ANNUAL REPORT
OCTOBER 31, 2000
[GRAPHIC OMITTED: ACORN, COLUMN, GRADUATION CAP, HAND SHAKE]
GALAXY MONEY MARKET FUNDS
GALAXY FUNDS
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
[GRAPHIC OMITTED: GALAXY LOGO]
GALAXY
FUNDS
<PAGE>
CHAIRMAN'S MESSAGE
[BEGIN SIDEBAR]
MUTUAL FUNDS:
(BULLET) ARE NOT BANK DEPOSITS
(BULLET) ARE NOT FDIC INSURED
(BULLET) ARE NOT OBLIGATIONS OF, OR GUARANTEED BY, ANY BANK
(BULLET) ARE SUBJECT TO INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF THE
PRINCIPAL AMOUNT INVESTED
[END SIDEBAR]
Dear Shareholder:
Enclosed is the annual report for the Galaxy Money Market Funds for the
fiscal year ended October 31, 2000. The report includes a Market Overview that
discusses the economic and market conditions that may have affected your
investments during this time. The Market Overview is followed by reviews of both
the Galaxy Taxable Money Market Funds and the Galaxy Tax-Exempt Money Market
Funds that describe how Fleet Investment Advisors Inc. ("FIA") managed the
Funds' portfolios in this climate. Financial statements and a list of portfolio
holdings for each of the Funds as of October 31, 2000 appear at the end of this
report.
In the wake of continued economic strength that threatened higher
inflation, the Federal Reserve (the "Fed") raised short-term interest rates by
125 basis points (1.25%) over the past year. Besides pushing money market yields
higher, the hikes in short-term rates eventually caused economic growth to slow
enough to keep inflation at bay. In the meantime, volatility increased for
stocks, bonds, and money market instruments. While such volatility can be
unnerving, even for experienced investors, such short-term fluctuations are
quite normal and should not deter you from the strategy you've set to meet
long-term financial goals with your money market investments and other assets.
The Galaxy Funds have taken several steps to help you reach those goals.
With the completion of the reorganization of the Boston 1784 Funds into the
Galaxy Funds in June 2000, you now have a broader range of funds from which to
choose in diversifying your portfolios. As assets from the Boston 1784 Funds
were transferred to existing Galaxy Funds in connection with the reorganization,
FIA made the portfolio adjustments necessary in seeking to achieve each Fund's
investment objective. In implementing such adjustments, FIA sought to make the
most of current market conditions and to maximize each Fund's returns.
Going forward, Keith Banks, FIA's new Chief Investment Officer, will
oversee the portfolio management of the Galaxy Money Market Funds and other
funds in the Galaxy family. Mr. Banks was the former managing director and head
of U.S. equities for J.P. Morgan Investment Management.
If you would like to know more about the expanded array of Galaxy Funds, or
you have questions about the information in this report, please contact the
Galaxy Information Center toll-free at 1-877-BUY-GALAXY (1-877-289-4252) or
visit us at www.galaxyfunds.com. You may also consult your financial advisor.
Sincerely,
/S/ SIGNATURE DWIGHT E. VICKS, JR.
Dwight E. Vicks, Jr.
Chairman of the Board of Trustees
<PAGE>
MARKET OVERVIEW
[BEGIN SIDEBAR]
"UNCERTAINTY AS TO WHEN THE FED WOULD RAISE RATES CAUSED INCREASED VOLATILITY IN
MONEY MARKET YIELDS AT VARIOUS POINTS DURING THE REPORTING PERIOD."
[END SIDEBAR]
MONEY MARKET OVERVIEW
BY FLEET INVESTMENT ADVISORS INC.
With a total increase of 125 basis points (1.25%) in short-term interest
rates by the the Fed during the 12 months ended October 31, 2000, money market
yields moved significantly higher. Most of the movement occurred in the first
half of the reporting period, when strong economic growth posed the greatest
threat of inflation and forced a series of rate hikes by the Fed. Once it
appeared that higher interest rates were slowing growth enough to keep inflation
at bay, the Fed put further rate hikes on hold and money market yields became
more stable.
Uncertainty as to when the Fed would raise rates caused increased
volatility in money market yields at various points during the reporting period.
By adjusting the mix of investments in the Galaxy Money Market Funds to take
advantage of these fluctuations and the overall increase in yields, we helped
the Funds earn competitive returns for the 12-month period.
INFLATION THREAT PROMPTS RATE HIKES
When the reporting period began at the start of November 1999, the annual
rate of inflation was about 2.6% and three-month Treasury bills were yielding
5.1%. During the fourth quarter of 1999, the Gross Domestic Product ("GDP"),
which measures the output of U.S. goods and services, grew at an annualized rate
of 7.3%.
With growth significantly higher than the 5.5% rate for the third quarter,
it became clear to the Fed and investors that two earlier increases in
short-term interest rates of 25 basis points each had not been enough to cool
the economy. Short-term yields rose through November 16, when the Fed imposed
the last 25 basis point rate hike of 1999.
Although GDP growth slowed to 4.8% in the first quarter of 2000, further
upward pressure on inflation from a tight labor market and rising energy costs
forced the Fed to raise short-term rates by 25 basis points each at meetings in
February and March. The impact of higher rates on growth was offset, however, by
the "wealth effect" of a strong stock market that sustained the demand for goods
and services. By March, inflation had risen to 3.7% and yields for 3-month
Treasuries had topped 5.8%.
As GDP growth remained robust at 5.6% in the second quarter of 2000, the
Fed boosted short-term rates by 50 basis points in May resulting in higher money
market yields. In the third quarter, growth slowed to an estimated rate of 2.7%,
the Fed put further rate hikes on hold, and money market yields stabilized.
Short-term yields remained stable through the end of the reporting period on
October 31, 2000, when the yield for 3-month Treasuries stood at 6.2%.
MAKING THE MOST OF RISING YIELDS
When yields were rising over the first six months of the reporting period,
we used a barbelled maturity structure for investments in the Galaxy Taxable
Money Market Funds that focused on issues at the shorter and longer ends of the
maturity spectrum. This strategy gave the Funds an average weighted maturity
that was slightly longer than that of their peer groups and helped the Funds
maximize yields, while remaining flexible as yields continued to rise. In
addition, we purchased investments that matured around the dates of future Fed
meetings, which let us pick up any extra yield from possible rate hikes.
In the last few months of the period, as short-term yields stabilized and
the yield curve flattened, we abandoned the barbelled maturity structure. With
the yields on one-year maturities about the same as those for two-month issues
we gave greater emphasis to short-term investments.
As changes in market supply and demand caused the yields for tax-exempt
securities to fluctuate during the reporting period, we adjusted the maturities
and mix of investments in the Galaxy Tax-Exempt Money Market Funds to make the
most of these changes. Like the Galaxy Taxable Money Market Funds, the Galaxy
Tax-Exempt Money Market Funds benefited from positions in variable rate issues,
as short-term yields rose over the period.
1
<PAGE>
PERFORMANCE AT-A-GLANCE As of October 31, 2000
[BEGIN SIDEBAR]
"SLOWER GROWTH, COMBINED WITH CONTINUED GAINS IN PRODUCTIVITY, SHOULD HELP
OFFSET FURTHER UPWARD PRESSURE ON INFLATION FROM A TIGHT LABOR SUPPLY."
[END SIDEBAR]
<TABLE>
<CAPTION>
RETAIL A RETAIL B TRUST BKB
SHARES SHARES SHARES SHARES
-------- -------- -------- --------
<S> <C> <C> <C> <C>
GALAXY MONEY MARKET FUND
7-day average yield................ 6.02% 5.29% 6.19% 6.05%
30-day average yield............... 6.00% 5.28% 6.17% 6.04%
GALAXY GOVERNMENT FUND
7-day average yield................ 5.91% N/A 6.08% N/A
30-day average yield............... 5.89% N/A 6.07% N/A
GALAXY U.S. TREASURY FUND
7-day average yield................ 5.68% N/A 5.85% 5.72%
30-day average yield............... 5.65% N/A 5.82% 5.69%
GALAXY TAX-EXEMPT FUND
7-day average yield................ 3.75% N/A 3.88% 3.83%
30-day average yield............... 3.65% N/A 3.79% 3.74%
GALAXY CONNECTICUT MUNICIPAL
MONEY MARKET FUND
7-day average yield................ 3.51% N/A N/A N/A
30-day average yield............... 3.41% N/A N/A N/A
GALAXY MASSACHUSETTS MUNICIPAL
MONEY MARKET FUND
7-day average yield................ 3.70% N/A N/A N/A
30-day average yield............... 3.62% N/A N/A N/A
</TABLE>
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 AND BKB SHARES ARE CURRENTLY SUBJECT TO A SHAREHOLDER
SERVICING FEE OF 0.10% OF AVERAGE DAILY NET ASSETS. RETAIL B SHARES ARE
CURRENTLY SUBJECT TO 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.)
FUTURE STRATEGIES
It appears that higher short-term rates have finally caused the "soft
landing" in economic growth sought by the Fed. While the slowdown may last
somewhat longer than investors initially expected, we expect GDP growth to
average a healthy annual rate of 3.0% to 3.5% for 2001. As a result, we do not
believe that the Fed will need to stimulate growth with lower short-term rates
in the foreseeable future.
Slower growth, combined with continued gains in productivity, should help
offset further upward pressure on inflation from a tight labor supply. In this
environment, we expect inflation to remain near 3.5%.
If we believe that short-term rates may fall, we will consider adding
longer-term investments to lock in higher yields. We plan to continue using
floating-rate issues even if rates fall, as these investments typically perform
well.
2
<PAGE>
PORTFOLIO REVIEWS
[PHOTO OMITTED: KAREN ARNEIL]
[BEGIN SIDEBAR]
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.
[END SIDEBAR]
GALAXY TAXABLE MONEY MARKET FUNDS
BY KAREN ARNEIL
PORTFOLIO MANAGER
As a stronger-than-expected economy threatened higher inflation and
prompted the Fed to raise short-term interest rates, we remained committed to
securities with good liquidity and superior credit characteristics 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. This strategy, plus
efforts to maximize yield opportunities within individual market sectors, helped
the Funds enjoy good relative performance for the 12 months ended October 31,
2000.
For the 12 months ended October 31, 2000, Trust Shares of the Galaxy Money
Market Fund had a total return of 5.95%, and Retail A Shares of the Fund earned
a total return of 5.77%. During the same period, Retail B Shares of the Fund
earned a total return of 5.01% before deducting the maximum 5.00% contingent
deferred sales charge, and a total return of 0.01% after deducting the 5.00%
contingent deferred sales charge. BKB Shares of the Fund earned a total return
of 2.66% for the period from June 19, 2000 (date of initial issuance) through
October 31, 2000.
Over the same time, Lipper Inc. ("Lipper"), a mutual fund performance
tracking service, measured average total returns of 5.99% for trust shares and
5.53% for retail shares of other taxable money market funds that reported their
results to Lipper.
During the period, Trust Shares of the Galaxy Government Fund had a total
return of 5.78%, and Retail A Shares of the Fund had a total return of 5.61%.
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
5.90% over the same period. Retail shares of similar funds that reported their
performance to Lipper earned an average total return of 5.52% for the period.
For the period, Trust Shares of the Galaxy U.S. Treasury Fund had a total
return of 5.42% and Retail A Shares of the Fund earned a total return of 5.26%.
BKBShares of the Fund earned a total return of 2.07% for the period from June
19, 2000 (date of initial issuance) through October 31, 2000. These total
returns compared with an average total return of 5.59% 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 5.26% for the period.
On October 31, 2000, the Galaxy Money Market Fund had an average maturity
of 32 days, the Galaxy Government Fund had an average maturity of 44 days and
the Galaxy U.S. Treasury Fund had an average maturity of 49 days.
ANTICIPATING CHANGES IN YIELD
When the reporting period began in November 1999, concerns about increased
redemptions due to potential Y2K computer problems caused us to increase
liquidity in all the Galaxy Taxable Money Market Funds. Once Y2K
GALAXY MONEY MARKET FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF OCTROBER 31, 2000
[GRAPHIC OMITTED: EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
<TABLE>
<CAPTION>
<S> <C>
CORPORATE NOTES AND BONDS 15%
COMMERCIAL PAPER 64%
CERTIFICATES OF DEPOSIT 14%
MUNICIPAL BONDS 6%
U.S. AGENCY OBLIGATIONS, REPURCHASE AGGREEMENT & NET OTHER ASSETS AND LIABILITIES 1%
</TABLE>
GALAXY MONEY MARKET FUND
7-DAY AVERAGE YIELD (%)
[GRAPHIC OMITTED: EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
GALAXY MONEY GALAXY MONEY GALAXY MONEY GALAXY MONEY
MARKET FUND MARKET FUND MARKET FUND MARKET FUND
TRUST RETAIL A RETAIL B BKB
10/31/99 4.96 4.8 4
11/30/99 5.19 5.03 3.96
12/31/99 5.31 5.15 4.49
1/31/2000 5.42 5.25 4.54
2/29/2000 5.47 5.31 4.59
3/31/2000 5.66 5.49 4.78
4/30/2000 5.71 5.54 4.83
5/31/2000 6.09 5.91 5.2
6/30/2000 6.21 6.04 5.32 6.06
7/31/2000 6.21 6.03 5.31 6.05
8/31/2000 6.21 6.04 5.31 6.05
9/30/2000 6.2 6.02 5.3 6.06
10/31/2000 6.19 6.02 5.29 6.05
NOVEMBER 1, 1999 OCTOBER 31, 2000
GALAXY GOVERNMENT FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF OCTROBER 31, 2000
[GRAPHIC OMITTED: EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
FEDERAL FARM CREDIT BANK 5%
FEDERAL HOME LOAN BANK 25%
REPURCHASE AGREEMENT AND NET OTHER ASSETS AND LIABILITiES 9%
FEDERAL NATIONAL MORTGAGE ASSOCIATION 26%
FEDERAL HOME LOAN MORTGAGE CORPORATION 35%
3
<PAGE>
PORTFOLIO REVIEWS
worries began to abate, we put this cash to work in investments that would
mature in 2000 to enhance the Funds' yields.
Early in 2000, we initiated a "barbelled" maturity structure for the Funds
by investing in issues that matured in one year and issues that matured in less
than one month. This strategy, and our decision to keep the average weighted
maturities of the Funds' portfolios slightly longer than those of their peers,
helped us make the most of rising yields.
The Galaxy Money Market Fund further benefited during this time from
additions of high-quality floating-rate corporate issues. As the yield curve
flattened, we emphasized shorter-term issues in the Galaxy U.S. Treasury Fund
and the Galaxy Government Fund. In late March and early April, we added
cash-management bills to the Galaxy U.S. Treasury Fund due to their attractive
yields.
In the second half of the reporting period, when the yield curve flattened,
we abandoned the barbelled portfolio structure and focused on issues with
shorter maturities. In the Galaxy Government Fund and the Galaxy U.S. Treasury
Fund we increased positions in floating-rate notes as the supply of these
securities increased.
WAITING TO LOCK IN HIGHER YIELDS
If economic growth remains moderate enough for the Fed to abandon its bias
toward higher short-term rates, we may look at longer maturities again. As
before, we expect to continue to purchase floating-rate issues, which also
perform well in a falling interest rate environment. In the Galaxy Money Market
Fund, we plan to add to positions in variable-rate taxable municipal issues,
whose yields have been very attractive.
GALAXY GOVERNMENT FUND
7-DAY AVERAGE YIELD (%)
[GRAPHIC OMITTED: EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
GALAXY GALAXY
GOVERNMENT FUND GOVERNMENT FUND
TRUST RETAIL A
10/31/99 4.88 4.75
11/30/99 5.09 4.96
12/31/99 5.09 4.92
1/31/2000 5.25 5.1
2/29/2000 5.34 5.18
3/31/2000 5.46 5.31
4/30/2000 5.5 5.34
5/31/2000 5.89 5.72
6/30/2000 6 5.84
7/31/2000 6.04 5.87
8/31/2000 6.09 5.92
9/30/2000 6.07 5.89
10/31/2000 6.08 5.91
NOVEMBER 1, 1999 OCTOBER 31, 2000
GALAXY U.S. TREASURY FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF OCTROBER 31, 2000
[GRAPHIC OMITTED: EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
<TABLE>
<CAPTION>
<S> <C>
FEDERAL HOME LOAN BANK 29%
U.S. TREASURY NOTES 6%
U.S. TREASURY BILLS 63%
FARM CREDIT BANK, STUDENT LOAN MARKETING ASSOCIATION & NET OTHER ASSETS AND LIABILITIES 2%
</TABLE>
GALAXY U.S. TREASURY FUND
7-DAY AVERAGE YIELD (%)
[GRAPHIC OMITTED: EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
GALAXY U.S. GALAXY U.S. GALAXY U.S.
TREASURY FUND TREASURY FUND TREASURY FUND
TRUST RETAIL A BKB
10/31/99 4.43 4.28
11/30/99 4.63 4.48
12/31/99 4.69 4.54
1/31/2000 4.91 4.76
2/29/2000 5.02 4.87
3/31/2000 5.25 5.1
4/30/2000 5.35 5.2
5/31/2000 5.43 5.27
6/30/2000 5.5 5.35 5.36
7/31/2000 5.6 5.44 5.45
8/31/2000 5.75 5.59 5.6
9/30/2000 5.81 5.65 5.68
10/31/2000 5.85 5.68 5.72
NOVEMBER 1, 1999 OCTOBER 31, 2000
4
<PAGE>
PORTFOLIO REVIEWS
GALAXY TAX-EXEMPT
MONEY MARKET FUNDS
BY KAREN ARNEIL
PORTFOLIO MANAGER
The movement in yields for tax-exempt money market securities over the past
year, as usual, was significantly affected by changes in the balance of and
demand for these issues. By using strategies that helped to maximize yield
opportunities in this environment, 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 - earned
total returns that compared favorably with other tax-exempt money market
portfolios.
For the twelve-month reporting period ended October 31, 2000, Trust and
Retail A Shares of the Galaxy Tax-Exempt Fund had total returns of 3.46%and
3.33%, respectively. BKBShares of the Fund earned a total return of 1.36% for
the period from June 19, 2000 (date of initial issuance) through October 31,
2000. Over the same time, trust and retail shares of other tax-exempt money
market funds reporting their performance to Lipper earned average total returns
of 3.72% and 3.31%, respectively.
During this period, Retail A Shares of the Galaxy Connecticut Municipal
Money Market Fund had a total return of 3.21% versus 3.13% for the retail shares
of other Connecticut tax-exempt money market funds tracked by Lipper. Retail A
Shares of the Galaxy Massachusetts Municipal Money Market Fund had a total
return of 3.31% versus 3.31% for the retail shares of other Massachusetts
tax-exempt money market funds reporting their performance to Lipper.
As of October 31, 2000, the average maturity of the Tax-Exempt Fund was 55
days, and the average maturities of the Connecticut and Massachusetts Municipal
Money Market Funds were 46 days and 62 days, respectively.
STRONG DEMAND DAMPENS RISE IN TAX-EXEMPT YIELDS
At the start of the reporting period in November 1999, the demand for
short-term tax-exempt securities with daily liquidity remained strong as
investors sought liquidity in the face of potential Y2K computer problems.
Although a renewed focus on the strength of the economy generally pushed
short-term interest rates higher, continued strength in the demand for
shorter-term tax-exempt securities prevented their yields from rising as the
yields for their taxable counterparts did. Further strength in demand from
seasonal factors kept downward pressure on the yields for short-term tax-exempt
issues through the early part of 2000.
GALAXY TAX-EXEMPT FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF OCTOBER 31, 2000
[GRAPHIC OMITTED: EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
EAST 15%
PACIFIC 7%
SOUTH 50%
MOUNTAIN 12%
NORTH CENTRAL 14%
OTHER TERRITORY,CASH EQUIVALENTS & NET OTHER ASSETS AND LIABILITIES 2%
GALAXY TAX-EXEMPT FUND
7-DAY AVERAGE YIELD (%)
[GRAPHIC OMITTED: EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
GALAXY TAX- GALAXY TAX- GALAXY TAX-
EXEMPT FUND EXEMPT FUND EXEMPT FUND
TRUST RETAIL A BKB
10/31/99 2.9 2.76
11/30/99 3.16 3.02
12/31/99 3.84 3.71
1/31/2000 2.83 2.69
2/29/2000 3.2 3.07
3/31/2000 3.2 3.07
4/30/2000 4.12 4.01
5/31/2000 3.6 3.47
6/30/2000 4.05 3.92 4
7/31/2000 3.72 3.59 3.67
8/31/2000 3.7 3.57 3.65
9/30/2000 4.43 4.3 4.38
10/31/2000 3.88 3.75 3.83
NOVEMBER 1, 1999 OCTOBER 31, 2000
GALAXY CONNECTICUT MUNICIPAL MONEY MARKET FUND
7-DAY AVERAGE YIELD (%)
[GRAPHIC OMITTED: EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
RETAIL
10/31/99 2.71
11/30/99 3
12/31/2000 3.66
1/31/2000 2.68
2/29/2000 2.94
3/31/2000 3
4/30/2000 3.87
5/31/2000 3.38
6/30/2000 3.69
7/31/2000 3.46
8/31/2000 3.43
9/30/2000 3.93
10/31/2000 3.51
NOVEMBER 1, 1999 OCTOBER 31, 2000
5
<PAGE>
PORTFOLIO REVIEWS
To prepare for the April tax season, when share liquidations often increase
and demand falls, we increased liquidity in the Galaxy Tax-Exempt Money Market
Funds. This allowed us to take advantage of the opportunities to add investments
with higher yields that typically occur as people use their money market fund
assets to pay their tax bills.
