ANNUAL REPORT
October 31, 2000
[GRAPHIC OMITTED]
ACORN ART
COLUM ART
GRADUATION CAP ART
HANDS ART
GALAXY INSTITUTIONAL MONEY MARKET FUND
GALAXY FUNDS
Galaxy Institutional Government
Money Market Fund
Galaxy Institutional
Money Market Fund
Galaxy Institutional Treasury
Money Market Fund
[GRAPHIC OMITTED]
GALAXY FUNDS LOGO
<PAGE>
INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2000
PAR VALUE VALUE
------------ -------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 74.72%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 25.64%
$10,000,000 6.45%, 11/17/00 (A)..................... $ 9,971,644
10,000,000 6.59%, 11/28/00 (A)..................... 9,952,075
10,000,000 6.41%, 12/20/00, MTN (B)................ 9,998,327
10,000,000 6.38%, 12/21/00 (A)..................... 9,911,667
10,000,000 6.60%, 12/28/00 (A)..................... 9,898,983
5,000,000 6.35%, 01/05/01, MTN.................... 4,998,173
10,000,000 6.43%, 07/19/01, MTN (B)................ 9,995,726
--------------
64,726,595
--------------
FEDERAL HOME LOAN BANK - 21.74%
10,000,000 6.60%, 12/13/00 (A)..................... 9,925,450
5,000,000 4.88%, 01/26/01......................... 4,977,935
5,000,000 6.45%, 03/16/01......................... 4,998,021
10,000,000 6.43%, 07/20/01 (B)..................... 9,995,710
10,000,000 6.46%, 08/17/01 (B)..................... 9,994,592
10,000,000 6.46%, 09/28/01 (B)..................... 9,995,578
5,000,000 6.55%, 10/19/01 (B)..................... 4,996,709
--------------
54,883,995
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 21.61%
5,000,000 6.39%, 11/09/00 (A)..................... 4,992,900
3,000,000 6.46%, 11/22/00, MTN (B)................ 2,999,949
10,000,000 6.42%, 12/08/00, MTN (B)................ 9,999,009
5,100,000 4.87%, 12/15/00, MTN.................... 5,088,850
17,000,000 6.44%, 01/11/01 (A)..................... 16,783,489
5,000,000 6.47%, 02/16/01, MTN.................... 4,999,577
10,000,000 6.62%, 04/19/01 (A)..................... 9,703,781
--------------
54,567,555
--------------
FEDERAL FARM CREDIT BANK - 4.15%
5,500,000 5.87%, 11/08/00, MTN.................... 5,499,300
5,000,000 5.13%, 04/02/01......................... 4,972,612
--------------
10,471,912
--------------
STUDENT LOAN MARKETING ASSOCIATION - 1.58%
4,000,000 6.05%, 11/03/00, MTN.................... 3,999,897
--------------
TOTAL U.S. GOVERNMENT AND AGENCY
OBLIGATIONS ............................ 188,649,954
--------------
(Cost $188,649,954)
PAR VALUE VALUE
------------ --------------
REPURCHASE AGREEMENTS - 24.92%
$20,113,000 Repurchase Agreement with:
J.P. Morgan
6.55%, 11/01/2000, dated 10/31/2000
Repurchase Price $20,116,659
(Collateralized by U.S. Treasury Notes
6.00%, Due 09/30/2002
Total Par $20,412,000
Market Value $20,515,902)............... $ 20,113,000
42,803,000 Repurchase Agreement with:
Salomon Smith Barney
6.56%, 11/01/2000, dated 10/31/2000
Repurchase Price $42,810,800
(Collateralized by U.S. Treasury Notes
7.50%, Due 05/15/2002
Total Par $41,425,00
Market Value $43,683,613)............... 42,803,000
--------------
TOTAL REPURCHASE AGREEMENTS ............ 62,916,000
--------------
(Cost $62,916,000)
SHARES
------------
INVESTMENT COMPANY - 0.07%
171,558 Federated U.S. Treasury Cash Reserve...... 171,558
--------------
TOTAL INVESTMENT COMPANY ................. 171,558
--------------
(Cost $171,558)
TOTAL INVESTMENTS - 99.71%................................ 251,737,512
--------------
(Cost $251,737,512)*
NET OTHER ASSETS AND LIABILITIES - 0.29%.................. 744,528
--------------
NET ASSETS - 100.00%...................................... $ 252,482,040
==============
---------------------------------------
* 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.
1
<PAGE>
INSTITUTIONAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2000
PAR VALUE VALUE
------------ --------------
CORPORATE NOTES AND BONDS - 27.15%
FINANCE - 19.44%
$20,000,000 Assocation Corp. of North America,
Senior Note
6.91%, 06/14/01 (B)..................... $ 20,012,602
20,000,000 Bank of New York, Bank Note
6.52%, 01/22/01......................... 19,997,652
30,000,000 Huntington National Bank, Bank Note
6.90%, 01/12/01 (B)..................... 30,008,031
20,000,000 Key Bank, N.A.
6.50%, 01/29/01......................... 19,997,219
9,500,000 U.S. Bank, N.A., Bank Note
6.68%, 12/20/00 (B)..................... 9,500,716
--------------
99,516,220
--------------
UTILITIES (B) - 4.89%
25,000,000 AT&T Corp.
