[GRAPHIC]
Galaxy Money Market Funds
Galaxy Funds
Annual Report
October 31, 1999
Galaxy Money Market Fund
Galaxy Government Fund
Galaxy U.S. Treasury Fund
Galaxy Tax-Exempt Fund
Galaxy Connecticut Municipal
Money Market Fund
Galaxy Massachusetts Municipal
Money Market Fund
[LOGO] Galaxy
Funds
<PAGE>
Chairman's Message
Dear Shareholder:
Enclosed is the Galaxy Money Market Funds' annual report for the fiscal
year ended October 31, 1999. The report includes a Market Overview that explains
the different economic and market factors influencing money market instruments
during this time. Following the Market Overview are reviews for both the Galaxy
Taxable Money Market Funds and the Galaxy Tax-Exempt Money Market Funds that
describe how Fleet Investment Advisors Inc. managed the Funds' portfolios in
this climate. Financial statements and list of portfolio holdings for each of
the Funds as of October 31, 1999 appear at the end of the report.
Unexpected economic strength, inflation concerns, and a tighter monetary
policy drove money market yields higher during the period. After cutting
short-term interest rates by 25 basis points (0.25%) at the start of the
reporting period, the Federal Reserve became concerned that the economy was
advancing strongly enough to produce inflation that would curb future growth.
This resulted in rate increases later in the period totaling 50 basis points
(0.50%). Along the way, uncertainty about where interest rates might head caused
significant fluctuations in short-term yields. Money market investments added
stability to many portfolios during this time, however, as uncertainty about
future inflation and growth curbed returns for bonds and many stocks.
While market fluctuations can be unnerving, they are typical of the ups
and downs that occur with most investments. Even so, this may be a good time to
meet with a financial advisor who can help you determine whether your current
strategies suit your long-term goals. Investment professionals at Fleet Bank
branches can provide you with a no-obligation analysis that will help you make
this comparison and get the most from your portfolio.
If you are saving for a child's education, or are helping a family member
prepare for college, ask our representatives about the Galaxy College Investment
Program. Galaxy offers an Education IRA which allows for tax-free earnings to
accumulate on your investment if used to pay for qualified college expenses.
Remember that anyone, not just a child's parents, can make a contribution.
You might also consider a custodial account such as a Uniform
Gift/Transfer to Minor Account (UGMA/UTMA). The UGMA/UTMA account offers another
opportunity to transfer assets to minors with favorable tax consequences in
preparation for college expenses. Ask your investment professional or tax
advisor about this important gifting opportunity.
If you have any questions about college investing opportunities or the
information in this report, please contact the Galaxy Information Center
toll-free at 1-877-BUY-GALAXY (1-877-289-4252). You can also visit one of our
investment professionals located at Fleet Bank branches.
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
- --------------------------------------------------------------------------------
<PAGE>
Market Overview
"By adjusting the maturities and mix of investments in the Galaxy Money Market
Funds to make the most of fluctuating yields, we helped the Funds earn
competitive returns during the reporting period."
MONEY MARKET OVERVIEW
By Fleet Investment Advisors Inc.
Short-term yields rose by about 80 basis points (0.80%) over the 12 months
ended October 31, 1999. As improving economic conditions abroad created a
brighter outlook at home, investors worried about higher inflation. Uncertainty
over how the Federal Reserve (the "Fed") would respond to inflation threats
caused significant volatility in short-term yields during this time.
The Fed cut short-term rates by 25 basis points in November of 1998, which
made a total cut of 75 basis points since September of 1998. Although inflation
remained low, economic growth was strong enough for the Fed to make a
pre-emptive move by raising rates by 25 basis points on June 30, 1999 and on
August 24, 1999.
By adjusting the maturities and mix of investments in the Galaxy Money
Market Funds to make the most of fluctuating yields, we helped the Funds earn
competitive returns during the reporting period.
Strong Growth Prompts Inflation Fears
At the start of the period, three-month Treasury bills were yielding about
4.3% and the annual rate of inflation was about 1.6%. After growing at an
annualized rate of 3.7% in the third quarter of 1998, the Gross Domestic Product
("GDP"), which measures the output of U.S. goods and services, improved by 6% in
the fourth quarter of 1998. The economies in Asia and other emerging markets
remained in crisis, however, causing many investors to look for safety in U.S.
Treasury securities. By cutting interest rates in November of 1998, the Fed
helped to restore confidence and ease the demand for Treasuries.
U.S. economic growth remained surprisingly strong in the first quarter of
1999, as GDP rose by 4.3%. By this time, foreign economies were recovering at a
rapid pace, which helped to sustain growth at home. Investors worried that the
Fed might begin to raise interest rates to keep the strong economy from
increasing inflation. The yield for three-month Treasury bills reached 4.7% by
the beginning of March. With current inflation still under control, however, the
Fed took no action on interest rates.
In the second quarter of 1999, GDP growth slowed to 1.8%. With signs that
the economy was cooling, the Fed continued to leave interest rates alone for
much of the quarter. By the end of June, however, the Fed was concerned enough
about future growth and inflation to raise short-term rates for the first time
since February 1995. Inflation concerns persisted in the third quarter. While
current inflation remained modest, GDP growth accelerated to an estimated 5.5%
for the quarter. Continued weakening in the U.S. dollar against the Japanese yen
and other foreign currencies put additional upward pressure on inflation. As the
result of these factors, the Fed raised short-term rates again in August of
1999.
Investors worried in the weeks that followed that the Fed would raise
rates again before the end of the year, effectively erasing the 75-point rate
cut from 1998. Eventually, however, investors thought that inflation might be
contained and another rate hike might not be needed. This helped three-month
Treasury yields decline to 5.1% by the end of October.
1
<PAGE>
"After averaging growth rates of 3.9% and 3.8% in 1998 and 1999, respectively,
we believe that the GDP may only improve by 2.5% next year. If that happens,
inflation should remain under control and money market yields could move lower."
Performance At-A-Glance As of October 31, 1999
- --------------------------------------------------------------------------------
Retail A Retail B Trust
Shares Shares Shares
Galaxy Money Market Fund
7-day average yield .................... 4.80% 4.00% 4.96%
30-day average yield ................... 4.76% 4.01% 4.92%
Galaxy Government Fund
7-day average yield .................... 4.75% N/A 4.88%
30-day average yield ................... 4.60% N/A 4.74%
Galaxy Tax-Exempt Fund
7-day average yield .................... 2.76% N/A 2.90%
30-day average yield ................... 2.68% N/A 2.81%
Galaxy U.S. Treasury Fund
7-day average yield .................... 4.28% N/A 4.43%
30-day average yield ................... 4.27% N/A 4.42%
Galaxy Connecticut Municipal
Money Market Fund
7-day average yield .................... 2.71% N/A N/A
30-day average yield ................... 2.61% N/A N/A
Galaxy Massachusetts Municipal
Money Market Fund
7-day average yield .................... 2.73% N/A N/A
30-day average yield ................... 2.64% N/A N/A
Past performance is no guarantee of future results. Investments in the Galaxy
Money Market Funds are neither insured nor guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Funds seek to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Funds. Yields are historical and will vary with market
performance.
Retail A Shares are currently charged a shareholder servicing fee of 0.10% of
average daily net assets. Retail B Shares are currently charged a distribution
fee of 0.65% of average daily net assets and a shareholder servicing fee of
0.10% of average daily net assets. (See Note 3 in the Notes to Financial
Statements.)
- --------------------------------------------------------------------------------
In this climate of uncertainty, the Galaxy Money Market Funds benefited
from holdings in high-quality investments and sizable positions in both
overnight securities and issues with floating interest rates. We emphasized
longer maturities when we thought yields were peaking to help the Funds'
returns.
Rate Hikes Should Slow Growth
We continue to believe that the U.S. economy cannot sustain its rapid rate
of expansion. In addition to its considerable longevity, this expansion should
be vulnerable to the recent hikes in interest rates. After averaging growth
rates of 3.9% and 3.8% in 1998 and 1999, respectively, we believe that the GDP
may only improve by 2.5% next year. If that happens, inflation should remain
under control and money market yields could move lower.
As before, we expect to continue making the most of special yield
opportunities that arise due to market fluctuations and to focus on high-quality
investments with strong liquidity.
2
<PAGE>
Portfolio Reviews
[PHOTO]
Karen Arneil has managed the Galaxy Taxable Money Market Funds and the Galaxy
Tax-Exempt Money Market Funds since September 1996. She has managed money market
investments since 1993.
Galaxy Money
Market Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was depicted as a pie chart in the printed material.]
Commercial Paper 52%
Corporate Notes and Bonds 30%
U.S. Government. and Agency Obligations 10%
Certificates of Deposit & Net Other Assets and Liabilities 8%
GALAXY TAXABLE MONEY MARKET FUNDS
By Karen Arneil
Portfolio Manager
Changing economic expectations caused money market yields to fluctuate
over the past year. In this environment, we focused on securities with strong
credit quality and good liquidity in the Galaxy Taxable Money Market Funds --
which include the Galaxy Money Market Fund, the Galaxy Government Fund and the
Galaxy U.S. Treasury Fund (collectively, the "Funds"). In addition, we took
advantage of opportunities in individual market sectors that enhanced the Funds'
yields. These strategies helped the Funds earn total returns for the 12 months
ended October 31, 1999 that were competitive with the returns for other taxable
money market funds.
During the period, Trust Shares of the Galaxy Money Market Fund had a
total return of 4.72%, and Retail A Shares of the Fund earned a total return of
4.54%. Retail B Shares of the Fund earned a total return of 3.85% before
deducting the 5.00% contingent deferred sales charge, and a total return of
- -1.15% after deducting the 5.00% contingent deferred sales charge.
Over the same time, Lipper Analytical Services ("Lipper"), a mutual fund
performance tracking service, reported average total returns of 4.95% for trust
shares and 4.40% for retail shares of other taxable money market funds that
reported their performance to Lipper.
For the 12 months ended October 31, 1999, Trust Shares of the Galaxy
Government Fund had a total return of 4.58%, and Retail A Shares of the Fund had
a total return of 4.39%. Trust shares of other money market funds investing in
U.S. government issues that reported their performance to Lipper earned an
average total return of 4.71% over the same period. Retail shares of similar
funds that reported their performance to Lipper earned an average total return
of 4.39% for the period.
During this time, Trust Shares of the Galaxy U.S. Treasury Fund had a
total return of 4.30% and Retail A Shares of the Fund earned a total return of
4.14%. These returns compared with an average total return of 4.29% for trust
shares of other money market funds investing in U.S. Treasury issues that
reported their results to Lipper. Retail shares of similar funds that reported
their performance to Lipper earned a total return of 4.16% for the period.
On October 31, 1999, the Galaxy Money Market Fund had an average maturity
of 40 days, the Galaxy Government Fund had an average maturity of 44 days, and
the Galaxy U.S. Treasury Fund had an average maturity of 42 days.
Adapting to Rising Yields
At the start of the reporting period in November 1998, significant
holdings in overnight issues gave the Galaxy Money Market Funds liquid-
Galaxy Money Market Fund
7-Day Average Yield (%)
[The following information was depicted as a line chart in the printed
material.]
<TABLE>
<CAPTION>
11/01/1998 10/31/1999
<S> <C> <C>
Trust 4.79% 4.96%
Retail A 4.61% 4.80%
Retail B 3.97% 4.00%
</TABLE>
November 1, 1998 October 31, 1999
Galaxy Government Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was depicted as a pie chart in the printed material.]
Federal National Mortgage Association 31%
Federal Home Loan Mortgage Corporation 30%
Federal Home Loan Bank 20%
Repurchase Agreement & Net Other Assets and Liabilities 16%
Federal Farm Credit Bank 3%
3
<PAGE>
Portfolio Reviews
ity in a very volatile market. As economic uncertainties sustained strong demand
for U.S. Treasury issues, we emphasized longer-term Treasuries in the U.S.
Treasury Fund to enhance yield.
Galaxy Government Fund
7-Day Average Yield (%)
[The following information was depicted as a line chart in the printed
material.]
<TABLE>
<CAPTION>
11/01/1998 10/31/1999
<S> <C> <C>
Trust 4.71% 4.88%
Retail A 4.82% 4.75%
</TABLE>
November 1, 1998 October 31, 1999
With corporate spreads wide later in the fourth quarter of 1998, we added
high-quality corporate securities with floating rates to the Money Market Fund.
When demand for Treasuries eased, and the yield curve flattened, we gave
increased attention to shorter-term issues in the U.S. Treasury Fund. As
standard year-end technical pressures boosted yields for issues that were to
mature in 1999, we selectively purchased longer-term instruments for all of the
Funds. We balanced these additions with overnight issues to maintain adequate
liquidity.
As money market yields moved higher in February of 1999, we purchased
one-year securities for the Funds to lock in the higher yields and continued to
buy high-quality corporate floating rate securities ("floaters") for the Money
Market Fund. When the U.S. Treasury issued multiple cash management bills as the
April 15 tax filing deadline approached, we bought those issues for the U.S.
Treasury Fund to take advantage of their attractive yields. With the yield curve
for Treasuries and issues of U.S. government agencies still relatively flat, we
focused on shorter-term investments in the U.S. Treasury Fund and the Government
Fund. As the agency paper we had purchased for the Money Market Fund at the end
of 1998 matured, we replaced it with corporate securities. When the market had
priced in a 25 basis point hike in short-term rates just before the June 30
meeting of the Fed, we added securities maturing in July and August to pick up
additional yield.
In August, when money market yields were high, we added one-year
securities to the Funds. We continued to add floating-rate issues to the Funds
during this time. To benefit from potential yield increases resulting from rate
hikes by the Fed, we bought securities that matured near the next Fed meeting.
We continued this strategy as yields trended downward in October, selectively
buying one-year issues on temporary upticks in yields.
Sufficient Liquidity for Year-End Concerns
Because many of the floaters the Funds hold will mature in December, there
should be sufficient liquidity for any market volatility that Y2K concerns might
bring. In the meantime, the floaters should help the Funds make the most of any
upticks in yield. Once the market outlook seems more certain, we may add issues
that mature in the first part of 2000 as the yields for these issues have become
quite attractive.
Galaxy U.S. Treasury Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was depicted as a pie chart in the printed material.]
U.S. Treasury Bills 43%
Federal Home Loan Bank 28%
U.S. Treasury Notes 25%
Federal Farm Credit Bank & Net Other Assets and Liabilities 4%
Galaxy U.S. Treasury Fund
7-Day Average Yield (%)
[The following information was depicted as a line chart in the printed
material.]
<TABLE>
<CAPTION>
11/01/1998 10/31/1999
<S> <C> <C>
Trust 4.40% 4.43%
Retail A 4.24% 4.28%
</TABLE>
November 1, 1998 October 31, 1999
4
<PAGE>
Portfolio Reviews
Galaxy Tax-Exempt Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was depicted as a pie chart in the printed material.]
South 54%
North Central 14%
Mountain 12%
East 11%
Pacific 6%
Other Territories, Cash Equivalents & Net Other Assets and Liabilities 3%
GALAXY TAX-EXEMPT MONEY MARKET FUNDS
By Karen Arneil
Portfolio Manager
As the yields for tax-exempt money market securities fluctuated over the
past year due to changes in economic expectations and the balance between supply
and demand, we made the most of resulting yield opportunities by adjusting
maturities of investments in the Galaxy Tax-Exempt Money Market Funds -- which
include the Galaxy Tax-Exempt Fund, the Galaxy Connecticut Municipal Money
Market Fund and the Galaxy Massachusetts Municipal Money Market Fund
(collectively, the "Funds"). These adjustments helped the Funds earn total
returns that compared favorably with those for other tax-exempt money market
funds.
For the 12-month reporting period ended October 31, 1999, Trust and Retail
A Shares of the Galaxy Tax-Exempt Fund had total returns of 2.67% and 2.53%,
respectively. Over the same time, retail and trust shares of other tax-exempt
money market funds that reported their performance to Lipper earned average
total returns of 2.60% and 3.09%, respectively.
Retail A Shares of the Galaxy Connecticut Municipal Money Market Fund had
a total return of 2.47%, versus 2.39% for the retail shares of other Connecticut
tax-exempt money market funds that reported their performance to Lipper. Retail
A Shares of the Galaxy Massachusetts Municipal Money Market Fund had a total
return of 2.50%, versus 2.49% for the retail shares of other Massachusetts
tax-exempt money market funds that reported their performance to Lipper.
As of October 31, 1999, the average maturity of the Tax-Exempt Fund was 46
days, and the average maturities of the Connecticut and Massachusetts Municipal
Money Market Funds were 45 days and 61 days, respectively.
Addressing Changes in Supply and Demand
When the reporting period began at the end of 1998, supplies of
longer-term tax-exempt debt were rising versus supplies of tax-exempt money
market securities, as low interest rates made longer-term securities more
attractive to issuers. Demand for tax-exempt money market securities remained
strong, however, resulting in downward pressure on their yields. In this
environment we focused on new purchases for the Galaxy Tax-Exempt Money Market
Funds on tax-exempt notes, which increased the Funds' average maturities
slightly. Given the economic turmoil overseas, we emphasized general obligation
issues of state and local governments and tax-exempt paper backed by domestic
banks.