Many of the yield opportunities we found at this time came from investments
in tax-exempt notes. We continued to buy notes for the Funds over the rest of
the period, as the yields for these securities remained attractive. In making
these purchases, we focused on general obligation securities, due to their high
credit quality.
Throughout the period, the Funds also benefited from investments in
variable-rate securities. Because the rates on these issues adjust periodically,
the holdings helped enhance the Funds' yields as short-term interest rates rose.
MANAGING SEASONAL MARKET CHANGES
The end of the calendar year typically brings a decrease in the demand for
short-term tax-exempt securities, which puts upward pressure on their yields.
But due to increased demand come January, our standard year-end strategy is to
buy investments that mature in February of the next calendar year to keep the
yields for the Funds as strong as possible. We balance this by increasing
liquidity at year end to meet potential redemptions.
GALAXY CONNECTICUT MUNICIPAL MONEY MARKET FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF OCTROBER 31, 2000
[GRAPHIC OMITTED: EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
CONNECTICUT 70%
NORTH CENTRAL 3%
SOUTH 9%
EAST 2%
MOUNTAIN 5%
PACIFIC, OTHER TERRITORIES, CASH EQUIVALENT & NET OTHER
ASSETS AND LIABILITIES 11%
GALAXY MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF OCTOBER 31, 2000
[GRAPHICOMITTED: EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
MASSACHUSETTS 74%
EAST 3%
SOUTH 14%
OTHER TERRITORIES, CASH EQUIVALENTS & NET OTHER ASSETS AND LIABILITIES 1%
PACIFIC 2%
MOUNTAIN 3%
NORTH CENTRAL 3%
GALAXY MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
7-DAY AVERAGE YIELD (%)
[GRAPHIC OMITTED: EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
RETAIL
10/31/99 2.73
11/30/99 3
12/31/99 3.81
1/31/2000 2.69
2/29/2000 3.02
3/31/2000 3.01
4/30/2000 4.15
5/31/2000 3.49
6/30/2000 3.9
7/31/2000 3.53
8/31/2000 3.51
9/30/2000 4.34
10/31/2000 3.7
NOVEMBER 1, 1999 OCTOBER 31, 2000
-------------------------------------------------------------------------------
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
[BEGIN SIDEBAR]
"A WELL-BALANCED ASSET ALLOCATION PLAN MAY HELP TO CONTROL YOUR RISK WHILE
PURSUING YOUR GOALS."
[END SIDEBAR]
AUTOMATIC INVESTMENT PROGRAM
The Golden Rule of investing is "pay yourself first." That is easy to do with
Galaxy's Automatic Investment Program. For as little as $50 per month deducted
directly from your checking, savings, or bank money market account, you can
consistently and conveniently add to your Galaxy investment. When you establish
an Automatic Investment Program, the $2,500 initial investment requirement for
Galaxy is waived. Of course, such a program does not assure a profit and does
not protect against loss in a declining market.
DIVERSIFICATION
A fundamental investment practice is "diversification." A well-balanced asset
allocation plan may help to control your risk while pursuing your goals. Many
mutual funds offer a low-cost way to diversify your investments while you
benefit from professional management. Galaxy's comprehensive array of investment
choices can be used in combination to match the needs of nearly everyone
EXCHANGE PRIVILEGES
As your investment needs change, you can conveniently exchange your shares in
one Fund for shares in another Fund within the same share class.
CONSOLIDATED STATEMENTS
If you hold your shares directly with the Galaxy Funds, you will receive a
consolidated statement from Galaxy on a quarterly basis. If your shares are held
in a brokerage account, your Galaxy Funds will appear on your brokerage
statement.
YOUR FINANCIAL ADVISOR
Your financial advisor can discuss the Galaxy Funds with you and how they may
help you to achieve your financial goals. Please see your financial advisor if
you have any questions about this report or if you have any questions about your
account
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 YOUR FUND PROSPECTUS. SHARES OF THE FUNDS ARE DISTRIBUTED THROUGH
PROVIDENT DISTRIBUTORS, INC., MEMBER NASD AND SIPC.
7
<PAGE>
SHAREHOLDER INFORMATION
TRUSTEES
AND
EXECUTIVE 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
William Greilich
VICE PRESIDENT
W. Bruce
McConnel, Esq.
SECRETARY
INVESTMENT ADVISOR
Fleet Investment
Advisors Inc.
100 Federal Street
Boston, MA 02110
DISTRIBUTOR
Provident Distributors, Inc.
3200 Horizon Drive
King of Prussia
Pennsylvania 19406
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 19103-699
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 Provident Distributors, Inc.
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 FINANCIAL 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 POSSIBLE LOSS OF
THE 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.
[GRAPHIC OMITTED: RECYCLE SYMBOL]
This report was printed on recycled paper.
8
<PAGE>
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
COMMERCIAL PAPER (A) - 64.11%
FINANCE - 37.92%
$50,000,000 ABB Treasury Center USA
6.60%, 11/15/00 (C).............. $ 49,873,806
100,000,000 ABB Treasury Center USA
6.40%, 12/04/00 (C).............. 99,405,083
24,000,000 AIG Funding, Inc.
6.40%, 12/06/00.................. 23,849,267
50,000,000 American Express Credit Corp.
6.60%, 11/13/00.................. 49,892,000
50,000,000 American Express Credit Corp.
6.60%, 12/14/00.................. 49,614,195
150,000,000 Associates Corp. of North America
6.60%, 11/01/00.................. 150,000,000
66,000,000 BellSouth Capital Funding Corp.
6.40%, 11/29/00 (C).............. 65,667,873
50,000,000 BellSouth Capital Funding Corp.
6.40%, 12/05/00 (C).............. 49,695,417
100,000,000 BMW U.S. Capital Corp.
6.60%, 11/06/00.................. 99,910,000
30,000,000 Cargill, Inc.
6.60%, 11/01/00 (C).............. 30,000,000
25,400,000 CDC Commercial Paper Corp.
6.40%, 11/01/00 (C).............. 25,400,000
50,000,000 CDC Commercial Paper Corp.
6.60%, 11/16/00 (C).............. 49,865,208
175,000,000 Ford Motor Credit Co.
6.60%, 11/20/00.................. 174,400,576
50,000,000 General Electric Capital Corp.
6.52%, 01/16/01.................. 49,311,778
75,000,000 General Electric Capital Corp.
6.60%, 01/17/01.................. 73,954,083
50,000,000 General Electric Capital Corp.
6.53%, 01/25/01.................. 49,229,097
50,000,000 General Motors Acceptance Corp.
6.60%, 11/13/00.................. 49,892,000
100,000,000 General Motors Acceptance Corp.
6.60%, 11/16/00.................. 99,729,166
100,000,000 Morgan (J.P.) & Co.
6.00%, 12/06/00.................. 99,370,000
100,000,000 Novartis Finance Corp.
6.00%, 11/02/00 (C).............. 99,982,028
113,300,000 Toyota Motor Credit Corp.
6.60%, 11/09/00 (C).............. 113,136,596
50,000,000 Toyota Motor Credit Corp.
6.60%, 11/21/00 (C).............. 49,820,000
175,000,000 UBS Finance (DE) LLC
6.60%, 11/01/00.................. 175,000,000
50,000,000 Verizon Global Funding Corp.
6.50%, 11/03/00.................. 49,981,944
35,000,000 Verizon Global Funding Corp.
6.60%, 11/06/00.................. 34,968,160
-------------
1,861,948,277
-------------
PAR VALUE VALUE
---------- ---------
CONSUMER STAPLES - 16.02%
$50,000,000 Bayer Corp.
6.00%, 11/09/00 (C).............. $ 49,928,000
60,000,000 Bayer Corp.
6.40%, 12/19/00 (C).............. 59,482,400
15,000,000 Coca-Cola Co.
6.47%, 11/06/00.................. 14,986,521
50,000,000 Coca-Cola Co.
6.40%, 12/04/00.................. 49,703,917
30,000,000 Colgate Palmolive Co.
6.40%, 11/17/00 (C).............. 29,913,733
50,000,000 DaimlerChrysler,
N.A. Holdings Corp.
6.48%, 11/09/00.................. 49,928,000
50,000,000 DaimlerChrysler,
N.A. Holdings Corp.
6.60%, 11/22/00.................. 49,811,292
50,000,000 Kimberly-Clark Corp.
6.00%, 12/01/00 (C).............. 49,731,250
50,000,000 Kimberly-Clark Corp.
6.40%, 12/08/00 (C).............. 49,667,514
115,300,000 Merck & Co., Inc.
6.50%, 11/28/00.................. 114,740,506
117,000,000 Pfizer, Inc.
6.60%, 11/27/00 (C).............. 116,453,285
19,104,000 United Parcel Service
of America, Inc.
6.20%, 12/01/00.................. 19,001,157
77,000,000 Wal-Mart Stores, Inc.
6.60%, 11/20/00 (C).............. 76,737,066
56,200,000 Wal-Mart Stores, Inc.
6.48%, 11/21/00 (C).............. 55,997,837
-------------
786,082,478
-------------
UTILITIES - 7.54%
100,000,000 AT&T Corp.
6.60%, 12/08/00.................. 99,335,026
25,000,000 AT&T Corp.
6.49%, 2/13/01................... 24,531,278
60,000,000 BellSouth Telecommunications Corp.
6.60%, 12/12/00.................. 59,557,883
33,000,000 Emerson Electric Co.
6.60%, 11/01/00 (C).............. 33,000,000
80,000,000 SBC Communiciations, Inc.
6.60%, 11/14/00 (C).............. 79,813,089
75,000,000 SBC Communiciations, Inc.
6.60%, 01/23/01 (C).............. 73,876,042
-------------
370,113,318
-------------
ENERGY - 2.03%
50,000,000 Texaco, Inc.
6.60%, 11/09/00.................. 49,928,000
50,000,000 Texaco, Inc.
6.60%, 12/08/00.................. 49,668,541
-------------
99,596,541
-------------
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
HIGHER EDUCATION - 0.60%
$29,800,000 Yale University
6.60%, 01/12/01.................. $ 29,409,620
-------------
TOTAL COMMERCIAL PAPER .......... 3,147,150,234
-------------
(Cost $3,147,150,234)
CORPORATE NOTES AND BONDS - 14.94%
BANKING - 10.86%
12,500,000 Allfirst Bank
6.89%, 12/04/00 (B).............. 12,502,412
50,000,000 American Express Centurion Bank
Bank Note
6.58%, 03/30/01 (B).............. 50,000,000
50,000,000 Bank of America, N.A., Bank Note
6.72%, 12/07/00.................. 50,000,000
50,000,000 Bank of America, N.A., Bank Note
6.73%, 12/08/00.................. 50,000,000
48,000,000 Bank of New York
6.52%, 01/22/01.................. 47,994,365
50,000,000 Citicorp, Inc., MTN
6.58%, 04/04/01 (B).............. 50,000,000
5,000,000 Comerica Bank, Bank Note
6.57%, 01/12/01 (B).............. 4,999,613
10,000,000 Comerica Bank, Bank Note
6.54%, 02/14/01 (B).............. 9,998,676
50,000,000 Comerica Bank, Bank Note
6.53%, 03/14/01 (B).............. 49,991,040
50,000,000 First Union National Bank,
Bank Note
6.62%, 05/16/01 (B).............. 50,000,000
50,000,000 Huntington National Bank,
Bank Note
6.57%, 12/13/00 (B).............. 49,994,836
30,750,000 Huntington National Bank,
Bank Note
6.90%, 01/12/01 (B).............. 30,758,232
37,000,000 Key Bank, N.A., Bank Note
6.97%, 11/02/00 (B).............. 37,000,187
40,000,000 Key Bank, N.A., Bank Note
6.50%, 01/29/01.................. 39,994,439
-------------
533,233,800
-------------
UTILITIES (B) - 3.06%
50,000,000 AT&T Corp.
6.61%, 06/14/01 (D).............. 50,000,000
100,000,000 Emerson Electric Co., MTN
6.57%, 06/06/01.................. 100,000,000
-------------
150,000,000
-------------
CONSUMER STAPLES - 1.02%
50,000,000 Sara Lee Corp., MTN
6.68%, 02/14/01.................. 49,991,824
-------------
TOTAL CORPORATE NOTES AND BONDS . 733,225,624
-------------
(Cost $733,225,624)
PAR VALUE VALUE
---------- ---------
CERTIFICATES OF DEPOSIT - 14.23%
$39,000,000 Allfirst Bank
6.56%, 02/09/01 (B).............. $ 38,994,785
55,000,000 Bank of Nova Scotia
6.70%, 02/12/01.................. 54,991,902
50,000,000 Bayerische Landesbank New York
6.54%, 12/15/00 (B).............. 49,993,989
105,000,000 Bayerische Landesbank New York
6.55%, 12/15/00 (B).............. 104,990,533
50,000,000 Canadian Imperial Bank
6.72%, 12/26/00.................. 50,000,000
48,000,000 Canadian Imperial Bank
6.88%, 05/02/01.................. 47,995,464
91,500,000 First Union National Bank
6.60%, 11/24/00 (B).............. 91,498,864
55,000,000 Rabobank Nederland NV
6.69%, 02/28/01.................. 54,991,493
50,000,000 Rabobank Nederland NV
5.66%, 03/08/01.................. 49,991,742
50,000,000 Royal Bank of Canada, Yankee
6.52%, 01/18/01.................. 49,994,922
50,000,000 Royal Bank of Canada, Yankee
6.52%, 03/14/01 (B).............. 49,990,143
55,000,000 SunTrust Bank, N.A.
6.78%, 04/18/01.................. 54,992,806
-------------
TOTAL CERTIFICATES OF DEPOSIT ... 698,426,643
-------------
(Cost $698,426,643)
MUNICIPAL BONDS - 5.92%
ARKANSAS - 0.06%
3,000,000 Union County
AK IDR Del-Tin Fiber L.l.C.
Project
6.65%, 10/01/27 (E)
LOC: Bank One N.A................ 3,000,000
-------------
CALIFORNIA - 1.93%
18,300,000 Anaheim, CA, COP
6.63%, 12/01/22
LOC: Credit Suisse First Boston.. 18,300,000
37,000,000 California HFA, Series K
6.63%, 08/01/31 (E)
Insured: FSA
SPA: Westduetsche Landesbank GZ
Bayerische Landesbank GZ
California State Teachers'
Retirement System................ 37,000,000
34,500,000 California HFA, Series O
6.63%, 08/01/12 (E)
Insured: AMBAC
SPA: Commerzbank
California State Teachers'
Retirement System................ 34,500,000
5,000,000 Los Angeles, CA Community
Redevelopment Agency, Series A
6.70%, 12/01/18 (E)
Insured: FSA
SPA: Credit Suisse First Boston.. 5,000,000
-------------
94,800,000
-------------
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
COLORADO - 0.04%
$ 1,900,000 Kit Carson County, CO
Agricultural Development
Midwest Farms LLC
6.70%, 06/01/27 (E)
LOC: Norwest Bank, MN, N.A....... $ 1,900,000
-------------
FLORIDA - 1.58%
20,090,000 Dade County,
FL Expressway Authority
6.60%, 07/01/19 (E)
Insured: FGIC
SPA: FGIC/SPI.................... 20,090,000
27,300,000 Florida HFA
6.55%, 01/01/34 (E)
Insured: MBIA
SPA: Westdeutsche Landesbank GZ.. 27,300,000
6,900,000 Florida HFC,
Affordable Housing Project
Series A
6.55%, 01/01/44 (E)
Insured: MBIA
SPA: Westdeutsche Landesbank GZ.. 6,900,000
23,000,000 Florida HFC, Series A
6.55%, 01/01/45 (E)
Insured: AMBAC
SPA: Westdeutsche Landesbank GZ.. 23,000,000
-------------
77,290,000
-------------
KANSAS - 0.15%
7,500,000 Olathe, KS IDR Multi-Modal,
Series B
6.60%, 03/01/27 (E)
LOC: Deutsche Bank AG............ 7,500,000
-------------
MARYLAND - 0.33%
10,000,000 Baltimore, MD
Community Development
Financing Corp.
6.62%, 08/15/30 (E)
Insured: MBIA
SPA: First Union National Bank... 10,000,000
4,000,000 Maryland State Health &
Higher Education Authority
Northern Arundel
Series B
6.65%, 07/01/27 (E)
LOC: Mellon Bank N.A............. 4,000,000
2,300,000 Maryland State Health &
Higher Education Authority,
Charlestown
Series B
6.65%, 01/01/28
LOC: First Union National Bank... 2,300,000
-------------
16,300,000
-------------
NEW YORK - 1.83%
36,500,000 New York City GO
6.62%, 11/07/00
Insured: FGIC.................... 36,500,000
15,555,000 New York City GO, Series 1993-B
6.65%, 11/08/00
Insured: FGIC.................... 15,555,000
32,635,000 New York City GO, Series 1994-H
6.65%, 11/08/00
Insured: FGIC.................... 32,635,000
PAR VALUE VALUE
---------- ---------
NEW YORK (CONTINUED)
$ 5,000,000 New York City GO, Series 1993-B
6.60%, 12/05/00
Insured: FGIC.................... $ 5,000,000
-------------
89,690,000
-------------
TOTAL MUNICIPAL BONDS ........... 290,480,000
-------------
(Cost $290,480,000)
U.S. AGENCY OBLIGATION - 0.10%
STUDENT LOAN MARKETING ASSOCIATION - 0.10%
5,000,000 5.18%, 05/18/01, MTN............. 4,999,426
-------------
Total U.S. Agency Obligation .... 4,999,426
-------------
(Cost $4,999,426)
REPURCHASE AGREEMENT - 0.49%
23,810,000 Repurchase Agreement with:
J.P. Morgan
6.55%, Due 11/1/2000, dated 10/31/2000
Repurchase Price $23,814,332
(Collateralized by U.S. Treasury Notes,
6.00% Due 09/30/2002
Total Par $24,164,000
Market Value $24,287,000)........ 23,810,000
-------------
TOTAL REPURCHASE AGREEMENT ...... 23,810,000
-------------
(Cost $23,810,000)
TOTAL INVESTMENTS - 99.79%....................... 4,898,091,927
-------------
(Cost $4,898,091,927)*
NET OTHER ASSETS AND LIABILITES - 0.21%.......... 10,093,127
-------------
NET ASSETS - 100.00%............................. $4,908,185,054
=============
---------------------------------------------
* 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, 2000.
(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, 2000, these securities amounted to $1,307,446,227 or
26.64% of net assets.
(D) Security exempt from registration persuant to Rule 144A under the
Securities Act of 1933, as amended. This security may only be resold in
an exempt transaction to qualified institutional buyers. At October 31,
2000, this security amounted to $50,000,000 or 1.02% of net assets.
(E) Variable rate demand notes are payable upon not more than one, seven or
thirty business days notice The interest rate shown reflects the rate
in effect at October 31, 2000.
AMBAC American Municipal Bond Assurance Corp.
COP Certificate of Participation
FGIC Federal Guaranty Insurance Corp.
FSA Financial Security Assurance Co.
GO General Obligation
HFA Housing Finance Agency
HFC Housing Finance Corp.