6.61%, 06/14/01 (D)..................... 25,000,000
--------------
CONSUMER STAPLES (B) - 2.82%
4,150,000 Advocare, Inc.
6.62%, 06/01/17
LOC: Wachovia Bank, N.A................. 4,150,000
6,550,000 Bowie Assisted Living
6.70%, 07/01/23
LOC: First Union National Bank.......... 6,550,000
1,900,000 Health Midwest Ventures
6.60%, 08/01/19
LOC: Bank of America NT & SA............ 1,900,000
1,800,000 Service Graphics, Inc.
6.70%, 11/01/10
LOC: Bank One, N.A...................... 1,800,000
--------------
14,400,000
--------------
TOTAL CORPORATE NOTES AND BONDS ........ 138,916,220
--------------
(Cost $138,916,220)
MUNICIPAL SECURITIES - 16.13%
ARKANSAS - 1.36%
7,000,000 Union County, IDR, Tin Fiber Project
6.65%, 10/01/27 (C)
LOC: Bank One, N.A...................... 7,000,000
--------------
PAR VALUE VALUE
------------ --------------
CALIFORNIA - 4.99%
$20,000,000 California Housing Finance Agency
Series K
6.63%, 08/01/31 (C)
Insured: FSA
SPA: Westdeutsche Landesbank GZ
Bayerische Landesbank GZ
California State Teachers
Retirement System....................... $ 20,000,000
5,500,000 Los Angeles, Community
Redevelopment Agency
Series A
6.70%, 12/01/18 (C)
LOC: FSA
SPA: Credit Suisse First Boston......... 5,500,000
--------------
25,500,000
--------------
FLORIDA - 4.26%
3,000,000 Collier County, IDA Health Care Facilities,
Community Health
Series B
6.65%, 11/01/19 (C)
LOC: First Union National Bank.......... 3,000,000
1,100,000 Dade County, Florida Expressway Authority
6.60%, 07/01/19 (C)
LOC: FGIC
SPA: FGIC/SPI........................... 1,100,000
17,700,000 Florida Housing Finance Agency
6.55%, 1/01/34 (C)
Insured: MBIA
SPA: Westdeutsche Landesbank GZ......... 17,700,000
--------------
21,800,000
--------------
ILLINOIS - 0.98%
5,000,000 Illinois Student Assistance,
Community Student Loan
Series B
6.60%, 09/01/31 (C)
LOC: Bank One, N.A...................... 5,000,000
--------------
MARYLAND - 0.59%
3,000,000 Maryland State Health and
Higher Educational Facilities,
Charlestown Project
Series B
6.65%, 01/01/28 (C)
LOC: First Union National Bank.......... 3,000,000
--------------
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE>
INSTITUTIONAL MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
------------ -------------
NEW YORK - 3.95%
$15,195,000 New York City, GO
6.65%, 11/08/00
Insured: FGIC........................... $ 15,195,000
5,000,000 New York City, GO
6.65%, 11/08/00
Insured: FGIC........................... 5,000,000
--------------
20,195,000
--------------
TOTAL MUNICIPAL SECURITIES ............. 82,495,000
--------------
(Cost $82,495,000)
CERTIFICATES OF DEPOSIT - 15.64%
20,000,000 Bayerische Landesbank NY
6.55%, 12/15/00 (B)..................... 19,998,197
20,000,000 First Union National Bank
6.60%, 11/24/00 (B)..................... 19,999,752
20,000,000 Rabobank Nederland
6.69%, 02/28/01......................... 19,996,906
20,000,000 Royal Bank of Canada, Yankee
6.52%, 01/18/01......................... 19,997,969
--------------
TOTAL CERTIFICATES OF DEPOSIT .......... 79,992,824
--------------
(Cost $79,992,824)
COMMERCIAL PAPER (A) - 21.59%
20,000,000 Bellsouth Telecommunication, Inc.
6.47%, 12/12/00......................... 19,852,628
20,000,000 General Electric Capital Corp.
6.51%, 02/08/01......................... 19,641,950
11,353,000 Kimberly-Clark Corp. (D)
6.47%, 12/08/00......................... 11,277,506
20,000,000 Merck & Co., Inc.
6.47%, 11/28/00......................... 19,902,950
20,000,000 Morgan (J.P.) & Co., Inc.
6.48%, 12/06/00......................... 19,874,000
20,000,000 Verizon Global Funding
6.46%, 12/12/00......................... 19,852,856
--------------
TOTAL COMMERCIAL PAPER ................. 110,401,890
--------------
(Cost $110,401,890)
U.S. AGENCY OBLIGATION - 1.96%
STUDENT LOAN MARKETING ASSOCIATION (B) - 1.96%
10,000,000 6.85%, 05/18/01, MTN.................... 9,998,852
--------------
TOTAL U.S. AGENCY OBLIGATION ........... 9,998,852
--------------
(Cost $9,998,852)
PAR VALUE VALUE
------------ --------------
REPURCHASE AGREEMENT - 12.50%
$63,904,000 Repurchase Agreement with:
J.P. Morgan
6.55%, 11/01/2000, dated 10/31/2000
Repurchase Price $63,915,627
(Collateralized by U.S. Treasury Note
6.50%, Due 08/31/2001
Total Par $64,412,000
Market Value $65,182,950)............... $ 63,904,000
--------------
TOTAL REPURCHASE AGREEMENT ............. 63,904,000
--------------
(Cost $63,904,000)
TOTAL INVESTMENTS - 94.97%.............................. 485,708,786
--------------
(Cost $485,708,786)*
NET OTHER ASSETS AND LIABILITIES - 5.03%................ 25,731,080
--------------
NET ASSETS - 100.00%.................................... $ 511,439,866
==============
------------------------------
* 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) 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.