With a seasonal increase in demand during January and February of 1999,
there was further downward pressure on the yields of tax-exempt money market
securities and we continued to take advantage of attractive yield opportunities
in tax-
Galaxy Tax-Exempt Fund
7-Day Average Yield (%)
[The following information was depicted as a line chart in the printed
material.]
<TABLE>
<CAPTION>
11/01/1998 10/31/1999
<S> <C> <C>
Trust 2.77% 2.90%
Retail A 2.64% 2.76%
</TABLE>
November 1, 1998 October 31, 1999
Galaxy Connecticut Municipal Money Market Fund
7-Day Average Yield (%)
[The following information was depicted as a line chart in the printed
material.]
<TABLE>
<CAPTION>
11/01/1998 10/31/1999
<S> <C> <C>
Retail A 2.58% 2.71%
</TABLE>
November 1, 1998 October 31, 1999
5
<PAGE>
Portfolio Reviews
Galaxy Connecticut Municipal Money Market Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was depicted as a pie chart in the printed material.]
Connecticut 62%
South 15%
Puerto Rico 7%
East, Other Territories, Cash Equivalents & Net Other Assets and Liabilities 6%
North Central 4%
Pacific 3%
Mountain 3%
exempt notes. To meet expected redemptions as the April tax season
approached, we added investments that would increase the Funds' liquidity. When
demand dropped sharply just after April 15, causing yields to spike higher, the
Funds benefited from their sizable investments in variable-rate issues.
We made further purchases in tax-exempt notes in May and June, as the
start of issuers' new fiscal years boosted the supplies and yields of those
securities. As ample supplies created further opportunities in tax-exempt notes
during the third quarter, we made additional purchases of those issues. The
Funds' investments in variable-rate issues further enhanced returns during this
time. Toward the end of the second quarter, Fund returns benefited as reduced
demand for variable-rate issues put upward pressure on their yields. In the
third quarter, variable-rate issues helped keep Fund returns in line with a
changing yield environment.
Continued Focus on Liquidity
Our typical year-end strategy is to purchase longer-term instruments that
mature in February of the following year to avoid the lower yields that usually
result from increased demand in November and December. We plan to emphasize
shorter-term investments at the end of 1999 to provide sufficient liquidity for
any market volatility that Y2K concerns might bring. Although supplies of
variable-rate securities have recently begun to shrink as issuers favor
longer-term debt, we expect to continue emphasizing variable-rate instruments
where we can. This should help us remain responsive to further fluctuations in
yields.
Galaxy Massachusetts Municipal Money Market Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was depicted as a pie chart in the printed material.]
Massachusetts 80%
South 10%
Pacific 4%
East 3%
North Central 2%
Mountain, Other Territories, Cash Equivalents
& Net Other Assets and Liabilities 1%
Galaxy Massachusetts Municipal Money Market Fund
7-Day Average Yield (%)
[The following information was depicted as a line chart in the printed
material.]
<TABLE>
<CAPTION>
11/01/1998 10/31/1999
<S> <C> <C>
Retail A 2.61% 2.73%
</TABLE>
November 1, 1998 October 31, 1999
- --------------------------------------------------------------------------------
Past performance is no guarantee of future results. 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 Advisor 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. Total return figures in this report
include changes in share price, reinvestment of dividends and capital gains
distributions and exclude the deduction of any contingent deferred sales charge
unless otherwise indicated. Retail B Shares of the Galaxy Money Market Fund are
subject to a 5.00% contingent deferred sales charge if shares are redeemed
within the first year after purchase. 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. There can be no assurance that the Funds will be able to
maintain a stable net asset value of $1.00 per share.
6
<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 invest
ment 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 within the same share class.
CONSOLIDATED STATEMENTS
Timely, comprehensive mutual fund account statements offer detailed information
on your individual account. If you have a FleetOne Gold or a Fleet Private
Banking Account, your Galaxy Fund information can be added to these statements.
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 services. Call toll-free 1-877-BUY-GALAXY (1-877-289-4252) for
information on initial purchases and current performance.
- --------------------------------------------------------------------------------
Certain shareholder services may not be available to Trust Share investors.
Please consult the Fund Prospectus. Shares of the Funds are distributed through
Provident Distributors, Inc., member NASD and SIPC.
7
<PAGE>
Shareholder Information
- --------------------------------------------------------------------------------
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 and
Assistant Treasurer
William Greilich
Vice President
INVESTMENT ADVISOR
Fleet Investment
Advisors Inc.
75 State Street
Boston, MA
02109
DISTRIBUTOR
Provident
Distributors, Inc.
Four Falls Corporate Center
6th Floor
West Conshohocken, PA
19428-2961
ADMINISTRATOR
PFPC Inc.
4400 Computer Drive
Westborough,
Massachusetts 01581-5108
AUDITOR
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
LEGAL COUNSEL
Drinker Biddle & Reath LLP
One Logan Square
18th and Cherry Streets
Philadelphia, PA 19103-6996
- --------------------------------------------------------------------------------
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 each Fund of The
Galaxy Fund, which contains more information concerning the investment policies
and expenses of the Funds as well as other pertinent information. For complete
information, and before making an investment decision on any of the Funds of The
Galaxy Fund, you should request a prospectus from the Funds' distributor by
calling toll-free 1-877-BUY-GALAXY (1-877-289-4252). Read the prospectus
carefully before you invest.
Shares of the Funds are not bank deposits or obligations of, or guaranteed or
endorsed by, FleetBoston Corporation or any of its affiliates, Fleet Investment
Advisors Inc., or any Fleet Bank. Shares of the Funds are not federally insured
by, guaranteed by, obligations of or otherwise supported by the U.S. Government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other governmental 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
amount invested. There is no assurance that the Funds will be able to maintain a
stable net asset value of $1.00 per share.
[RECYCLED LOGO]
This report was printed on recycled paper.
8
<PAGE>
Money Market Fund
Portfolio of Investments
October 31, 1999
Par Value Value
--------- ---------
COMMERCIAL PAPER (A) - 52.12%
Finance - 26.89%
$ 70,000,000 ABB Treasury Center USA
5.35%, 11/01/99 (C) ......................... $ 70,000,000
35,000,000 American Express Credit Corp.
5.29%, 11/02/99 ............................. 34,994,857
20,000,000 American Express Credit Corp.
5.29%, 11/08/99 ............................. 19,979,428
50,000,000 American Express Credit Corp.
5.27%, 12/02/99 ............................. 49,773,097
50,000,000 Associates Corp. of North America
5.29%, 11/01/99 ............................. 50,000,000
50,000,000 Associates Corp. of North America
5.30%, 11/17/99 ............................. 49,882,222
50,000,000 Associates Corp. of North America
5.30%, 11/29/99 ............................. 49,793,889
75,900,000 BellSouth Capital Funding Corp.
5.29%, 11/04/99 (C) ......................... 75,866,541
42,000,000 BellSouth Capital Funding Corp.
5.29%, 11/09/99 (C) ......................... 41,950,627
50,000,000 Ford Motor Credit Co.
5.30%, 11/16/99 ............................. 49,889,583
35,000,000 Ford Motor Credit Co.
5.30%, 11/30/99 ............................. 34,850,569
35,000,000 Ford Motor Credit Co.
5.31%, 12/03/99 ............................. 34,834,800
30,000,000 Ford Motor Credit Co.
5.32%, 12/08/99 ............................. 29,835,967
50,000,000 General Electric Capital Corp.
5.30%, 11/18/99 ............................. 49,874,861
25,000,000 General Electric Capital Corp.
5.34%, 12/09/99 ............................. 24,859,083
50,000,000 General Motors Acceptance Corp.
5.28%, 11/03/99 ............................. 49,985,333
50,000,000 General Motors Acceptance Corp.
5.32%, 11/30/99 ............................. 49,785,722
50,000,000 General Motors Acceptance Corp.
5.31%, 12/14/99 ............................. 49,682,875
40,000,000 International Lease Finance Corp.
5.30%, 11/24/99 ............................. 39,864,556
50,000,000 Morgan (J.P.) & Co.
5.35%, 11/15/99 ............................. 49,895,972
50,000,000 Morgan (J.P.) & Co.
5.30%, 11/17/99 ............................. 49,882,222
20,000,000 National Rural Utilities Cooperative
Finance Corp.
5.29%, 11/18/99 ............................. 19,950,039
105,000,000 Novartis Finance Corp.
5.35%, 11/01/99 (C) ......................... 105,000,000
10,000,000 USAA Capital Corp.
5.29%, 11/04/99 ............................. 9,995,592
16,500,000 USAA Capital Corp.
5.28%, 11/09/99 ............................. 16,480,640
--------------
1,106,908,475
--------------
Consumer Staples - 16.58%
62,802,000 Abbott Laboratories
5.30%, 11/16/99 ............................. 62,663,312
32,000,000 Campbell Soup Co.
5.26%, 11/12/99 ............................. 31,948,569
50,000,000 DaimlerChrysler
5.30%, 11/19/99 ............................. 49,867,500
37,000,000 Heinz, (H.J.) Co.
5.30%, 11/08/99 ............................. 36,961,870
50,000,000 Heinz, (H.J.) Co.
5.29%, 11/12/99 ............................. 49,919,181
150,000,000 Koch Industries, Inc.
5.35%, 11/01/99 (C) ......................... 150,000,000
100,000,000 Merck & Co., Inc.
5.27%, 11/02/99 ............................. 99,985,361
88,325,000 Sara Lee Corp.
5.29%, 11/08/99 ............................. 88,234,148
40,000,000 Unilever Capital Corp.
5.27%, 11/23/99 (C) ......................... 39,871,178
32,000,000 Wal-Mart Stores, Inc.
5.29%, 11/09/99 (C) ......................... 31,962,382
41,500,000 Wal-Mart Stores, Inc.
5.30%, 11/23/99 (C) ......................... 41,365,586
--------------
682,779,087
--------------
Technology - 3.63%
50,000,000 Hewlett-Packard Co.
5.28%, 11/09/99 ............................. 49,941,333
50,000,000 International Business Machines Corp.
5.30%, 12/06/99 ............................. 49,742,361
50,000,000 Motorola, Inc.
5.30%, 11/24/99 ............................. 49,830,694
--------------
149,514,388
--------------
Chemicals and Drugs - 3.34%
40,000,000 Pfizer, Inc.
5.28%, 11/04/99 (C) ......................... 39,982,400
50,000,000 Pfizer, Inc.
5.28%, 11/08/99 (C) ......................... 49,948,667
31,000,000 Pfizer, Inc.
5.28%, 11/15/99 (C) ......................... 30,936,347
16,675,000 Pfizer, Inc.
5.28%, 11/17/99 (C) ......................... 16,635,869
--------------
137,503,283
--------------
Utilities - 1.68%
54,000,000 Emerson Electric Co.
5.28%, 11/05/99 ............................. 53,968,320
15,192,000 Emerson Electric Co.
5.30%, 11/23/99 ............................. 15,142,795
--------------
69,111,115
--------------
Total Commercial Paper ...................... 2,145,816,348
(Cost $2,145,816,348) --------------
See Notes to Financial Statements.
9
<PAGE>
Money Market Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
--------- ---------
CORPORATE NOTES AND BONDS - 30.07%
Banking - 19.52%
$ 40,000,000 American Express Centurion Bank
Bank Note
5.37%, 02/14/00 (B) ......................... $ 40,000,000
50,000,000 Bank One, N.A., Bank Note
6.16%, 10/16/00 (B) ......................... 49,981,713
50,000,000 Comerica Bank, Bank Note
5.41%, 11/23/99 (B) ......................... 49,998,812
50,000,000 Comerica Bank, Bank Note
5.42%, 09/01/00 (B) ......................... 49,970,721
70,000,000 Fifth Third Bancorp, Bank Note
5.30%, 11/19/99 ............................. 70,000,000
50,000,000 Fifth Third Bancorp, Bank Note
5.39%, 12/13/99 ............................. 50,000,000
50,000,000 First Union National Bank, Bank Note
5.49%, 11/22/99 (B) ......................... 49,999,590
50,000,000 First Union National Bank, Bank Note
5.50%, 11/29/99 (B) ......................... 50,000,000
50,000,000 Huntington National Bank, Bank Note
5.50%, 12/01/99 (B) ......................... 49,998,794
50,000,000 Huntington National Bank, Bank Note
5.52%, 12/03/99 (B) ......................... 50,000,000
50,000,000 Key Bank N.A., Bank Note
5.48%, 02/29/00 (B) ......................... 49,997,815
37,500,000 Key Bank N.A., Bank Note
5.35%, 06/26/00 (B) ......................... 37,485,581
37,000,000 Key Bank N.A., Bank Note
5.56%, 11/02/00 (B) ......................... 37,066,958
44,000,000 M & I Bank Northeast
6.36%, 10/26/00 ............................. 44,000,000
50,000,000 Mellon Bank, Bank Note
5.33%, 03/10/00 (B) ......................... 49,993,038
50,000,000 NationsBank, N.A., Bank Note
5.37%, 12/15/99 (B) ......................... 49,997,628
25,000,000 Old Kent Bank, Bank Note
5.35%, 03/10/00 (B) ......................... 24,996,497
--------------
803,487,147
--------------
Finance - 5.73%
50,000,000 Deere (John) Capital Corp., MTN
5.50%, 12/10/99 (B) ......................... 49,997,648
50,000,000 IBM Credit Corp., MTN
5.49%, 12/07/99 (B) ......................... 50,000,000
36,000,000 IBM Credit Corp., MTN
5.90%, 08/07/00 ............................. 35,988,739
100,000,000 Texaco Capital, Inc., MTN
5.19%, 05/03/00 (B) ......................... 99,952,743
--------------
235,939,130
--------------
Utilities (B) - 4.21%
75,000,000 AT & T Corp.
6.14%, 07/13/00 (D) ......................... 74,979,041
60,000,000 National Rural Utilities
Cooperative, MTN
5.48%, 06/26/00 ............................. 59,996,433
38,500,000 National Rural Utilities
Cooperative, MTN
5.40%, 08/02/00 ............................. 38,493,946
--------------
173,469,420
--------------
Consumer Staples (B) - 0.61%
25,000,000 Anheuser-Busch Cos., Inc.
5.31%, 06/16/00 (D) ......................... 24,983,124
--------------
Total Corporate Notes and Bonds ............. 1,237,878,821
(Cost $1,237,878,821) --------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 10.02%
Federal Home Loan
Mortgage Corporation (A) - 6.90%
50,000,000 5.20%, 11/09/99 ............................. 49,942,222
40,000,000 5.21%, 11/12/99 ............................. 39,936,322
45,000,000 5.20%, 11/15/99 ............................. 44,909,000
50,000,000 5.21%, 11/16/99 ............................. 49,891,458
50,000,000 5.22%, 11/26/99 ............................. 49,818,750
50,000,000 5.26%, 12/17/99 ............................. 49,663,945
--------------
284,161,697
--------------
Federal National
Mortgage Association (A) - 2.80%
31,257,000 5.25%, 11/03/99 ............................. 31,247,883
84,062,000 5.22%, 11/12/99 ............................. 83,927,921
--------------
115,175,804
--------------
Federal Home Loan Bank - 0.32%
13,000,000 5.92%, 10/13/00 ............................. 12,988,661
--------------
Total U.S. Government and
Agency Obligations .......................... 412,326,162
(Cost $412,326,162) --------------
See Notes to Financial Statements.
10
<PAGE>
Money Market Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
--------- ---------
CERTIFICATES OF DEPOSIT - 7.73%
$ 50,000,000 Bank of Nova Scotia
5.31%, 04/20/00 (B) ......................... $ 50,012,073
50,000,000 Canadian Imperial Bank
5.25%, 05/10/00 ............................. 49,988,419
15,000,000 Key Bank N.A.
5.71%, 07/12/00 ............................. 14,995,501
74,500,000 Royal Bank of Canada, Yankee
5.27%, 03/02/00 ............................. 74,486,827
29,000,000 Toronto Dominion Holdings, Yankee
5.27%, 03/02/00 ............................. 28,995,338
100,000,000 UBS AG, Yankee
5.28%, 03/03/00 ............................. 99,987,035
--------------
Total Certificates of Deposit ............... 318,465,193
(Cost $318,465,193)
--------------
Total Investments - 99.94% .................................... 4,114,486,524
(Cost $4,114,486,524)* --------------
Net Other Assets and Liabilities - 0.06% ...................... 2,536,338
--------------
Net Assets - 100.00% .......................................... $4,117,022,862
==============
- ----------
* Aggregate cost for federal tax purposes.
(A) Discount yield at time of purchase.
(B) Interest is reset at various time intervals. The interest rate shown
reflects the rate in effect at October 31, 1999.
(C) Securities exempt from registration under section 4(2) of the Securities
Act of 1933, as amended. These securities may only be resold in an exempt
transaction to qualified institutional buyers. At October 31,1999, these
securities amounted to $693,519,597 or 16.85% of net assets.