IDR Industrial Development Revenue
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
MTN Medium Term Note
SPA Stand-by Purchase Agreement
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 90.31%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 34.50%
$69,881,000 6.38%, 12/07/00 (A).............. $ 69,435,260
40,000,000 6.37%, 12/14/00 (A).............. 39,695,656
40,000,000 6.41%, 12/20/00, MTN (B)......... 39,993,306
40,000,000 6.38%, 12/28/00 (A).............. 39,595,933
20,000,000 6.35%, 01/05/01, MTN............. 19,992,693
35,346,000 6.34%, 03/29/01 (A).............. 34,424,726
25,000,000 6.23%, 04/26/01 (A).............. 24,238,555
30,000,000 6.43%, 07/19/01 (B).............. 29,987,178
-------------
297,363,307
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 26.43%
50,000,000 6.44%, 11/02/00 (A).............. 49,991,063
50,000,000 6.39%, 11/09/00 (A).............. 49,929,000
20,000,000 6.39%, 12/07/00 (A).............. 19,872,200
40,000,000 6.42%, 12/08/00, MTN (B)......... 39,996,037
50,000,000 6.47%, 01/11/01 (A).............. 49,361,986
19,000,000 6.37%, 02/22/01 (A).............. 18,620,100
-------------
227,770,386
-------------
FEDERAL HOME LOAN BANK - 24.75%
35,000,000 6.38%, 11/15/00 (A).............. 34,913,161
17,440,000 6.39%, 12/01/00 (A).............. 17,347,132
16,564,000 6.39%, 12/13/00 (A).............. 16,440,515
15,000,000 6.31%, 03/14/01 (A).............. 14,650,321
10,000,000 6.45%, 03/16/01.................. 9,996,043
30,000,000 6.43%, 07/20/01 (B).............. 29,987,129
50,000,000 6.46%, 08/17/01 (B).............. 49,972,961
20,000,000 6.46%, 09/28/01 (B).............. 19,991,155
20,000,000 6.55%, 10/19/01 (B).............. 19,986,820
-------------
213,285,237
-------------
FEDERAL FARM CREDIT BANK - 4.63%
20,000,000 5.13%, 04/02/01.................. 19,890,446
20,000,000 6.44%, 10/24/01 (B).............. 19,996,162
-------------
39,886,608
-------------
TOTAL U.S. GOVERNMENT AND AGENCY
OBLIGATIONS ..................... 778,305,538
-------------
(Cost $778,305,538)
PAR VALUE VALUE
---------- ---------
REPURCHASE AGREEMENT - 14.54%
$125,265,000 Repurchase Agreement with:
J.P. Morgan
6.55%, Due 11/01/2000,
dated 10/31/2000
Repurchase Price $125,287,791
(Collateralized by U.S.
Treasury Notes
6.63%, Due 04/30/2002
Total Par $126,917,000
Market Value $127,770,644)....... $ 125,265,000
-------------
TOTAL REPURCHASE AGREEMENT ...... 125,265,000
-------------
(Cost $125,265,000)
TOTAL INVESTMENTS - 104.85%...................... 903,570,538
-------------
(Cost $903,570,538)*
NET OTHER ASSETS AND LIABILITIES - (4.85)%....... (41,796,852)
-------------
NET ASSETS - 100.00%............................. $ 861,773,686
=============
-------------------------------------------
* 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, 2000.
MTN Medium Term Note
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
U.S. TREASURY FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 101.76%
U.S. TREASURY BILLS (A) - 62.92%
$50,000,000 6.07%, 11/09/00.................. $ 49,932,556
50,000,000 6.10%, 11/09/00.................. 49,932,278
20,000,000 6.08%, 11/16/00.................. 19,949,292
25,000,000 6.12%, 11/16/00.................. 24,936,250
20,000,000 5.90%, 12/07/00.................. 19,880,600
50,000,000 5.90%, 12/07/00.................. 49,701,499
50,000,000 6.01%, 12/07/00.................. 49,699,500
50,000,000 5.90%, 12/14/00.................. 49,644,055
35,000,000 6.10%, 12/14/00.................. 34,744,986
75,000,000 5.91%, 12/21/00.................. 74,378,126
50,000,000 6.27%, 12/21/00.................. 49,564,582
25,000,000 6.38%, 12/21/00.................. 24,778,472
50,000,000 6.02%, 12/28/00.................. 49,523,812
50,000,000 6.05%, 01/04/01.................. 49,462,222
30,000,000 6.05%, 01/11/01.................. 29,642,338
35,000,000 6.16%, 01/11/01.................. 34,575,134
100,000,000 6.11%, 01/18/01.................. 98,676,168
60,000,000 6.16%, 01/25/01.................. 59,128,041
-------------
818,149,911
-------------
FEDERAL HOME LOAN BANK - 29.32%
118,312,000 6.45%, 11/01/00 (A).............. 118,312,000
10,000,000 5.38%, 03/02/01.................. 9,965,011
35,000,000 6.38%, 03/13/01.................. 34,984,811
23,250,000 5.19%, 03/29/01.................. 23,132,277
5,000,000 6.88%, 04/16/01 (B).............. 5,000,000
50,000,000 6.43%, 07/20/01 (B).............. 49,978,548
25,000,000 6.43%, 08/15/01 (B).............. 24,986,505
50,000,000 6.46%, 08/17/01 (B).............. 49,972,961
50,000,000 6.46%, 09/28/01 (B).............. 49,977,936
15,000,000 6.55%, 10/19/01 (B).............. 14,990,127
-------------
381,300,176
-------------
PAR VALUE VALUE
---------- ---------
U.S. TREASURY NOTES - 6.14%
$15,000,000 4.63%, 11/30/00.................. $ 14,978,520
50,000,000 5.25%, 01/31/01.................. 49,860,695
15,000,000 5.00%, 02/28/01.................. 14,935,310
-------------
79,774,525
-------------
FEDERAL FARM CREDIT BANK - 2.00%
6,000,000 5.13%, 04/02/01.................. 5,967,182
5,000,000 6.87%, 05/07/01, MTN (B)......... 4,999,527
15,000,000 6.44%, 10/24/01 (B).............. 14,997,121
-------------
25,963,830
-------------
STUDENT LOAN MARKETING ASSOCIATION - 1.38%
3,950,000 6.63%, 03/07/01 (B).............. 3,946,842
10,000,000 6.85%, 03/12/01, MTN (B)......... 9,998,972
4,000,000 5.18%, 05/18/01, MTN............. 3,999,770
-------------
17,945,584
-------------
TOTAL U.S. GOVERNMENT AND AGENCY
OBLIGATIONS ..................... 1,323,134,026
-------------
(Cost $1,323,134,026)
TOTAL INVESTMENTS - 101.76%...................... 1,323,134,026
-------------
(Cost $1,323,134,026)*
NET OTHER ASSETS AND LIABILITIES - (1.76)%....... (22,827,823)
-------------
NET ASSETS - 100.00%............................. $1,300,306,203
=============
-------------------------------------------
* 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, 2000.
MTN Medium Term Note
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
MUNICIPAL SECURITIES - 100.25%
ALABAMA - 1.29%
$ 4,900,000 Chatom, IDB, PCR,
National Rural Utilities CFC
4.10%, 11/02/00.................. $ 4,900,000
14,300,000 Mobile, IDB, Dock & Wharf Revenue,
Holnam Inc. Project, Series A
4.25%, 06/01/32 (A)
LOC: Bayerische Landesbank GZ.... 14,300,000
1,000,000 Phoenix County, IDB,
Environmental Improvement Revenue,
Georgia Kraft Project
4.60%, 12/01/15 (A)
LOC: Deutsche Bank AG............ 1,000,000
-------------
20,200,000
-------------
ALASKA - 2.18%
17,300,000 Valdez Marine Terminal Revenue
Exxon Mobil Pipeline Co. Project, Series A
4.30%, 11/01/03 (A).............. 17,300,000
3,345,000 Valdez Marine Terminal Revenue
Exxon Mobil Pipeline Co. Project, Series A
4.60%, 12/01/33 (A).............. 3,345,000
4,400,000 Valdez Marine Terminal Revenue
Exxon Mobil Pipeline Co. Project, Series B
4.60%, 12/01/33 (A).............. 4,400,000
9,320,000 Valdez Marine Terminal Revenue
Exxon Mobil Pipeline Co. Project, Series C
4.60%, 12/01/33 (A).............. 9,320,000
-------------
34,365,000
-------------
ARIZONA - 3.86%
5,000,000 Maricopa County, PCR, Arizona Public
Service Co., Series A
4.60%, 05/01/29 (A)
LOC: Morgan Guaranty Trust Co.... 5,000,000
2,000,000 Maricopa County, PCR, Arizona Public
Service Co., Series C
4.60%, 05/01/29 (A)
LOC: Toronto Dominion Bank....... 2,000,000
12,200,000 Maricopa County, PCR, Arizona Public
Service Co., Series D
4.55%, 05/01/29 (A)
LOC: Bank of America NT & SA..... 12,200,000
22,680,000 Maricopa County, PCR, Arizona Public
Service Co., Series F
4.60%, 05/01/29 (A)
LOC: Bank of America NT & SA..... 22,680,000
19,000,000 Pima County, IDB, Tucson Elec-Irvington
4.40%, 10/01/22 (A)
LOC: Societe Generale............ 19,000,000
-------------
60,880,000
-------------
PAR VALUE VALUE
---------- ---------
ARKANSAS - 0.60%
$ 7,300,000 Crossett, PCR, Georgia Pacific Corp. Project
4.35%, 10/01/07 (A)
LOC: Wachovia Bank N.A........... $ 7,300,000
2,200,000 Pulaski County, PCR,
Minnesota Mining & Manufacturing
4.35%, 08/01/22 (A).............. 2,200,000
-------------
9,500,000
-------------
CALIFORNIA - 2.36%
9,000,000 California Higher Education
Loan Authority,
Student Loan Revenue, Series A
4.30%, 06/01/01 (A)
LOC: National Westminister
Bank Plc ........................ 9,000,000
1,100,000 Los Angeles Regional Airports
Improvement Corp. Lease Revenue,
American Airlines, Inc.
LA International Airport, Series A
4.65%, 12/01/24 (A)
LOC: Wachovia Bank, N.A.......... 1,100,000
2,700,000 Los Angeles Regional Airports
Improvement Corp. Lease Revenue,
American Airlines, Inc.
LA International Airport, Series B
4.65%, 12/01/24 (A)
LOC: Wachovia Bank, N.A.......... 2,700,000
17,390,000 Los Angeles Regional Airports
Improvement Corp. Lease Revenue,
LAX Two Corp,
LA International Airport
4.65%, 12/01/25 (A)
LOC: Societe Generale............ 17,390,000
7,000,000 Student Education
Loan Marketing Corp.
Student Loan Revenue, Series A
4.40%, 11/01/02 (A)
LOC: State Street Bank........... 7,000,000
-------------
37,190,000
-------------
COLORADO - 2.28%
13,000,000 Colorado State, TRAN
5.00%, 06/27/01.................. 13,056,853
22,900,000 Moffat County, PCR, Pacificorp Project
4.65%, 05/01/13 (A)
Insured: AMBAC
SPA: Bank of New York............ 22,900,000
-------------
35,956,853
-------------
FLORIDA - 4.96%
40,950,000 Dade County Water & Sewer System
Revenue, Series A
4.25%, 10/05/22 (A)
Insured: FGIC
SPA: Commerzbank AG.............. 40,950,000
19,150,000 Orange County
School Board Certificates,
Series B
4.60%, 08/01/25 (A)
Insured: AMBAC
SPA: SunTrust Bank, N.A.......... 19,150,000
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
FLORIDA (CONTINUED)
$ 10,000,000 Putnam County
Development Authority, PCR,
Seminole Electric Corp.
Series 84-D
4.35%, 12/15/09 (A)
Guaranteed: National Rural
Utilities CFC $ 10,000,000
8,000,000 West Orange Healthcare
District Revenue
Series B
4.35%, 02/01/22 (A)
LOC: SunTrust Bank, N.A. ........ 8,000,000
-------------
78,100,000
-------------
GEORGIA - 7.76%
8,360,000 Burke County Development
Authority,
PCR, Oglethorpe Power Corp.,
Series A
4.30%, 01/01/16 (A)
Insured: FGIC
SPA: Canadian Imperial
Bank of Commerce................. 8,360,000
13,550,000 Burke County Development
Authority, PCR,
Oglethorpe Power Corp., Series A
4.30%, 01/01/19 (A)
Insured: FGIC
SPA: Dexia Credit
Local de France.................. 13,550,000
4,190,000 Georgia State, GO, Series B
5.00%, 07/01/01.................. 4,207,387
7,350,000 Georgia State, GO, Series C
6.00%, 07/01/01.................. 7,427,687
28,800,000 Hapeville, IDR,
Hapeville Hotel, Ltd.
4.55%, 11/01/15 (A)
LOC: Deutsche Bank A.G........... 28,800,000
20,000,000 Metropolitan Atlanta
Rapid Transit Authority, Series B
4.25%, 07/01/25 (A)
LOC: Bayerische Landesbank GZ.... 20,000,000
1,900,000 Municipal Electric Authority,
Project One
Series D
4.30%, 01/01/22 (A)
LOC: ABN-AMRO Bank N.V........... 1,900,000
38,000,000 Private Colleges & Universities
Facilities Authority,
Emory University
Series C
4.25%, 11/01/18 (A).............. 38,000,000
-------------
122,245,074
-------------
IDAHO - 1.18%
18,500,000 Idaho State, GO, TAN
5.38%, 06/29/01.................. 18,617,931
-------------
ILLINOIS - 3.90%
8,600,000 Chicago O'Hare International
Airport American Airlines
Series C
4.60%, 12/01/17 (A)
LOC: Royal Bank of Canada........ 8,600,000
PAR VALUE VALUE
---------- ---------
ILLINOIS (CONTINUED)
$ 2,700,000 Chicago O'Hare International
Airport American Airlines
Series D
4.60%, 12/01/17 (A)
LOC: Royal Bank of Canada........ $ 2,700,000
5,000,000 Illinois Development
Finance Authority
PCR, Illinois Power Co. Project
Series A
4.30%, 11/01/28 (A)
LOC: ABN-AMRO Bank N.V........... 5,000,000
9,800,000 Illinois Educational Facilities
Authority Revenue
4.15%, 02/06/01
LOC: Northern Trust Co........... 9,800,000
6,000,000 Illinois Educational Facilities
Authority Revenue,
Shedd Aquarium Society
Series 1987-B
4.40%, 05/22/01
LOC: Bank of America NT & SA..... 6,000,000
25,000,000 Illinois State
Toll Highway Authority
Series B
4.40%, 01/01/17 (A)
Insured: FSA
SPA: Landesbank
Hessen-Thuringen GZ.............. 25,000,000
2,700,000 Joliet Regional Port District
Marine Terminal,
Exxon Mobil Project
4.60%, 10/01/24 (A).............. 2,700,000
1,700,000 Northbrook, IDR,
Euromarket Designs, Inc.
4.40%, 07/01/02 (A)
LOC: Harris Trust & Savings Bank. 1,700,000
-------------
61,500,000
-------------
INDIANA - 2.08%
5,205,000 Fort Wayne Hospital Authority
Parkview Memorial Hospital,
Series B
4.30%, 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
4.30%, 01/01/16 (A)
LOC: Bank of America NT & SA..... 3,840,000
14,100,000 Monroe County Industry Hospital
Authority Revenue
4.25%, 05/01/11 (A)
Insured: MBIA
SPA: Credit Suisse First Boston.. 14,100,000
9,700,000 Princeton Industrial, PCR,
PSI Energy, Inc. Project
4.65%, 03/01/19 (A)
LOC: Canadian Imperial Bank
of Commerce...................... 9,700,000
-------------
32,845,000
-------------
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
IOWA - 0.25%
$ 4,000,000 Iowa Finance Authority Revenue,
Wheaton Franciscan
Series A
4.40%, 08/15/12 (A)
Insured: MBIA
SPA: Toronto-Dominion Bank....... $ 4,000,000
-------------
KENTUCKY - 0.85%
8,800,000 Ashland, PCR, Ashland Oil, Inc. Project
4.35%, 04/01/09 (A)
LOC: SunTrust Bank, N.A. ........ 8,800,000
4,630,000 Kentucky State
Property & Buildings Commission
Project No. 65
5.00%, 02/01/01.................. 4,639,854
-------------
13,439,854
-------------
LOUISIANA - 6.32%
9,800,000 Ascension Parish, PCR,
Shell Oil Co. Project
4.20%, 05/01/26 (A).............. 9,800,000
16,050,000 East Baton Rouge Parish, PCR,
Exxon Mobil Project
4.55%, 11/01/19 (A).............. 16,050,000
4,000,000 East Baton Rouge Parish, PCR,
Exxon Mobil Project
4.60%, 03/01/22 (A).............. 4,000,000
1,800,000 Lake Charles Harbor &
Terminal District
Port Facilities Revenue,
Citgo Petroleum Corp.
4.35%, 08/01/07 (A)
LOC: Westdeutsche Landesbank GZ.. 1,800,000
9,150,000 Louisiana Public Facilities
Authority, IDB,
Kenner Hotel, Ltd.
4.55%, 12/01/15 (A)
LOC: Deutsche Bank A.G........... 9,150,000
1,000,000 Louisana Public Facilities
Authority, PCR,
Ciba-Geigy Corp. Project
4.25%, 12/01/04 (A)
LOC: UBS AG...................... 1,000,000
16,000,000 Louisana State Offshor
Terminal Authority,
Deepwater Port Revenue Loop, Inc.
1st Stage
4.60%, 09/01/08 (A)
LOC: SunTrust Bank, N.A. ........ 16,000,000
6,700,000 Louisana State Offshore
Terminal Authority,
Deepwater Port Revenue Loop, Inc.
1st Stage A
4.65%, 09/01/06 (A)
LOC: SunTrust Bank, N.A. ........ 6,700,000
10,800,000 South Commission Port Revenue,
Occidental Petrolium
4.30%, 07/01/18 (A)
LOC: Wachovia Bank, N.A. ........ 10,800,000
PAR VALUE VALUE
---------- ---------
LOUISIANA (CONTINUED)
$ 8,800,000 St. Charles Parish, PCR,
Shell Oil Co. Project
4.25%, 06/01/05 (A).............. $ 8,800,000
15,500,000 St. James Parish, PCR,
Texaco Project
Series 1988-A
4.40%, 11/16/00.................. 15,500,000
-------------
99,600,000
-------------
MAINE - 0.63%
10,000,000 Maine Finance Authority,
Jackson Laboratory Issue
4.50%, 12/01/30 (A)
LOC: Keybank, N.A. .............. 10,000,000
-------------
MARYLAND - 2.40%
8,185,000 Maryland State, GO, First Series
5.00%, 03/01/01.................. 8,207,823
18,500,000 Maryland State
Economic Development Corp.
College Park LLC
Series A
4.35%, 06/01/32 (A)
LOC: First Union National Bank... 18,500,000
11,100,000 Maryland State
Health & Higher Educational
Facilities
Authority, Pooled Loan Program
Series A
4.25%, 04/01/35 (A)
LOC: Bank One , N.A. ............ 11,100,000
-------------
37,807,823
-------------
MASSACHUSETTS - 4.44%
14,575,000 Dover, GO, BAN
5.00%, 06/22/01.................. 14,619,502
30,000,000 Massachusetts State, GO, BAN
Series A
5.00%, 09/06/01.................. 30,180,888
25,000,000 Winchester, BAN
5.00%, 07/03/01.................. 25,100,775
-------------
69,901,165
-------------
MICHIGAN - 1.32%
6,000,000 Michigan Municipal Bond Authority
Series A-1
4.75%, 04/26/01.................. 6,013,867
14,835,000 Michigan State University Revenue
Series A-2
4.30%, 08/15/22 (A).............. 14,835,000
-------------
20,848,867
-------------
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
MINNESOTA - 1.84%
$ 5,000,000 Minneapolis, GO
4.50%, 12/01/00.................. $ 5,002,175
23,925,000 Minnesota State, GO, Multi-Purpose
4.75%, 06/01/01.................. 23,985,219
-------------
28,987,394
-------------
MISSISSIPPI - 4.18%
4,725,000 Claibourne County, PCR
4.10%, 11/01/00
Guaranteed: National
Rural Utility CFC 4,725,000
2,200,000 Claibourne County, PCR
4.10%, 11/09/00
Guaranteed: National
Rural Utility CFC 2,200,000
4,900,000 Claibourne County, PCR
4.20%, 11/09/00
Guaranteed: National
Rural Utility CFC 4,900,000
1,100,000 Harrison County, PCR
duPont (E.I.) deNemours & Co.