(D) Securities exempt from registration pursuant to Rule 144A under the
Securities Act of 1933, as amended. These securities may only be resold,
in a transaction exempt from registration, to qualified institutional
buyers. At October 31, 2000, these securities amounted to $36,277,506
or 7.09% of net assets.
FGIC Federal Guaranty Insurance Corp.
MBIA Municipal Bond Insurance Association
MTN Medium Term Note
FSA Financial Security Assurance Company
GO General Obligation
IDA Industrial Development Authority
IDR Industrial Development Revenue
LOC Letter of Credit
SPA Stand-by Purchase Agreement
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
INSTITUTIONAL TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2000
PAR VALUE VALUE
------------ -------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 49.58%
FEDERAL HOME LOAN BANK - 15.78%
$50,000,000 6.38%, 12/20/00 (A)..................... $ 49,565,805
100,000,000 6.60%, 02/22/01......................... 100,000,000
26,415,000 5.38%, 03/02/01......................... 26,322,576
42,000,000 6.38%, 03/13/01......................... 41,981,773
100,000,000 6.45%, 03/16/01......................... 99,962,829
45,000,000 6.88%, 04/16/01 (B)..................... 45,000,000
50,000,000 6.43%, 07/20/01 (B)..................... 49,978,548
20,000,000 6.43%, 08/15/01 (B)..................... 19,989,070
130,000,000 6.46%, 08/17/01 (B)..................... 129,929,698
160,000,000 6.46%, 09/28/01 (B)..................... 159,929,396
40,000,000 6.55%, 10/19/01 (B)..................... 39,973,672
--------------
762,633,367
--------------
U.S. TREASURY NOTES - 13.82%
200,000,000 4.63%, 11/30/00......................... 199,712,773
120,000,000 5.00%, 02/28/01......................... 119,482,725
100,000,000 5.00%, 04/30/01......................... 99,386,778
150,000,000 5.63%, 05/15/01......................... 149,415,817
100,000,000 5.25%, 05/31/01......................... 99,410,371
--------------
667,408,464
--------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 7.02%
100,000,000 6.40%, 11/22/00 (A)..................... 99,626,667
100,000,000 6.37%, 12/14/00 (A)..................... 99,239,139
140,000,000 6.43%, 07/19/01, MTN (B)................ 139,940,164
--------------
338,805,970
--------------
U.S. TREASURY BILL (A) - 6.16%
300,000,000 6.38%, 12/21/00......................... 297,341,670
-------------
STUDENT LOAN MARKETING ASSOCIATION (B) - 3.08%
49,500,000 6.85%, 03/12/01, MTN.................... 49,495,199
6,970,000 6.85%, 03/23/01, MTN.................... 6,969,436
92,075,000 6.85%, 05/18/01, MTN.................... 92,067,206
--------------
148,531,841
--------------
FEDERAL FARM CREDIT BANK (B) - 2.17%
45,000,000 6.87%, 05/07/01, MTN.................... 44,995,741
60,000,000 6.44%, 10/24/01......................... 59,988,486
--------------
104,984,227
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 1.55%
50,000,000 6.44%, 11/02/00 (A)..................... 49,991,063
25,000,000 6.47%, 02/16/01, MTN.................... 24,997,884
--------------
74,988,947
--------------
TOTAL U.S. GOVERNMENT AND AGENCY
OBLIGATIONS ............................ 2,394,694,486
--------------
(Cost $2,394,694,486)
PAR VALUE VALUE
------------ --------------
REPURCHASE AGREEMENTS - 57.27%
$200,000,000 Repurchase Agreement with:
Goldman Sachs
6.30%, 11/01/2000, dated 10/31/2000
Repurchase Price $200,035,000
(Collateralized by U.S. Treasury
Bonds, 3.63% - 9.13%
Due 05/15/2018 - 04/15/2028
Total Par $159,147,000
Market Value $205,280,846).............. $ 200,000,000
500,000,000 Repurchase Agreement with:
Goldman Sachs
6.55%, 11/01/2000, dated 10/31/2000
Repurchase Price $500,090,972
(Collateralized by U.S. Treasury
Notes & Bonds, 5.50% - 8.13%
Due 11/15/2004 - 08/15/2028
Total Par $507,013,000
Market Value $508,720,180).............. 500,000,000
600,000,000 Repurchase Agreement with:
Greenwich Captial
6.56%, 11/01/2000, dated 10/31/2000
Repurchase Price $600,109,333
(Collateralized by U.S. Treasury
Notes, 5.50% - 7.88%
Due 03/31/2001 - 08/15/2010
Total Par $592,254,000
Market Value $612,003,322).............. 600,000,000
230,000,000 Repurchase Agreement with:
J.P. Morgan
6.55%, 11/01/2000, dated 10/31/2000
Repurchase Price $230,041,847
(Collateralized by U.S. Treasury
Notes & Bonds, 7.25% - 9.13%
Due 05/15/2004 - 02/15/2019
Total Par $200,209,000
Market Value $234,601,130).............. 230,000,000
100,000,000 Repurchase Agreement with:
Lehman Brothers
6.55%, 11/01/2000, ated 10/31/2000
Repurchase Price $100,018,194
(Collateralized by U.S. Treasury
Notes & Bonds, 6.25% - 13.88%
Due 08/15/2001 - 02/15/2023,
Total Par $86,449,000
Market Value $102,005,614).............. 100,000,000
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
INSTITUTIONAL TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
PAR VALUE VALUE
------------ --------------
REPURCHASE AGREEMENTS (CONTINUED)
$935,892,000 Repurchase Agreement with:
Salomon Smith Barney
6.56%, 11/01/2000, dated 10/31/2000
Repurchase Price $936,062,540
(Collateralized by U.S. Treasury
Bonds, 6.00% - 11.25%
Due 02/15/2015 - 11/15/2026
Total Par $777,505,000
Market Value $954,887,722).............. $ 935,892,000
200,000,000 Repurchase Agreement with:
State Street Bank
6.55%, 11/01/2000, dated 10/31/2000
Repurchase Price $200,036,389
(Collateralized by U.S. Treasury
Notes & Bonds, 4.75% - 8.88%
Due 11/30/2001 - 02/15/2019
Total Par $187,590,000
Market Value $204,005,029).............. 200,000,000
--------------
TOTAL REPURCHASE AGREEMENTS ............ 2,765,892,000
--------------
(Cost $2,765,892,000)
TOTAL INVESTMENTS - 106.85%............................... 5,160,586,486
--------------
(Cost $5,160,586,486)*
NET OTHER ASSETS AND LIABILITIES - (6.85)%................ (330,824,868)
--------------
NET ASSETS - 100.00%...................................... $4,829,761,618
==============
-----------------------------------
* Aggregate cost for federal tax purposes.
(A) Discount yield at time of purchase.