(D) Securities exempt from registration pursuant to Rule 144A under the
Securities Act of 1933, as amended. These securities may only be resold in
an exempt transaction to qualified institutional buyers. At October
31,1999, these securities amounted to $99,962,165 or 2.43% of net assets.
MTN Medium Term Note
See Notes to Financial Statements.
11
<PAGE>
Government Fund
Portfolio of Investments
October 31, 1999
Par Value Value
--------- ---------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 84.14%
Federal National
Mortgage Association - 31.21%
$ 69,532,000 5.25%, 11/09/99 (A) ......................... $ 69,450,959
50,000,000 5.22%, 11/12/99 (A) ......................... 49,920,250
40,000,000 5.24%, 12/10/99 (A) ......................... 39,772,933
29,000,000 5.23%, 12/16/99 (A) ......................... 28,810,412
48,325,000 5.24%, 12/17/99 (A) ......................... 48,001,544
15,000,000 5.56%, 01/20/00 (A) ......................... 14,814,667
18,000,000 5.23%, 07/26/00 (B) ......................... 17,991,762
25,000,000 5.18%, 08/04/00 (B) ......................... 24,988,648
--------------
293,751,175
--------------
Federal Home Loan
Mortgage Corporation - 30.15%
22,508,000 5.20%, 11/03/99 (A) ......................... 22,501,498
50,000,000 5.26%, 11/04/99 (A) ......................... 49,978,083
40,000,000 5.20%, 11/09/99 (A) ......................... 39,953,778
25,000,000 5.21%, 11/10/99 (A) ......................... 24,967,438
70,000,000 5.22%, 11/16/99 (A) ......................... 69,847,833
45,000,000 5.22%, 11/26/99 (A) ......................... 44,836,875
21,762,000 5.17%, 12/01/99 (A) ......................... 21,668,242
10,000,000 5.21%, 05/18/00 (B) ......................... 9,994,609
--------------
283,748,356
--------------
Federal Home Loan Bank - 20.12%
40,000,000 5.17%, 11/10/99 (A) ......................... 39,948,300
10,000,000 5.11%, 11/17/99 (A) ......................... 9,977,289
30,000,000 5.16%, 03/08/00 ............................. 29,990,914
30,500,000 5.20%, 05/26/00 ............................. 30,493,617
15,000,000 5.23%, 07/28/00 (B) ......................... 14,993,361
30,000,000 5.71%, 08/09/00 ............................. 29,985,438
15,000,000 5.92%, 10/04/00 (B) ......................... 14,990,474
19,000,000 5.92%, 10/13/00 ............................. 18,983,427
--------------
189,362,820
--------------
Federal Farm Credit Bank (B) - 2.66%
25,000,000 5.24%, 09/01/00 ............................. 24,993,750
--------------
Total U.S. Government
and Agency Obligations ...................... 791,856,101
(Cost $791,856,101) --------------
REPURCHASE AGREEMENT - 16.52%
155,435,000 Repurchase Agreement with:
J.P. Morgan
5.22%, 11/01/99, dated 10/29/99
Repurchase Price $155,502,614
(Collateralized by U.S. Treasury
Notes and Bonds
4.63% to 8.88%, Due 11/30/00
to 08/15/17
Total Par $143,664,000
Market Value $158,544,568) .................. 155,435,000
--------------
Total Repurchase Agreement .................. 155,435,000
(Cost $155,435,000) --------------
Total Investments - 100.66% ................................... 947,291,101
(Cost $947,291,101)* --------------
Net Other Assets and Liabilities - (0.66)% .................... (6,227,383)
--------------
Net Assets - 100.00% .......................................... $ 941,063,718
==============
- ----------
* Aggregate cost for federal tax purposes.
(A) Discount yield at time of purchase.
(B) Interest is reset at various time intervals. The interest rate shown
reflects the rate in effect at October 31, 1999.
See Notes to Financial Statements.
12
<PAGE>
Tax-Exempt Fund
Portfolio of Investments
October 31, 1999
Par Value Value
--------- ---------
MUNICIPAL SECURITIES - 98.22%
Alabama - 3.24%
$ 6,000,000 Chatom IDB, PCR
National Rural Utilities CFC
3.45%, 11/17/99 ............................. $ 6,000,000
15,000,000 Montgomery County, IDB
3.55%, 11/02/99
Guaranteed: General Electric Co. ............ 15,000,000
1,200,000 North Alabama, PCR
Environmental Improvement Authority
Reynolds Metals
3.65%, 12/01/00 (A)
LOC: Bank of Nova Scotia .................... 1,200,000
1,000,000 Phoenix County IDB
Environmental Improvements
Georgia Kraft Project
3.60%, 12/01/15 (A)
LOC: Deutsche Bank AG ....................... 1,000,000
--------------
23,200,000
--------------
Alaska - 1.23%
3,400,000 Valdez Marine Terminal Revenue
Exxon Pipeline Co. Project, Series B
3.50%, 12/01/33 (A) ......................... 3,400,000
5,400,000 Valdez Marine Terminal Revenue
Exxon Pipeline Co. Project, Series C
3.50%, 12/01/33 (A) ......................... 5,400,000
--------------
8,800,000
--------------
Arizona - 1.96%
14,000,000 Maricopa County, PCR
Arizona Public Service Co.
Series A
3.50%, 05/01/29 (A)
LOC: Morgan Guaranty Trust Co. .............. 14,000,000
--------------
Arkansas - 1.13%
5,900,000 Crossett, PCR
Georgia Pacific Corp. Project
3.45%, 10/01/07 (A)
LOC: Wachovia Bank N.A. ..................... 5,900,000
2,200,000 Pulaski County, PCR
Minnesota Mining & Manufacturing
3.40%, 08/01/22 (A) ......................... 2,200,000
--------------
8,100,000
--------------
California - 0.84%
1,000,000 Los Angeles Regional
Airports Improvement Corp.
American Airlines, Inc., Series A
LA International Airport
3.65%, 12/01/24 (A)
LOC: Wachovia Bank, N.A. .................... 1,000,000
5,000,000 Los Angeles Regional
Airports Improvement Corp.
Lease Revenue
LAX Two Corp
3.65%, 12/01/25 (A)
LOC: Societe Generale ....................... 5,000,000
--------------
6,000,000
--------------
Colorado - 0.96%
3,815,000 Colorado State HFA
Boulder Community Hospital Project
Series B
3.45%, 10/01/14 (A)
Insured: MBIA
SPA: Rabobank Nederland NV .................. 3,815,000
3,070,000 Colorado State HFA
Boulder Community Hospital Project
Series C
3.45%, 10/01/14 (A)
Insured: MBIA
SPA: Rabobank Nederland NV .................. 3,070,000
--------------
6,885,000
--------------
Florida - 1.40%
10,000,000 Putnam County Development
Authority, PCR, Seminole Electric
Cooperative, Series D
3.13%, 12/15/09 (A)
Guaranteed: National Rural
Utilities CFC ............................... 10,000,000
--------------
Georgia - 5.30%
8,495,000 Burke County Development
Authority, PCR, Oglethorpe
Power Corp., Series A
3.50%, 01/01/16 (A)
Insured: FGIC
SPA: Canadian Imperial
Bank of Commerce ............................ 8,495,000
4,955,000 Georgia State, GO
Series A
5.80%, 03/01/00 ............................. 4,997,841
9,000,000 Municipal Electric Authority
Project One, Series B
3.40%, 01/01/16 (A)
LOC: ABN-AMRO Bank N.V. ..................... 9,000,000
See Notes to Financial Statements.
13
<PAGE>
Tax-Exempt Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
--------- ---------
Georgia (continued)
$13,600,000 Municipal Electric Authority
Project One, Series C
3.40%, 01/01/20 (A)
LOC: ABN-AMRO Bank N.V. ..................... $ 13,600,000
1,900,000 Municipal Electric Authority
Project One, Series D
3.40%, 01/01/22 (A)
LOC: ABN-AMRO Bank N.V. ..................... 1,900,000
--------------
37,992,841
--------------
Illinois - 3.76%
4,900,000 Chicago O'Hare International Airport
American Airlines, Series C
3.60%, 12/01/17(A)
LOC: Royal Bank of Canada ................... 4,900,000
5,000,000 Illinois Development Finance
Authority, PCR, Illinois Power Co.
Project, Series A
3.45%, 11/01/28 (A)
LOC: ABN-AMRO Bank N.V. ..................... 5,000,000
9,800,000 Illinois Educational Facility
Authority Revenue
3.60%, 11/17/99
LOC: Northern Trust Co. ..................... 9,800,000
5,100,000 Joliet Regional Port District
Marine Terminal Revenue
Exxon Project
3.50%, 10/01/24 (A) ......................... 5,100,000
2,100,000 Northbrook, IDR
Euromarket Designs, Inc.
3.50%, 07/01/02 (A)
LOC: Harris Trust & Savings Bank ............ 2,100,000
--------------
26,900,000
--------------
Indiana - 7.02%
5,205,000 Fort Wayne Hospital Authority
Parkview Memorial Hospital
Series B
3.45%, 01/01/16 (A)
LOC: Bank of America NT & SA ................ 5,205,000
3,840,000 Fort Wayne Hospital Authority
Parkview Memorial Hospital
Series C
3.45%, 01/01/16 (A)
LOC: Bank of America NT & SA ................ 3,840,000
5,000,000 Indiana State Development Finance
Authority, Environmental Revenue
USX Corp. Project
3.45%, 12/01/22 (A)
LOC: Bank of Nova Scotia .................... 5,000,000
16,000,000 Mount Vernon County
3.55%, 11/02/99
Guaranteed: General Electric Co. ............ 16,000,000
8,700,000 Princeton Industrial, PCR
PSI Energy, Inc. Project
3.50%, 03/01/19 (A)
LOC: Canadian Imperial
Bank of Commerce ............................ 8,700,000
11,500,000 Sullivan Industrial Pollution Control
3.55%, 11/04/99
Guaranteed: National Rural Utility CFC ...... 11,500,000
--------------
50,245,000
--------------
Kentucky - 3.33%
8,800,000 Ashland, PCR
Ashland Oil, Inc. Project
3.35%, 04/01/09 (A)
LOC: Suntrust Bank .......................... 8,800,000
15,000,000 Kentucky Asset Liability Commission
General Fund Revenue, TRAN
Series A
4.25%, 06/28/00 ............................. 15,083,207
--------------
23,883,207
--------------
Louisiana - 8.28%
9,800,000 Ascension Parish, PCR
Shell Oil Co.
3.35%, 05/01/26 (A) ......................... 9,800,000
1,800,000 Lake Charles Harbor &
Terminal District
Port Facilities Revenue
Citgo Petroleum Corp.
3.50%, 08/01/07 (A)
LOC: Westdeutsche Landesbank ................ 1,800,000
1,100,000 Lake Charles Harbor &
Terminal District
Revenue Updates
Reynolds Metals Co. Project
3.50%, 05/01/06 (A)
LOC: Canadian Imperial
Bank of Commerce ............................ 1,100,000
11,700,000 Louisiana State Offshore Terminal
Authority, Deepwater Port Revenue
Loop, Inc., 1st Stage
3.55%, 09/01/06
LOC: UBS AG ................................. 11,700,000
11,100,000 Louisiana State Offshore Terminal
Authority, Deepwater Port Revenue
Loop, Inc., 1st Stage A
3.50%, 09/01/08 (A)
LOC: UBS AG ................................. 11,100,000
1,000,000 Louisiana Public Facilities Authority
PCR, Ciba-Geigy Corp. Project
3.45%, 12/01/04 (A)
LOC: UBS AG ................................. 1,000,000
8,800,000 St. Charles Parish, PCR
Shell Oil Co. Project
3.35%, 06/01/05 (A) ......................... 8,800,000
See Notes to Financial Statements.
14
<PAGE>
Tax-Exempt Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
--------- ---------
Louisiana (continued)
$14,000,000 St. James Parish, PCR
3.50%, 01/19/00
Guaranteed: Texaco, Inc. .................... $ 14,000,000
--------------
59,300,000
--------------
Massachusetts - 1.79%
6,000,000 Brookline, BAN, GO
3.25%, 12/16/99 ............................. 6,002,515
3,000,000 Massachusetts State Housing Finance
Agency, Multi-Family, Series A
3.35%, 12/01/25 (A)
LOC: GNMA
SPA: Republic National
Bank of New York ............................ 3,000,000
3,850,000 Stoneham, BAN, GO
3.25%, 11/16/99 ............................. 3,850,538
--------------
12,853,053
--------------
Michigan - 1.33%
9,535,000 Michigan State University
Revenue, Series A-2
3.45%, 08/15/22 (A) ......................... 9,535,000
--------------
Mississippi - 2.88%
1,100,000 Harrison County PCR
duPont (E.I) deNemours & Co.
3.50%, 09/01/10 (A) ......................... 1,100,000
2,000,000 Jackson County
Water System
3.35%, 11/01/24 (A)
Guaranteed: Chevron Corp. ................... 2,000,000
1,600,000 Jackson County, PCR
Chevron USA, Inc. Project
3.50%, 12/01/16 (A) ......................... 1,600,000
2,240,000 Mississippi State, GO
Capital Improvements, Series B
4.50%, 11/01/99 ............................. 2,240,000
13,595,000 Mississippi State Highway Revenue
Four Lane Highway Project, Series 39
4.50%, 06/01/00 ............................. 13,679,552
--------------
20,619,552
--------------
Missouri - 0.85%
6,100,000 Missouri State Environmental
Improvement and Energy Resources
Authority, Union Electric Co.
Project, PCR
3.30%, 02/18/00
LOC: UBS AG ................................. 6,100,000
--------------
Nevada - 1.08%
7,700,000 Reno Hospital Revenue
St Mary's Regional Medical Center
Series B
3.65%, 05/15/23 (A)
Insured: MBIA
SPA: Rabobank Nederland NV .................. 7,700,000
--------------
New Mexico - 2.86%
3,900,000 Farmington, PCR
El Paso Electric Co.
Series A
3.55%, 11/01/13 (A)
LOC: Barclays Bank Plc ...................... 3,900,000
16,500,000 New Mexico State, TRAN
4.00%, 06/30/00 ............................. 16,581,282
--------------
20,481,282
--------------
New York - 1.58%
6,300,000 Long Island Power Authority
Electric Systems Revenue
Series 6
3.65%, 05/01/33 (A)
LOC: ABN-AMRO Bank NV/
Morgan Guaranty Trust ....................... 6,300,000
5,000,000 New York City Municipal Water
Finance Authority, Water & Sewer
System Revenue, Series G
3.50%, 06/15/24 (A)
LOC: FGIC
SPA: FGIC-SPI ............................... 5,000,000
--------------
11,300,000
--------------
North Carolina - 2.16%
9,500,000 North Carolina Educational
Facilities Finance Agency
Bowman Gray School Project
3.50%, 09/01/26 (A)
LOC: Wachovia Bank, N.A. .................... 9,500,000
6,000,000 Wake County Industrial Facilities &
Pollution Control Financing Authority
Carolina Power & Light
Co. Project, Series A
3.60%, 06/15/14 (A)
LOC: First National Bank of Chicago ......... 6,000,000
--------------
15,500,000
--------------
Ohio - 0.50%
1,700,000 Evendale, IDR
SHV Real Estate, Inc.
3.35%, 09/01/15 (A)
LOC: ABN-AMRO Bank NV ....................... 1,700,000
See Notes to Financial Statements.
15
<PAGE>
Tax-Exempt Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
--------- ---------
Ohio (continued)
$ 1,900,000 Ohio State Air Quality
Development Authority Revenue
Cincinnati Gas & Electric, Series A
3.50%, 09/01/30 (A)
LOC: ABN-AMRO Bank NV ....................... $ 1,900,000
--------------
3,600,000
--------------
Oregon - 0.92%
6,600,000 Port Portland, PCR
Reynolds Metals Co.