4.65%, 09/01/10 (A).............. 1,100,000
7,700,000 Jackson County Port
Facility Revenue,
Chevron USA, Inc. Project
4.60%, 06/01/23 (A).............. 7,700,000
2,000,000 Jackson County Water System, GO
Chevron USA, Inc. Project
4.20%, 11/01/24 (A).............. 2,000,000
11,000,000 Jackson County, PCR,
Chevron USA, Inc. Project
4.60%, 12/01/16 (A).............. 11,000,000
11,750,000 Jackson County, PCR,
Chevron USA, Inc. Project
4.60%, 06/01/23 (A).............. 11,750,000
20,500,000 Perry County, PCR,
Leaf River Forest Project
4.65%, 03/01/02 (A)
LOC: Wachovia Bank, N.A.......... 20,500,000
-------------
65,875,000
-------------
MISSOURI - 2.74%
3,000,000 Kansas City, IDA, Hospital
Revenue,
Research Health Services System
4.75%, 10/15/15 (A)
Insured: MBIA
SPA: Bank of America NT & SA..... 3,000,000
2,400,000 Missouri State Development
Finance Board
Infrastructure Facilities
Science City Union Station
Series B
4.75%, 12/01/03 (A)
LOC: Canadian Imperial
Bank of Commerce................. 2,400,000
2,800,000 Missouri State Development
Finance Board
Infrastructure Facilities
Science City Union Station
Series C
4.75%, 12/01/03 (A)
LOC: Canadian Imperial
Bank of Commerce................. 2,800,000
PAR VALUE VALUE
---------- ---------
MISSOURI (CONTINUED)
$35,000,000 Missouri State HEFA
Medical Research Facilities,
Stowers Institution
4.30%, 06/01/35 (A)
Insured: MBIA
SPA: Morgan Guaranty Trust Co.... $ 35,000,000
-------------
43,200,000
-------------
MONTANA - 0.17%
2,600,000 Forsyth, PCR, Pacificorp Project
4.75%, 01/01/18 (A)
LOC: Rabobank Nederland NV....... 2,600,000
-------------
NEW HAMPSHIRE - 1.78%
12,600,000 New Hampshire Health & Higher
Education Facilities Authority,
Mary Hitchcock Memorial,
Series 85-D
4.30%, 07/01/21 (A)
Insured: FGIC
SPA: Chase Manhattan Bank........ 12,600,000
4,400,000 New Hampshire Health & Higher
Education Facilities Authority,
VHA of New England, Inc.
Series B
4.40%, 12/01/25 (A)
Insured: AMBAC
SPA: Mellon Bank, N.A............ 4,400,000
4,000,000 New Hampshire Health & Higher
Education Facilities Authority,
VHA of New England, Inc.
Series C
4.40%, 12/01/25 (A)
Insured: AMBAC
SPA: Mellon Bank, N.A............ 4,000,000
7,125,000 New Hampshire Health & Higher
Education Facilities Authority,
VHA of New England, Inc.
Series G
4.40%, 12/01/25 (A)
Insured: AMBAC
SPA: Mellon Bank, N.A............ 7,125,000
-------------
28,125,000
-------------
NEW MEXICO - 0.97%
9,100,000 Hurley, PCR, Kennecott
Santa Fe Corp. Project
4.60%, 12/01/15 (A)
Guaranteed: BP Amoco Capital Plc. 9,100,000
6,220,000 New Mexico State
Highway Commission, Sub Lien
Series A
5.00%, 06/15/01.................. 6,233,004
-------------
15,333,004
-------------
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
NEW YORK - 1.71%
$ 21,810,000 Long Island Power Authority
Electric Systems Revenue
Series 6
4.55%, 05/01/33 (A)
LOC: ABN-AMRO Bank NV
Morgan Guaranty Trust Co......... $ 21,810,000
3,000,000 New York City Municipal
Water Finance Authority,
Water & Sewer System Revenue
Series C
4.55%, 06/15/23 (A)
Insured: FGIC.................... 3,000,000
2,200,000 New York State
Energy Research & Development
Authority,
PCR, New York State
Electric & Gas Corp.
Series C
4.55%, 06/01/29 (A)
LOC: Morgan Guaranty Trust Co.... 2,200,000
-------------
27,010,000
-------------
NORTH CAROLINA - 0.86%
13,500,000 North Carolina
Educational Facilities
Finance Agency,
Bowman Gray School Project
4.35%, 09/01/26 (A)
LOC: Wachovia Bank, N.A.......... 13,500,000
-------------
OHIO - 1.31%
1,500,000 Ohio State Air
Quality Development
Authority Revenue, Mead Corp.
4.55%, 10/01/01 (A)
LOC: Deutsche Bank A.G........... 1,500,000
19,200,000 Ohio State Air
Quality Development
Authority Revenue, PCR,
Ohio Edison
Series C
4.60%, 06/01/23 (A)
LOC: First Union National Bank... 19,200,000
-------------
20,700,000
-------------
OREGON - 0.70%
11,000,000 Portland, TAN, GO
5.00%, 06/28/01.................. 11,048,389
-------------
PENNSYLVANIA - 3.31%
3,500,000 Delaware County, IDA,
PECO Energy Co. Project
4.30%, 11/07/00
Insured: FGIC.................... 3,500,000
5,145,000 Delaware County, IDA,
Resource Recovery Facility
Series G
4.20%, 12/01/31 (A)
Guaranteed: General
Electric Corp. .................. 5,145,00
PAR VALUE VALUE
---------- ---------
PENNSYLVANIA (CONTINUED)
$ 3,100,000 Delaware Valley
Regional Finance Authority
Local Government Revenue
Series A
4.30%, 12/01/19 (A)
LOC: Credit Suisse First Boston.. $ 3,100,000
10,900,000 Delaware Valley Regional
Finance Authority
Local Government Revenue
Series B
4.30%, 12/01/20 (A)
LOC: Credit Suisse First Boston.. 10,900,000
8,100,000 Delaware Valley Regional
Finance Authority
Local Government Revenue
Series C
4.30%, 12/01/20 (A)
LOC: Credit Suisse First Boston.. 8,100,000
12,900,000 Schuylkill County, IDA,
Resource Recovery Revenue
Gilberton Power Project
4.30%, 12/01/02 (A)
LOC: Mellon Bank N.A............. 12,900,000
8,500,000 South Fork Municipal Authority,
Hospital Revenue,
Conemaugh Health System
Series A
4.60%, 07/01/28 (A)
Insured: MBIA
SPA: Credit Suisse First Boston.. 8,500,000
-------------
52,145,000
-------------
SOUTH CAROLINA - 3.38%
19,400,000 Piedmont Municipal Power Agency,
Electric Co., Series C
4.30%, 01/01/22 (A)
Insured: MBIA
SPA: Morgan Guaranty Trust Co.... 19,400,000
16,800,000 Spartanburg County
Health Services
District, Inc. Hospital Revenue
4.25%, 04/15/23 (A)
LOC: MBIA
SPA: NationsBank, N.A............ 16,800,000
17,000,000 Spartanburg County School
District No. 7, BAN
4.75%, 02/15/01.................. 17,029,541
-------------
53,229,541
-------------
TENNESSEE - 1.94%
13,570,000 Metropolitan Nashville
Airport Authority
Special Facilities Revenue,
American Airlines Project
Series A
4.55%, 10/01/12 (A)
LOC: Credit Suisse First Boston.. 13,570,000
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
TENNESSEE (CONTINUED)
$13,900,000 Metropolitan Nashville
Airport Authority
Special Facilities Revenue,
American Airlines Project
Series B
4.55%, 10/01/12 (A)
LOC: Bayerische Landesbank GZ.... $ 13,900,000
3,100,000 Sullivan County, IDB,
PCR, Mead Corp. Project
4.55%, 10/01/16 (A)
LOC: UBS AG...................... 3,100,000
-------------
30,570,000
-------------
TEXAS - 14.86%
1,700,000 Grapevine, IDC,
American Airlines
Series A-2
4.65%, 12/01/24 (A)
LOC: Bayerische Landesbank GZ.... 1,700,000
2,200,000 Grapevine, IDC,
American Airlines
Series A-3
4.65%, 12/01/24 (A)
LOC: Bayerische Landesbank GZ.... 2,200,000
1,600,000 Grapevine, IDC,
American Airlines
Series B-1
4.65%, 12/01/24 (A)
LOC: Bayerische Landesbank GZ.... 1,600,000
15,550,000 Guadalupe-Blanco River
Authority, PCR,
Central Power & Light Co. Project
4.65%, 11/01/15 (A)
LOC: Barclays Bank Plc........... 15,550,000
6,000,000 Gulf Coast Waste Disposal
Authority, PCR,
Amoco Oil Co. Project
4.60%, 10/01/17 (A).............. 6,000,000
12,500,000 Gulf Coast Waste Disposal
Authority, PCR,
Exxon Mobil Project
4.25%, 10/01/24 (A).............. 12,500,000
18,000,000 Harris County Health Facilities
Development Corp.
Texas Childrens Hospital,
Series B-1
4.35%, 10/01/29 (A)
Insured: MBIA
SPA: Morgan Guaranty Trust Co.... 18,000,000
13,000,000 Harris County, IDC,
Baytank Houston, Inc. Project
4.30%, 02/01/20 (A)
LOC: Rabobank Nederland NV....... 13,000,000
3,800,000 Harris County, IDC, PCR
4.60%, 03/01/24 (A).............. 3,800,000
13,500,000 Hockley County, IDC, PCR,
Amoco Project, Standard Oil Co.
4.10%, 03/01/14 (A).............. 13,502,224
PAR VALUE VALUE
---------- ---------
TEXAS (CONTINUED)
$5,700,000 Houston, Series B
4.20%, 01/11/01
SPA: Toronto-Dominion Bank....... $ 5,700,000
12,000,000 Houston, Series B
4.20%, 01/11/01
SPA: Toronto-Dominion Bank....... 12,000,000
5,000,000 Houston, Series B
4.30%, 01/11/01
SPA: Toronto-Dominion Bank....... 5,000,000
12,500,000 Houston Higher Education
Finance Authority,
Rice University
Series A
4.30%, 02/14/01.................. 12,500,000
1,300,000 Lone Star Airport
Improvement Authority,
American Airlines, Inc.
Series A-2
4.65%, 12/01/14 (A)
LOC: Royal Bank of Canada........ 1,300,000
2,000,000 Lone Star Airport
Improvement Authority,
American Airlines, Inc.
Series A-4
4.65%, 12/01/14 (A)
LOC: Royal Bank of Canada........ 2,000,000
2,200,000 Lone Star Airport
Improvement Authority,
American Airlines, Inc.
Series B-1
4.65%, 12/01/14 (A)
LOC: Royal Bank of Canada........ 2,200,000
13,650,000 Lower Neches Valley Authority,
PCR, Chevron USA, Inc. Project
4.25%, 02/15/17 (A).............. 13,650,000
12,000,000 Midlothian IDC, PCR,
Crow Chemical Co. Project
4.30%, 12/01/09 (A)
LOC: UBS AG...................... 12,000,000
3,600,000 North Central HFDC
Presbyterian Medical Center
Series D
4.65%, 12/01/15 (A)
LOC: MBIA
SPA: Chase Manhattan Bank, N.A... 3,600,000
20,450,000 Sabine River Authority,
PCR, Texas Utilities Project
Series A
4.65%, 03/01/26 (A)
Insured: AMBAC
SPA: Bank of New York............ 20,450,000
55,500,000 Texas State, TRAN
5.25%, 08/31/01.................. 55,930,779
-------------
234,183,003
-------------
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
UTAH - 3.67%
$48,300,000 Utah State, GO
Series B
4.30%, 07/01/16 (A)
SPA: Toronto Dominion Bank....... $ 48,300,000
9,500,000 Utah State, GO
Series C
4.30%, 07/01/16 (A)
SPA: Toronto Dominion Bank....... 9,500,000
-------------
57,800,000
-------------
VERMONT - 0.52%
5,900,000 Vermont Education &
Health Building
Finance Agency Hospital Revenue
VHA of New England
Series D
4.40%, 12/01/25 (A)
Insured: AMBAC
SPA: Mellon Bank N.A............. 5,900,000
2,300,000 Vermont Education &
Health Building
Finance Agency Hospital Revenue
VHA of New England
Series F
4.40%, 12/01/25 (A)
Insured: AMBAC
SPA: Mellon Bank, N.A............ 2,300,000
-------------
8,200,000
-------------
VIRGINIA - 0.22%
3,500,000 Peninsula Ports Authority,
CTR, Dominion Terminal Project
Series C
4.60%, 07/01/16 (A)
LOC: Barclays Bank Plc........... 3,500,000
-------------
WISCONSIN - 3.14%
40,000,000 Milwaukee, RAN,
Series B
5.25%, 08/30/01.................. 40,311,786
9,200,000 Wisconsin State HEFA,
University of Wisconsin
Medical Foundation
4.40%, 05/01/30 (A)
LOC: LaSalle Bank, N.A........... 9,200,000
-------------
49,511,786
-------------
PAR VALUE VALUE
---------- ---------
WYOMING - 4.29%
$ 1,700,000 Kemmerer, PCR, Exxon Mobil Project
4.60%, 11/01/14 (A).............. $ 1,700,000
2,200,000 Lincoln County, PCR,
Exxon Mobil Project
Series A
4.55%, 11/01/14 (A).............. 2,200,000
2,200,000 Lincoln County, PCR,
Exxon Mobil Project
Series B
4.55%, 11/01/14 (A).............. 2,200,000
2,500,000 Lincoln County, PCR,
Exxon Mobil Project
Series C
4.55%, 11/01/14 (A).............. 2,500,000
10,700,000 Platte County, PCR, Tri-State G & T
Series A
4.75%, 07/01/14 (A)
LOC: National Rural Utility CFC.. 10,700,000
3,900,000 Platte County, PCR, Tri-State G & T
Series B
4.75%, 07/01/14 (A)
LOC: National Rural Utility CFC.. 3,900,000
7,800,000 Sublette County, PCR,
Exxon Mobil Project
4.60%, 11/01/14 (A).............. 7,800,000
14,500,000 Sweetwater County, PCR,
Series 88-A
4.20%, 12/06/00
LOC: UBS AG...................... 14,500,000
4,600,000 Sweetwater County, PCR,
Pacificorp Project
Series A
4.25%, 07/01/15 (A)
LOC: Commerzbank AG.............. 4,600,000
6,700,000 Uinta County, PCR,
Amoco Project
4.60%, 07/01/26 (A).............. 6,700,000
4,600,000 Unita County, PCR,
Chevron USA, Inc. Project
4.60%, 04/01/10 (A).............. 4,600,000
4,660,000 Uinta County, PCR,
Chevron USA, Inc. Project
4.60%, 08/15/20 (A).............. 4,660,000
1,600,000 Uinta County, PCR,
Chevron USA, Inc. Project
4.60%, 12/01/22 (A).............. 1,600,000
-------------
67,660,000
-------------
TOTAL MUNICIPAL SECURITIES ...... 1,580,175,684
-------------
(Cost $1,580,175,684)
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
TAX-EXEMPT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
SHARES VALUE
---------- ---------
INVESTMENT COMPANIES - 0.04%
12,378 Dreyfus Tax-Exempt
Cash Management Fund............. $ 12,378
633,273 Federated Investors
Tax-Free Obligations Fund........ 633,273
-------------
TOTAL INVESTMENT COMPANIES ...... 645,651
-------------
(Cost $645,651)
TOTAL INVESTMENTS - 100.29%...................... 1,580,821,335
-------------
(Cost $1,580,821,335)*
NET OTHER ASSETS AND LIABILITIES - (0.29)%....... (4,546,738)
-------------
NET ASSETS - 100.00%............................. $1,576,274,597
=============
--------------------------------------------
* 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 have demand features within one
year. Notes mature within one year. The interest rate shown reflects
the rate in effect at October 31, 2000.
AMBAC American Municipal Bond Assurance Corp.
BAN Bond Anticipation Notes
CFC Cooperative Finance Corp.
CTR Coal Term Revenue
FGIC Federal Guaranty Insurance Corp.
FSA Financial Security Assurance Co.
GO General Obligation
HEFA Health and Educational 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 Pollution Control Revenue
RAN Revenue Anticipation Notes
SPA Stand-by Purchase Agreement
TAN Tax Anticipation Notes
TRAN Tax and Revenue Anticipation Notes
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
CONNECTICUT MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
MUNICIPAL SECURITIES - 98.15%
CALIFORNIA - 0.46%
$ 1,200,000 Los Angeles Regional Airports
Improvement Corp. Lease Revenue,
American Airlines, Inc.,
LA International Airport
Series A
4.65%, 12/01/24 (A)
LOC: Wachovia Bank, N.A.......... $ 1,200,000
-------------
CONNECTICUT - 70.51%
2,000,000 Brookfield, BAN, GO
4.25%, 12/08/00.................. 2,000,590
1,905,000 Connecticut State
Series A, GO
6.00%, 03/15/01.................. 1,917,896
11,740,000 Connecticut State
Series B, GO
4.15%, 05/15/14 (A)
SPA: Bayerische Hypo-Und
Vereinsbank AG................... 11,740,000
1,300,000 Connecticut State Development
Authority
Conco Project
4.00%, 11/01/05 (A)
LOC: Bayerische Hypo-Und
Vereinsbank AG................... 1,300,000
10,515,000 Connecticut State Development
Authority
Health Care Corp.
for Independent Living
4.10%, 07/01/15 (A)
LOC: Chase Manhattan Bank, N.A... 10,515,000
2,600,000 Connecticut State
Development Authority,
PCR, Central Vermont
Public Service
4.35%, 12/01/15 (A)
LOC: Toronto-Dominion Bank....... 2,600,000
11,500,000 Connecticut State HEFA,
Hotchkiss School
Series A
4.05%, 07/01/30 (A)
SPA: Northern Trust Company...... 11,500,000
3,000,000 Connecticut State HEFA,
Hospital of St. Raphael
Series J
3.85%, 07/01/22 (A)
LOC: KBC Bank NV................. 3,000,000
7,300,000 Connecticut State HEFA,
Stamford Hospital Issue
Series H
3.85%, 07/01/24 (A)
Insured: MBIA
SPA: Chase Manhattan Bank, N.A... 7,300,000
5,300,000 Connecticut State HEFA,
Summerwood University Park,
Series A
3.85%, 07/01/30 (A)
LOC: LaSalle Bank, N.A........... 5,300,000
PAR VALUE VALUE
---------- ---------
CONNECTICUT (CONTINUED)
$ 2,800,000 Connecticut State HEFA,
Taft School
Series E
3.90%, 07/01/30 (A)
LOC: First Union National Bank... $ 2,800,000
7,500,000 Connecticut State HEFA,
Yale University
4.20%, 11/07/00.................. 7,500,000
5,000,000 Connecticut State HEFA,
Yale University
Series T-1
4.20%, 07/01/29 (A).............. 5,000,000
2,000,000 Connecticut State HEFA,
Yale University
Series T-2
4.20%, 07/01/29 (A).............. 2,000,000
6,500,000 Connecticut State Housing
Finance Authority,
Housing Mortgage
Finance Program
Series D-3
3.35%, 11/15/28 (A)
Insured: AMBAC
SPA: Landesbank
Hessen-Thuringen GZ 6,500,000
7,900,000 Connecticut State Housing
Finance Authority,
Housing Mortgage
Finance Program
Series G
4.25%, 05/15/18 (A)
Insured: AMBAC
SPA: Morgan Guaranty Trust Co.... 7,900,000
11,000,000 Connecticut State
Special Assessment
Second Injury Fund
4.25%, 12/21/00
SPA: Caisse Nationale
de Credit Agricole............... 11,000,000
7,000,000 Connecticut State
Special Assessment
Unemployment Compensation
Advisory Fund
Series C
4.35%, 11/15/01 (A)
Insured: FGIC
SPA: FGIC - SPI.................. 7,000,000
13,200,000 Connecticut State
Special Tax Obligation
Revenue, Second Lien
Transportation Infrastructure
Series 1
4.10%, 12/01/10 (A)
LOC: Commerzbank AG.............. 13,200,000
3,600,000 Connecticut State, IDA,
Allen Group, Inc.
4.50%, 02/01/13 (A)
LOC: Bayerische Hypo-Und
Vereinsbank AG................... 3,600,000
2,020,000 Fairfield, BAN, Series A
5.25%, 06/22/01.................. 2,029,866
5,900,000 Groton, BAN, Series A
5.25%, 06/12/01.................. 5,922,374
3,405,000 Hamden, BAN, GO
4.25%, 01/24/01.................. 3,408,236
2,600,000 Milford, BAN, GO
4.00%, 11/09/00.................. 2,600,192
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
CONNECTICUT MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
CONNECTICUT (CONTINUED)
$ 6,510,000 Norwich, BAN, GO
4.50%, 05/15/01.................. $ 6,520,009
7,170,000 Ridgefield, BAN
4.75%, 07/11/01.................. 7,196,110
10,000,000 Shelton, BAN, GO
4.00%, 11/21/00.................. 10,000,893
10,000,000 Stamford, BAN
5.25%, 05/02/01.................. 10,035,997
5,425,000 Stonington, BAN
4.75%, 02/15/01.................. 5,434,313
8,000,000 Trumbull, BAN, GO
4.50%, 01/16/01.................. 8,011,203
-------------
184,832,679
-------------
ILLINOIS - 0.57%
1,500,000 Chicago O'Hare
International Airport
American Airlines
Series C
4.60%, 12/01/17 (A)
LOC: Royal Bank of Canada........ 1,500,000
-------------
MICHIGAN - 1.06%
2,790,000 Cornell Township Economic
Development Corp.