(B) Interest is reset at various time intervals. The interest shown reflects
the rate in effect at October 31, 2000.
MTN Medium Term Note
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
GALAXY INSTITUTIONAL MONEY MARKET FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 2000
<TABLE>
INSTITUTIONAL GOVERNMENT INSTITUTIONAL INSTITUTIONAL TREASURY
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND
------------------------ ----------------- ----------------------
<S> <C> <C> <C>
ASSETS:
Investments
Investments at amortized cost (Note 2)........................ $ 188,821,512 $ 421,804,786 $2,394,694,486
Repurchase agreement.......................................... 62,916,000 63,904,000 2,765,892,000
-------------- -------------- --------------
Total Investments at value.................................. 251,737,512 485,708,786 5,160,586,486
Cash .......................................................... 1,355 - 802
Receivable for shares sold...................................... 1,040,028 33,619,410 10,835,225
Interest and dividends receivable............................... 1,055,900 5,442,326 23,884,930
-------------- -------------- --------------
Total Assets.................................................. 253,834,795 524,770,522 5,195,307,443
-------------- -------------- --------------
LIABILITIES:
Dividends payable............................................... 1,275,569 1,152,866 20,756,349
Payable to custodian............................................ -- 55,280 --
Payable for investments purchased............................... -- -- 297,341,670
Payable for shares repurchased.................................. -- 11,999,394 46,320,644
Advisory fee payable (Note 3)................................... 17,835 58,806 626,335
Payable to Fleet affiliates (Note 3)............................ -- -- 1,356
Payable to Administrator (Note 3)............................... 15,510 41,105 296,619
Trustees' fees and expenses payable (Note 3).................... 11,728 3,372 22,954
Accrued expenses and other payables............................. 32,113 19,833 179,898
-------------- -------------- --------------
Total Liabilities............................................. 1,352,755 13,330,656 365,545,825
-------------- -------------- --------------
NET ASSETS......................................................... $ 252,482,040 $ 511,439,866 $4,829,761,618
============== ============== ==============
NET ASSETS CONSIST OF:
Par value (Note 5).............................................. $ 252,482 $ 511,442 $ 4,829,762
Paid-in capital in excess of par value.......................... 252,229,560 510,930,513 4,824,881,938
Undistributed net investment income............................. 5,152 661 49,126
Accumulated net realized gain (loss) on investments sold........ (5,154) (2,750) 792
-------------- -------------- --------------
TOTAL NET ASSETS................................................... $ 252,482,040 $ 511,439,866 $4,829,761,618
============== ============== ==============
SHARES OF BENEFICIAL INTEREST OUTSTANDING.......................... 252,482,042 511,442,434 4,829,761,618
-------------- -------------- --------------
NET ASSET VALUE:
offering and redemption price per share
(Net Assets (DIVIDE) Shares Outstanding)........................ $ 1.00 $ 1.00 $ 1.00
============== ============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
GALAXY INSTITUTIONAL MONEY MARKET FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2000
<TABLE>
INSTITUTIONAL GOVERNMENT INSTITUTIONAL INSTITUTIONAL TREASURY
MONEY MARKET FUND MONEY MARKET FUND(1) MONEY MARKET FUND(1)
------------------------ -------------------- ----------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2)............................................ $ 14,597,938 $ 16,966,380 $ 129,142,654
Dividends (Note 2)........................................... 8,341 -- --
------------- -------------- --------------
Total investment income.................................... 14,606,279 16,966,380 129,142,654
------------- -------------- --------------
EXPENSES:
Investment advisory fee (Note 3)............................. 476,248 512,998 3,969,645
Administration fee (Note 3).................................. 214,312 171,313 1,326,210
Custodian fee ............................................... 14,938 12,991 16,981
Fund accounting fee (Note 3)................................. 55,143 31,880 46,148
Professional fees (Note 3)................................... 23,562 21,613 67,545
Shareholder servicing and 12b-1 fees (Note 3)................ -- -- 46,145
Transfer agent fee (Note 3).................................. 4,983 3,518 10,240
Trustees' fees and expenses (Note 3)......................... 6,591 4,138 28,717
Reports to shareholders...................................... 8,547 2,337 82,137
Miscellaneous................................................ 39,933 41,492 200,591
------------- -------------- --------------
Total expenses before reimbursement/waiver (Note 4)........ 844,257 802,280 5,794,359
------------- -------------- --------------
Less: reimbursement/waiver (Note 4)........................ (368,009) (68,266) (461,427)
------------- -------------- --------------
Total expenses net of reimbursement/waiver................. 476,248 734,014 5,332,932
------------- -------------- --------------
NET INVESTMENT INCOME........................................... 14,130,031 16,232,366 123,809,722
------------- -------------- --------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS SOLD (NOTE 2)........... -- (272) 792
------------- -------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ $ 14,130,031 $ 16,232,094 $ 123,810,514
============= ============== ==============
</TABLE>
------------------------------------
(1) For the period June 1, 2000 through October 31, 2000.
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
GALAXY INSTITUTIONAL MONEY MARKET FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MAY 31, 2000
