP and Galaxy II.
Expenses for the year ended October 31, 1997 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
The Investment Advisor voluntarily agreed to waive a portion of its fees
and/or reimburse the Funds for certain expenses so that total expenses would not
exceed certain expense limitations established for each series. The Investment
Advisor at its discretion, may revise or discontinue the waivers and/or expense
reimbursements at any time. For the year ended October 31, 1997, the Investment
Advisor waived fees and/or reimbursed expenses with respect to the Funds in the
following amounts:
FUND FEES WAIVED EXPENSES REIMBURSED
Asset Allocation .... $ -- $ 19,254
Equity Income ....... -- 38,298
Growth and Income ... -- 306,295
Equity Value ........ -- 26,924
Equity Growth ....... -- 27,033
Small Cap Value ..... -- 103,101
Small Company Equity -- 118,118
International Equity 682,009 18,362
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-four 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) 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 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 year ended October 31, 1997 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
---------------------------- --------------------------------
FUND U.S. Government Other U.S. Government Other
- ----- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Asset Allocation ...................................... $ 65,048,875 $ 161,599,123 $ 54,178,278 $ 102,253,011
Equity Income ......................................... -- 91,958,697 -- 80,755,978
Growth and Income ..................................... -- 355,127,105 -- 297,177,302
Equity Value .......................................... -- 404,754,927 -- 388,898,498
Equity Growth ......................................... -- 564,635,027 -- 539,682,585
Small Cap Value ....................................... -- 92,927,122 -- 96,859,786
Small Company Equity .................................. -- 329,904,662 -- 236,444,968
International Equity .................................. -- 177,719,692 -- 114,838,484
</TABLE>
The aggregate gross unrealized appreciation and depreciation, net unrealized
appreciation (depreciation) and cost for all securities as computed on a federal
income tax basis, at October 31, 1997 for each Fund is as follows:
<TABLE>
<CAPTION>
FUND APPRECIATION (DEPRECIATION) NET COST
- ----- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Asset Allocation ...................................... $ 58,922,640 $ (2,516,682) $ 56,405,958 $ 320,824,196
Equity Income ......................................... 67,805,404 (2,957,375) 64,848,029 223,323,114
Growth and Income ..................................... 67,589,981 (9,211,227) 58,378,754 365,748,588
Equity Value .......................................... 70,779,447 (8,499,588) 62,279,859 361,163,720
Equity Growth ......................................... 314,031,634 (14,689,576) 299,342,058 708,619,786
Small Cap Value ....................................... 73,231,102 (9,377,315) 63,853,787 188,671,553
Small Company Equity .................................. 103,591,695 (33,523,807) 70,067,888 383,560,638
International Equity .................................. 59,241,958 (26,687,934) 32,554,024 288,288,302
</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.
8. ACQUISITION OF SHAWMUT FUNDS
At a meeting held on June 12, 1995, the Board of Trustees of the Trust
approved an Agreement and Plan of Reorganization (the "Agreement") for the
acquisition of The Shawmut Funds ("Shawmut") by the Trust. Pursuant to the
Agreement, all of the assets and liabilities of the Shawmut Growth Equity Fund
were transferred to the Galaxy Equity Growth Fund in exchange for shares of the
Galaxy Equity Growth Fund. In addition, all of the assets and liabilities of the
Shawmut Growth and Income Equity Fund and the Shawmut Small Capitalization
Equity Fund were transferred to the Galaxy Growth and Income Fund and the Galaxy
Small Cap Value Fund, respectively, new portfolios of the Trust, in exchange for
shares of the Galaxy Growth and Income Fund and the Galaxy Small Cap Value Fund,
respectively. Accordingly, the net assets attributable to Investment Shares and
Trust Shares of the Shawmut Growth Equity Fund were exchanged for 578,307 Retail
A Shares and 1,090,562 Trust Shares, respectively, of the Galaxy Equity Growth
Fund, the net assets attributable to the Investment Shares and Trust Shares of
the Shawmut Growth and Income Equity Fund were exchanged for 4,539,659 Retail A
and 15,827,841 Trust Shares of the Galaxy Growth and Income Fund and the net
assets attributable to Investment Shares and Trust Shares of the Shawmut Small
Capitalization Equity Fund were exchanged for 2,337,814 Retail A and 10,259,304
Trust Shares of the Galaxy Small Cap Value Fund. In related transactions, the
assets and liabilities of other Shawmut portfolios were transferred to
corresponding Galaxy portfolios in exchange for shares in such Galaxy
portfolios. The reorganization, which qualified as a tax-free reorganization for
federal income tax purposes, was completed on December 4, 1995, following the
approval of the reorganization by the Shawmut Fund shareholders. Certain share
registration fees incurred in connection with the reorganization were borne by
the Trust. The following is a summary of the Net Assets, Shares Outstanding, Net
Asset Values per share and unrealized Appreciation associated with the
transaction.