Mead Escabana Paper Co.
4.55%, 11/01/16 (A)
LOC: Bank of America NT & SA..... 2,790,000
-------------
MISSISSIPPI - 0.38%
1,000,000 Perry County, PCR,
Leaf River Forest Project
4.65%, 03/01/02 (A)
LOC: Wachovia Bank N.A........... 1,000,000
-------------
NEW MEXICO - 0.48%
1,245,000 Farmington, PCR,
Arizona Public Service Co.
Series B
4.65%, 09/01/24 (A)
LOC: Barclays Bank Plc........... 1,245,000
-------------
NEW YORK - 2.10%
2,300,000 Long Island Power Authority
Electric Systems Revenue
Series 5
4.60%, 05/01/33 (A)
LOC: ABN-AMRO Bank NV
Morgan Guaranty Trust Co......... 2,300,000
3,200,000 New York City Municipal
Water Finance Authority
Water and Sewer System
Revenue Bonds
Series C
4.55%, 06/15/23 (A)
LOC: FGIC........................ 3,200,000
-------------
5,500,000
-------------
PAR VALUE VALUE
---------- ---------
OHIO - 1.29%
$ 1,675,000 Cuyahoga County Hospital Revenue,
University Hospital of Cleveland
4.55%, 01/01/16 (A)
LOC: Chase Manhattan Bank........ $ 1,675,000
1,700,000 Ohio State Air Quality
Development Authority
Revenue, Mead Corp.
4.55%, 10/01/01 (A)
LOC: Deutsche Bank A.G........... 1,700,000
-------------
3,375,000
-------------
PUERTO RICO - 8.58%
12,600,000 Puerto Rico Commonwealth
Government Development Bank
3.85%, 12/01/15 (A)
Insured: MBIA
SPA: Credit Suisse First Boston.. 12,600,000
9,900,000 Puerto Rico Commonwealth
Highway & Transportation Authority
Series A
3.90%, 07/01/28 (A)
Insured: AMBAC
SPA: Bank of Nova Scotia......... 9,900,000
-------------
22,500,000
-------------
TEXAS - 6.46%
1,000,000 Grapevine IDC, American Airlines
Series A-3
4.65%, 12/01/24 (A)
LOC: Bayerische Landesbank GZ.... 1,000,000
5,690,000 Guadalupe-Blanco River Authority, PCR,
Central Power & Light Co. Project
4.65%, 11/01/15 (A)
LOC: ABN AMRO Bank N.V........... 5,690,000
4,350,000 Harris County, IDC, PCR,
Exxon Mobil Corp.
4.60%, 03/01/24 (A).............. 4,350,000
1,100,000 Lone Star Airport Improvement Authority
American Airlines, Inc.
Series A-3
4.65%, 12/01/14 (A)
LOC: Royal Bank of Canada........ 1,100,000
2,400,000 Lone Star Airport Improvement Authority,
American Airlines,
Series A-5
4.65%, 12/01/14 (A)
LOC: Royal Bank of Canada........ 2,400,000
2,400,000 Lone Star Airport Improvement Authority,
American Airlines,
Series B-3
4.65%, 12/01/14 (A)
LOC: Royal Bank of Canada........ 2,400,000
-------------
16,940,000
-------------
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
CONNECTICUT MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
VIRGINIA - 2.06%
$ 5,400,000 Peninsula Ports Authority, CTR,
Dominion Terminal Association
Project
Series C
4.60%, 07/01/16 (A)
LOC: Barclays Bank Plc........... $ 5,400,000
-------------
WYOMING - 4.20%
1,100,000 Lincoln County, PCR,
Exxon Mobil Project
Series A
4.55%, 11/01/14 (A).............. 1,100,000
2,000,000 Lincoln County, PCR,
Exxon Mobil Project
Series B
4.55%, 11/01/14 (A).............. 2,000,000
2,200,000 Lincoln County,
Resource Recovery Revenue Bond,
Exxon Mobil Project
Series C
4.55%, 11/01/14 (A).............. 2,200,000
1,300,000 Platte County, PCR,
Tri-State G & T
Series A
4.75%, 07/01/14 (A)
LOC: National Rural Utility CFC.. 1,300,000
2,075,000 Platte County, PCR,
Tri-State G & T
Series B
4.75%, 07/01/14 (A)
LOC: National Rural Utility CFC.. 2,075,000
2,335,000 Uinta County, PCR,
Chevron USA, Inc. Project
4.60%, 08/15/20 (A).............. 2,335,000
-------------
11,010,000
-------------
TOTAL MUNICIPAL SECURITIES ...... 257,292,679
-------------
(Cost $257,292,679)
SHARES VALUE
---------- ---------
INVESTMENT COMPANY - 0.49%
1,281,136 Federated Municipal Trust Connecticut
Municipal Cash Trust............. $ 1,281,136
-------------
TOTAL INVESTMENT COMPANY ........ 1,281,136
-------------
(Cost $1,281,136)
TOTAL INVESTMENTS - 98.64%....................... 258,573,815
-------------
(Cost $258,573,815)*
NET OTHER ASSETS AND LIABILITIES - 1.36%......... 3,574,975
-------------
NET ASSETS - 100.00%............................. $ 262,148,790
=============
---------------------------------------------
* 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 have demand features within one
year. Notes mature within one year. The interest rate shown reflects
the rate in effect at October 31, 2000.
AMBAC American Municipal Bond Assurance Corp.
BAN Bond Anticipation Notes
CFC Cooperative Finance Corp.
CTR Coal Term Revenue
FGIC Federal Guaranty Insurance Corp.
GO General Obligation
HEFA Health and Educational Facilities Authority
IDA Industrial Development Authority
IDC Industrial Development Corp.
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
SPA Stand-by Purchase Agreement
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
MUNICIPAL SECURITIES - 99.72%
ALASKA - 0.50%
$ 2,500,000 Valdez Marine Terminal Revenue
Exxon Mobil Pipeline Co. Project
Series B
4.60%, 12/01/33 (A).............. $ 2,500,000
-------------
ARIZONA - 0.83%
2,600,000 Maricopa County, PCR Arizona
Public Service Co.
Series A
4.60%, 05/01/29 (A)
LOC: Morgan Guaranty Trust Co.... 2,600,000
1,400,000 Maricopa County, PCR Arizona
Public Service Co.
Series F
4.60%, 05/01/29 (A)
LOC: Bank of America NT & SA..... 1,400,000
-------------
4,000,000
-------------
CALIFORNIA - 1.17%
2,300,000 Los Angeles Regional Airports
Improvement Corp.,
Lease Revenue
American Airlines, Inc.
LA International Airport
Series G
4.65%, 12/01/24 (A)
LOC: Wachovia Bank, N.A.......... 2,300,000
3,300,000 Los Angeles Regional Airports
Improvement Corp.,
Lease Revenue
Lax Two Corp.
4.65%, 12/01/25 (A)
LOC: Societe Generale............ 3,300,000
-------------
5,600,000
-------------
ILLINOIS - 1.96%
3,700,000 Chicago O'Hare
International Airport
American Airlines Project
Series A
4.60%, 12/01/17 (A)
LOC: Credit Suisse First Boston.. 3,700,000
5,700,000 Chicago O'Hare
International Airport
American Airlines Project
Series D
4.60%, 12/01/17 (A)
LOC: Royal Bank of Canada........ 5,700,000
-------------
9,400,000
-------------
PAR VALUE VALUE
---------- ---------
LOUISIANA - 4.75%
$14,910,000 East Baton Rouge Parish, PCR,
Exxon Mobil Project
4.60%, 03/01/22 (A).............. $ 14,910,000
3,950,000 Louisiana Offshore
Terminal Authority,
Deepwater Port Revenue Loop, Inc.
1st Stage A
4.60%, 09/01/08 (A)
LOC: SunTrust Bank, Nashville.... 3,950,000
4,000,000 Louisiana Offshore
Terminal Authority,
Deepwater Port Revenue Loop, Inc.
1st Stage
4.65%, 09/01/06 (A)
LOC: SunTrust Bank, Nashville.... 4,000,000
-------------
22,860,000
-------------
MASSACHUSETTS - 74.31%
7,300,000 Boston Water and
Sewer Commission
General Purpose,
Senior Series A
4.05%, 11/01/24 (A)
LOC: State Street Bank........... 7,300,000
10,500,000 Brookline, BAN, GO
4.75%, 06/01/01.................. 10,502,866
2,400,000 Cohasset, BAN, GO
5.00%, 07/27/01.................. 2,410,973
2,224,488 Hamilton, BAN, GO
5.25%, 06/01/01.................. 2,230,651
22,000,000 Hingham, BAN, GO
4.63%, 09/26/01.................. 22,071,190
8,905,000 Holliston, BAN, GO
4.65%, 08/24/01.................. 8,931,206
8,000,000 Holliston, BAN, GO
4.75%, 08/24/01.................. 8,027,313
3,900,000 Holyoke, PCR, Holyoke
Water & Power Co.
4.05%, 11/01/23 (A)
LOC: Toronto-Dominion Bank....... 3,900,000
10,952,000 Marshfield, BAN, GO
5.00%, 06/20/01.................. 10,999,048
2,500,000 Massachusetts Municipal
Wholesale Electric Co.
Power Supply System
Series C
4.20%, 07/01/19 (A)
Insured: MBIA
LOC: Credit Suisse First Boston.. 2,500,000
14,590,000 Massachusetts State HEFA,
Amherst College
Series F
4.25%, 11/01/26 (A).............. 14,590,000
2,400,000 Massachusetts State HEFA,
Bentley College
Series K
4.20%, 07/01/30 (A)
LOC: State Street Bank........... 2,400,000
4,000,000 Massachusetts State HEFA,
Capital Asset Program
Series A
4.05%, 01/01/01 (A)
LOC: Bank One, N.A............... 4,000,000
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
MASSACHUSETTS (CONTINUED)
$12,000,000 Massachusetts State HEFA,
Capital Asset Program
Series D
4.55%, 01/01/35 (A)
Insured: MBIA
SPA: State Street Bank........... $ 12,000,000
5,200,000 Massachusetts State HEFA,
Capital Asset Program
Series E
4.60%, 01/01/35 (A)
LOC: Bank One, N.A............... 5,200,000
2,400,000 Massachusetts State HEFA,
Capital Asset Program
Series G-1
4.15%, 01/01/19 (A)
LOC: MBIA
SPA: Credit Suisse First Boston.. 2,400,000
25,370,000 Massachusetts State HEFA,
Harvard University
4.13%, 08/01/17 (A).............. 25,370,000
8,100,000 Massachusetts State HEFA,
Harvard University
Series Q
4.13%, 02/01/16 (A).............. 8,100,000
8,000,000 Massachusetts State HEFA,
Harvard University, Series R
4.13%, 11/01/49 (A).............. 8,000,000
11,900,000 Massachusetts State HEFA,
Newton Wellesley Hospital
Series F
4.15%, 07/01/25 (A)
Insured: MBIA
SPA: Credit Suisse First Boston.. 11,900,000
16,700,000 Massachusetts State HEFA,
Partners Healthcare System
Series P-2
4.20%, 07/01/27 (A)
Insured: FSA
SPA: Morgan Guaranty Trust
Bayerische Landesbank GZ......... 16,700,000
12,000,000 Massachusetts State HEFA,
Wellesley College
Series G
4.40%, 07/01/39 (A).............. 12,000,000
26,800,000 Massachusetts State HFA
Multi-Family
Series A
4.20%, 12/01/25 (A)
Insured: GNMA
SPA: Republic National
Bank of New York................ 26,800,000
1,800,000 Massachusetts State IFA,
Buckingham Brown Nichols Issue
4.25%, 05/01/27 (A)
LOC: State Street Bank........... 1,800,000
1,500,000 Massachusetts State IFA,
Gordon College Issue
4.25%, 12/01/27 (A)
LOC: State Street Bank........... 1,500,000
PAR VALUE VALUE
---------- ---------
MASSACHUSETTS (CONTINUED)
$ 5,000,000 Massachusetts State IFA,
Governor Dummer Academy
4.25%, 07/01/26 (A)
LOC: State Street Bank........... $ 5,000,000
9,300,000 Massachusetts State IFA, PCR,
Holyoke Water Power Co.
Series A
4.05%, 05/01/22 (A)
LOC: Canadian Imperial
Bank of Commerce................. 9,300,000
4,000,000 Massachusetts State IFA,
Worcester Academy
4.25%, 10/01/30 (A)
LOC: Allied Irish Bank........... 4,000,000
1,000,000 Massachusetts State
Port Authority
4.20%, 12/07/00
LOC: Westdeutsche Landesbank GZ.. 1,000,000
2,000,000 Massachusetts State
Port Authority
4.25%, 01/10/01
LOC: Westdeutsche Landesbank GZ.. 2,000,000
12,000,000 Massachusetts State
Water Resource Authority
Subordinated, General Purpose
Series A
4.20%, 04/01/28 (A)
Insured: AMBAC
SPA: Bank of Nova Scotia......... 12,000,000
5,500,000 Massachusetts State
Water Resource Authority
Subordinated, General Purpose
Series B
4.20%, 08/01/28 (A)
LOC: Landesbank
Hessen - Thuringen GZ............ 5,500,000
4,000,000 Massachusetts State,
Series A, GO
4.30%, 09/01/16 (A)
SPA: Commerzbank A.G............. 4,000,000
20,000,000 Massachusetts State,
Series B, GO
4.30%, 09/01/16 (A)
SPA: Toronto Dominion Bank....... 20,000,000
5,483,547 Millis, BAN, GO
5.25%, 01/31/01.................. 5,495,579
7,005,000 Natick, BAN, GO
4.75%, 08/02/01.................. 7,025,146
7,000,000 Reading, BAN, GO
4.13%, 01/11/01.................. 7,002,280
13,000,000 Sudbury, BAN, GO
4.75%, 12/29/00.................. 13,011,148
4,270,500 Tisbury, BAN, GO
5.50%, 11/15/00.................. 4,271,743
6,358,000 Topsfield, BAN, GO
4.50%, 03/23/01.................. 6,364,859
9,327,000 Topsfield, BAN, GO
4.63%, 09/21/01.................. 9,355,144
3,130,000 Wellesley, BAN, GO
5.25%, 06/07/01.................. 3,139,815
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
$ 2,750,000 Westfield, BAN, GO
4.75%, 02/01/01.................. $ 2,752,988
4,445,000 Winchester, BAN, GO
5.00%, 07/03/01.................. 4,462,918
-------------
357,314,867
-------------
MISSISSIPPI - 1.06%
3,600,000 Harrison County, PCR, E.I.
duPont deNemours Project
4.65%, 09/01/10 (A).............. 3,600,000
1,500,000 Perry County, PCR, Leaf River
Forest Project
4.65%, 03/01/02 (A)
LOC: Wachovia Bank N.A........... 1,500,000
-------------
5,100,000
-------------
MISSOURI - 0.21%
1,000,000 Kansas City,
IDA Hospital Revenue,
Research Health Services System
4.75%, 04/15/15 (A)
Insured: MBIA
SPA: Bank of America............. 1,000,000
-------------
NEW YORK - 2.00%
1,000,000 Long Island Power Authority
Electric Systems Revenue
Series 5
4.60%, 05/01/33 (A)
LOC: ABN-AMRO Bank NV
Morgan Guaranty Trust Co......... 1,000,000
8,600,000 Long Island Power Authority
Electric Systems Revenue
Series 6
4.55%, 05/01/33 (A)
LOC: ABN-AMRO Bank NV
Morgan Guaranty Trust Co......... 8,600,000
-------------
9,600,000
-------------
OHIO - 0.87%
4,200,000 Ohio State Air Quality
Development Authority
Revenue, Mead Corp.
4.55%, 10/01/01 (A)
LOC: Deutsche Bank A.G........... 4,200,000
-------------
PENNSYLVANIA - 0.75%
3,600,000 Delaware County, IDA,
Airport Facilities Revenue,
United Parcel Service Project
4.55%, 12/01/15 (A).............. 3,600,000
-------------
PAR VALUE VALUE
---------- ---------
PUERTO RICO - 0.21%
$1,000,000 Puerto Rico Commonwealth
Highway & Transportation
Authority
Series A
3.90%, 07/01/28 (A)
Insured: AMBAC
SPA: Bank of Nova Scotia......... $ 1,000,000
-------------
TENNESSEE - 1.69%
8,100,000 Metropolitan Nashville
Airport Authority
Special Facilities Revenue,
American Airlines Project
Series B
4.55%, 10/01/12 (A)
LOC: Bayerische Landesbank GZ.... 8,100,000
-------------
TEXAS - 6.23%
1,800,000 Grapevine IDC,
American Airlines, Inc.
Series A-4
4.65%, 11/01/15 (A)
LOC: Bayerische Landesbank GZ.... 1,800,000
1,400,000 Grapevine IDC,
American Airlines, Inc.
Series B-1
4.65%, 12/01/24 (A)
LOC: Bayerische Landesbank GZ.... 1,400,000
4,000,000 Guadalupe-Blanco
River Authority,
PCR, Central Power & Light Co.
4.65%, 11/01/15 (A)
LOC: Barclays Bank............... 4,000,000
4,200,000 Harris County IDC, PCR,
Exxon Mobil Corp.
4.60%, 03/01/24 (A).............. 4,200,000
4,350,000 Harris County IDC, PCR,
Exxon Mobil Corp.
4.60%, 03/01/24 (A).............. 4,350,000
900,000 Lone Star Airport
Improvement Authority,
American Airlines, Inc.
Series A-1
4.65%, 12/01/14 (A)
LOC: Royal Bank of Canada........ 900,000
1,200,000 Lone Star Airport
Improvement Authority,
American Airlines, Inc.
Series A-2
4.65%, 12/01/14 (A)
LOC: Royal Bank of Canada........ 1,200,000
2,600,000 Lone Star Airport
Improvement Authority,
American Airlines, Inc.
Series A-3
4.65%, 12/01/14 (A)
LOC: Royal Bank of Canada........ 2,600,000
1,300,000 Lone Star Airport
Improvement Authority,
American Airlines, Inc.
Series B-1
4.65%, 12/01/14 (A)
LOC: Royal Bank of Canada........ 1,300,000
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
---------- ---------
TEXAS (CONTINUED)
$ 3,700,000 Lone Star Airport
Improvement Authority,
American Airlines, Inc.
Series B-2
4.65%, 12/01/14 (A)
LOC: Royal Bank of Canada........ $ 3,700,000
3,300,000 Lone Star Airport
Improvement Authority,
American Airlines, Inc.
Series B-4
4.65%, 12/01/14 (A)
LOC: Royal Bank of Canada........ 3,300,000
1,200,000 Sabine River Authority, PCR,
Texas Utilities Project
Series A
4.65%, 03/01/26 (A)
Insured: AMBAC
SPA: Bank of New York............ 1,200,000
-------------
29,950,000
-------------
WYOMING - 3.18%
1,600,000 Lincoln County, PCR,
Exxon Mobil Project
Series A
4.55%, 11/01/14 (A).............. 1,600,000
6,300,000 Platte County, PCR,
Tri-State G & T
Series A
4.75%, 07/01/14 (A)
Guaranteed: National
Rural Utility CFC ............... 6,300,000
3,725,000 Platte County, PCR,
Tri-State G & T
Series B
4.75%, 07/01/14 (A)
Guaranteed: National
Rural Utility CFC................ 3,725,000
2,050,000 Uinta County, PCR, Amoco Project
4.60%, 07/01/26 (A).............. 2,050,000
1,600,000 Uinta County, PCR,
Chevron, Inc. Project
4.60%, 08/15/20 (A).............. 1,600,000
-------------
15,275,000
-------------
TOTAL MUNICIPAL SECURITIES ...... 479,499,867
-------------
(Cost $479,499,867)
SHARES VALUE
---------- ---------
INVESTMENT COMPANIES - 0.20%
48,767 Dreyfus Massachusestts
Tax-Exempt Money Market.......... $ 48,767
918,218 Federated Municipal Trust
Massachusetts Municipal
Cash Trust....................... 918,218
3,961 Federated Municipal Trust
Tax-Exempt Money Market.......... 3,962
-------------
TOTAL INVESTMENT COMPANIES ...... 970,947
-------------
(Cost $970,947)
TOTAL INVESTMENTS - 99.92%....................... 480,470,814
-------------
(Cost $480,470,814)*
NET OTHER ASSETS AND LIABILITES - 0.08%.......... 364,514
-------------
NET ASSETS - 100.00%............................. $ 480,835,328
=============
--------------------------------------------------------------------------
* 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 have demand features within one
year. Notes mature within one year. The interest rate shown reflects
the rate in effect at October 31, 2000.