<TABLE>
INSTITUTIONAL INSTITUTIONAL TREASURY
MONEY MARKET FUND MONEY MARKET FUND
--------------------- ----------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest (Note 2)............................................... $ 47,008,000 $ 265,039,000
---------------- ----------------
Total investment income....................................... 47,008,000 265,039,000
---------------- ----------------
EXPENSES:
Investment advisory fee (Note 3)................................ 1,666,000 9,736,000
Administration fee (Note 3)..................................... 538,000 3,148,000
Custodian fee .................................................. 45,000 225,000
Professional fees (Note 3)...................................... 53,000 306,000
Transfer agent fee (Note 3)..................................... 130,000 541,000
Trustees' fees and expenses (Note 3)............................ 21,000 118,000
Reports to shareholders......................................... 46,000 210,000
Miscellaneous................................................... 25,000 466,000
---------------- ----------------
Total expenses before reimbursement/waiver (Note 4)........... 2,524,000 14,750,000
---------------- ----------------
Less: reimbursement/waiver (Note 4)........................... (24,000) --
---------------- ----------------
Total expenses net of reimbursement/waiver.................... 2,500,000 14,750,000
---------------- ----------------
NET INVESTMENT INCOME.............................................. 44,508,000 250,289,000
---------------- ----------------
NET REALIZED GAIN ON INVESTMENTS SOLD.................................. 1,000 --
---------------- ----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... $ 44,509,000 $ 250,289,000
================ ================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
GALAXY INSTITUTIONAL MONEY MARKET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
INSTITUTIONAL GOVERNMENT
MONEY MARKET FUND
------------------------
YEARS ENDED OCTOBER 31,
2000 1999
---- ----
<S> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD.......................................... $222,442,738 $200,319,062
------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income................................................... 14,130,031 10,831,855
------------ ------------
Net increase in net assets resulting from operations.................. 14,130,031 10,831,855
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income................................................... (14,130,031) (10,831,855)
------------ ------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares....................................... 663,880,450 545,832,680
Issued to shareholders in reinvestment of dividends..................... 882,368 1,271,007
Cost of shares repurchased.............................................. (634,723,516) (524,980,011)
------------ ------------
Net increase from share transactions.................................. 30,039,302 22,123,676
------------ ------------
Net increase in net assets............................................ 30,039,302 22,123,676
------------ ------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A)............................. $252,482,040 $222,442,738
============ ============
(A) Undistributed net investment income.................................... $ 5,152 $ 5,152
============ ============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold.................................................................... 663,880,450 545,832,680
Issued to shareholders in reinvestment of dividends..................... 882,368 1,271,007
Repurchased............................................................. (634,723,516) (524,980,011)
------------ ------------
Net increase in shares outstanding...................................... 30,039,302 22,123,676
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
GALAXY INSTITUTIONAL MONEY MARKET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
INSTITUTIONAL
MONEY MARKET FUND
----------------------------------------------------------
PERIOD ENDED YEARS ENDED MAY 31,
OCTOBER 31, 2000(1) 2000 1999
-------------------- ------ ------
<S> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD.................................. $ 696,612,800 $ 516,901,000 $ 302,338,000
-------------- ------------- -------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income........................................... 16,232,366 44,508,000 24,188,000
Net realized gain (loss) on investments sold.................... (272) 1,000 (3,000)
-------------- ------------- -------------
Net increase in net assets resulting from operations.......... 16,232,094 44,509,000 24,185,000
-------------- ------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income........................................... (16,236,608) (44,503,200) (24,188,000)
-------------- ------------- -------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares............................... 2,205,236,101 8,100,869,000 4,471,716,000
Issued to shareholders in reinvestment of dividends............. 10,399,576 34,100,000 18,834,000
Cost of shares repurchased...................................... (2,400,804,097) (7,955,263,000) (4,275,984,000)
-------------- ------------- -------------
Net increase (decrease) from share transactions............... (185,168,420) 179,706,000 214,566,000
-------------- ------------- -------------
Net increase (decrease) in net assets......................... (185,172,934) 179,711,800 214,563,000
-------------- ------------- -------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A)..................... $ 511,439,866 $ 696,612,800 $ 516,901,000
============== ============= =============
(A) Undistributed net investment income............................ $ 661 $ 5,000 $ --
============== ============= =============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold ........................................................... 2,205,236,578 8,100,869,000 4,471,716,000