3.65%, 12/01/09 (A)
LOC: Bank of Nova Scotia .................... 6,600,000
--------------
Pennsylvania - 8.10%
2,000,000 Beaver County IDA, PCR
Duquesne-Beaver Valley, Series A
3.40%, 08/01/20 (A)
LOC: Barclays Bank Plc ...................... 2,000,000
6,900,000 Beaver County IDA, PCR
Duquesne-Mansfield, Series B
3.40%, 08/01/09 (A)
LOC: Barclays Bank Plc ...................... 6,900,000
3,500,000 Chester County IDA, IDR
General Motors Corp. Project
3.50%, 08/01/01 (A) ......................... 3,500,000
3,005,000 Delaware County IDA
Resource Recovery Facility, Series G
3.40%, 12/01/31 (A)
Guaranteed: General Electric
Capital Corp. ............................... 3,005,000
2,140,000 Delaware County IDA
Resource Recovery Facility
Series G
3.40%, 12/01/31 (A)
Guaranteed: General Electric
Capital Corp. ............................... 2,140,000
6,300,000 Delaware County Industrial, PCR
Philadelphia Electric
3.35%, 11/09/99
Insured: FGIC ............................... 6,300,000
6,000,000 Delaware Valley Regional
Finance Authority, Local
Government Revenue
3.50%, 08/01/16 (A)
LOC: Credit Suisse First Boston ............. 6,000,000
3,100,000 Delaware Valley Regional
Finance Authority, Local
Government Revenue, Series A
3.50%, 12/01/19 (A)
LOC: Credit Suisse First Boston ............. 3,100,000
5,000,000 Delaware Valley Regional
Finance Authority, Local
Government Revenue, Series B
3.50%, 12/01/20 (A)
LOC: Credit Suisse First Boston ............. 5,000,000
8,100,000 Delaware Valley Regional
Finance Authority, Local
Government Revenue, Series C
3.50%, 12/01/20 (A)
LOC: Credit Suisse First Boston ............. 8,100,000
12,000,000 Quakertown General Authority Revenue
Pooled Financing Program, Series A
3.60%, 06/01/28 (A)
LOC: PNC Bank, N.A. ......................... 12,000,000
--------------
58,045,000
--------------
South Carolina - 3.25%
13,260,000 South Carolina Jobs
Economic Development Authority
St. Francis Hospital
3.65%, 07/01/22 (A)
LOC: Chase Manhattan Bank ................... 13,260,000
10,000,000 Spartanburg County
Health Services District, Inc.
Hospital Revenue
3.45%, 04/15/23 (A)
LOC: MBIA
SPA: NationsBank N.A. ....................... 10,000,000
--------------
23,260,000
--------------
Tennessee - 2.15%
8,400,000 Metropolitan Nashville Airport
Authority Special Facilities Revenue
American Airlines Project, Series A
3.65%, 10/01/12 (A)
LOC: Credit Suisse First Boston ............. 8,400,000
1,200,000 Sullivan County IDB, PCR
Mead Corp. Project
3.60%, 10/01/16 (A)
LOC: UBS AG ................................. 1,200,000
2,300,000 Tennessee State, BAN, GO, Series C
3.50%, 07/02/01 (A)
SPA: Tennessee Conservative
Retirement System ........................... 2,300,000
3,450,000 Tennessee State, GO
Series A
5.00%, 05/01/00 ............................. 3,483,137
--------------
15,383,137
--------------
Texas - 18.97%
2,750,000 Dallas, GO
7.50%, 02/15/00 ............................. 2,785,941
2,300,000 Grapevine IDC
American Airlines, Series A2
3.65%, 12/01/24 (A)
LOC: Morgan Guaranty Trust .................. 2,300,000
See Notes to Financial Statements.
16
<PAGE>
Tax-Exempt Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
--------- ---------
Texas (continued)
$ 5,690,000 Guadalupe-Blanco River Authority
PCR, Central Power & Light Co. Project
3.50%, 11/01/15 (A)
LOC: ABN-AMRO Bank NV ....................... $ 5,690,000
11,700,000 Gulf Coast Waste Disposal Authority
PCR, Amoco Oil Co. Project
3.50%, 10/01/17 (A) ......................... 11,700,000
12,500,000 Gulf Coast Waste Disposal
Authority, PCR
Exxon Project
3.40%, 10/01/24 (A) ......................... 12,500,000
13,000,000 Harris County IDC
Baytank Houston, Inc. Project
3.40%, 02/01/20 (A)
LOC: Rabobank Nederland ..................... 13,000,000
10,000,000 Hockley County IDC, PCR
Amoco Project, Standard Oil Co.
3.60%, 03/01/14 (A) ......................... 10,001,042
10,000,000 Houston Higher Education Finance Corp.
Rice University, Series A
3.75%, 05/10/00 ............................. 10,000,000
15,000,000 Houston, TRAN
4.25%, 06/30/00 ............................. 15,086,424
3,700,000 Lone Star Airport
Improvement Authority
American Airlines, Inc., Series A-3
3.65%, 12/01/14 (A)
LOC: Royal Bank of Canada ................... 3,700,000
2,770,000 Lone Star Airport
Improvement Authority
American Airlines, Inc., Series A-4
3.65%, 12/01/14 (A)
LOC: Royal Bank of Canada ................... 2,770,000
1,300,000 Lone Star Airport
Improvement Authority
American Airlines, Inc., Series A-5
3.65%, 12/01/14 (A)
LOC: Royal Bank of Canada ................... 1,300,000
1,800,000 Lone Star Airport
American Airlines, Inc., Series B-3
3.65%, 12/01/14 (A)
LOC: Royal Bank of Canada ................... 1,800,000
13,250,000 Lower Neches Valley Authority
Chevron USA, Inc. Project
3.45%, 02/15/17 (A) ......................... 13,250,000
5,110,000 North Central HFDC
Presbyterian Medical Center
Series D
3.65%, 12/01/15 (A)
LOC: MBIA
SPA: NationsBank of Texas ................... 5,110,000
14,300,000 Sabine River Authority, PCR
Texas Utilities Project, Series A
3.50%, 03/01/26 (A)
Insured: AMBAC
SPA: Bank of New York ....................... 14,300,000
10,500,000 Texas, TRAN
Series A
4.50%, 08/31/00 ............................. 10,567,426
--------------
135,860,833
--------------
Utah - 2.72%
10,000,000 Utah State, GO
Series B
3.35%, 07/01/16 (A)
SPA: Toronto Dominion Bank .................. 10,000,000
9,500,000 Utah State, GO
Series C
3.40%, 07/01/16 (A)
SPA: Toronto Dominion Bank .................. 9,500,000
--------------
19,500,000
--------------
Virginia - 0.75%
5,400,000 Peninsula Ports Authority
Coal Term Revenue
Dominion Terminal Project
Series C
3.65%, 07/01/16 (A)
LOC: Barclays Bank Plc ...................... 5,400,000
--------------
Washington - 2.34%
6,750,000 Seattle Municipal Light and Power
Revenue
3.50%, 11/16/99
SPA: Morgan Guaranty Trust .................. 6,750,000
1,000,000 Snohomish County Public Utility
District No. 1, Electric Revenue
Generation System
3.45%, 01/01/25 (A)
Insured: MBIA
SPA: Bayerische Vereinsbank ................. 1,000,000
5,025,000 Washington State
Public Power Supply System
Nuclear Project No. 1 Revenue
Series 1A-1
3.400%, 07/01/17 (A)
LOC: Bank of America NT & SA ................ 5,025,000
3,950,000 Washington State
Public Power Supply System
Nuclear Project No. 1
Series 1A-3
3.35%, 07/01/17 (A)
LOC: Morgan Guaranty Trust .................. 3,950,000
--------------
16,725,000
--------------
See Notes to Financial Statements.
17
<PAGE>
Tax-Exempt Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
--------- ---------
Wisconsin - 1.03%
$ 7,355,000 Wisconsin State, GO
Series A
4.25%, 05/01/00 ............................. $ 7,403,826
--------------
Wyoming - 4.51%
10,000,000 Kemmerer, PCR
Exxon Project
3.50%, 11/01/14 (A) ......................... 10,000,000
1,000,000 Platte County, PCR
Tri-State G & T, Series A
3.75%, 07/01/14 (A)
LOC: National Rural Utility CFC ............. 1,000,000
12,100,000 Sweetwater County, PCR
Pacific Corp Project
3.65%, 02/11/00
LOC: UBS AG ................................. 12,100,000
2,400,000 Sweetwater County, PCR
Pacific Corp Project
3.75%, 02/11/00
LOC: UBS AG ................................. 2,400,000
5,800,000 Uinta County, PCR
Amoco, Inc.
3.50%, 07/01/26 (A) ......................... 5,800,000
1,000,000 Uinta County, PCR
Chevron USA, Inc.
3.50%, 04/01/10 (A) ......................... 1,000,000
--------------
32,300,000
--------------
Total Municipal Securities .................. 703,472,731
(Cost $703,472,731) --------------
INVESTMENT COMPANIES - 0.49%
Shares Value
--------- ---------
205,069 Dreyfus Tax Exempt Cash
Management Fund ............................. 205,069
3,289,768 Federated Investors Tax-Free
Obligations Fund ............................ 3,289,768
--------------
Total Investment Companies .................. 3,494,837
(Cost $3,494,837) --------------
Total Investments - 98.71% .................................... 706,967,568
(Cost $706,967,568)* --------------
Net Other Assets and Liabilities - 1.29% ...................... 9,227,149
--------------
Net Assets - 100.00% .......................................... $ 716,194,717
==============
- ----------
* Aggregate cost for federal tax purposes.
(A) Variable rate demand notes are payable upon not more than one, seven or
thirty business days notice. Put bonds and notes have demand features
which mature within one year. The interest rate shown reflects the rate
in effect at October 31, 1999.
AMBAC American Municipal Bond Assurance Corp.
BAN Bond Anticipation Notes
CFC Cooperative Finance Corp.
FGIC Federal Guaranty Insurance Corp.
GNMA Government National Mortgage Association
GO General Obligation
HFA Health Facilities Authority
HFDC Health Facilities Development Corp.
IDA Industrial Development Authority
IDB Industrial Development Board
IDC Industrial Development Corp.
IDR Industrial Development Revenue
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PCR Polution Control Revenue
SPA Stand-by Purchase Agreement
TRAN Tax and Revenue Anticipation Notes
See Notes to Financial Statements.
18
<PAGE>
U.S. Treasury Fund
Portfolio of Investments
October 31, 1999
Par Value Value
--------- ---------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 98.92%
U.S. Treasury Bills (A) - 42.93%
$ 30,000,000 4.72%, 11/04/99 ............................. $ 29,988,212
85,000,000 4.59%, 11/12/99 ............................. 84,880,741
60,000,000 4.63%, 11/18/99 ............................. 59,868,958
65,000,000 4.80%, 12/02/99 ............................. 64,731,226
110,000,000 4.57%, 12/09/99 ............................. 109,463,302
40,000,000 4.56%, 12/16/99 ............................. 39,772,000
45,000,000 4.68%, 12/23/99 ............................. 44,696,125
15,000,000 4.80%, 01/27/00 ............................. 14,820,200
--------------
448,220,764
--------------
Federal Home Loan Bank - 28.19%
135,477,000 5.16%, 11/01/99 (A) ......................... 135,477,000
20,000,000 5.17%, 11/10/99 (A) ......................... 19,974,150
45,000,000 5.16%, 03/08/00 ............................. 44,986,371
35,000,000 5.23%, 07/28/00 (B) ......................... 34,984,508
25,000,000 5.71%, 08/09/00 ............................. 24,987,865
25,000,000 5.92%, 10/04/00 (B) ......................... 24,984,123
9,000,000 5.92%, 10/13/00 ............................. 8,992,150
--------------
294,386,167
--------------
U.S. Treasury Notes - 24.93%
80,000,000 5.88%, 11/15/99 ............................. 80,030,650
100,000,000 5.63%, 11/30/99 ............................. 100,057,723
40,000,000 7.75%, 11/30/99 ............................. 40,089,872
20,000,000 5.63%, 12/31/99 ............................. 20,014,960
20,000,000 7.75%, 12/31/99 ............................. 20,087,963
--------------
260,281,168
--------------
Federal Farm Credit Bank (B) - 2.87%
30,000,000 5.24%, 09/01/00 ............................. 29,992,500
--------------
Total Investments - 98.92% .................................... 1,032,880,599
(Cost $1,032,880,599)* --------------
Net Other Assets and Liabilities - 1.08% ...................... 11,274,822
--------------
Net Assets - 100.00% .......................................... $1,044,155,421
==============
- ----------
* Aggregate cost for federal tax purposes.
(A) Discount yield at time of purchase.
(B) Interest is reset at various time intervals. The interest rate shown
reflects the rate in effect at October 31, 1999.
See Notes to Financial Statements.
19
<PAGE>
Connecticut Municipal Money Market Fund
Portfolio of Investments
October 31, 1999
Par Value Value
--------- ---------
MUNICIPAL SECURITIES - 99.81%
Alaska - 2.59%
$ 2,800,000 Valdez Marine Terminal Revenue
Exxon Pipeline Co. Project, Series B
3.50%, 12/01/33 (A) ......................... $ 2,800,000
3,500,000 Valdez Marine Terminal Revenue
Exxon Pipeline Co. Project, Series C
3.50%, 12/01/33 (A) ......................... 3,500,000
--------------
6,300,000
--------------
Arizona - 1.98%
3,100,000 Farmington, NM, PCR
Arizona Public Services Co.
Series A
3.55%, 05/01/24 (A)
LOC: Bank of America, NT & SA ............... 3,100,000
1,720,000 Farmington, NM, PCR
Arizona Public Services Co.
Series B
3.55%, 09/01/24 (A)
LOC: Barclays Bank Plc ...................... 1,720,000
--------------
4,820,000
--------------
California - 1.23%
1,000,000 Los Angeles Regional Airports
Improvement Corp.
Lease Revenue
LA International Airport, Series A
3.65%, 12/01/24 (A)
LOC: Wachovia Bank, N.A. .................... 1,000,000
2,000,000 Los Angeles Regional Airports
Improvement Corp.
Lease Revenue, Lax Two Corp.
3.65%, 12/01/25 (A)
LOC: Societe Generale ....................... 2,000,000
--------------
3,000,000
--------------
Connecticut - 62.09%
6,100,000 Connecticut State
Series B, GO
3.35%, 05/15/14 (A)
SPA: Bayerische Landesbank GZ ............... 6,100,000
2,600,000 Connecticut State
Development Authority, PCR
Central Vermont Public Service
3.30%, 12/01/15 (A)
LOC: Toronto Dominion Bank .................. 2,600,000
1,300,000 Connecticut State
Development Authority
Conco Project
3.25%, 11/01/05 (A)
LOC: Bayerische Vereinsbank AG .............. 1,300,000
11,140,000 Connecticut State
Development Authority
Health Care Corp.
for Independent Living
3.30%, 07/01/15 (A)
LOC: Chase Manhattan Bank, NA ............... 11,140,000
7,000,000 Connecticut State HEFA
Stamford Hospital Issue, Series H
3.20%, 07/01/24 (A)
Insured: MBIA
SPA: Chase Manhattan Bank, NA ............... 7,000,000
7,500,000 Connecticut State HEFA
Yale University
3.40%, 12/09/99 (A) ......................... 7,500,000
5,000,000 Connecticut State HEFA
Yale University, Series T-1
3.40%, 07/01/29 (A) ......................... 5,000,000
2,000,000 Connecticut State HEFA
Yale University, Series T-2
3.40%, 07/01/29 (A) ......................... 2,000,000
2,500,000 Connecticut State
Housing Finance Authority
Subject to AMT
3.45%, 12/08/99 (A)
SPA: Morgan Trust Guaranty .................. 2,500,000
4,700,000 Connecticut State
Housing Finance Authority
Housing Mortgage Finance Program
Series D-3
3.20%, 11/15/28 (A)
Insured: AMBAC
SPA: Landesbank Hessen-Thrgn ................ 4,700,000
8,100,000 Connecticut State
Housing Finance Authority
Housing Mortgage Finance Program
Series G
3.35%, 05/15/18 (A)
Insured: AMBAC
SPA: Morgan Guaranty Trust .................. 8,100,000
3,600,000 Connecticut State, IDA
Allen Group, Inc.
3.75%, 02/01/13 (A)
LOC: Bayerische Vereinsbank AG .............. 3,600,000
4,500,000 Connecticut State Special Assessment
Second Injury fund
Municipal Commercial Paper
3.20%, 11/09/99
LOC: Credit Communal de Belgique ............ 4,500,000
4,000,000 Connecticut State Special Assessment
Second Injury fund
Municipal Commercial Paper
3.50, 11/17/99
LOC: Credit Communal de Belgique ............ 4,000,000
3,500,000 Connecticut State Special Assessment
Second Injury fund
Municipal Commercial Paper
3.35%, 11/18/99
LOC: Credit Communal de Belgique ............ 3,500,000
See Notes to Financial Statements.