AMBAC American Municipal Bond Assurance Corp.
BAN Bond Anticipation Note
CFC Cooperative Finance Corp.
FSA Financial Security Assurance Co.
GNMA Government National Mortgage Association
GO General Obligation
HEFA Health and Educational Facilities Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDC Industrial Development Corp.
IFA Industrial Finance Authority
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
SPA Stand-by Purchase Agreement
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
This page left blank intentionally.
29
<PAGE>
GALAXY MONEY MARKET FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 2000
<TABLE>
<CAPTION>
MONEY MARKET GOVERNMENT U.S. TREASURY TAX-EXEMPT
FUND FUND FUND FUND
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at amortized cost.............................. $4,874,281,927 $ 778,305,538 $1,323,134,026 $1,580,821,335
Repurchase agreement....................................... 23,810,000 125,265,000 -- --
-------------- ------------- -------------- --------------
Total investments at value............................... 4,898,091,927 903,570,538 1,323,134,026 1,580,821,335
Cash......................................................... -- 6 450 8,003
Receivable for shares sold................................... 30,527,399 2,825,535 8,514,549 7,820,955
Interest and dividends receivable............................ 30,262,706 2,085,973 3,120,437 9,665,749
-------------- ------------- -------------- --------------
Total Assets............................................... 4,958,882,032 908,482,052 1,334,769,462 1,598,316,042
-------------- ------------- -------------- --------------
LIABILITIES:
Dividends payable............................................ 10,384,650 2,814,852 2,339,809 4,114,640
Payable for investments purchased............................ -- -- 24,778,472 16,363,578
Payable for shares repurchased............................... 37,497,424 43,344,176 6,593,098 831,521
Investment advisory fee payable (Note 3)..................... 1,493,852 294,358 418,732 490,728
Payable to Fleet affiliates (Note 3)......................... 265,766 33,048 61,363 12,297
Payable to Administrator (Note 3)............................ 518,351 89,602 152,103 104,392
Trustees' fees and expenses payable (Note 3)................. 154,083 47,018 45,043 24,088
Payable to custodian......................................... 17,680 -- -- --
Accrued expenses and other payables.......................... 365,172 85,312 74,639 100,201
-------------- ------------- -------------- --------------
Total Liabilities.......................................... 50,696,978 46,708,366 34,463,259 22,041,445
-------------- ------------- -------------- --------------
NET ASSETS...................................................... $4,908,185,054 $ 861,773,686 $1,300,306,203 $1,576,274,597
============== ============= ============== ==============
NET ASSETS CONSIST OF:
Par value (Note 5)........................................... $ 4,907,990 $ 861,815 $ 1,299,955 $ 1,576,540
Paid-in capital in excess of par value....................... 4,903,034,983 860,953,045 1,298,656,803 1,574,963,114
Undistributed (overdistributed) net investment income (loss). 243,113 (41,174) 316,537 (19,453)
Accumulated net realized gain (loss) on investments sold..... (1,032) -- 32,908 (245,604)
-------------- ------------- -------------- --------------
TOTAL NET ASSETS................................................ $4,908,185,054 $ 861,773,686 $1,300,306,203 $1,576,274,597
============== ============= ============== ==============
Retail A Shares:
Net assets................................................... $2,785,839,803 $ 333,271,767 $ 544,741,284 $ 215,913,814
Shares of beneficial interest outstanding.................... 2,785,699,572 332,888,624 544,545,631 215,971,129
-------------- ------------- -------------- --------------
NET ASSET VALUE, offering and redemption price per share..... $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============= ============== ==============
Retail B Shares:
Net assets................................................... $ 2,325,038 N/A N/A N/A
Shares of beneficial interest outstanding.................... 2,324,888 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................................................... $1,999,242,506 $ 528,501,919 $ 510,814,745 $1,276,444,824
Shares of beneficial interest outstanding.................... 1,999,177,125 528,926,234 510,661,544 1,276,652,565
-------------- ------------- -------------- --------------
NET ASSET VALUE, offering and redemption price per share..... $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== ============= ============== ==============
BKB Shares:
Net assets................................................... $ 120,777,707 N/A $ 244,750,174 $ 83,915,959
Shares of beneficial interest outstanding.................... 120,788,836 N/A 244,747,588 83,915,963
-------------- ------------- -------------- --------------
NET ASSET VALUE, offering and redemption price per share..... $ 1.00 N/A $ 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.
30-31
<PAGE>
<TABLE>
<CAPTION>
CONNECTICUT MUNICIPAL MASSACHUSETTS MUNICIPAL
MONEY MARKET FUND MONEY MARKET FUND
--------------------- -----------------------
<S> <C> <C>
ASSETS:
Investments (Note 2):
Investments at amortized cost.............................. $258,573,815 $480,470,814
Repurchase agreement....................................... -- --
------------ ------------
Total investments at value............................... 258,573,815 480,470,814
Cash......................................................... 44 666
Receivable for shares sold................................... 3,061,748 3,735,869
Interest and dividends receivable............................ 2,399,244 2,688,978
------------ ------------
Total Assets............................................... 264,034,851 486,896,327
------------ ------------
LIABILITIES:
Dividends payable............................................ 372,063 650,543
Payable for investments purchased............................ -- --
Payable for shares repurchased............................... 1,336,977 5,123,525
Investment advisory fee payable (Note 3)..................... 90,617 165,601
Payable to Fleet affiliates (Note 3)......................... 22,654 41,457
Payable to Administrator (Note 3)............................ 30,203 41,630
Trustees' fees and expenses payable (Note 3)................. 8,220 6,765
Payable to custodian......................................... -- --
Accrued expenses and other payables.......................... 25,327 31,478
------------ ------------
Total Liabilities.......................................... 1,886,061 6,060,999
------------ ------------
NET ASSETS...................................................... $262,148,790 $480,835,328
============ ============
NET ASSETS CONSIST OF:
Par value (Note 5)........................................... $ 262,155 $ 480,852
Paid-in capital in excess of par value....................... 261,899,462 480,371,142
Undistributed (overdistributed) net investment income (loss). (5,391) (4,086)
Accumulated net realized gain (loss) on investments sold..... (7,436) (12,580)
------------ ------------
TOTAL NET ASSETS................................................ $262,148,790 $480,835,328
============ ============
Retail A Shares:
Net assets................................................... $262,148,790 $480,835,328
Shares of beneficial interest outstanding.................... 262,154,997 480,851,830
------------ ------------
NET ASSET VALUE, offering and redemption price per share..... $ 1.00 $ 1.00
============ ============
Retail B Shares:
Net assets................................................... N/A N/A
Shares of beneficial interest outstanding.................... N/A N/A
------------ ------------
NET ASSET VALUE and offering price per share*................ N/A N/A
============ ============
Trust Shares:
Net assets................................................... N/A N/A
Shares of beneficial interest outstanding.................... N/A N/A
------------ ------------
NET ASSET VALUE, offering and redemption price per share..... N/A N/A
============ ============
BKB Shares:
Net assets................................................... N/A N/A
Shares of beneficial interest outstanding.................... N/A N/A
------------ ------------
NET ASSET VALUE, offering and redemption price per share..... N/A N/A
============ ============
</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.
30-31
<PAGE>
GALAXY MONEY MARKET FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2000
<TABLE>
<CAPTION>
MONEY MARKET GOVERNMENT U.S. TREASURY TAX-EXEMPT
FUND FUND FUND FUND
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) ..................................... $282,069,607 $56,598,791 $67,613,513 $38,224,042
Dividends (Note 2) .................................... -- -- -- 133,786
------------ ----------- ----------- -----------
Total investment income ............................. 282,069,607 56,598,791 67,613,513 38,357,828
------------ ----------- ----------- -----------
EXPENSES:
Investment advisory fee (Note 3) ..................... 17,980,032 3,703,908 4,438,357 3,828,136
Administration fee (Note 3) ........................... 3,179,857 659,767 822,341 667,581
Custodian fee (Note 3) ................................ 70,478 25,113 24,246 34,563
Fund accounting fee (Note 3) .......................... 144,574 94,993 150,229 142,874
Professional fees (Note 3) ............................ 172,556 46,009 76,567 59,601
Shareholder servicing and 12b-1 fees (Note 3) ......... 2,522,020 336,331 611,907 197,013
Transfer agent fee (Note 3) ........................... 2,347,435 353,580 460,852 58,822
Trustees' fees and expenses (Note 3) .................. 114,598 26,910 35,314 23,994
Reports to shareholders (Note 3) ...................... 465,168 49,637 69,816 14,083
Miscellaneous ......................................... 270,905 59,575 82,931 99,407
------------ ----------- ----------- -----------
Total expenses before reimbursement/waiver (Note 4) . 27,267,623 5,355,823 6,772,560 5,126,074
------------ ----------- ----------- -----------
Less: reimbursement/waiver (Note 4) ................. (1,876,940) (90,817) (3,006) (155,344)
------------ ----------- ----------- -----------
Total expenses net of reimbursement/waiver ........ 25,390,683 5,265,006 6,769,554 4,970,730
------------ ----------- ----------- -----------
NET INVESTMENT INCOME .................................... 256,678,924 51,333,785 60,843,959 33,387,098
------------ ----------- ----------- -----------
NET REALIZED GAIN ON INVESTMENTS SOLD (NOTE 2) ........... 111 -- 32,908 --
------------ ----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................................ $256,679,035 $51,333,785 $60,876,867 $33,387,098
============ =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
32-33
<PAGE>
<TABLE>
<CAPTION>
CONNECTICUT MUNICIPAL MASSACHUSETTS MUNICIPAL
MONEY MARKET FUND MONEY MARKET FUND
------------------- -------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) ..................................... $ 9,889,300 $ 11,908,083
Dividends (Note 2) .................................... 600 57,169
----------- ------------
Total investment income ............................. 9,889,900 11,965,252
----------- ------------
EXPENSES:
Investment advisory fee (Note 3) ...................... 1,043,059 1,214,975
Administration fee (Note 3) ........................... 185,381 214,326
Custodian fee (Note 3) ................................ 8,693 9,813
Fund accounting fee (Note 3) .......................... 70,095 76,010
Professional fees (Note 3) ............................ 34,998 30,972
Shareholder servicing and 12b-1 fees (Note 3) ......... 255,205 291,580
Transfer agent fee (Note 3) ........................... 29,965 27,494
Trustees' fees and expenses (Note 3) .................. 8,832 8,666
Reports to shareholders (Note 3) ...................... 6,935 5,378
Miscellaneous ......................................... 19,606 28,144
----------- ------------
Total expenses before reimbursement/waiver (Note 4) . 1,662,769 1,907,358
----------- ------------
Less: reimbursement/waiver (Note 4) ................. (34,226) (34,446)
----------- ------------
Total expenses net of reimbursement/waiver ........ 1,628,543 1,872,912
----------- ------------
NET INVESTMENT INCOME .................................... 8,261,357 10,092,340
----------- ------------
NET REALIZED GAIN ON INVESTMENTS SOLD (NOTE 2) ........... -- --
----------- ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ....................................... $ 8,261,357 $ 10,092,340
=========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
32-33
<PAGE>
GALAXY MONEY MARKET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MONEY MARKET FUND GOVERNMENT FUND
----------------------------- -----------------------------
YEARS ENDED YEARS ENDED
OCTOBER 31, OCTOBER 31,
2000 1999 2000 1999
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD ............................... $4,117,022,862 $3,403,719,219 $ 941,063,718 $1,075,274,938
-------------- -------------- ------------- --------------
NCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income ........................................ 256,678,924 174,007,413 51,333,785 45,883,014
Net realized gain on investments sold ........................ 111 19,413 -- 37,116
-------------- -------------- ------------- --------------
Net increase in net assets resulting from operations ....... 256,679,035 174,026,826 51,333,785 45,920,130
-------------- -------------- ------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
RETAIL A SHARES:
Net investment income ...................................... (146,866,198) (104,393,213) (18,475,073) (15,592,532)
-------------- -------------- ------------- --------------
RETAIL B SHARES:
Net investment income ...................................... (115,383) (86,034) N/A N/A
-------------- -------------- ------------- --------------
TRUST SHARES:
Net investment income ...................................... (106,347,775) (69,528,195) (32,995,383) (30,149,607)
-------------- -------------- ------------- --------------
BKB SHARES:
Net investment income ...................................... (3,349,002) N/A N/A N/A
-------------- -------------- ------------- --------------
Total Dividends to shareholders .......................... (256,678,358) (174,007,442) (51,470,456) (45,742,139)
-------------- -------------- ------------- --------------
NET INCREASE (DECREASE) FROM SHARE TRANSACTIONS(1) .............. 791,161,515 711,961,641 (79,153,361) (135,195,652)
-------------- -------------- ------------- --------------
CAPITAL CONTRIBUTION FROM INVESTMENT ADVISOR (NOTE 5) ........... -- 1,322,618 -- 806,441
-------------- -------------- ------------- --------------
Net increase (decrease) in net assets ........................ 791,162,192 713,303,643 (79,290,032) (134,211,220)
-------------- -------------- ------------- --------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) .................. $4,908,185,054 $4,117,022,862 $ 861,773,686 $ 941,063,718
============== ============== ============= ==============
(A) Undistributed (overdistributed) net investment income (loss). $ 243,113 $ 242,547 $ (41,174) $ 95,497
============== ============== ============= ==============
</TABLE>
-----------------------------------------------
(1) For detail on share transactions by series, see Statements of Changes in Net
Assets - Capital Stock Activity on page 36 and 37.
SEE NOTES TO FINANCIAL STATEMENTS.
34-35
<PAGE>
<TABLE>
<CAPTION>
U.S. TREASURY FUND TAX-EXEMPT FUND
---------------------------- -----------------------------
YEARS ENDED YEARS ENDED
OCTOBER 31, OCTOBER 31,
2000 1999 2000 1999
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD ................................ $1,044,155,421 $ 988,698,222 $ 716,194,717 $ 391,515,416
-------------- -------------- -------------- -------------
NCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income ......................................... 60,843,959 42,909,407 33,387,098 15,160,727
Net realized gain on investments sold ......................... 32,908 10,820 -- --
-------------- -------------- -------------- -------------
Net increase in net assets resulting from operations ........ 60,876,867 42,920,227 33,387,098 15,160,727
-------------- -------------- -------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
RETAIL A SHARES:
Net investment income ....................................... (29,479,574) (24,098,884) (5,967,705) (4,259,280)
-------------- -------------- -------------- -------------
RETAIL B SHARES:
Net investment income ....................................... N/A N/A N/A N/A
-------------- -------------- -------------- -------------
TRUST SHARES:
Net investment income ....................................... (25,421,120) (18,810,523) (25,796,826) (10,901,372)
-------------- -------------- -------------- -------------
BKB SHARES:
Net investment income ....................................... (5,943,265) N/A (1,622,567) N/A
-------------- -------------- -------------- -------------
Total Dividends to shareholders ........................... (60,843,959) (42,909,407) (33,387,098) (15,160,652)
-------------- -------------- -------------- -------------
NET INCREASE (DECREASE) FROM SHARE TRANSACTIONS(1) ............... 256,117,874 54,710,415 860,079,880 324,679,226
-------------- -------------- -------------- -------------
CAPITAL CONTRIBUTION FROM INVESTMENT ADVISOR (NOTE 5) ............ -- 735,964 -- --
-------------- -------------- -------------- -------------
Net increase (decrease) in net assets ......................... 256,150,782 55,457,199 860,079,880 324,679,301
-------------- -------------- -------------- -------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) ................... $1,300,306,203 $1,044,155,421 $1,576,274,597 $ 716,194,717
============== ============== ============== =============
(A) Undistributed (overdistributed) net investment income (loss) . $ 316,537 $ 316,537 $ (19,453) $ (19,453)
============== ============== ============== =============
</TABLE>
-----------------------------------------------
(1) For detail on share transactions by series, see Statements of Changes in Net
Assets - Capital Stock Activity on page 36 and 37.
SEE NOTES TO FINANCIAL STATEMENTS.
34-35
<PAGE>
<TABLE>
<CAPTION>
CONNECTICUT MUNICIPAL MASSACHUSETTS MUNICIPAL
MONEY MARKET FUND MONEY MARKET FUND
----------------------------- -----------------------------
YEARS ENDED YEARS ENDED
OCTOBER 31, OCTOBER 31,
2000 1999 2000 1999
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD ................................ $ 243,051,014 $ 165,185,627 $ 241,611,437 $ 127,921,915
-------------- ------------- ------------- --------------
NCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income ......................................... 8,261,357 5,240,021 10,092,340 5,034,474
Net realized gain on investments sold ......................... -- -- -- --
-------------- ------------- ------------- --------------
Net increase in net assets resulting from operations ........ 8,261,357 5,240,021 10,092,340 5,034,474
-------------- ------------- ------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
RETAIL A SHARES:
Net investment income ....................................... (8,261,357) (5,240,300) (10,094,660) (5,036,187)
-------------- ------------- ------------- --------------
RETAIL B SHARES:
Net investment income ....................................... N/A N/A N/A N/A
-------------- ------------- ------------- --------------
TRUST SHARES:
Net investment income ....................................... N/A N/A N/A N/A
-------------- ------------- ------------- --------------
BKB SHARES:
Net investment income ....................................... N/A N/A N/A N/A
-------------- ------------- ------------- --------------
Total Dividends to shareholders ........................... (8,261,357) (5,240,300) (10,094,660) (5,036,187)
-------------- ------------- ------------- --------------
NET INCREASE (DECREASE) FROM SHARE TRANSACTIONS(1) ............... 19,097,776 77,865,666 239,226,211 113,691,235
-------------- ------------- ------------- --------------
CAPITAL CONTRIBUTION FROM INVESTMENT ADVISOR (NOTE 5) ............ -- -- -- --
-------------- ------------- ------------- --------------
Net increase (decrease) in net assets ......................... 19,097,776 77,865,387 239,223,891 113,689,522
-------------- ------------- ------------- --------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) ................... $ 262,148,790 $ 243,051,014 $ 480,835,328 $ 241,611,437
============== ============= ============= ==============
(A) Undistributed (overdistributed) net investment income (loss) . $ (5,391) $ (5,391) $ (4,086) $ (1,766)
============== ============= ============= ==============
</TABLE>
-----------------------------------------------
(1) For detail on share transactions by series, see Statements of Changes in Net
Assets - Capital Stock Activity on page 36 and 37.
SEE NOTES TO FINANCIAL STATEMENTS.