Issued to shareholders in reinvestment of dividends............. 10,399,576 34,100,000 18,834,000
Repurchased..................................................... (2,400,804,097) (7,955,263,000) (4,275,984,000)
-------------- ------------- -------------
Net increase (decrease) in shares outstanding................. (185,167,943) 179,706,000 214,566,000
-------------- ------------- -------------
</TABLE>
--------------------------
(1) For the period June 1, 2000 through October 31, 2000.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
GALAXY INSTITUTIONAL MONEY MARKET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
INSTITUTIONAL TREASURY
MONEY MARKET FUND
------------------------------------------------------------
PERIOD ENDED YEARS ENDED MAY 31,
OCTOBER 31, 2000(1) 2000 1999
-------------------- ------ ------
<S> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD.................................. $ 5,022,305,685 $ 4,346,037,000 $ 4,285,801,000
--------------- --------------- ---------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income........................................... 123,809,722 250,289,000 199,476,000
Net realized gain on investments sold........................... 792 -- 49,000
--------------- --------------- ---------------
Net increase in net assets resulting from operations.......... 123,810,514 250,289,000 199,525,000
--------------- --------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income........................................... (123,809,657) (250,480,315) (199,476,000)
--------------- --------------- ---------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares............................... 6,627,713,689 20,275,870,000 14,696,641,000
Issued to shareholders in reinvestment of dividends............. 30,252,408 88,313,000 74,848,000
Cost of shares repurchased...................................... (6,850,511,021) (19,687,723,000) (14,711,302,000)
--------------- --------------- ---------------
Net increase (decrease) from share transactions............... (192,544,924) 676,460,000 60,187,000
--------------- --------------- ---------------
Net increase (decrease) in net assets......................... (192,544,067) 676,268,685 60,236,000
--------------- --------------- ---------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A)..................... $ 4,829,761,618 $ 5,022,305,685 $ 4,346,037,000
=============== =============== ===============
(A) Undistributed net investment income............................ $ 49,126 $ 49,000 $ 192,000
=============== =============== ===============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold............................................................ 6,627,754,281 20,275,870,000 14,696,641,000
Issued to shareholders in reinvestment of dividends............. 30,252,408 88,313,000 74,848,000
Repurchased..................................................... (6,850,502,283) (19,687,723,000) (14,711,302,000)
--------------- --------------- ---------------
Net increase (decrease) in shares outstanding................. (192,495,594) 676,460,000 60,187,000
=============== =============== ===============
</TABLE>
-----------------------
(1) For the period June 1, 2000 through October 31, 2000.
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
INSTITUTIONAL GOVERNMENT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
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.......................................... 6.09% 4.92% 5.32% 5.09% 5.12%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)...................... $ 252,482 $ 222,443 $ 200,319 $ 175,141 $ 500,927
Ratios to average net assets:
Net investment income including
reimbursement/waiver.............................. 5.94% 4.82% 5.17% 4.94% 5.00%
Operating expenses including reimbursement/waiver... 0.20% 0.20% 0.20% 0.19% 0.19%
Operating expenses excluding reimbursement/waiver... 0.35% 0.38% 0.36% 0.33% 0.33%
</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 the
years ended October 31, 2000, 1999, 1998, 1997 and 1996 were $0.06, $0.05,
$0.05, $0.05 and $0.05, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
INSTITUTIONAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
PERIOD JUNE 1, 2000 YEARS ENDED MAY 31, PERIOD ENDED
TO OCTOBER 31, ------------------------------ MAY 31,
2000(1) 2000 1999 1998(2)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------
Income from Investment Operations:
Net investment income (A)........................... 0.03 0.05 0.05 0.03
------------ ------------ ------------ ------------
Less Dividends:
Dividends from net investment income................ (0.03) (0.05) (0.05) (0.03)
------------ ------------ ------------ ------------
Net increase (decrease) in net asset value............. -- -- -- --
------------ ------------ ------------ ------------
Net Asset Value, End of Period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============ ============ ============
Total Return........................................... 2.68%** 5.43% 5.10% 5.55%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)...................... $ 511,440 $ 696,613 $ 516,901 $ 302,338
Ratios to average net assets:
Net investment income including
reimbursement/waiver.............................. 6.33%* 5.35% 4.93% 5.36%*
Operating expenses including reimbursement/waiver... 0.29%* 0.30% 0.30% 0.27%*
Operating expenses excluding reimbursement/waiver... 0.31%* 0.30% 0.35% 0.42%*
</TABLE>
-------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on November 5, 1997 as a separate portfolio
(the "Predecessor Fund") of the Boston 1784 Funds. On June 26, 2000, the
Predecessor Fund was reorganized as a new portfolio of the Trust. Prior to
the reorganization, the Predecessor Fund offered and sold one class of
shares. In connection with the reorganization, shareholders of the
Predecessor Fund exchanged their shares for shares of the Galaxy
Institutional Money Market Fund.