20
<PAGE>
Connecticut Municipal Money Market Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
--------- ---------
Connecticut (continued)
$ 7,000,000 Connecticut State Special Assessment
Unemployment Compensation
Advisory Fund, Series C
3.38%, 11/15/01 (A)
Insured: FGIC
SPA: FGIC - SPI ............................. $ 7,000,000
14,000,000 Connecticut State Special Tax
Obligation Revenue, Second Lien
Transportation Infrastructure
Series 1
3.40%, 12/01/10 (A)
LOC: Commerzbank AG ......................... 14,000,000
1,375,000 Danbury, GO
5.00%, 02/01/00 ............................. 1,381,218
1,525,000 Danbury, BAN, GO
3.75%, 02/08/00 ............................. 1,526,609
1,290,000 Darien, GO
4.00%, 08/01/00 ............................. 1,295,664
4,500,000 East Lyme, BAN, GO
3.10%, 01/20/00 ............................. 4,502,196
1,000,000 Hartford Redevelopment Agency
Multi-Family Mortgage Revenue
Underwood Tower Project
3.40%, 06/01/20 (A)
Insured: FSA
SPA: Societe Generale ....................... 1,000,000
6,755,000 Milford, BAN, GO
3.50%, 11/10/99 ............................. 6,755,244
2,600,000 Milford, BAN, GO
4.00%, 11/09/00 ............................. 2,608,736
7,000,000 Norwich, BAN, GO
3.00%, 11/04/99 ............................. 7,000,112
2,000,000 Regional School District No. 14
Woodbury & Bethlehem, BAN
3.75%, 05/25/00 ............................. 2,007,115
7,550,000 Ridgefield, BAN, GO
3.50%, 7/12/00 .............................. 7,560,140
8,000,000 Trumbull, BAN, GO
3.75%, 01/20/00 ............................. 8,010,271
3,792,000 Trumbull, BAN, GO
3.75%, 01/20/00 ............................. 3,793,463
2,130,000 Westport, BAN, GO
3.50%, 07/26/00 ............................. 2,133,018
6,795,000 Wilton, BAN, GO
3.50%, 07/19/00 ............................. 6,804,378
--------------
150,918,164
--------------
Illinois - 2.47%
1,600,000 Chicago O'Hare International Airport
American Airlines, Series C
3.60%, 12/01/17 (A)
LOC: Royal Bank of Canada ................... 1,600,000
4,400,000 Joliet Regional Port District
Marine Terminal Revenue
Exxon Project
3.50%, 10/01/24 (A) ......................... 4,400,000
--------------
6,000,000
--------------
Indiana - 0.45%
1,100,000 Princeton Industrial, PCR
PSI Energy, Inc. Project
3.50%, 03/01/19 (A)
LOC: Canadian Imperial
Bank of Commerce ............................ 1,100,000
--------------
Massachusetts - 0.41%
1,000,000 Massachusetts State HEFA
Capital Asset Program, Series E
3.50%, 01/01/35 (A)
LOC: First National Bank
of Chicago .................................. 1,000,000
--------------
Mississippi - 3.81%
9,250,000 Perry County, PCR
Leaf River Forest Project
3.55%, 03/01/02 (A)
LOC: Wachovia Bank N.A. ..................... 9,250,000
--------------
Nevada - 0.70%
1,700,000 Reno Hospital Revenue
St. Mary's Regional Medical Center
Series B
3.65%, 05/15/23 (A)
Insured: MBIA
SPA: Rabobank Nederland NV .................. 1,700,000
--------------
New York - 1.03%
2,500,000 Long Island Power Authority
Electric Systems Revenue
Series 6
3.65%, 05/01/33 (A)
LOC: ABN-AMRO Bank NV/
Morgan Guaranty Trust ....................... 2,500,000
--------------
North Carolina - 4.03%
9,800,000 Wake County Industrial Facilities &
Pollution Control Financing Authority
Revenue
Carolina Power & Light Co. Project
Series A
3.60%, 06/15/14 (A)
LOC: First National Bank of Chicago ......... 9,800,000
--------------
Ohio - 0.58%
1,400,000 Ohio State
Air Quality Development Authority Revenue
Cincinnati Gas & Electric, Series A
3.50%, 09/01/30 (A)
LOC: ABN-AMRO Bank NV ....................... 1,400,000
--------------
See Notes to Financial Statements.
21
<PAGE>
Connecticut Municipal Money Market Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
--------- ---------
Pennsylvania - 1.69%
$ 4,100,000 Delaware Valley, Regional Finance
Authority, Local Government Revenue
3.50%, 08/01/16 (A)
LOC: Credit Suisse First Boston ............. $ 4,100,000
--------------
Puerto Rico - 7.00%
11,000,000 Puerto Rico Commonwealth
Government Development Bank
3.25%, 12/01/15 (A)
Insured: MBIA
SPA: Credit Suisse First Boston ............. 11,000,000
6,000,000 Puerto Rico Commonwealth
Highway & Transportation Authority
Series A
3.10%, 07/01/28 (A)
Insured: AMBAC
SPA: Bank of Nova Scotia .................... 6,000,000
--------------
17,000,000
--------------
Tennessee - 1.32%
3,200,000 Metropolitan Nashville Airport Authority
Special Facilities Revenue
American Airlines Project, Series B
3.65%, 10/01/12 (A)
LOC: Bayerische Landesbank GZ ............... 3,200,000
--------------
Texas - 4.44%
1,300,000 Grapevine Industrial Development Corp.
American Airlines
Series A-4
3.65%, 12/01/24 (A)
LOC: Morgan Guaranty Trust .................. 1,300,000
8,500,000 Gulf Coast Waste Disposal Authority
PCR, Amoco Oil Co. Project
3.50%, 10/01/17 (A) ......................... 8,500,000
1,000,000 Lone Star Airport Improvement
Authority, American Airlines
Series B-4
3.65%, 12/01/14 (A)
LOC: Royal Bank of Canada ................... 1,000,000
--------------
10,800,000
--------------
Virginia - 1.32%
3,200,000 Peninsula Ports Authority, CTR
Dominion Term Project, Series C
3.65%, 07/01/16 (A)
LOC: Barclays Bank Plc ...................... 3,200,000
--------------
Wyoming - 2.67%
2,600,000 Kemmerer, PCR
Exxon Project
3.50%, 11/01/14 (A) ......................... 2,600,000
3,900,000 Uinta County, PCR
Amoco Project
3.50%, 07/01/26 (A) ......................... 3,900,000
--------------
6,500,000
--------------
Total Municipal Securities .................. 242,588,164
(Cost $242,588,164) --------------
Shares
----------
INVESTMENT COMPANY - 0.16%
398,977 Federated Municipal Trust
Connecticut Municipal Cash Trust ............ 398,977
--------------
Total Investment Company .................... 398,977
(Cost $398,977) --------------
Total Investments - 99.97% .................................... 242,987,141
(Cost $242,987,141)* --------------
Net Other Assets and Liabilities - 0.03% ...................... 63,873
--------------
Net Assets - 100.00% .......................................... $ 243,051,014
==============
* Aggregate cost for federal tax purposes.
(A) Variable rate demand notes are payable upon not more than one, seven or
thirty business days notice. Put bonds and notes have demand features
which mature within one year. The interest rate shown reflects the rate
in effect at October 31, 1999.
AMBAC American Municipal Bond Assurance Corp.
AMT Alternative Minimum Tax. Private activity obligations whose interest is
subject to the federal AMT for individuals.
BAN Bond Anticipation Notes
CTR Coal Term Revenue
FGIC Federal Guaranty Insurance Corp.
FSA Financial Security Assurance Co.
GO General Obligation
HEFA Health and Educational Facilities Authority
IDA Industrial Development Authority
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PCR Polution Control Revenue
SPA Stand-by Purchase Agreement
See Notes to Financial Statements.
22
<PAGE>
Massachusetts Municipal Money Market Fund
Portfolio of Investments
October 31, 1999
Par Value Value
--------- ---------
MUNICIPAL SECURITIES - 100.76%
Alaska - 1.04%
$ 2,500,000 Valdez Alaska Marine Terminal
Exxon Pipeline Co. Project, Series C
3.50%, 12/01/33 (A) ......................... $ 2,500,000
--------------
Arizona - 0.83%
2,000,000 Farmington, NM, PCR
Arizona Public Services Co.
Series B
3.55%, 09/01/24 (A)
LOC: Barclays Bank Plc ...................... 2,000,000
--------------
California - 1.57%
1,800,000 Los Angeles Regional Airports
Improvement Corp., Lease Revenue
American Airlines, Inc., Series D
LA International Airport
3.65%, 12/01/24 (A)
LOC: Wachovia Bank, N.A. .................... 1,800,000
2,000,000 Los Angeles Regional Airports
Improvement Corp., Lease Revenue
Lax Two Corp.
3.65%, 12/01/25 (A)
LOC: Societe Generale ....................... 2,000,000
--------------
3,800,000
--------------
Colorado - 0.41%
1,000,000 Moffat County, PCR
PacifiCorp, Inc. Project
3.50%, 05/01/13 (A)
Insured: AMBAC
SPA: Bank of New York ....................... 1,000,000
--------------
Massachusetts - 79.98%
1,350,000 Belmont, BAN, GO
3.75%, 09/06/00 ............................. 1,351,649
7,400,000 Boston Water and Sewer Commission
General Purpose, Senior Series A
3.20%, 11/01/24 (A)
LOC: State Street ........................... 7,400,000
5,000,000 Brookline, BAN, GO
3.25%, 12/16/99 ............................. 5,002,096
4,000,000 Brookline, BAN, GO
3.50%, 06/01/00 ............................. 4,007,886
5,167,000 Canton, BAN, GO
3.25%, 11/12/99 ............................. 5,167,522
7,442,916 Canton, BAN, GO, Lot A
3.25%, 12/17/99 ............................. 7,444,021
2,750,000 Easton, BAN, GO
3.75%, 08/11/00 ............................. 2,754,108
1,043,000 Framingham, GO
5.25%, 02/01/00 ............................. 1,048,781
6,000,000 Hingham, BAN, GO
3.75%,09/28/00 .............................. 6,002,572
2,500,000 Massachusetts Municipal
Wholesale Electric Co.
Power Supply System, Series C
3.38%, 07/01/19 (A)
Insured: MBIA
LOC: Credit Suisse First Boston ............. 2,500,000
2,000,000 Massachusetts State, GO
Series A
4.60%, 11/01/99 ............................. 2,000,000
10,000,000 Massachusetts State, GO
Series B
3.40%, 09/01/16 (A)
SPA: Toronto Dominion Bank .................. 10,000,000
8,120,000 Massachusetts State HEFA
Amherst College, Series F
3.15%, 11/01/26 (A) ......................... 8,120,000
4,000,000 Massachusetts State HEFA
Capital Asset Program, Series A
3.35%, 01/01/01 (A)
LOC: First National
Bank of Chicago ............................. 4,000,000
3,200,000 Massachusetts State HEFA
Capital Asset Program, Series E
3.50%, 01/01/35 (A)
LOC: First National
Bank of Chicago ............................. 3,200,000
4,100,000 Massachusetts State HEFA
Capital Asset Program, Series G-1
3.25%, 01/01/19 (A)
Insured: MBIA
SPA: Credit Suisse First Boston ............. 4,100,000
2,420,000 Massachusetts State HEFA
Harvard University
3.34%, 08/01/17 (A) ......................... 2,420,000
5,300,000 Massachusetts State HEFA
Harvard University, Series Q
3.34%, 02/01/16 (A) ......................... 5,300,000
1,000,000 Massachusetts State HEFA
Harvard University, Series Q
3.34%, 09/01/40 (A) ......................... 1,000,000
8,800,000 Massachusetts State HEFA
Newton Wellesley Hospital, Series F
3.15%, 07/01/25 (A)
Insured: MBIA
SPA: Credit Suisse First Boston ............. 8,800,000
2,000,000 Massachusetts State HEFA
Partners Healthcare System, Series P-2
3.40%, 07/01/27 (A)
Insured: FSA
SPA: Morgan Guaranty Trust/
Bayerische Landesbank GZ .................... 2,000,000
8,300,000 Massachusetts State HEFA
Wellesley College, Series G
3.50%, 07/01/39 (A) ......................... 8,300,000
See Notes to Financial Statements.
23
<PAGE>
Massachusetts Municipal Money Market Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
--------- ---------
Massachusetts (continued)
$ 9,700,000 Massachusetts State
Housing Finance Agency
Multi-Family, Series A
3.35%, 12/01/25 (A)
Insured: GNMA
SPA: Republic National
Bank of New York ............................ $ 9,700,000
1,000,000 Massachusetts State IFA
Health Care Facility Revenue
Beverly Enterprises-Dedham
3.55%, 04/01/09 (A)
LOC: PNC Bank, N.A. ......................... 1,000,000
1,800,000 Massachusetts State IFA
Buckingham Browne Nichols Issue
3.35%, 05/01/27 (A)
LOC: State Street ........................... 1,800,000
1,500,000 Massachusetts State IFA
Gordon College Issue
3.35%, 12/01/27 (A)
LOC: State Street ........................... 1,500,000
1,000,000 Massachusetts State IFA
Governor Dummer Academy
3.35%, 07/01/26 (A)
LOC: State Street ........................... 1,000,000
9,300,000 Massachusetts State IFA, PCR
Holyoke Water Power Co., Series A
3.30%, 05/01/22 (A)
LOC: Canadian Imperial
Bank of Commerce ............................ 9,300,000
5,000,000 Massachusetts State
Water Resource Authority
Municipal Commercial Paper
3.40%, 11/04/99
LOC: State Street ........................... 5,000,000
4,600,000 Massachusetts State
Water Resource Authority
Subordinated, General Purpose, Series A
3.30%, 04/01/28 (A)
Insured: AMBAC
SPA: Bank of Nova Scotia .................... 4,600,000
7,000,000 Natick, BAN, GO, Lot A
3.75%, 08/04/00 ............................. 7,015,395
1,297,000 Newton, GO
5.50%, 03/15/00 ............................. 1,308,692
4,275,000 Peabody, BAN, GO
3.12%, 04/06/00 ............................. 4,275,350
5,000,000 Peabody, BAN, GO
3.50%, 04/06/00 ............................. 4,997,450
3,000,000 Stoneham, BAN, GO
3.25%, 11/16/99 ............................. 3,000,419
4,970,000 Wellesley, BAN, GO
3.50%, 06/07/00 ............................. 4,980,073
8,757,577 Westfield, BAN, GO
4.25%, 04/20/00 ............................. 8,775,614
6,000,000 Westford, BAN
3.50%, 04/14/00 ............................. 6,009,168
5,000,000 Weston, BAN, GO
3.75%, 03/01/00 ............................. 5,001,150
7,482,000 Weston, BAN, GO
4.00%, 11/01/99 ............................. 7,482,000
4,560,000 Weston, BAN, GO
4.10%, 09/14/00 ............................. 4,576,090
--------------
193,240,036
--------------
Michigan - 0.85%
2,055,000 Cornell Township Economic
Development Corp.
Mead-Escanaba Paper Co.
3.60%, 11/01/16 (A)
LOC: Bank of America NT & SA ................ 2,055,000
--------------
Mississippi - 0.41%
1,000,000 Harrison County, PCR
EI duPont deNemours Project
3.50%, 09/01/10 (A) ......................... 1,000,000
--------------
North Carolina - 1.95%
4,700,000 Wake County Industrial Facilities &
Pollution Control Financing Authority
Revenue
Carolina Power & Light Co. Project, Series A
3.60%, 06/15/14 (A)
LOC: First National Bank of Chicago ......... 4,700,000
--------------
Ohio - 0.79%
1,900,000 Franklin County Health System Revenue
Franciscan Sister - St. Anthony's
3.60%, 07/01/15 (A)
LOC: Chase Manhattan Bank ................... 1,900,000
--------------
Oregon - 1.45%
3,500,000 Port Portland, PCR
Reynolds Metals Co.
3.65%, 12/01/09 (A)
LOC: Bank of Nova Scotia .................... 3,500,000
--------------
Pennsylvania - 3.10%
5,500,000 Delaware County, IDA
Airport Facilities Revenue
United Parcels Service Project
3.60%,12/01/15 (A) .......................... 5,500,000
2,000,000 Lehigh County General Purpose
Authority Revenues
Lehigh Valley Hospitals, Series A
3.65%, 07/01/28 (A)
Insured: AMBAC
SPA: Chase Manhattan Bank ................... 2,000,000
--------------
7,500,000
--------------
See Notes to Financial Statements.
24
<PAGE>
Massachusetts Municipal Money Market Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
--------- ---------
Tennessee - 1.06%
$ 1,570,000 Metropolitan Nashville Airport Authority
Special Facilities Revenue
American Airlines Project, Series A
3.65%, 10/01/12 (A)
LOC: Credit Suisse First Boston ............. $ 1,570,000
1,000,000 Sullivan County, Industrial
Development Board PCR
Mead Corp. Project
3.60%, 10/01/16 (A)
LOC: UBS AG ................................. 1,000,000
-------------
2,570,000
-------------
Texas - 6.26%
5,525,000 Gulf Coast Waste Disposal Authority
PCR, Amoco Oil Co. Project
3.50%, 10/01/17 (A) ......................... 5,525,000
2,500,000 Harris County Industrial Development
Corp., PCR, Exxon Corp.
3.60%, 03/01/24 (A) ......................... 2,500,000
1,000,000 Lone Star Airport Improvement
Authority, American Airlines, Inc.
Series A-1
3.65%, 12/01/14 (A)
LOC: Royal Bank of Canada ................... 1,000,000
2,800,000 Lone Star Airport Improvement
Authority, American Airlines, Inc.
Series B-2
3.65%, 12/01/14 (A)
LOC: Royal Bank of Canada ................... 2,800,000
1,000,000 Lone Star Airport Improvement
Authority, American Airlines, Inc.
Series B-3
3.65%, 12/01/14 (A)
LOC: Royal Bank of Canada ................... 1,000,000
2,300,000 Lone Star Airport Improvement
Authority, American Airlines, Inc.