34-35
<PAGE>
GALAXY MONEY MARKET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS --
CAPITAL STOCK ACTIVITY
<TABLE>
<CAPTION>
MONEY MARKET FUND GOVERNMENT FUND
------------------------------ ------------------------------
YEARS ENDED YEARS ENDED
OCTOBER 31, OCTOBER 31,
2000 1999 2000 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
RETAIL A SHARES:
Sold ........................................................ $8,268,570,953 $6,810,510,960 $ 743,509,199 $ 752,972,310
Issued to shareholders in reinvestment of dividends ......... 146,291,812 103,931,212 18,402,924 15,539,078
Repurchased ................................................. (8,063,682,800) (6,619,773,827) (777,745,452) (772,791,398)
-------------- -------------- ------------- --------------
Net increase (decrease) in shares outstanding ............... $ 351,179,965 $ 294,668,345 $ (15,833,329) $ (4,280,010)
============== ============== ============== ==============
RETAIL B SHARES:
Sold ........................................................ $ 14,255,894 $ 55,831,317 N/A N/A
Issued to shareholders in reinvestment of dividends ......... 104,601 65,248 N/A N/A
Repurchased ................................................. (14,520,464) (55,018,715) N/A N/A
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding ............... $ (159,969) $ 877,850 N/A N/A
============== ============== ============== ==============
TRUST SHARES:
Sold ........................................................ $3,066,536,467 $2,538,829,954 $1,468,685,373 $1,357,748,522
Issued in connection with acquisition (Note 8) ............. 7,620,184 -- -- --
Issued to shareholders in reinvestment of dividends ......... 238,892 134,516 592,505 487,478
Repurchased ................................................. (2,755,003,951) (2,122,549,024) (1,532,597,910) (1,489,151,642)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding ............... $ 319,391,592 $ 416,415,446 $ (63,320,032) $ (130,915,642)
============== ============== ============== ==============
BKB SHARES:
Sold ........................................................ $ 55,732,830 N/A N/A N/A
Issued in connection with acquisition (Note 8) ............. 163,912,313 N/A N/A N/A
Issued to shareholders in reinvestment of dividends ......... 3,263,395 N/A N/A N/A
Repurchased ................................................. (102,158,611) N/A N/A N/A
-------------- -------------- -------------- --------------
Net increase in shares outstanding .......................... $ 120,749,927 N/A N/A N/A
============== ============== ============== ==============
SHARE ACTIVITY
RETAIL A SHARES:
Sold ........................................................ 8,268,570,953 6,810,510,960 743,509,199 752,972,310
Issued to shareholders in reinvestment of dividends ......... 146,291,812 103,931,212 18,402,924 15,539,078
Repurchased ................................................. (8,063,682,800) (6,619,773,827) (777,745,452) (772,791,398)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding ............... 351,179,965 294,668,345 (15,833,329) (4,280,010)
============== ============== ============== ==============
RETAIL B SHARES:
Sold ........................................................ 14,255,894 55,831,317 N/A N/A
Issued to shareholders in reinvestment of dividends ......... 104,601 65,248 N/A N/A
Repurchased ................................................. (14,520,464) (55,018,715) N/A N/A
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding ............... (159,969) 877,850 N/A N/A
============== ============== ============== ==============
TRUST SHARES:
Sold ........................................................ 3,066,536,467 2,538,829,954 1,468,685,373 1,357,748,522
Issued in connection with acquisition (Note 8) ............. 7,621,993 -- -- --
Issued to shareholders in reinvestment of dividends ......... 238,892 134,516 592,505 487,478
Repurchased ................................................. (2,755,003,951) (2,122,549,024) (1,532,597,910) (1,489,151,642)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding ............... 319,393,401 416,415,446 (63,320,032) (130,915,642)
============== ============== ============== ==============
BKB SHARES:
Sold ........................................................ 55,732,830 N/A N/A N/A
Issued in connection with acquisition (Note 8) ............. 163,951,222 N/A N/A N/A
Issued to shareholders in reinvestment of dividends ......... 3,263,395 N/A N/A N/A
Repurchased ................................................. (102,158,611) N/A N/A N/A
-------------- -------------- -------------- --------------
Net increase in shares outstanding .......................... 120,788,836 N/A N/A N/A
============== ============== ============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
36-37
<PAGE>
<TABLE>
<CAPTION>
U.S. TREASURY FUND TAX-EXEMPT FUND
----------------------------- -----------------------------
YEARS ENDED YEARS ENDED
OCTOBER 31, OCTOBER 31,
2000 1999 2000 1999
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
RETAIL A SHARES:
Sold ..................................................... $1,698,310,672 $1,323,763,867 $ 734,554,805 $ 579,782,056
Issued to shareholders in reinvestment of dividends ...... 29,379,151 24,034,012 5,950,738 4,254,656
Repurchased .............................................. (1,767,331,977)(1,322,862,475) (684,649,168) (588,319,329)
-------------- -------------- -------------- -------------
Net increase (decrease) in shares outstanding ............ $ (39,642,154)$ 24,935,404 $ 55,856,375 $ (4,282,617)
============== ============== ============== =============
RETAIL B SHARES:
Sold ..................................................... N/A N/A N/A N/A
Issued to shareholders in reinvestment of dividends ...... N/A N/A N/A N/A
Repurchased .............................................. N/A N/A N/A N/A
-------------- -------------- -------------- -------------
Net increase (decrease) in shares outstanding ............ N/A N/A N/A N/A
============== ============== ============== =============
TRUST SHARES:
Sold ..................................................... $ 594,818,752 $ 701,245,755 $ 890,432,517 $ 618,365,910
Issued in connection with acquisition (Note 8) .......... -- -- 736,875,656 --
Issued to shareholders in reinvestment of dividends ...... 1,437,395 1,291,866 -- --
Repurchased .............................................. (545,245,702) (672,762,610) (906,982,301) (289,404,067)
-------------- -------------- -------------- -------------
Net increase (decrease) in shares outstanding ............ $ 51,010,445 $ 29,775,011 $ 720,325,872 $ 328,961,843
============== ============== ============== =============
BKB SHARES:
Sold ..................................................... $ 113,884,896 N/A $ 61,631,050 N/A
Issued in connection with acquisition (Note 8) .......... 326,518,379 N/A 141,125,080 N/A
Issued to shareholders in reinvestment of dividends ...... 5,784,933 N/A 1,461,060 N/A
Repurchased .............................................. (201,438,625) N/A (120,319,557) N/A
-------------- -------------- -------------- -------------
Net increase in shares outstanding ....................... $ -244,749,583 N/A $ 83,897,633 N/A
============== ============== ============== =============
SHARE ACTIVITY
RETAIL A SHARES:
Sold ..................................................... 1,698,310,672 1,323,763,867 734,554,805 579,782,056
Issued to shareholders in reinvestment of dividends ...... 29,379,151 24,034,012 5,950,738 4,254,657
Repurchased .............................................. (1,767,331,977)(1,322,862,475) (684,649,168) (588,319,329)
-------------- -------------- -------------- -------------
Net increase (decrease) in shares outstanding ............ (39,642,154) 24,935,404 55,856,375 (4,282,616)
============== ============== ============== =============
RETAIL B SHARES:
Sold ..................................................... N/A N/A N/A N/A
Issued to shareholders in reinvestment of dividends ...... N/A N/A N/A N/A
Repurchased .............................................. N/A N/A N/A N/A
-------------- -------------- -------------- -------------
Net increase (decrease) in shares outstanding ............ N/A N/A N/A N/A
============== ============== ============== =============
TRUST SHARES:
Sold ..................................................... 594,818,752 701,245,755 890,432,517 618,365,910
Issued in connection with acquisition (Note 8) .......... -- -- 736,971,362 --
Issued to shareholders in reinvestment of dividends ...... 1,437,395 1,291,866 -- --
Repurchased .............................................. (545,245,702) (672,762,610) (906,982,301) (289,404,067)
-------------- -------------- -------------- -------------
Net increase (decrease) in shares outstanding ............ 51,010,445 29,775,011 720,421,578 328,961,843
============== ============== ============== =============
BKB SHARES:
Sold ..................................................... 113,884,896 N/A 61,631,050 N/A
Issued in connection with acquisition (Note 8) .......... 326,516,384 N/A 141,143,410 N/A
Issued to shareholders in reinvestment of dividends ...... 5,784,933 N/A 1,461,060 N/A
Repurchased .............................................. (201,438,625) N/A (120,319,557) N/A
-------------- -------------- -------------- -------------
Net increase in shares outstanding ....................... 244,747,588 N/A 83,915,963 N/A
============== ============== ============== =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
36-37
<PAGE>
<TABLE>
<CAPTION>
CONNECTICUT MUNICIPAL MASSACHUSETTS MUNICIPAL
MONEY MARKET FUND MONEY MARKET FUND
----------------------------- -----------------------------
YEARS ENDED YEARS ENDED
OCTOBER 31, OCTOBER 31,
2000 1999 2000 1999
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
RETAIL A SHARES:
Sold ................................................. $ 594,009,719 $ 561,490,148 $ 966,197,524 $ 497,315,703
Issued to shareholders in reinvestment of dividends .. 4,354,922 2,878,303 4,743,897 2,079,087
Repurchased .......................................... (579,266,865) (486,502,785) (731,715,210) (385,703,555)
-------------- ------------- ------------- --------------
Net increase (decrease) in shares outstanding ........ $ 19,097,776 $ 77,865,666 $ 239,226,211 $ 113,691,235
============== ============= ============= ==============
RETAIL B SHARES:
Sold ................................................. N/A N/A N/A N/A
Issued to shareholders in reinvestment of dividends .. N/A N/A N/A N/A
Repurchased .......................................... N/A N/A N/A N/A
-------------- ------------- ------------- --------------
Net increase (decrease) in shares outstanding ........ N/A N/A N/A N/A
============== ============= ============= ==============
TRUST SHARES:
Sold ................................................. N/A N/A N/A N/A
Issued in connection with acquisition (Note 8) ...... N/A N/A N/A N/A
Issued to shareholders in reinvestment of dividends .. N/A N/A N/A N/A
Repurchased .......................................... N/A N/A N/A N/A
-------------- ------------- ------------- --------------
Net increase (decrease) in shares outstanding ........ N/A N/A N/A N/A
============== ============= ============= ==============
BKB SHARES:
Sold ................................................. N/A N/A N/A N/A
Issued in connection with acquisition (Note 8) ...... N/A N/A N/A N/A
Issued to shareholders in reinvestment of dividends .. N/A N/A N/A N/A
Repurchased .......................................... N/A N/A N/A N/A
-------------- ------------- ------------- --------------
Net increase in shares outstanding ................... N/A N/A N/A N/A
============== ============= ============= ==============
SHARE ACTIVITY
RETAIL A SHARES:
Sold ................................................. 594,009,719 561,490,148 966,197,524 497,315,703
Issued to shareholders in reinvestment of dividends .. 4,354,922 2,878,303 4,743,897 2,079,087
Repurchased .......................................... (579,266,865) (486,502,785) (731,715,210) (385,703,555)
-------------- ------------- ------------- --------------
Net increase (decrease) in shares outstanding ........ 19,097,776 77,865,666 239,226,211 113,691,235
============== ============= ============= ==============
RETAIL B SHARES:
Sold ................................................. N/A N/A N/A N/A
Issued to shareholders in reinvestment of dividends .. N/A N/A N/A N/A
Repurchased .......................................... N/A N/A N/A N/A
-------------- ------------- ------------- --------------
Net increase (decrease) in shares outstanding ........ N/A N/A N/A N/A
============== ============= ============= ==============
TRUST SHARES:
Sold ................................................. N/A N/A N/A N/A
Issued in connection with acquisition (Note 8) ...... N/A N/A N/A N/A
Issued to shareholders in reinvestment of dividends .. N/A N/A N/A N/A
Repurchased .......................................... N/A N/A N/A N/A
-------------- ------------- ------------- --------------
Net increase (decrease) in shares outstanding ........ N/A N/A N/A N/A
============== ============= ============= ==============
BKB SHARES:
Sold ................................................. N/A N/A N/A N/A
Issued in connection with acquisition (Note 8) ...... N/A N/A N/A N/A
Issued to shareholders in reinvestment of dividends .. N/A N/A N/A N/A
Repurchased .......................................... N/A N/A N/A N/A
-------------- ------------- ------------- --------------
Net increase in shares outstanding ................... N/A N/A N/A N/A
============== ============= ============= ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
36-37
<PAGE>
MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
RETAIL A SHARES
YEARS ENDED OCTOBER 31,
----------------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ------------ ------------ -----------
<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).............................. 0.06 0.04 0.05 0.05 0.05
----------- ----------- ------------ ------------ -----------
Less Dividends:
Dividends from net investment income................... (0.06) (0.04) (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)......................................... 5.77% 4.54% 5.04% 4.93% 4.78%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)........................ $ 2,785,840 $ 2,434,662 $ 2,139,213 $ 1,877,889 $ 1,159,312
Ratios to average net assets:
Net investment income including
reimbursement/waiver................................. 5.65% 4.45% 4.94% 4.85% 4.67%
Operating expenses including reimbursement/waiver...... 0.63% 0.65% 0.67% 0.69% 0.77%
Operating expenses excluding reimbursement/waiver...... 0.69% 0.69% 0.71% 0.73% 0.80%
---------------------------------------------------------
</TABLE>
* Annualized.
** Not Annualized.
(1) The Fund began offering Retail B Shares on March 6, 1997.
(2) The Fund began issuing BKB Shares on June 19, 2000.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for
Retail A Shares for the years ended October 31, 2000, 1999, 1998, 1997 and
1996 were $0.06, $0.04, $0.05, $0.05 and $0.05, respectively. Net
investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for Trust
Shares for the years ended October 31, 2000, 1999, 1998, 1997 and 1996 were
$0.06, $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 its affiliates and/or the Administrator for Retail B Shares for the
years ended October 31, 2000, 1999 and 1998 and the period ended October
31, 1997 were $0.05, $0.04, $0.04 and $0.03, respectively. Net investment
income per share before reimbursement/waiver of fees by the Investment
Advisor and/or its affiliates and/or the Administrator for BKB Shares for
the period ended October 31, 2000 was $0.02.
(B) Calculation does not include the effect of any sales charge for Retail B
Shares.
SEE NOTES TO FINANCIAL STATEMENTS.
38-39
<PAGE>
<TABLE>
<CAPTION>
TRUST SHARES
YEARS ENDED OCTOBER 31,
--------------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- -----------
<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).............................. 0.06 0.05 0.05 0.05 0.05
----------- ----------- ----------- ----------- -----------
Less Dividends:
Dividends from net investment income................... (0.06) (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)......................................... 5.95% 4.72% 5.23% 5.13% 5.00%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)........................ $ 1,999,243 $ 1,679,875 $ 1,262,900 $ 1,138,185 $ 924,222
Ratios to average net assets:
Net investment income including
reimbursement/waiver................................. 5.82% 4.62% 5.12% 5.04% 4.89%
Operating expenses including reimbursement/waiver...... 0.46% 0.48% 0.49% 0.50% 0.55%
Operating expenses excluding reimbursement/waiver...... 0.51% 0.52% 0.53% 0.54% 0.58%
---------------------------------------------------------
</TABLE>
* Annualized.
** Not Annualized.
(1) The Fund began offering Retail B Shares on March 6, 1997.
(2) The Fund began issuing BKB Shares on June 19, 2000.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for
Retail A Shares for the years ended October 31, 2000, 1999, 1998, 1997 and
1996 were $0.06, $0.04, $0.05, $0.05 and $0.05, respectively. Net
investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for Trust
Shares for the years ended October 31, 2000, 1999, 1998, 1997 and 1996 were
$0.06, $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 its affiliates and/or the Administrator for Retail B Shares for the
years ended October 31, 2000, 1999 and 1998 and the period ended October
31, 1997 were $0.05, $0.04, $0.04 and $0.03, respectively. Net investment
income per share before reimbursement/waiver of fees by the Investment
Advisor and/or its affiliates and/or the Administrator for BKB Shares for
the period ended October 31, 2000 was $0.02.
(B) Calculation does not include the effect of any sales charge for Retail B
Shares.
SEE NOTES TO FINANCIAL STATEMENTS.
38-39
<PAGE>
<TABLE>
<CAPTION>
RETAIL B SHARES BKB SHARES
PERIOD ENDED
YEARS ENDED OCTOBER 31, OCTOBER 31,
------------------------------------------------
2000 1999 1998 1997(1) 2000(2)
---------- ---------- ---------- ----------- ------------
<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).............................. 0.05 0.04 0.04 0.03 0.02
---------- ---------- ---------- ----------- ------------
Less Dividends:
Dividends from net investment income................... (0.05) (0.04) (0.04) (0.03) (0.02)
---------- ---------- ---------- ----------- ------------
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)......................................... 5.01% 3.85% 4.33% 2.66%** 2.26%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)........................ $ 2,325 $ 2,485 $ 1,607 $ 749 $ 120,778
Ratios to average net assets:
Net investment income including
reimbursement/waiver................................. 4.93% 3.81% 4.26% 4.27%* 5.67%*
Operating expenses including reimbursement/waiver...... 1.35% 1.29% 1.35% 1.38%* 0.61%*
Operating expenses excluding reimbursement/waiver...... 1.46% 1.41% 1.39% 1.42%* 0.65%*
---------------------------------------------------------
</TABLE>
* Annualized.
** Not Annualized.
(1) The Fund began offering Retail B Shares on March 6, 1997.
(2) The Fund began issuing BKB Shares on June 19, 2000.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for
Retail A Shares for the years ended October 31, 2000, 1999, 1998, 1997 and
1996 were $0.06, $0.04, $0.05, $0.05 and $0.05, respectively. Net
investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for Trust
Shares for the years ended October 31, 2000, 1999, 1998, 1997 and 1996 were
$0.06, $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 its affiliates and/or the Administrator for Retail B Shares for the
years ended October 31, 2000, 1999 and 1998 and the period ended October
31, 1997 were $0.05, $0.04, $0.04 and $0.03, respectively. Net investment
income per share before reimbursement/waiver of fees by the Investment
Advisor and/or its affiliates and/or the Administrator for BKB Shares for
the period ended October 31, 2000 was $0.02.
(B) Calculation does not include the effect of any sales charge for Retail B
Shares.
SEE NOTES TO FINANCIAL STATEMENTS.
38-39
<PAGE>
GOVERNMENT FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
RETAIL A SHARES
YEARS ENDED OCTOBER 31,
----------------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ------------ ------------ -----------
<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).............................. 0.05 0.04 0.05 0.05 0.05
----------- ----------- ------------ ------------ -----------
Less Dividends:
Dividends from net investment income................... (0.05) (0.04) (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 ............................................ 5.61% 4.39% 4.94% 4.85% 4.72%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)........................ $ 333,272 $ 348,758 $ 352,799 $ 350,513 $ 326,411
Ratios to average net assets:
Net investment income including
reimbursement/waiver................................. 5.44% 4.32% 4.84% 4.74% 4.62%
Operating expenses including reimbursement/waiver...... 0.68% 0.69% 0.70% 0.71% 0.75%
Operating expenses excluding reimbursement/waiver...... 0.69% 0.71% 0.71% 0.72% 0.76%
---------------------------------------------------------------
</TABLE>
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for
Retail A Shares for the years ended October 31, 2000, 1999, 1998, 1997 and
1996 were $0.05, $0.04, $0.05, $0.05 and $0.05, respectively. Net
investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for Trust
Shares for the years ended October 31, 2000, 1999, 1998, 1997 and 1996 were
$0.06, $0.04, $0.05, $0.05 and $0.05, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
40-41
<PAGE>
<TABLE>
<CAPTION>
TRUST SHARES
YEARS ENDED OCTOBER 31,
----------------------------------------------------------------------
2000 1999 1998 1997 1996
<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).............................. 0.06 0.04 0.05 0.05 0.05
----------- ----------- ----------- ----------- ----------
Less Dividends:
Dividends from net investment income................... (0.06) (0.04) (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 ............................................ 5.78% 4.58% 5.15% 5.06% 4.95%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)........................ $ 528,502 $ 592,305 $ 722,476 $ 630,859 $ 733,759
Ratios to average net assets:
Net investment income including
reimbursement/waiver................................. 5.61% 4.50% 5.03% 4.94% 4.85%
Operating expenses including reimbursement/waiver...... 0.51% 0.51% 0.51% 0.51% 0.52%
Operating expenses excluding reimbursement/waiver...... 0.52% 0.53% 0.52% 0.52% 0.53%
------------------------------------------------------------
</TABLE>
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for
Retail A Shares for the years ended October 31, 2000, 1999, 1998, 1997 and
1996 were $0.05, $0.04, $0.05, $0.05 and $0.05, respectively. Net
investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for Trust
Shares for the years ended October 31, 2000, 1999, 1998, 1997 and 1996 were
$0.06, $0.04, $0.05, $0.05 and $0.05, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
40-41
<PAGE>
U.S. TREASURY FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
RETAIL A SHARES
YEARS ENDED OCTOBER 31,
-----------------------------------------------------------
2000 1999 1998 1997 1996
--------- ----------- ---------- ------------ ---------
<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).............................. 0.05 0.04 0.05 0.05 0.05
--------- ----------- ---------- ------------ ---------
Less Dividends:
Dividends from net investment income................... (0.05) (0.04) (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 ............................................. 5.26% 4.14% 4.73% 4.67% 4.63%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)......................... $ 544,741 $ 584,364 $ 559,053 $ 585,969 $ 443,230
Ratios to average net assets:
Net investment income including
reimbursement/waiver................................. 5.17% 4.06% 4.63% 4.58% 4.53%
Operating expenses including reimbursement/waiver...... 0.65% 0.67% 0.68% 0.69% 0.69%
Operating expenses excluding reimbursement/waiver...... 0.65% 0.67% 0.68% 0.70% 0.69%
</TABLE>
-------------------------------------------------------------
* Annualized.
** Not Annualized.
(1) The Fund began issuing BKB Shares on June 19, 2000.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for
Retail A Shares for the years ended October 31, 2000, 1999, 1998, 1997 and
1996 were $0.05, $0.04, $0.05, $0.05 and $0.05, respectively. Net
investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for Trust
Shares for the years ended October 31, 2000, 1999, 1998, 1997 and 1996 were
$0.05, $0.04, $0.05, $0.05 and $0.05, respectively. Net investment income
per share before reimbursement/waiver of fees by the Investment Advisor
and/or its affiliates and/or the Administrator for BKB Shares for the
period ended October 31, 2000 was $0.02.