<TABLE>
<CAPTION>
Before Acquisition After Acquisition
---------------------------- ----------------
Galaxy Shawmut Galaxy
Equity Growth Equity
Growth Equity Growth
-------- -------- --------
<S> <C> <C> <C>
Net Assets.............................. $ 541,014,789 $ 29,513,366 $ 570,528,155
Shares outstanding...................... 30,602,041 2,442,515 32,270,910
Retail A (Investment) and Trust
Net Asset Value, per share............ $ 17.68 $ 12.08 $ 17.68
Unrealized Appreciation................. $ 165,620,815 $ 4,373,967
<CAPTION>
Before Acquisition After Acquisition
---------------------------- ----------------
Galaxy Shawmut Galaxy
Growth Growth and Growth
and Income Income Equity and Income
---------- ------------- ----------
<S> <C> <C> <C>
Net Assets ............................. $ 10.00 $ 247,375,548 $ 247,375,558
Shares outstanding ..................... 1.00 20,367,500 20,367,501
Retail A (Investment)
Net Asset Value, per share ........... $ 10.00 $ 12.14 $ 12.14
Trust Net Asset Value, per share ....... $ 10.00 $ 12.15 $ 12.15
<S> <C>
Unrealized Appreciation ................ -- $ 36,544,615
<CAPTION>
Before Acquisition After Acquisition
---------------------------- ---------------
Galaxy Shawmut Small Galaxy
Small Cap Capitalization Small Cap
Value Equity Value
--------- -------------- ---------
<S> <C> <C> <C>
Net Assets ............................. $ 10.00 $ 154,893,661 $ 154,893,671
Shares outstanding ..................... 1.00 12,597,118 12,597,119
Retail A (Investment)
Net Asset Value, per share ........... $ 10.00 $ 12.31 $ 12.31
Trust Net Asset Value, per share ....... $ 10.00 $ 12.29 $ 12.29
Unrealized Appreciation ................ -- $ 25,218,968
</TABLE>
TAX INFORMATION (UNAUDITED):
During the fiscal year ended October 31, 1997, the following Funds made
distributions from long-term capital gains:
LONG-TERM GAINS
FUND PAID
---- ---------------
Asset Allocation Fund .......... $ 8,776,449
Equity Income Fund ............. 18,269,844
Growth and Income Fund ......... 17,190,746
Equity Value Fund .............. 31,776,294
Equity Growth Fund ............. 45,683,692
Small Cap Value Fund ........... 21,095,654
Small Company Equity Fund ...... 34,921,874
International Equity Fund ...... 7,226,949
During the fiscal year ended October 31, 1997, the Funds earned income from
direct obligations of the U.S. Government as follows:
U.S. GOVERNMENT
FUND INCOME
---- ---------------
Asset Allocation Fund ............. 29.57%
Equity Income Fund ................ 11.52
Growth and Income Fund ............ 4.93
Equity Value Fund ................. 7.77
Equity Growth Fund ................ 4.87
Small Cap Value Fund .............. 2.08
Small Company Equity Fund ......... 13.97
International Equity Fund ......... 15.45
Appropriate tax information detailing government income percentages on a
calendar year basis will accompany your year-end tax statement. As each state's
rules on the exemption of this income differ, please consult your tax advisor
regarding specific tax treatment.
See Notes to Financial Statements.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To Shareholders and the Board of Trustees of
The Galaxy Fund:
We have audited the accompanying statements of assets and liabilities
of the Asset Allocation Fund, Equity Income Fund, Equity Value Fund, Equity
Growth Fund, Small Company Equity Fund and International Equity Fund, including
the portfolios of investments, as of October 31, 1997, and the related
statements of operations for the year then ended and the statements of changes
in net assets and financial highlights for each of the periods indicated
therein. In addition, we have audited the accompanying statements of assets and
liabilities of the Growth and Income Fund and Small Cap Value Fund, including
the portfolios of investments, as of October 31, 1997, and the related
statements of operations for the year then ended and changes in net assets and
financial highlights for each of the two years in the period then ended. These
financial statements and financial highlights for the aforementioned eight
series of The Galaxy Fund are the responsibility of The Galaxy Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
The financial highlights for each of the two years in the period ended
October 31, 1995 and for the period from December 14, 1992 (commencement of
operations) through October 31, 1993 for Growth and Income Fund and Small Cap
Value Fund, presented herein, were audited by other auditors whose report dated
November 27, 1995 expressed an unqualified opinion on such financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free from material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to in the first paragraph above present fairly, in all materials
respects, the financial position of each of the aforementioned series of The
Galaxy Fund as of October 31, 1997, the results of their operations, changes in
their net assets, and their financial highlights for each of the periods
referenced therein, in conformity with generally accepted accounting principles.
Boston, Massachusetts Coopers & Lybrand L.L.P.
December 19, 1997
<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.
[RECYCLE SYMBOL]
This report was printed on recycled paper.
<PAGE>
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PERMIT NO. 105
NORTH READING, MA
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4400 Computer Drive
GALAXY Box 5108
FUNDS Westborough, MA 01581-5108
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FN-081 (12/97) Date of first use 1/1/98