Series B-4
3.65%, 12/01/14 (A)
LOC: Royal Bank of Canada ................... 2,300,000
-------------
15,125,000
-------------
Washington - 0.44%
1,055,000 Washington State Public Power
Supply System Nuclear Project
No. 1 Revenue, Series 1A-1
3.40%, 07/01/17 (A)
LOC: Bank of America NT & SA ................ 1,055,000
-------------
Wyoming - 0.62%
1,500,000 Uinta County, PCR
Amoco Project
3.50%, 07/01/26 (A) ......................... 1,500,000
-------------
Total Municipal Securities .................. 243,445,036
(Cost $243,445,036) -------------
Shares
----------
INVESTMENT COMPANIES - 0.83%
193,844 Dreyfus Massachusetts Tax
Exempt Money Market ......................... 193,844
1,044,819 Federated Municipal Trust
Massachusetts Municipal
Cash Trust .................................. 1,044,819
764,764 Federated Municipal Trust
Tax Exempt Money Market ..................... 764,764
-------------
Total Investment Companies .................. 2,003,427
(Cost $2,003,427) -------------
Total Investments - 101.59% ................................... 245,448,463
(Cost $245,448,463)* -------------
Net Other Assets and Liabilities - (1.59)% .................... (3,837,026)
-------------
Net Assets - 100.00% .......................................... $ 241,611,437
=============
- ----------
* Aggregate cost for federal tax purposes.
(A) Variable rate demand notes are payable upon not more than one, seven or
thirty business days notice. Put bonds and notes have demand features
which mature within one year. The interest rate shown reflects the rate
in effect at October 31, 1999.
AMBAC American Municipal Bond Assurance Corp.
BAN Bond Anticipation Note
FSA Financial Security Assurance Co.
GNMA Government National Mortgage Association
GO General Obligation
HEFA Health and Educational Facilities Authority
IDA Industrial Development Authority
IFA Industrial Finance Authority
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PCR Polution Control Revenue
SPA Stand-by Purchase Agreement
See Notes to Financial Statements.
25
<PAGE>
Galaxy Money Market Funds
Statements of Assets and Liabilities
October 31, 1999
<TABLE>
<CAPTION>
Money Market Government Tax-Exempt U.S. Treasury
Fund Fund Fund Fund
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at amortized cost ............................... $4,114,486,524 $ 791,856,101 $ 706,967,568 $1,032,880,599
Repurchase agreement ........................................ -- 155,435,000 -- --
-------------- -------------- -------------- --------------
Total investments at value ................................ 4,114,486,524 947,291,101 706,967,568 1,032,880,599
Cash .......................................................... -- 10,742 4,912 2,457
Receivable for shares sold .................................... 21,288,495 2,889,756 8,157,742 11,004,159
Interest and dividends receivable ............................. 16,039,942 1,977,989 3,631,404 7,710,134
-------------- -------------- -------------- --------------
Total Assets ................................................ 4,151,814,961 952,169,588 718,761,626 1,051,597,349
-------------- -------------- -------------- --------------
LIABILITIES:
Dividends payable ............................................. 7,170,917 2,463,528 1,322,859 1,606,561
Payable for investments purchased ............................. -- -- -- --
Payable for shares repurchased ................................ 25,094,899 8,058,857 864,706 5,251,150
Investment advisory fee payable (Note 3) ...................... 1,263,490 320,538 245,591 343,565
Payable to Fleet affiliates (Note 3) .......................... 223,993 31,016 14,450 53,437
Payable to Administrator (Note 3) ............................. 490,609 123,162 49,577 104,476
Trustees' fees and expenses payable (Note 3) .................. 102,933 35,627 12,955 27,746
Payable to custodian .......................................... 119,421 -- -- --
Accrued expenses and other payables ........................... 325,837 73,142 56,771 54,993
-------------- -------------- -------------- --------------
Total Liabilities ........................................... 34,792,099 11,105,870 2,566,909 7,441,928
-------------- -------------- -------------- --------------
NET ASSETS ....................................................... $4,117,022,862 $ 941,063,718 $ 716,194,717 $1,044,155,421
============== ============== ============== ==============
NET ASSETS consist of:
Par value (Note 6) ............................................ $ 4,116,788 $ 940,968 $ 716,346 $ 1,043,839
Paid-in capital in excess of par value ........................ 4,112,663,527 940,027,253 715,629,395 1,042,795,045
Undistributed (overdistributed) net investment income (loss) .. 242,547 95,497 (19,453) 316,537
Accumulated net realized (loss) on investments sold ........... -- -- (131,571) --
-------------- -------------- -------------- --------------
TOTAL NET ASSETS ................................................. $4,117,022,862 $ 941,063,718 $ 716,194,717 $1,044,155,421
============== ============== ============== ==============
Retail A Shares:
Net assets .................................................... $2,434,662,436 $ 348,758,370 $ 160,057,310 $ 584,363,843
Shares of beneficial interest outstanding ..................... 2,434,519,607 348,721,953 160,114,754 584,187,785
NET ASSET VALUE, offering and redemption price per share ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============== ============== ==============
Retail B Shares:
Net assets .................................................... $ 2,484,979 N/A N/A N/A
Shares of beneficial interest outstanding ..................... 2,484,857 N/A N/A N/A
NET ASSET VALUE and offering price per share* ................. $ 1.00 N/A N/A N/A
============== ============== ============== ==============
Trust Shares:
Net assets .................................................... $1,679,875,447 $ 592,305,348 $ 556,137,407 $ 459,791,578
Shares of beneficial interest outstanding ..................... 1,679,783,724 592,246,266 556,230,987 459,651,099
NET ASSET VALUE, offering and redemption price per share ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============== ============== ==============
</TABLE>
- ----------
* Redemption price per share is equal to the Net Asset Value per share less any
applicable contingent deferred sales charge.
See Notes to Financial Statements.
26
<PAGE>
<TABLE>
<CAPTION>
Connecticut Municipal Massachusetts Municipal
Money Market Fund Money Market Fund
--------------------- -----------------------
<S> <C>
$ 242,987,141 $ 245,448,463
-- --
-------------- --------------
242,987,141 245,448,463
43,737 816
2,554,221 864,467
1,389,725 1,565,078
-------------- --------------
246,974,824 247,878,824
-------------- --------------
278,774 318,579
2,608,736 5,001,150
913,215 830,369
52,319 49,117
21,007 20,022
15,319 8,209
4,630 2,551
-- --
29,810 37,390
-------------- --------------
3,923,810 6,267,387
-------------- --------------
$ 243,051,014 $ 241,611,437
============== ==============
$ 243,057 $ 241,626
242,820,784 241,384,157
(5,391) (1,766)
(7,436) (12,580)
-------------- --------------
$ 243,051,014 $ 241,611,437
============== ==============
$ 243,051,014 $ 241,611,437
243,057,222 241,625,619
$ 1.00 $ 1.00
============== ==============
N/A N/A
N/A N/A
N/A N/A
============== ==============
N/A N/A
N/A N/A
N/A N/A
============== ==============
</TABLE>
27
<PAGE>
Galaxy Money Market Funds
Statements of Operations
For the year ended October 31, 1999
<TABLE>
<CAPTION>
Money Market Government Tax-Exempt U.S. Treasury
Fund Fund Fund Fund
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) ....................................... $ 196,670,570 $ 51,856,973 $ 18,296,350 $ 49,150,173
Dividends (Note 2) ...................................... -- -- 113,526 --
------------- ------------- ------------- -------------
Total Investment Income ............................... 196,670,570 51,856,973 18,409,876 49,150,173
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fee (Note 3) ........................ 15,391,369 4,142,899 2,322,782 4,011,663
Administration fee (Note 3) ............................. 2,885,072 778,896 435,865 779,542
Custodian fee (Note 3) .................................. 64,639 40,001 22,075 23,118
Fund accounting fee (Note 3) ............................ 145,559 147,747 90,473 122,360
Professional fees (Note 3) .............................. 229,260 60,598 42,306 62,770
Shareholder servicing and 12b-1 fees (Note 3) ........... 2,239,110 360,723 169,840 590,338
Transfer agent fee (Note 3) ............................. 2,182,221 384,641 66,080 406,563
Trustees' fees and expenses (Note 3) .................... 108,170 27,192 14,425 23,514
Reports to shareholders (Note 3) ........................ 622,989 89,758 13,365 125,657
Miscellaneous ........................................... 345,506 84,366 74,037 95,241
------------- ------------- ------------- -------------
Total expenses before reimbursement/waiver (Note 4) ... 24,213,895 6,116,821 3,251,248 6,240,766
------------- ------------- ------------- -------------
Less: reimbursement/waiver (Note 4) ................... (1,550,738) (142,862) (2,099) --
------------- ------------- ------------- -------------
Total expenses net of reimbursement/waiver .......... 22,663,157 5,973,959 3,249,149 6,240,766
------------- ------------- ------------- -------------
NET INVESTMENT INCOME ...................................... 174,007,413 45,883,014 15,160,727 42,909,407
------------- ------------- ------------- -------------
Net realized gain on investments SOLD (Note 2) ............. 19,413 37,116 -- 10,820
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................................ $ 174,026,826 $ 45,920,130 $ 15,160,727 $ 42,920,227
============= ============= ============= =============
</TABLE>
See Notes to Financial Statements.
28
<PAGE>
<TABLE>
<CAPTION>
Connecticut Municipal Massachusetts Municipal
Money Market Fund Money Market Fund
--------------------- -----------------------
<S> <C>
$ 6,526,088 $ 6,234,408
40,912 56,089
------------- -------------
6,567,000 6,290,497
------------- -------------
856,115 810,887
160,459 151,558
16,154 15,734
57,738 51,452
36,452 23,614
214,029 202,530
24,764 17,482
4,572 3,867
5,854 3,823
27,626 44,650
------------- -------------
1,403,763 1,325,597
------------- -------------
(76,784) (69,574)
------------- -------------
1,326,979 1,256,023
------------- -------------
5,240,021 5,034,474
------------- -------------
-- --
------------- -------------
$ 5,240,021 $ 5,034,474
============= =============
</TABLE>
29
<PAGE>
Galaxy Money Market Funds
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Money Market Fund Government Fund
--------------------------------- ---------------------------------
Years ended October 31, Years ended October 31,
1999 1998 1999 1998
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
NET ASSETS at beginning of period .......................... $ 3,403,719,219 $ 3,016,823,396 $ 1,075,274,938 $ 981,371,917
--------------- --------------- --------------- ---------------
Increase in Net Assets resulting from operations:
Net investment income ................................... 174,007,413 161,375,090 45,883,014 54,289,776
Net realized gain on investments sold ................... 19,413 10,935 37,116 27,699
--------------- --------------- --------------- ---------------
Net increase in net assets resulting from operations .. 174,026,826 161,386,025 45,920,130 54,317,475
--------------- --------------- --------------- ---------------
Dividends to shareholders from:
Retail A Shares:
Net investment income ................................. (104,393,213) (101,530,947) (15,592,532) (17,622,243)
--------------- --------------- --------------- ---------------
Retail B Shares:
Net investment income ................................. (86,034) (28,669) N/A N/A
--------------- --------------- --------------- ---------------
Trust Shares:
Net investment income ................................. (69,528,195) (59,798,762) (30,149,607) (36,667,533)
--------------- --------------- --------------- ---------------
Total Dividends to shareholders ..................... (174,007,442) (161,358,378) (45,742,139) (54,289,776)
--------------- --------------- --------------- ---------------
Net increase (decrease) from share transactions(1) ......... 711,961,641 386,868,176 (135,195,652) 93,875,322
--------------- --------------- --------------- ---------------
Capital Contribution from Investment Advisor (Note 5) ...... 1,322,618 -- 806,441 --
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets ................... 713,303,643 386,895,823 (134,211,220) 93,903,021
--------------- --------------- --------------- ---------------
NET ASSETS at end of period (including line A) ............. $ 4,117,022,862 $ 3,403,719,219 $ 941,063,718 $ 1,075,274,938
=============== =============== =============== ===============
(A) Undistributed (overdistributed) net investment
income (loss) ........................................... $ 242,547 $ 242,576 $ 95,497 $ (45,378)
=============== =============== =============== ===============
</TABLE>
- ----------
(1) For detail on share transactions by series, see Statements of Changes in Net
Assets - Capital Stock Activity on pages 32 and 33.
See Notes to Financial Statements.
30
<PAGE>
<TABLE>
<CAPTION>
Connecticut Municipal Massachusetts Municipal
Tax-Exempt Fund U.S. Treasury Fund Money Market Fund Money Market Fund
- ---------------------------- ------------------------------ ---------------------------- ----------------------------
Years ended October 31, Years ended October 31, Years ended October 31, Years ended October 31,
1999 1998 1999 1998 1999 1998 1999 1998
- ------------ ------------ -------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$391,515,416 $321,222,118 $ 988,698,222 $979,144,066 $165,185,627 $137,094,660 $127,921,915 $ 80,965,571
- ------------ ------------ -------------- ------------ ------------ ------------ ------------ ------------
15,160,727 11,105,164 42,909,407 44,998,730 5,240,021 4,395,139 5,034,474 2,961,693
-- -- 10,820 28,589 -- -- -- --
- ------------ ------------ -------------- ------------ ------------ ------------ ------------ ------------
15,160,727 11,105,164 42,920,227 45,027,319 5,240,021 4,395,139 5,034,474 2,961,693
- ------------ ------------ -------------- ------------ ------------ ------------ ------------ ------------
(4,259,280) (4,682,093) (24,098,884) (26,401,651) (5,240,300) (4,395,162) (5,036,187) (2,961,746)
- ------------ ------------ -------------- ------------ ------------ ------------ ------------ ------------
N/A N/A N/A N/A N/A N/A N/A N/A
- ------------ ------------ -------------- ------------ ------------ ------------ ------------ ------------
(10,901,372) (6,422,658) (18,810,523) (18,597,072) N/A N/A N/A N/A
- ------------ ------------ -------------- ------------ ------------ ------------ ------------ ------------
(15,160,652) (11,104,751) (42,909,407) (44,998,723) (5,240,300) (4,395,162) (5,036,187) (2,961,746)
- ------------ ------------ -------------- ------------ ------------ ------------ ------------ ------------
324,679,226 70,292,885 54,710,415 9,525,560 77,865,666 28,090,990 113,691,235 46,956,397
- ------------ ------------ -------------- ------------ ------------ ------------ ------------ ------------
-- -- 735,964 -- -- -- -- --
- ------------ ------------ -------------- ------------ ------------ ------------ ------------ ------------
324,679,301 70,293,298 55,457,199 9,554,156 77,865,387 28,090,967 113,689,522 46,956,344
- ------------ ------------ -------------- ------------ ------------ ------------ ------------ ------------
$716,194,717 $391,515,416 $1,044,155,421 $988,698,222 $243,051,014 $165,185,627 $241,611,437 $127,921,915
============ ============ ============== ============ ============ ============ ============ ============
$ (19,453) $ (19,528) $ 316,537 $ 316,537 $ (5,391) $ (5,112) $ (1,766) $ (53)
============ ============ ============== ============ ============ ============ ============ ============
</TABLE>
31
<PAGE>
Galaxy Money Market Funds
Statements of Changes in Net Assets --
Capital Stock Activity
<TABLE>
<CAPTION>
Money Market Fund Government Fund
---------------------------------- ----------------------------------
Years ended October 31, Years ended October 31,
1999 1998 1999 1998
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
Retail A Shares:
Sold ................................................. $ 6,810,510,960 $ 6,260,244,949 $ 752,972,310 $ 820,134,497
Issued to shareholders in reinvestment of dividends .. 103,931,212 100,806,250 15,539,078 17,568,387
Repurchased .......................................... (6,619,773,827) (6,099,746,389) (772,791,398) (835,396,007)
--------------- --------------- --------------- ---------------
Net increase (decrease) in shares outstanding ........ $ 294,668,345 $ 261,304,810 $ (4,280,010) $ 2,306,877
=============== =============== =============== ===============
Retail B Shares:
Sold ................................................. $ 55,831,317 $ 6,169,532 N/A N/A
Issued to shareholders in reinvestment of dividends .. 65,248 25,226 N/A N/A
Repurchased .......................................... (55,018,715) (5,336,739) N/A N/A
--------------- --------------- --------------- ---------------
Net increase in shares outstanding ................... $ 877,850 $ 858,019 N/A N/A
=============== =============== =============== ===============
Trust Shares:
Sold ................................................. $ 2,538,829,954 $ 2,082,969,065 $ 1,357,748,522 $ 1,513,726,831
Issued to shareholders in reinvestment of dividends .. 134,516 473,182 487,478 646,367
Repurchased .......................................... (2,122,549,024) (1,958,736,900) (1,489,151,642) (1,422,804,753)
--------------- --------------- --------------- ---------------
Net increase (decrease) in shares outstanding ........ $ 416,415,446 $ 124,705,347 $ (130,915,642) $ 91,568,445
=============== =============== =============== ===============
SHARE ACTIVITY
Retail A Shares:
Sold ................................................. 6,810,510,960 6,260,244,949 752,972,310 820,134,497
Issued to shareholders in reinvestment of dividends .. 103,931,212 100,806,250 15,539,078 17,568,387
Repurchased .......................................... (6,619,773,827) (6,099,746,389) (772,791,398) (835,396,007)
--------------- --------------- --------------- ---------------
Net increase (decrease) in shares outstanding ........ 294,668,345 261,304,810 (4,280,010) 2,306,877
=============== =============== =============== ===============
Retail B Shares:
Sold ................................................. 55,831,317 6,169,532 N/A N/A
Issued to shareholders in reinvestment of dividends .. 65,248 25,226 N/A N/A
Repurchased .......................................... (55,018,715) (5,336,739) N/A N/A
--------------- --------------- --------------- ---------------
Net increase in shares outstanding ................... 877,850 858,019 N/A N/A
=============== =============== =============== ===============
Trust Shares:
Sold ................................................. 2,538,829,954 2,082,969,065 1,357,748,522 1,513,726,831
Issued to shareholders in reinvestment of dividends .. 134,516 473,182 487,478 646,367
Repurchased .......................................... (2,122,549,024) (1,958,736,900) (1,489,151,642) (1,422,804,753)
--------------- --------------- --------------- ---------------
Net increase (decrease) in shares outstanding ........ 416,415,446 124,705,347 (130,915,642) 91,568,445
=============== =============== =============== ===============
</TABLE>
See Notes to Financial Statements.