SEE NOTES TO FINANCIAL STATEMENTS.
42-43
<PAGE>
<TABLE>
<CAPTION>
TRUST SHARES BKB SHARES
PERIOD ENDED
YEARS ENDED OCTOBER 31, OCTOBER 31,
--------------------------------------------------------
2000 1999 1998 1997 1996 2000(1)
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income (A).............................. 0.05 0.04 0.05 0.05 0.05 0.02
-------- -------- -------- -------- -------- --------
Less Dividends:
Dividends from net investment income................... (0.05) (0.04) (0.05) (0.05) (0.05) 0.02)
-------- -------- -------- -------- -------- --------
Net increase (decrease) in net asset value................ -- -- -- -- -- --
-------- -------- -------- --------- -------- --------
Net Asset Value, End of Period............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========= ======== ========
Total Return ............................................. 5.42% 4.30% 4.90% 4.85% 4.80% 2.07%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)......................... $510,815 $459,792 $429,645 $393,175 $354,331 $244,750
Ratios to average net assets:
Net investment income including
reimbursement/waiver................................. 5.33% 4.22% 4.80% 4.75% 4.69% 5.19%*
Operating expenses including reimbursement/waiver...... 0.49% 0.51% 0.51% 0.52% 0.53% 0.63%*
Operating expenses excluding reimbursement/waiver...... 0.49% 0.51% 0.51% 0.53% 0.53% 0.63%*
</TABLE>
-----------------------------------------------------------
* Annualized.
** Not Annualized.
(1) The Fund began issuing BKB Shares on June 19, 2000.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for
Retail A Shares for the years ended October 31, 2000, 1999, 1998, 1997 and
1996 were $0.05, $0.04, $0.05, $0.05 and $0.05, respectively. Net
investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for Trust
Shares for the years ended October 31, 2000, 1999, 1998, 1997 and 1996 were
$0.05, $0.04, $0.05, $0.05 and $0.05, respectively. Net investment income
per share before reimbursement/waiver of fees by the Investment Advisor
and/or its affiliates and/or the Administrator for BKB Shares for the
period ended October 31, 2000 was $0.02.
SEE NOTES TO FINANCIAL STATEMENTS.
42-43
<PAGE>
TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
RETAIL A SHARES
YEARS ENDED OCTOBER 31,
---------------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- -----------
<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).............................. 0.03 0.02 0.03 0.03 0.03
----------- ----------- ----------- ----------- -----------
Less Dividends:
Dividends from net investment income................... (0.03) (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 $ 1.00
=========== =========== =========== =========== ===========
Total Return ............................................. 3.33% 2.53% 2.89% 2.95% 2.82% *
Ratios/Supplemental Data:
Net Assets, End of Period (000's)......................... $ 215,914 $ 160,057 $ 164,340 $ 151,907 $ 117,548
Ratios to average net assets:
Net investment income including
reimbursement/waiver................................. 3.39% 2.51% 2.85% 2.92% 2.78%
Operating expenses including reimbursement/waiver...... 0.62% 0.66% 0.67% 0.68% 0.68%
Operating expenses excluding reimbursement/waiver...... 0.64% 0.66% 0.67% 0.69% 0.69%
</TABLE>
---------------------------------------------------------
* Annualized.
** Not Annualized.
(1) The Fund began issuing BKB Shares on June 19, 2000.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for
Retail A Shares for the years ended October 31, 2000, 1999, 1998, 1997 and
1996 were $0.03, $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 its affiliates and/or the Administrator for Trust
Shares for the years ended October 31, 2000, 1999, 1998, 1997 and 1996 were
$0.03, $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 its affiliates and/or the Administrator for BKB Shares for the
period ended October 31, 2000 was $0.01.
SEE NOTES TO FINANCIAL STATEMENTS.
44-45
<PAGE>
<TABLE>
<CAPTION>
RETAIL A SHARES TRUST SHARES BKB SHARES
PERIOD ENDED
YEARS ENDED OCTOBER 31, OCTOBER 31,
------------------------------------------------------
2000 1999 1998 1997 1996 2000(1)
---------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A).............................. 0.03 0.03 0.03 0.03 0.03 0.01
---------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income................... (0.03) 0.03) (0.03) (0.03) (0.03) (0.01)
---------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value................ -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========= ========= ========= ========= =========
Total Return ............................................. 3.46% 2.67% 3.03% 3.10% 2.97% 1.36%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)......................... $1,276,445 $ 556,137 $ 227,176 $ 169,316 $ 184,307 $ 83,916
Ratios to average net assets:
Net investment income including
reimbursement/waiver................................. 3.52% 2.65% 2.99% 3.05% 2.92% 3.46%*
Operating expenses including reimbursement/waiver...... 0.49% 0.52% 0.53% 0.53% 0.54% 0.55%*
Operating expenses excluding reimbursement/waiver...... 0.51% 0.52% 0.53% 0.53% 0.54% 0.57%*
</TABLE>
---------------------------------------------------------
* Annualized.
** Not Annualized.
(1) The Fund began issuing BKB Shares on June 19, 2000.
(A) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or its affiliates and/or the Administrator for
Retail A Shares for the years ended October 31, 2000, 1999, 1998, 1997 and
1996 were $0.03, $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 its affiliates and/or the Administrator for Trust
Shares for the years ended October 31, 2000, 1999, 1998, 1997 and 1996 were
$0.03, $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 its affiliates and/or the Administrator for BKB Shares for the
period ended October 31, 2000 was $0.01.
SEE NOTES TO FINANCIAL STATEMENTS.
44-45
<PAGE>
CONNECTICUT MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
RETAIL A SHARES
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------------------
2000 1999 1998 1997 1996(1)
------------- ------------- -------------- ------------- -------------
<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) ................. 0.03 0.02 0.03 0.03 0.03
------------- ------------- -------------- ------------- -------------
Less Dividends:
Dividends from net investment income ...... (0.03) (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 $ 1.00
============= ============= ============== ============= =============
Total Return ................................ 3.21% 2.47% 2.87% 2.94% 2.83%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ............ $ 262,149 $ 243,051 $ 165,186 $ 137,095 $ 110,544
Ratios to average net assets:
Net investment income
including reimbursement/waiver .......... 3.17% 2.44% 2.83% 2.91% 2.79%
Operating expenses
including reimbursement/waiver .......... 0.62% 0.62% 0.62% 0.60% 0.64%
Operating expenses
excluding reimbursement/waiver .......... 0.64% 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 its affiliates and/or the Administrator for the
years ended October 31, 2000, 1999, 1998, 1997 and 1996 were $0.03, $0.02,
$0.03, $0.03 and $0.03, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
46
<PAGE>
MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
RETAIL A SHARES
YEARS ENDED OCTOBER 31,
----------------------------------------------------------------
2000 1999 1998 1997 1996(1)
----------- ----------- ------------ ----------- -----------
<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).............................. 0.03 0.02 0.03 0.03 0.03
----------- ----------- ------------ ----------- -----------
Less Dividends:
Dividends from net investment income................... (0.03) (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 $ 1.00
=========== =========== ============ =========== ===========
Total Return ............................................. 3.31% 2.50% 2.86% 2.92% 2.83%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)......................... $ 480,835 $ 241,611 $ 127,922 $ 80,966 $ 47,066
Ratios to average net assets:
Net investment income including
reimbursement/waiver................................. 3.32% 2.48% 2.81% 2.90% 2.78%
Operating expenses including
reimbursement/waiver................................. 0.62% 0.62% 0.62% 0.61% 0.62%
Operating expenses excluding
reimbursement/waiver................................. 0.63% 0.65% 0.68% 0.69% 0.83%
</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 its affiliates and/or the Administrator for the
years ended October 31, 2000, 1999, 1998, 1997 and 1996 were $0.03, $0.02,
$0.03, $0.03 and $0.03, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
47
<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 thirty-seven managed investment portfolios. The
accompanying financial statements and financial highlights are those of the
Money Market, Government, U.S. Treasury, Tax-Exempt, 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 four series of shares (Trust
Shares, Retail A Shares, Retail B Shares and BKB Shares). The Government Fund is
authorized to issue two series of Shares (Trust Shares and Retail A Shares). The
U.S. Treasury and Tax-Exempt Funds are authorized to issue three series of
shares (Trust Shares, Retail A Shares and BKB 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,
Retail B Shares and BKB 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. BKB Shares of the Money
Market, U.S. Treasury and Tax-Exempt Funds will convert to Retail A Shares of
the same Fund on the first anniversary of the closing of the reorganization of
the Boston 1784 Funds into the Trust provided that prior thereto the Board of
Trustees of the Trust has determined that such conversion is in the best
interest of the holders of such BKB Shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates. The following is a
summary of significant accounting policies in conformity with generally accepted
accounting principles consistently followed by the Funds in the preparation of
their financial statements.
PORTFOLIO VALUATION: 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. Investments in other mutual funds are valued at net asset value.
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 underlying securities, and a possible
decline in the value of the underlying securities during the period while the
Fund seeks to assert its rights.
48
<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 Financial
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 PFPC Inc. (formerly known as First Data Investor Services
Group, Inc.), a member of PNC Financial Services Group (formerly known as PNC
Bank Corp.), are parties to an administration agreement under which PFPC Inc.
(the "Administrator") provides services for a fee, computed daily and paid
monthly, at the annual rate of 0.09% of the first $2.5 billion of the combined
average daily net assets of the Funds and the other funds offered by the Trust
(whose financial statements are provided in separate reports), 0.085% of the
next $2.5 billion of combined average daily net assets, 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, 0.0575% of the next $3 billion of combined average
daily net assets and 0.0525% of combined average daily net assets in excess of
$21 billion. Prior to December 1, 1999,the services described above were
provided by First Data Investor Services Group,Inc., a wholly-owned subsidiary
of First Data Corp. On that date, PFPC Trust Co., a wholly-owned subsidiary of
PFPC Worldwide Inc., and an indirect wholly-owned subsidiary of PNC Bank Corp.,
acquired all the outstanding stock of First Data Investor Services Group, Inc.
As part of that transaction, PFPC Inc., also an indirect wholly-owned
subsidiarly of PNC Bank Corp., was merged into First Data Investor Services
Group, Inc., which then changed its name to PFPC Inc.
In addition, PFPC Inc. also provides certain fund accounting, custody
administration and transfer agency services pursuant to certain fee
arrangements. In accordance with such fee arrangements, PFPC Inc. compensates
the Trust's custodian bank, The Chase Manhattan Bank, for its services.
Provident Distributors, Inc. (the "Distributor") serves as the distributor
of the Trust's shares. Prior to December 1, 1999, First Data Distributors, Inc.,
a wholly-owned subsidiary of First Data Investor Services Group, Inc., acted as
exclusive 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
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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 beneficially by customers of institutions.
For the year ended October 31, 2000, 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 ........ $ 2,471,865 $ 2,175 $ 15,230
Government Fund .......... 336,331 -- --
U.S. Treasury Fund ....... 553,468 -- --
Tax-Exempt Fund .......... 179,525 -- --
Connecticut Municipal
Money Market Fund ........ 255,205 -- --
Massachusetts Municipal
Money Market Fund ........ 291,580 -- --
The Trust has adopted a shareholder services plan (the "BKB Plan") with
respect to BKB Shares of the Money Market, U.S. Treasury and Tax-Exempt Funds.
The BKB Plan provides compensation to institutions (including Fleet Bank and its
affiliates) which provide administrative and support services to their customers
who beneficially own BKB Shares, at an aggregate annual rate not to exceed 0.25%
of the average daily net asset value of the outstanding BKB Shares of each Fund
beneficially owned by such customers. The Trust, under the direction of the
Board of Trustees, is currently limiting fees payable under the BKB Plan with
respect to each Fund to an annual aggregate rate not to exceed 0.10% of the
average daily net asset value of the outstanding BKB Shares beneficially owned
by such customers. For the period ended October 31, 2000, the Funds paid fees
under the BKB Plan as follows:
BKB
FUND PLAN
----- -------
Money Market Fund ........ $32,750
U.S. Treasury Fund ....... 58,439
Tax-Exempt Fund .......... 17,488
Retail A Shares, Retail B Shares, Trust Shares and BKB 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 PFPC Inc. 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 2000, transfer agent charges for each series, were as
follows:
FUND RETAIL A RETAIL B TRUST BKB
----- ---------- -------- -------- -------
Money Market Fund ....... $2,152,216 $ 5,283 $138,318 $51,618
Government Fund ......... 281,484 -- 72,096 --
U.S. Treasury Fund ...... 355,400 -- 13,824 91,628
Tax-Exempt Fund ......... 48,600 -- 23 10,199
Connecticut Municipal
Money Market Fund ....... 29,965 -- -- --
Massachusetts Municipal
Money Market Fund ....... 27,494 -- -- --
Certain officers of the Trust are officers of the Investment Advisor or
PFPC Inc. Such officers receive no compensation from the Trust for serving in
their respective roles. Effective September 8, 2000, each Trustee is entitled to
receive for services as a Trustee of the Trust, The Galaxy VIPFund ("VIP") and
Galaxy Fund ("Galaxy II") an aggregate fee of $54,000 per annum plus certain
other fees for attending or participating in meetings as well as reimbursement
for expenses incurred in attending meetings. For the period May 28, 1999 until
September 7, 2000, each Trustee was entitled to receive for services as a
Trustee of the Trust, VIP, and 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, 2000 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 and/or the Administrator
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 and/or the Administrator, at their discretion, may revise or
discontinue
50
<PAGE>
NOTES TO FINANCIAL STATEMENTS
the voluntary fee waivers and/or expense reimbursements at any time. For the
year ended October 31, 2000, the Investment Advisor and/or its affiliates
and/or the Administrator waived fees and/or reimbursed expenses with respect to
the Funds in the following amounts:
FUND FEES WAIVED
---- -----------
Money Market Fund ............ $ 1,875,324
Government Fund .............. 90,817
U.S. Treasury Fund ........... 3,006
Tax-Exempt Fund .............. 150,706
Connecticut Municipal
Money Market Fund ....... 3,000
Massachusetts Municipal
Money Market Fund ....... 3,000
FUND EXPENSES REIMBURSED
----- -------------------
Money Market Fund ............ $ 1,616
Tax-Exempt Fund .............. 4,638
Connecticut Municipal
Money Market Fund ............ 31,226
Massachusetts Municipal
Money Market Fund ............ 31,446
5. CAPITAL CONTRIBUTION
On October 28, 1999, the Investment Advisor 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 Advisor 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 forty-three classes of
shares, each consisting of one or more series.
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, BKBShares of a Fund bear the
expense of payments under the BKB Plan and Retail A Shares, Retail B Shares,
Trust Shares and BKBShares 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. ACQUISITION OF BOSTON 1784 FUNDS
At a meeting held on January 25, 2000, the Board of Trustees of the Trust
approved an Agreement and Plan of Reorganization (the "Agreement") providing for
the acquisition of the Boston 1784 Funds by the Trust. Purusant to the
Agreement, (i) all of the assets and liabilities of the Boston 1784 Prime Money
Market Fund were transferred to the Galaxy Money Market Fund in exchange for
7,621,993 Trust Shares and 163,951,222 BKB Shares of the Galaxy Money Market
Fund, (ii) all of the assets and liabilities of the Boston 1784 U.S. Treasury
Money Market Fund were transferred to the Galaxy U.S. Treasury Fund in exchange
for 326,516,384 BKB Shares of the Galaxy U.S. Treasury Fund, and (iii) all of
the assets and liabilities of the Boston 1784 Tax-Free Money Market Fund were
transferred to the Galaxy Tax-Exempt Fund in exchange for 736,971,362 Trust
Shares and 141,143,410 BKB Shares of the Galaxy Tax-Exempt Fund. In related
transactions, the assets and liabilities of the other Boston 1784 Fund
portfolios were transferred to corresponding Galaxy portfolios in exchange for
shares in such Galaxy portfolios. The acquisition, which qualified as a tax-free
reorganization for federal income tax purposes, was completed on June 26, 2000,
following the approval of the reorganization by Boston 1784 Fund shareholders.
The following is a summary of the Net Assets, Shares Outstanding and Net Asset
Value per share associated with the transaction:
51
<PAGE>
NOTES TO FINANCIAL STATEMENTS
BEFORE AFTER
ACQUISITION ACQUISITION
-------------------------------- ---------------
GALAXY BOSTON 1784 GALAXY
MONEY MARKET PRIME MONEY MONEY MARKET
FUND MARKET FUND FUND
--------------- -------------- ---------------
Net Assets .................. $ 4,362,446,242 $ 171,532,497 $ 4,533,978,739
Shares Outstanding .......... 4,362,211,457 171,573,215 4,533,784,672
Net Asset Value, per share .. $ 1.00 $ 1.00 $ 1.00
BEFORE AFTER
ACQUSITION ACQUISITION
-------------------------------- ---------------
GALAXY BOSTON 1784 GALAXY
U.S. TREASURY U.S. TREASURY U.S. TREASURY
FUND MONEY MARKET FUND FUND
--------------- -------------- ---------------
Net Assets .................. $ 1,047,416,987 $ 326,518,379 $ 1,373,935,366
Shares Outstanding .......... 1,047,070,602 326,516,384 1,373,586,986
Net Asset Value, per share .. $ 1.00 $ 1.00 $ 1.00
BEFORE AFTER
ACQUISITION ACQUISITION
-------------------------------- ---------------
GALAXY BOSTON 1784 GALAXY
TAX-EXEMPT TAX-FREE TAX-EXEMPT
FUND MONEY MARKET FUND FUND
--------------- -------------- ---------------
Net Assets .................. $ 595,282,334 $ 878,000,736 $ 1,473,283,070
Shares Outstanding .......... 595,433,357 878,114,772 1,473,548,129
Net Asset Value, per share .. $ 1.00 $ 1.00 $ 1.00
9. FEDERAL TAX INFORMATION
At October 31, 2000, the following Funds had capital loss carryforwards:
FUND AMOUNT EXPIRATION
--------------- --------- ----------
Money Market Fund ............ $ 1,032 2007
Tax-Exempt Fund .............. 224,243 2002
13,572 2003
7,498 2004
291 2005
Connecticut Municipal
Money Market Fund ............ 6,619 2002
817 2004
Massachusetts Municipal
Money Market Fund ............ 133 2001
31 2002
12,416 2004
The availability of a portion of these capital loss carryforwards, which
were acquired on June 19, 2000 in a connection with Boston 1784 Funds
reorganization, may be limited in a given year.
10. TAX INFORMATION (UNAUDITED)
During the fiscal year ended October 31, 2000, the following Funds earned
income from direct obligations of the U. S. Government:
U.S. GOVERNMENT
FUND INCOME
---- ------
Money Market Fund ............ 1.23%
Government Fund .............. 84.99%
U.S. Treasury Fund ........... 100%
Appropriate tax information detailing U.S. Government income percentages on
a calendar year basis will accompany each sharehoder'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.
52
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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 Galaxy Money Market Fund, Galaxy
Government Fund, Galaxy U.S. Treasury Fund, Galaxy Tax-Exempt Fund, Galaxy
Connecticut Municipal Money Market Fund, and Galaxy Massachusetts Municipal
Money Market Fund (six of the portfolios constituting The Galaxy Fund) as of
October 31, 2000, and the related statements of operations for the year then
ended, the statements of changes in net assets and the financial highlights for
each of the two years in the period 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 audits. The financial highlights for the three
years ended October 31, 1998 were audited by other auditors whose report dated
December 23, 1998, expressed an unqualified opinion on those financial
highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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, 2000 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
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Galaxy Money Market Fund, Galaxy Government Fund, Galaxy U.S. Treasury Fund,
Galaxy Tax-Exempt Fund, Galaxy Connecticut Municipal Money Market Fund, and
Galaxy Massachusetts Municipal Money Market Fund portfolios of The Galaxy Fund
at October 31, 2000, the results of their operations for the year then ended,
and the changes in their net assets and their financial highlights for each of
the two years in the period then ended, in conformity with accounting principles
generally accepted in the United States.
/S/ SIGNATURE ERNST & YOUNG LLP
Boston, Massachusetts
December 15, 2000
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[GRAPHIC OMITTED: GALAXY LOGO]
GALAXY
FUNDS
4400 Computer Drive
P.O. Box 5108
Westborough, MA 01581-5108
-----------------------
BULK RATE
U. S. POSTAGE PAID
PERMIT NO. 105
NORTH READING, MA
-----------------------
AMM(12/00)