(2) For the period from commencement of operations, beginning on
November 5, 1997.
(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
period ended October 31, 2000 was $0.03.
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
INSTITUTIONAL TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
PERIOD JUNE 1, 2000 YEARS ENDED MAY 31,
TO OCTOBER 31, -----------------------------------------------------
2000(1) 2000 1999 1998 1997 1996
---------- ---------- ---------- ---------- ---------- ---------
<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 0.05 0.05 0.05 0.05 0.05
---------- ---------- ---------- ---------- ---------- ---------
Less Dividends:
Dividends from net investment income................ (0.03) (0.05) (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 $ 1.00
========== ========== ========== ========== ========== =========
Total Return.......................................... 2.64%** 5.26% 4.90% 5.36% 5.16% 5.45%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)...................... $4,829,762 $5,022,306 $4,346,037 $4,285,801 $2,591,487 $ 644,733
Ratios to average net assets:
Net investment income including
reimbursement/waiver.............................. 6.24%* 5.15% 4.79% 5.24% 5.05% 5.29%
Operating expenses including reimbursement/waiver... 0.27%* 0.30% 0.31% 0.33% 0.33% 0.32%
Operating expenses excluding reimbursement/waiver... 0.29%* 0.30% 0.31% 0.33% 0.34% 0.39%
</TABLE>
-------------------------------------
* Annualized
** Not Annualized
(1) The Fund began operations on June 14, 1993 as a separate portfolio (the
"Predecessor Fund") of the Boston 1784 Funds. On June 26, 2000, the
Predecessor Fund was reorganized as a new portfolio of the Trust. Prior to
the reorganization, the Predecessor Fund offered and sold one class of
shares. In connection with the reorganization, shareholders of the
Predecessor Fund exchanged their shares for shares of the Galaxy
Institutional Treasury 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
period ended October 31, 2000 was $0.03.
SEE NOTES TO FINANCIAL STATEMENTS.
14
<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
Institutional Government Money Market Fund, Institutional Money Market Fund
(previously, Boston 1784 Institutional Prime Money Market Fund) and
Institutional Treasury Money Market Fund (previously, Boston 1784 Institutional
U.S. Treasury Money Market Fund),(individually, a "Fund", collectively the
"Funds") only.
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.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
accounted for on a trade date basis. Net realized gains or losses on sales of
securities are determined by the identified cost method. Interest income is
recorded on the accrual basis.
DIVIDENDS TO SHAREHOLDERS: Dividends from net investment income are
declared daily and paid monthly. Net realized capital gains, if any, are
distributed at least annually.
Income dividends and capital gain dividends are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles.
FEDERAL INCOME TAXES: The Trust treats 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.
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.
REPURCHASE AGREEMENTS: Each 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.
3. INVESTMENT ADVISORY, ADMINISTRATION AND OTHER FEES
The Trust and Fleet Investment Advisors Inc. (the "Investment Advisor"), an
indirect wholly-owned subsidiary of FleetBoston Financial Corporation, are
parties to an investment advisory agreement under which the Investment Advisor
provides advisory services for a fee, computed daily and paid monthly, at the
annual rate of 0.20% of the average daily net assets of each of the Funds (see
Note 4).
Prior to June 26, 2000, Fleet National Bank (formerly known as BankBoston,
N.A.) ("FNB"), an affiliate of the Investment Advisor, provided investment
advisory services to the Boston 1784 Institutional Prime Money Market Fund and
Boston 1784 Institutional U.S. Treasury Money Market Fund, predecessor funds of
the Galaxy Institutional Money Market Fund and Galaxy Institutional Treasury
Money Market Fund, respectively (collectively, the "Predecessor Funds," see Note
6). FNBwas paid a fee for its services at the annual rate of 0.20% of each
Predecessor
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Funds' average daily net assets. For the period June 1, 2000 through June
25, 2000, fees paid to FNBby the Predecessor Funds, which are included in the
Investment advisory fees on the Statement of Operations for the year ended
October 31, 2000, were $99,992 for the Institutional Money Market Fund and
$683,831 for the Institutional Treasury Money Market Fund.