32
<PAGE>
<TABLE>
<CAPTION>
Connecticut Municipal Massachusetts Municipal
Tax-Exempt Fund U.S. Treasury Fund Money Market Fund Money Market Fund
- ----------------------------- ---------------------------------- ----------------------------- -----------------------------
Years ended October 31, Years ended October 31, Years ended October 31, Years ended October 31,
1999 1998 1999 1998 1999 1998 1999 1998
- ------------- ------------- --------------- --------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 579,782,056 $ 472,089,252 $ 1,323,763,867 $ 1,201,282,799 $ 561,490,148 $ 439,511,535 $ 497,315,703 $ 287,313,215
4,254,656 4,666,644 24,034,012 26,324,657 2,878,303 3,071,043 2,079,087 1,572,995
(588,319,329) (464,321,475) (1,322,862,475) (1,254,541,716) (486,502,785) (414,491,588) (385,703,555) (241,929,813)
- ------------- ------------- --------------- --------------- ------------- ------------- ------------- -------------
$ (4,282,617) $ 12,434,421 $ 24,935,404 $ (26,934,260) $ 77,865,666 $ 28,090,990 $ 113,691,235 $ 46,956,397
============= ============= =============== =============== ============= ============= ============= =============
N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A
- ------------- ------------- --------------- --------------- ------------- ------------- ------------- -------------
N/A N/A N/A N/A N/A N/A N/A N/A
============= ============= =============== =============== ============= ============= ============= =============
$ 618,365,910 $ 253,133,512 $ 701,245,755 $ 814,143,806 N/A N/A N/A N/A
-- 23,573 1,291,866 1,298,463 N/A N/A N/A N/A
(289,404,067) (195,298,621) (672,762,610) (778,982,449) N/A N/A N/A N/A
- ------------- ------------- --------------- --------------- ------------- ------------- ------------- -------------
$ 328,961,843 $ 57,858,464 $ 29,775,011 $ 36,459,820 N/A N/A N/A N/A
============= ============= =============== =============== ============= ============= ============= =============
579,782,056 472,089,252 1,323,763,867 1,201,282,799 561,490,148 439,511,535 497,315,703 287,313,215
4,254,657 4,666,644 24,034,012 26,324,657 2,878,303 3,071,043 2,079,087 1,572,995
(588,319,329) (464,321,475) (1,322,862,475) (1,254,541,716) (486,502,785) (414,491,588) (385,703,555) (241,929,813)
- ------------- ------------- --------------- --------------- ------------- ------------- ------------- -------------
(4,282,616) 12,434,421 24,935,404 (26,934,260) 77,865,666 28,090,990 113,691,235 46,956,397
============= ============= =============== =============== ============= ============= ============= =============
N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A
- ------------- ------------- --------------- --------------- ------------- ------------- ------------- -------------
N/A N/A N/A N/A N/A N/A N/A N/A
============= ============= =============== =============== ============= ============= ============= =============
618,365,910 253,133,512 701,245,755 814,143,806 N/A N/A N/A N/A
-- 23,573 1,291,866 1,298,463 N/A N/A N/A N/A
(289,404,067) (195,298,621) (672,762,610) (778,982,449) N/A N/A N/A N/A
- ------------- ------------- --------------- --------------- ------------- ------------- ------------- -------------
328,961,843 57,858,464 29,775,011 36,459,820 N/A N/A N/A N/A
============= ============= =============== =============== ============= ============= ============= =============
</TABLE>
33
<PAGE>
Money Market Fund
Financial Highlights
For a Share outstanding throughout each period
Retail A Shares
<TABLE>
<CAPTION>
Years ended October 31,
----------------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income (A) ........................... 0.04 0.05 0.05 0.05 0.05
---------- ---------- ---------- ---------- ----------
Less Dividends:
Dividends from net investment income ................ (0.04) (0.05) (0.05) (0.05) (0.05)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value ............ -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return (B) ...................................... 4.54% 5.04% 4.93% 4.78% 5.23%
Ratios/Supplemental data:
Net assets, End of Period (000's) ..................... $2,434,662 $2,139,213 $1,877,889 $1,159,312 $ 580,762
Ratios to average net assets:
Net investment income including
reimbursement/waiver .............................. 4.45% 4.94% 4.85% 4.67% 5.12%
Operating expenses including reimbursement/waiver ... 0.65% 0.67% 0.69% 0.77% 0.74%
Operating expenses excluding reimbursement/waiver ... 0.69% 0.71% 0.73% 0.80% 0.76%
</TABLE>
- ----------
* Annualized
** Not Annualized
(1) Prior to November 1, 1994, the Fund offered a single series of shares. As
of such date, the existing series of shares was designated as Retail A
Shares and the Fund began issuing a second series of shares designated as
Trust Shares.
(2) The Fund began offering Retail B Shares on March 6, 1997.
(A) 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, 1999, 1998, 1997, 1996 and 1995 were $0.04, $0.05,
$0.05, $0.05 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, 1999, 1998,
1997, 1996 and 1995 were $0.05, $0.05, $0.05, $0.05 and $0.05,
respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for Retail B Shares
for the years ended October 31, 1999 and 1998 and the period ended October
31, 1997 were $0.04, $0.04 and $0.03, respectively.
(B) Calculation does not include the effect of any sales charge for Retail B
Shares.
See Notes to Financial Statements.
34
<PAGE>
<TABLE>
<CAPTION>
Trust Shares Retail B Shares
Years ended October 31, Years ended October 31,
- ---------------------------------------------------------------------- ----------------------------------------
1999 1998 1997 1996 1995(1) 1999 1998 1997(2)
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
0.05 0.05 0.05 0.05 0.05 0.04 0.04 0.03
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(0.05) (0.05) (0.05) (0.05) (0.05) (0.04) (0.04) (0.03)
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
-- -- -- -- -- -- -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ========== ========== ==========
4.72% 5.23% 5.13% 5.00% 5.43% 3.85% 4.33% 2.66%**
$1,679,875 $1,262,900 $1,138,185 $ 924,222 $ 334,054 $ 2,485 $ 1,607 $ 749
4.62% 5.12% 5.04% 4.89% 5.30% 3.81% 4.26% 4.27%*
0.48% 0.49% 0.50% 0.55% 0.55% 1.29% 1.35% 1.38%*
0.52% 0.53% 0.54% 0.58% 0.56% 1.41% 1.39% 1.42%*
</TABLE>
35
<PAGE>
Government Fund
Financial Highlights
For a Share outstanding throughout each period
Retail A Shares
<TABLE>
<CAPTION>
Years ended October 31,
------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income (A) ........................... 0.04 0.05 0.05 0.05 0.05
-------- -------- -------- -------- --------
Less Dividends:
Dividends from net investment income ................ (0.04) (0.05) (0.05) (0.05) (0.05)
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value .......... -- -- -- -- --
-------- -------- -------- -------- --------
Net Asset Value, End of Period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return .......................................... 4.39% 4.94% 4.85% 4.72% 5.20%
Ratios/Supplemental data:
Net assets, End of Period (000's) ..................... $348,758 $352,799 $350,513 $326,411 $320,795
Ratios to average net assets:
Net investment income including
reimbursement/waiver .............................. 4.32% 4.84% 4.74% 4.62% 5.11%
Operating expenses including reimbursement/waiver ... 0.69% 0.70% 0.71% 0.75% 0.73%
Operating expenses excluding reimbursement/waiver ... 0.71% 0.71% 0.72% 0.76% 0.74%
</TABLE>
- ----------
(1) Prior to November 1, 1994, the Fund offered a single series of shares. As
of such date, the existing series of shares was designated as Retail A
Shares and the Fund began issuing a second series of shares designated as
Trust Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail A Shares for the years
ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.04, $0.05,
$0.05, $0.05 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, 1999, 1998,
1997, 1996 and 1995 were $0.04, $0.05, $0.05, $0.05 and $0.05,
respectively.
See Notes to Financial Statements.
36
<PAGE>
Trust Shares
<TABLE>
<CAPTION>
Years ended October 31,
- --------------------------------------------------------------------
1999 1998 1997 1996 1995(1)
- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------- -------- -------- -------- --------
0.04 0.05 0.05 0.05 0.05
- -------- -------- -------- -------- --------
(0.04) (0.05) (0.05) (0.05) (0.05)
- -------- -------- -------- -------- --------
-- -- -- -- --
- -------- -------- -------- -------- --------
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
4.58% 5.15% 5.06% 4.95% 5.39%
$592,305 $722,476 $630,859 $733,759 $678,679
4.50% 5.03% 4.94% 4.85% 5.27%
0.51% 0.51% 0.51% 0.52% 0.53%
0.53% 0.52% 0.52% 0.53% 0.54%
</TABLE>
37
<PAGE>
Tax-Exempt Fund
Financial Highlights
For a Share outstanding throughout each period
Retail A Shares
<TABLE>
<CAPTION>
Years ended October 31,
------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income (A) ........................... 0.02 0.03 0.03 0.03 0.03
-------- -------- -------- -------- --------
Less Dividends:
Dividends from net investment income ................ (0.02) (0.03) (0.03) (0.03) (0.03)
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value ............. -- -- -- -- --
-------- -------- -------- -------- --------
Net Asset Value, End of Period ......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return ........................................... 2.53% 2.89% 2.95% 2.82% 3.16%
Ratios/Supplemental data:
Net assets, End of Period (000's) ...................... $160,057 $164,340 $151,907 $117,548 $127,056
Ratios to average net assets:
Net investment income including
reimbursement/waiver .............................. 2.51% 2.85% 2.92% 2.78% 3.12%
Operating expenses including reimbursement/waiver ... 0.66% 0.67% 0.68% 0.68% 0.68%
Operating expenses excluding reimbursement/waiver ... 0.66% 0.67% 0.69% 0.69% 0.71%
</TABLE>
- ----------
(1) Prior to November 1, 1994, the Fund offered a single series of shares. As
of such date, the existing series of shares was designated as Retail A
Shares and the Fund began issuing a second series of shares designated as
Trust Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail A Shares for the years
ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.02, $0.03,
$0.03, $0.03 and $0.03, 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, 1999, 1998,
1997, 1996 and 1995 were $0.03, $0.03, $0.03, $0.03 and $0.03,
respectively.
See Notes to Financial Statements.
38
<PAGE>
Trust Shares
<TABLE>
<CAPTION>
Years ended October 31,
- ------------------------------------------------------------------------
1999 1998 1997 1996 1995(1)
- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------- -------- -------- -------- --------
0.03 0.03 0.03 0.03 0.03
- -------- -------- -------- -------- --------
(0.03) (0.03) (0.03) (0.03) (0.03)
- -------- -------- -------- -------- --------
-- -- -- -- --
- -------- -------- -------- -------- --------
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
2.67% 3.03% 3.10% 2.97% 3.29%
$556,137 $227,176 $169,316 $184,307 $180,706
2.65% 2.99% 3.05% 2.92% 3.24%
0.52% 0.53% 0.53% 0.54% 0.55%
0.52% 0.53% 0.53% 0.54% 0.56%
</TABLE>
39
<PAGE>
U.S. Treasury Fund
Financial Highlights
For a Share outstanding throughout each period
Retail A Shares
<TABLE>
<CAPTION>
Years ended October 31,
------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income (A) ........................... 0.04 0.05 0.05 0.05 0.05
-------- -------- -------- -------- --------
Less Dividends:
Dividends from net investment income ................ (0.04) (0.05) (0.05) (0.05) (0.05)
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value ............. -- -- -- -- --
-------- -------- -------- -------- --------
Net Asset Value, End of Period ......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return ........................................... 4.14% 4.73% 4.67% 4.63% 4.99%
Ratios/Supplemental data:
Net assets, End of Period (000's) ...................... $584,364 $559,053 $585,969 $443,230 $318,621
Ratios to average net assets:
Net investment income including
reimbursement/waiver .............................. 4.06% 4.63% 4.58% 4.53% 4.90%
Operating expenses including reimbursement/waiver ... 0.67% 0.68% 0.69% 0.69% 0.73%
Operating expenses excluding reimbursement/waiver ... 0.67% 0.68% 0.70% 0.69% 0.73%
</TABLE>
- ----------
(1) Prior to November 1, 1994, the Fund offered a single series of shares. As
of such date, the existing series of shares was designated as Retail A
Shares and the Fund began issuing a second series of shares designated as
Trust Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail A Shares for the years
ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.04, $0.05,
$0.05, $0.05 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, 1999, 1998,
1997, 1996 and 1995 were $0.04, $0.05, $0.05, $0.05 and $0.05,
respectively.
See Notes to Financial Statements.
40
<PAGE>
Trust Shares
<TABLE>
<CAPTION>
Years ended October 31,
- ------------------------------------------------------------------------
1999 1998 1997 1996 1995(1)
- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------- -------- -------- -------- --------
0.04 0.05 0.05 0.05 0.05
- -------- -------- -------- -------- --------
(0.04) (0.05) (0.05) (0.05) (0.05)
- -------- -------- -------- -------- --------
-- -- -- -- --
- -------- -------- -------- -------- --------
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
4.30% 4.90% 4.85% 4.80% 5.18%
$459,792 $429,645 $393,175 $354,331 $271,036
4.22% 4.80% 4.75% 4.69% 5.06%
0.51% 0.51% 0.52% 0.53% 0.55%
0.51% 0.51% 0.53% 0.53% 0.55%
</TABLE>
41
<PAGE>
Connecticut Municipal Money Market Fund
Financial Highlights
For a Share outstanding throughout each period
<TABLE>
<CAPTION>
Years ended October 31,
---------------------------------------------------------------------------
1999 1998 1997 1996
--------------- --------------- --------------- ---------------
Retail A Shares Retail A Shares Retail A Shares Retail A Shares(1)
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------- --------------- --------------- ---------------
Income from Investment Operations:
Net investment income (A) ................... 0.02 0.03 0.03 0.03
--------------- --------------- --------------- ---------------
Less Dividends:
Dividends from net investment income ........ (0.02) (0.03) (0.03) (0.03)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net asset value ..... -- -- -- --
--------------- --------------- --------------- ---------------
Net Asset Value, End of Period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============== =============== =============== ===============
Total Return (B) .............................. 2.47% 2.87% 2.94% 2.83%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .............. $ 243,051 $ 165,186 $ 137,095 $ 110,544
Ratios to average net assets:
Net investment income
including reimbursement/waiver ............ 2.44% 2.83% 2.91% 2.79%
Operating expenses
including reimbursement/waiver ............ 0.62% 0.62% 0.60% 0.64%
Operating expenses
excluding reimbursement/waiver ............ 0.65% 0.65% 0.65% 0.73%
</TABLE>
- ----------
(1) The Fund commenced operations on October 4, 1993 as a separate investment
portfolio (the "Predecessor Fund") of the Shawmut Funds. On December 4,
1995, the Predecessor Fund was reorganized as a new portfolio of the Trust
with a single series of shares. Prior to the reorganization, the
Predecessor Fund offered two series of shares, Investment Shares and Trust
Shares. In connection with the reorganization, the shareholders of the
Predecessor Fund exchanged shares of the two series for a single series of
shares in the Galaxy Connecticut Municipal Money Market Fund.
(A) 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, 1999, 1998, 1997 and 1996 were $0.02, $0.03, $0.03 and
$0.03, respectively. Net investment income per share before
reimbursement/waiver of fees by the Investment Advisor and/or other
parties for Investment Shares for the year ended October 31, 1995 was
$0.03 (unaudited). Net investment income per share before
reimbursement/waiver of fees by the Investment Advisor and/or other
parties for Trust Shares for the year ended October 31, 1995 was $0.02
(unaudited).
(B) Calculation does not include the effect of any sales charge for the
Investment Shares of the Predecessor Fund.
See Notes to Financial Statements.
42
<PAGE>
<TABLE>
<CAPTION>
Years ended October 31,
- -------------------------
1995
- -------------------------
Investment Trust
Shares Shares
- ---------- ----------
<S> <C>
$ 1.00 $ 1.00
- ---------- ----------
0.03 0.03
- ---------- ----------
(0.03) (0.03)
- ---------- ----------
-- --
- ---------- ----------
$ 1.00 $ 1.00
========== ==========
2.94% 3.19%
$ 71,472 $ 31,164
2.88% 3.14%
0.82% 0.57%
1.29% 0.79%
</TABLE>
43
<PAGE>
Massachusetts Municipal Money Market Fund
Financial Highlights
For a Share outstanding throughout each period
Retail A Shares
<TABLE>
<CAPTION>
Years ended October 31,
------------------------------------------------------------
1999 1998 1997 1996(1) 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income (A) ............. 0.02 0.03 0.03 0.03 0.03
-------- -------- -------- -------- --------
Less Dividends:
Dividends from net investment income .. (0.02) (0.03) (0.03) (0.03) (0.03))
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value -- -- -- -- --
-------- -------- -------- -------- --------
Net Asset Value, End of Period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return ............................. 2.50% 2.86% 2.92% 2.83% 3.21%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ........ $241,611 $127,922 $ 80,966 $ 47,066 $ 40,326
Ratios to average net assets:
Net investment income including
reimbursement/waiver ................ 2.48% 2.81% 2.90% 2.78% 3.16%
Operating expenses including
reimbursement/waiver ................ 0.62% 0.62% 0.61% 0.62% 0.57%
Operating expenses excluding
reimbursement/waiver ................ 0.65% 0.68% 0.69% 0.83% 1.06%
</TABLE>
- ----------
(1) The Fund commenced operations on October 5, 1993 as a separate investment
portfolio (the "Predecessor Fund") of the Shawmut Funds. On December 4,
1995, the Predecessor Fund was reorganized as a new portfolio of the
Trust.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or other parties for the years ended October 31,
1999, 1998, 1997, 1996 and 1995 were $0.02, $0.03, $0.03, $0.03 and $0.03
(unaudited), respectively.
See Notes to Financial Statements.
44
<PAGE>
Notes to Financial Statements
1. Organization
The Galaxy Fund, a Massachusetts business trust (the "Trust"), is
registered under the Investment Company Act of 1940, as amended, (the "1940
Act") as an open-end management investment company. As of the date of this
report, the Trust offered twenty-nine managed investment portfolios. The
accompanying financial statements and financial highlights are those of the
Money Market, Government, Tax-Exempt, U.S. Treasury, Connecticut Municipal Money
Market and Massachusetts Municipal Money Market Funds (individually, a "Fund,"
collectively, the "Funds") only.
The Money Market Fund is authorized to issue three series of shares (Trust
Shares, Retail A Shares and Retail B Shares). The Government, Tax-Exempt and
U.S. Treasury Funds are authorized to issue two series of Shares (Trust Shares
and Retail A Shares). The Connecticut Municipal Money Market and Massachusetts
Municipal Money Market Funds are authorized to issue one series of shares
(Retail A Shares). Trust Shares, Retail A Shares and Retail B Shares are
substantially the same, except (i) Retail B Shares are subject to a maximum
5.00% contingent deferred sales charge and (ii) each series of shares bears the
following series specific expenses: distribution fees and/or shareholder
servicing fees and transfer agency charges. Six years after the date of
purchase, Retail B Shares of the Money Market Fund will automatically convert to
Retail A Shares of such Fund.
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 account ing policies in conformity with generally
accepted accounting principles consistently followed by the Funds in the
preparation of their financial statements.
Portfolio Valuation: Securities in the Funds are valued utilizing the
amortized cost valuation method permitted in accordance with Rule 2a-7 under the
1940 Act. This method involves valuing a portfolio security initially at its
cost and thereafter assuming a constant amortization to maturity of any discount
or premium.
Securities Transactions and Investment Income: Securities transactions are
accounted for on a trade date basis. Net realized gains or losses on sales of
securities are determined by the identified cost method. Interest income is
recorded on the accrual basis. Investment income and realized and unrealized
gains and losses are allocated to the separate series of a Fund based upon the
outstanding shares of each series.
Dividends to Shareholders: Dividends from net investment income are
determined separately for each series of a Fund and are declared daily and paid
monthly. Net realized capital gains, if any, are distributed at least annually.
Income dividends and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Federal Income Taxes: The Trust treats each Fund as a separate entity for
Federal income tax purposes. Each Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code.
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.
Repurchase Agreements: Each Fund, except the U.S. Treasury Fund, may
engage in repurchase agreement transactions with institutions that the Trust's
investment advisor has determined are creditworthy. Each repurchase agreement
transaction is recorded at cost plus accrued interest. Each Fund requires that
the securities collateralizing a repurchase agreement transaction be transferred
to the Trust's custodian in a manner that is intended to enable the Fund to
obtain those securities in the event of a counterparty default. The value of the
collateral securities is monitored daily to ensure that the value of the
collateral, including accrued interest, equals or exceeds the repurchase price.
Repurchase agreement transactions involve certain risks in the event of default
or insolvency of the counterparty, including possible delays or restrictions
upon a Fund's ability to dispose of the under lying securities, and a possible
decline in the value of the underlying securities during the period while the
Fund seeks to assert its rights.
45
<PAGE>
Notes to Financial Statements
Expenses: The Trust accounts separately for the assets, liabilities and
operations of each Fund. Expenses directly attributable to a Fund are charged to
the Fund, while expenses which are attributable to more than one fund of the
Trust are allocated among the respective funds.
In addition, expenses of a Fund not directly attributable to the
operations of a particular series of shares of the Fund are allocated to the
separate series based upon the outstanding shares of each series. Operating
expenses directly attributable to a series of shares of a Fund are charged to
the operations of that series.
3. Investment Advisory, Administration, Distribution, Shareholder Services
and Other Fees
The Trust and Fleet Investment Advisors Inc. (the "Investment Advisor" or
"Fleet"), an indirect wholly-owned subsidiary of FleetBoston Corporation, are
parties to an investment advisory agreement under which the Investment Advisor
provides services for a fee, computed daily and paid monthly, at the following
annual rates: with respect to the Money Market, Government and Tax-Exempt Funds,
0.40% of the average daily net assets of each Fund, and with respect to the U.S.
Treasury, Connecticut Municipal Money Market and Massachusetts Municipal Money
Market Funds, 0.40% of the first $750,000,000 of net assets of each Fund plus
0.35% of net assets of each Fund in excess of $750,000,000. The Trust has been
advised by the Investment Advisor that, with respect to the Money Market,
Government and Tax-Exempt Funds, the Investment Advisor intends to waive
advisory fees payable to it by each Fund by 0.05% to the extent that a Fund's
net assets exceed $750,000,000.
The Trust and First Data Investor Services Group, Inc. ("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, effective September 10, 1998, 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,
0.075% of the next $7 billion of combined average daily net assets, 0.065% of
the next $3 billion of combined average daily net assets, 0.06% of the next $3
billion of combined average daily net assets and 0.0575% of combined average
daily net assets in excess of $18 billion. Prior to September 10, 1998, Investor
Services Group received administration fees at the annual rate of 0.09% of the
first $2.5 billion of 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 0.075% of combined average daily net assets over $5
billion.
In addition, Investor Services Group also provides certain fund
accounting, custody administration and transfer agency services pursuant to
certain fee arrangements. In accordance with such fee arrangements, Investor
Services Group compensates the Trust's custodian bank, The Chase Manhattan Bank,
for its services.
First Data Distributors, Inc. (the "Distributor"), a wholly-owned
subsidiary of Investor Services Group and an indirect wholly-owned subsidiary of
First Data Corporation, serves as the distributor of the Trust's shares.
The Trust has adopted a shareholder services plan (the "Services Plan")
with respect to Retail A Shares 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 0.25% 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 the Trustees, is
currently limiting fees payable under the Services Plan with respect to each
Fund to an aggregate annual rate not to exceed 0.10% 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 services plan (the "12b-1 Plan")
with respect to Retail B Shares of the Money Market Fund. 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
affiliates. Payments for distribution expenses may not exceed an annual rate of
0.65% of the average daily net assets attributable to the Money Market Fund's
outstanding Retail B Shares. The fees paid for shareholder liaison and
administrative support services may not exceed the annual rates of 0.25% and
0.25%, respectively, of the average daily net assets attributable to the Money
Market Fund's outstanding Retail B Shares owned of record or beneficially by
customers of institutions. The Trust is currently limiting the Money Market
Fund's payments for shareholder liaison and administrative support services
under the 12b-1 Plan to an aggregate fee of not more than 0.10% of the average
daily net asset value of Retail B Shares owned of record or benefi-
46
<PAGE>
Notes to Financial Statements
cially by customers of institutions. For the year ended October 31, 1999, the
Funds paid fees under the Services Plan and 12b-1 Plan as follows:
Services 12b-1 Plan
Fund Plan Services Distribution
---- -------- ------------
Money Market Fund .............. $2,222,784 $ 1,820 $ 14,506
Government Fund ................ 360,723 -- --
Tax-Exempt Fund ................ 169,840 -- --
U.S. Treasury Fund ............. 590,338 -- --
Connecticut Municipal
Money Market Fund .............. 214,029 -- --
Massachusetts Municipal
Money Market Fund .............. 202,530 -- --
The Retail A Shares, Retail B Shares and Trust Shares of a Fund bear
series specific transfer agent charges based upon the number of shareholder
accounts for each series. Trust Shares of the Funds (except the Tax-Exempt Fund)
also bear additional transfer agency fees in order to compensate 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. These additional fees are based on the number of underlying participant
accounts. For the year ended October 31, 1999, transfer agent charges for each
series were as follows:
Fund Retail A Retail B Trust
-------- -------- -----
Money Market Fund .............. $2,001,491 $ 3,858 $ 176,872
Government Fund ................ 312,794 -- 71,847
Tax-Exempt Fund ................ 66,023 -- 57
U.S. Treasury Fund ............. 382,324 -- 24,239
Connecticut Municipal
Money Market Fund .............. 24,764 -- --
Massachusetts Municipal
Money Market Fund .............. 17,482 -- --
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 May 28, 1999, 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 $45,000 per
annum plus certain other fees for attending or participating in meetings as well
as reimbursement for expenses incurred in attending meetings. Prior to May 28,
1999, each Trustee was entitled to receive for services as a trustee of the
Trust, VIP and Galaxy II an aggregate fee of $40,000 per annum plus certain
other fees for attending or participating in meetings as well as reimbursement
for expenses incurred in attending meetings. The Chairman of the Boards of
Trustees and the President and Treasurer of the Trust, VIP and Galaxy II are
also entitled to additional fees for their services in these capacities. These
fees are allocated among the funds of the Trust, VIP and Galaxy II, based on
their relative net assets.
Each Trustee is eligible to participate in The Galaxy Fund/The Galaxy VIP
Fund/Galaxy Fund II Deferred Compensation Plan (the "Plan"), an unfunded,
non-qualified deferred compensation plan. The Plan allows each trustee to defer
receipt of all or a percentage of fees which otherwise would be payable for
services performed.
Expenses for the year ended October 31, 1999 include legal fees paid to
Drinker Biddle & Reath LLP. A partner of that firm is Secretary of the Trust.
4. Waiver of Fees and Reimbursement of Expenses
The Investment Advisor and/or its affiliates 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
Fund. The InvestmentAdvisor and/or its affiliates, at their discretion, may
revise or discontinue the voluntary fee waivers and/or expense reimbursements at
any time. For the year ended October 31, 1999, the Investment Advisor and/or its
affiliates waived fees and/or reimbursed expenses with respect to the Funds in
the following amounts:
Fees Waived by
Fund Investment Advisor
------------------
Money Market Fund.............. $ 1,548,921
Government Fund................ 142,862
Expenses Reimbursed by
Fund Investment Advisor and/or Its Affiliates
----------------------------------------
Money Market Fund.............. $ 1,817
Tax-Exempt Fund................ 2,099
Connecticut Municipal
Money Market Fund.............. 76,784
Massachusetts Municipal
Money Market Fund.............. 69,574
5. Capital Contribution
On October 28, 1999, the Investment Adviser voluntarily contributed
capital to the Money Market Fund, Government Fund and U.S. Treasury Fund in the
amounts of approximately $1.3 million, $806,000 and $736,000, respectively.
These amounts were contributed to offset losses realized on the sale of certain
securities which occured in 1994. The Investment Adviser received no shares of
beneficial interest or other consideration in exchange for these contributions
which increased the net asset value of each Fund.
6. Shares of Beneficial Interest
The Trust's Declaration of Trust authorizes the Trustees to issue an
unlimited number of shares of beneficial interest in the Funds, each with a par
value of $0.001. The Trust's shares are classified into thirty-one classes of
shares, each consisting of one or more series.
47
<PAGE>
Notes to Financial Statements
Each share represents an equal proportionate interest in the respective
Fund, bears the same fees and expenses (except that Retail A Shares of a Fund
bear the expense of payments under the Services Plan, Retail B Shares of a Fund
bear the expense of payments under the 12b-1 Plan and Retail A Shares, Retail B
Shares and Trust Shares of a Fund 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.
7. Concentration of Credit
The Connecticut Municipal Money Market and Massachusetts Municipal Money
Market Funds invest primarily in debt obligations issued by the State of
Connecticut and the Commonwealth of Massachusetts, respectively, and their
respective political subdivisions, agencies and public authorities to obtain
funds for various public purposes. Such Funds are more susceptible to economic
and political factors adversely affecting issuers of each respective state's
specific municipal securities than are municipal funds that are not concentrated
in these issuers to the same extent.
8. Federal Tax Information
At October 31, 1999, the following Funds had capital loss carryforwards:
Fund Amount Expiration
- ----------------- ------------ ----------
Tax-Exempt Fund.......... $ 120,301 2002
3,772 2003
7,498 2004
Connecticut Municipal
Money Market Fund........ 6,619 2002
817 2004
Massachusetts Municipal
Money Market Fund........ 133 2001
31 2002
12,416 2004
9. Tax Information (unaudited)
During the fiscal year ended October 31, 1999, the following Funds earned
income from direct obligations of the U.S. Government:
U.S. Government
Fund Income
- ----------------- ---------------
Money Market Fund........ 2.97%
Government Fund.......... 16.70%
U.S. Treasury Fund....... 100.00%
Appropriate tax information detailing U.S. Government income percentages
on a calendar year basis will accompany each shareholder's year-end tax
statement. As each state's rules on the exemption of this income differ, please
consult your tax advisor regarding specific tax treatment. 100% of the income
earned by the Tax-Exempt Fund, the Connecticut Municipal Money Market Fund and
the Massachusetts Municipal Money Market Fund will generally qualify as exempt
from federal and state taxation.
10. Subsequent Event - Change in Control of Administrator and Change in
Distributor (unaudited)
On December 1, 1999, PFPC Trust Company, a wholly-owned subsidiary of PFPC
Worldwide, Inc. and an indirect wholly-owned subsidiary of PNC Bank Corp.,
acquired all of the outstanding stock of Investor Services Group (the
"Transaction"). On that same date and as part of the Transaction, PFPC Inc., an
indirect wholly-owned subsidiary of PNC Bank Corp., was merged into Investor
Services Group, which then changed its name to PFPC Inc.
In connection with the Transaction, on December 1, 1999, Provident
Distributors, Inc. became the distributor of the Trust's shares.
48
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders and Board of Trustees of
The Galaxy Fund:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of the Money Market Fund, Government Fund,
Tax-Exempt Fund, U.S. Treasury Fund, Connecticut Municipal Money Market Fund,
and Massachusetts Municipal Money Market Fund (six of the portfolios
constituting The Galaxy Fund) as of October 31, 1999, and the related statements
of operations, the statements of changes in net assets, and the financial
highlights for the year then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audit. The statements of changes in net assets for the year ended
October 31, 1998 and the financial highlights for the four years then ended were
audited by other auditors whose report dated December 23, 1998 expressed an
unqualified opinion on those statements and financial highlights.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in financial statements and
financial highlights. Our procedures included confirmation of securities owned
as of October 31, 1999 by correspondence with the custodian and brokers or other
appropriate auditing procedures where replies from brokers were not received. 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Money Market Fund, Government Fund, Tax-Exempt Fund, U.S. Treasury Fund,
Connecticut Municipal Money Market Fund, and Massachusetts Municipal Money
Market Fund portfolios of The Galaxy Fund at October 31, 1999, the results of
their operations, changes in their net assets and their financial highlights for
the year then ended, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
December 13, 1999
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[LOGO] Galaxy
Funds
P.O. Box 6520
Providence, RI 02940-6520
ANMM (January 1, 2000)