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 of the outstanding stock of First Data Investor Services Group,
Inc. As part of the transaction, PFPC Inc., also an indirect wholly-owned
subsidiary 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.
Prior to June 26, 2000, SEI Investments Mutual Funds Services ("SEI"), a
wholly-owned subsidiary of SEI Investments Company, provided certain
administrative services to the Predecessor Funds. The fees paid to SEI were
based on the level of average aggregate net assets of the Boston 1784 Funds. For
the period June 1, 2000 through June 25, 2000, fees paid to SEI by the
Predecessor Funds, which are included in the administration fees on the
Statement of Operations for the year ended October 31, 2000, were $32,686 for
the Institutional Money Market Fund and $223,534 for the Institutional Treasury
Money Market Fund.
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
the exclusive distributor of the Trust's shares.
Prior to June 26, 2000, SEI Investments Distribution Co. served as the
exclusive distributor of shares of the Predecessor Funds.
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 VIP Fund ("VIP") and
Galaxy Fund II ("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.
In addition, 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.
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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 their fees and/or to reimburse certain
expenses so that total expenses of the Funds would not exceed certain expense
limitations. The Investment Advisor and/or its affiliates and/or the
Administrator, at their discretion, may revise or discontinue the voluntary fee
waivers and/or expense reimbursements at any time. For the period 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 as follows:
EXPENSES
FUND FEES WAIVED REIMBURSED
---- ----------- ----------
Institutional Government
Money Market Fund.......... $ 336,349 $ 31,660
Institutional
Money Market Fund.......... 3,000 65,266
Institutional Treasury
Money Market Fund.......... 3,000 458,427
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an
unlimited number of shares of beneficial interest in the 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 of shares.
6. 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. Pursant to the Agreement,
(i) all of the assets and liabilities of the Boston 1784 Institutional Prime
Money Market Fund were transferred to the Galaxy Institutional Money Market Fund
in exchange for 711,535,715 shares of the Galaxy Institutional Money Market Fund
and (ii) all of the assets and liabilities of the Boston 1784 Institutional U.S.
Treasury Money Market Fund were transferred to the Galaxy Institutional Treasury
Money Market Fund in exchange for 4,749,128,459 shares of the Galaxy
Institutional Treasury Money Market Fund. The reorganization, which qualified as
a tax-free reorganization for federal income tax purposes, was completed on June
26, 2000. The Galaxy Institutional Money Market Fund and Galaxy Institutional
Treasury Money Market Fund had nominal assets and liabilities prior to the
reorganization and were organized solely to acquire the assets and continue the
business, including carrying forward financial and performance history of the
Boston 1784 Institutional Prime Money Market Fund and Boston 1784 Institutional
U.S. Treasury Money Fund respectively. Following the reorganization, the Galaxy
Institutional Money Market Fund and Galaxy Institutional Treasury Money Market
Fund changed their fiscal year end from May 31 to October 31.
7. FEDERAL TAX INFORMATION
As of October 31, 2000, the following Funds had capital loss carryforwards:
FUND AMOUNT EXPIRATION
---- ------ ----------
Institutional Government
Money Market Fund.......... $ 5,154 2,004
Institutional Treasury
Money Market Fund.......... 2,478 2,007
272 2,008
17
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders and Board of Trustees of
The Galaxy Fund:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of the Galaxy Institutional Government Money
Market Fund, Galaxy Institutional Money Market Fund (formerly, Boston 1784
Institutional Prime Money Market Fund), and Galaxy Institutional Treasury Money
Market Fund (formerly, Boston 1784 Institutional U.S. Treasury Money Market
Fund) (three of the portfolios constituting The Galaxy Fund), as of October 31,
2000, and the related statements of operations, the statements of changes in net
assets, and the financial highlights for the periods indicated therein ending
October 31, 2000 and for the Galaxy Institutional Government Money Market Fund,
the statement of changes in net assets and financial highlights for the year
ended October 31, 1999. 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 for
the Galaxy Institutional Government Money Market Fund were audited by other
auditors whose report dated December 23, 1998 expressed an unqualified opinion
on those financial highlights. The statements of operations for the year ended
May 31, 2000, the statements of changes in net assets for each of the two years
in the period then ended, and the financial highlights for each of the five
years in the period then ended for the Galaxy Institutional Money Market Fund
and Galaxy Institutional Treasury Money Market Fund were audited by other
auditors whose report dated July 17, 2000 expressed an unqualified opinion on
those statements and 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 Institutional Government Money Market Fund, Galaxy Institutional Money
Market Fund and Galaxy Institutional Treasury Money Market Fund portfolios of
The Galaxy Fund at October 31, 2000, the results of their operations, changes in
their net assets and financial highlights for the periods indicated above, in
conformity with accounting principles generally accepted in the United States.
/S/SIGNATURE ERNST & YOUNG LLP
Boston, Massachusetts
December 15, 2000
18
<PAGE>
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<PAGE>
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<PAGE>
[GRAPHIC OMITTED]
GALAXY FUNDS LOGO
4400 Computer Drive
P.O. Box 5108
Westborough, MA 01581-5108
-------------------
Bulk Rate
U. S. Postage Paid
Permit No. 105
North Reading, MA
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AINSMM (12/00)
