[front cover]
[Cover graphics of acorn, column, graduation cap, and interlocked hands]
Semi-Annual Report
April 30, 2000
GALAXY TAXABLE BOND FUNDS
Galaxy Funds
Galaxy Short-Term Bond Fund
Galaxy Intermediate Government
Income Fund
Galaxy High Quality Bond Fund
Galaxy Corporate Bond Fund
[Galaxy Funds Logo]
<PAGE>
CHAIRMAN'S MESSAGE
Dear Shareholder:
Enclosed is the semi-annual report for the Galaxy Taxable Bond Funds that
covers the six months ended April 30, 2000. The report includes a Market
Overview that explains the different economic and market factors influencing
bond investments during this time. Following the Market Overview are individual
reviews that describe how Fleet Investment Advisors Inc. managed each of the
Funds' portfolios in this climate. Financial statements and a list of portfolio
holdings for each of the Funds as of April 30, 2000 appear at the end of the
report.
U.S. growth remained strong over the past six months, surprising most
observers, but inflation remained relatively moderate. Concerned that the robust
pace of growth would eventually cause higher inflation, the Federal Reserve (the
"Fed") imposed three hikes in short-term interest rates of 25 basis points
(0.25%) each. Although the yields on shorter-maturity bonds rose in response,
yields for longer maturities fell. With investors uncertain about how far
interest rates would rise, and when the Fed would act, the prices for bonds of
all maturities became more volatile.
Of course, market volatility, while unsettling, is part of the normal ups
and downs that occur with most investments. This is important to remember with
all the talk about the effect of securities from "new economy" industries, like
technology, on the market behavior of both bonds and stocks. In recent months
the stock market has been caught up in "momentum investing," in which the prices
for technology shares have outstripped their fundamentals. Most analysts
believe, however, that there will always be demand for investments in the "old
economy" sectors represented by industrial and retail firms, as well as other
asset classes. Such demand was clearly evident in the final weeks of the
reporting period, when investors shifted out of technology stocks into both
other equities and bonds.
During this time, many investors decided to stick with the portfolio
strategies that they had set to meet long-term investment goals. One strategy
that has served investors well over time is diversification. By using the broad
array of portfolios offered by the Galaxy Funds, you can reduce the impact of
market volatility on your returns. You may also be able to stabilize returns by
diversifying across a range of asset classes and market sectors. Because
individual classes and sectors often move in different directions, such
diversification improves the chance that some part of your portfolio will
perform well within a given period.
With many stock, bond and money market funds from which to choose, the
Galaxy Funds can provide much of the diversification you need. Following the
completion of the reorganization of the Boston 1784 Funds into the Galaxy Funds
in June, you will have even more funds from which to choose. Your financial
professional can help you select a mix of funds that suits your particular
investment goals and make sure that your asset allocations remain in place
through any major market changes.
If you have any questions about the information in this report, please
contact the Galaxy Information Center toll-free at 1-877-BUY-GALAXY
(1-877-289-4252). You can also visit one of our investment professionals located
at Fleet Bank branches.
Sincerely,
/S/ SIGNATURE OMITTED
Dwight E. Vicks, Jr.
Chairman of the Board of Trustees
[BEGIN SIDEBAR]
MUTUAL FUNDS:
(BULLET) ARE NOT BANK DEPOSITS
(BULLET) ARE NOT FDIC INSURED
(BULLET) ARE NOT OBLIGATIONS OF FLEET BANK
(BULLET) ARE NOT GUARANTEED BY FLEET BANK
(BULLET) ARE SUBJECT TO INVESTMENT RISK INCLUDING POSSIBLE LOSS OF PRINCIPAL
AMOUNT INVESTED
[END SIDEBAR]
<PAGE>
MARKET OVERVIEW
BOND MARKET OVERVIEW
BY FLEET INVESTMENT ADVISORS INC.
[BEGIN SIDEBAR]
"AFTER GROWING AT AN ANNUALIZED RATE OF 5.6% IN THE THIRD QUARTER OF 1999,
THE GROSS DOMESTIC PRODUCT ("GDP"), WHICH MEASURES THE OUTPUT OF U.S. GOODS AND
SERVICES, GREW 7.3% IN THE FOURTH QUARTER."
[END SIDEBAR]
As economic growth accelerated over the past six months and inflationary
pressures began to surface, the Federal Reserve ("the Fed") raised the Federal
Funds rate a total of 75 basis points (0.75%) to slow growth and keep inflation
under control. Yields across all maturities rose in response until peaking near
6.75% in mid-January when the U.S. Treasury announced that it would begin to buy
back long-term debt. Investors realized that the supply of long-term, risk-free
government assets was set to decline dramatically over the next few years due to
growing budget surpluses. The scramble for these long-term Treasuries was the
driving force behind the dramatic decline in yields. From their peak, long-term
yields fell over 75 basis points (0.75%), but short-term yields declined only 10
basis points (0.10%) through the end of April.
By adjusting the mix of maturities and investments in the Galaxy Taxable
Bond Funds to take advantage of these and other market changes, we helped the
Funds make the most of this environment.
FED SEEKS TO STEM INFLATION
At the start of the reporting period on November 1, 1999, 30-year Treasury
bonds were yielding 6.16%, and the annual rate of inflation was about 2.6%.
After growing at an annualized rate of 5.6% in the third quarter of 1999, the
Gross Domestic Product ("GDP"), which measures the output of U.S. goods and
services, grew 7.3% in the fourth quarter.
While core inflation remained relatively moderate, headline inflation had
risen to 2.6% by the beginning of the period as a result of energy price
increases. The Fed worried that this rise in headline inflation, in combination
with tightening labor markets and excessive GDPgrowth, would drive core
inflation higher in the months to come. The Fed raised rates again in November
after two prior moves in the summer. Market expectations for additional rate
hikes intensified, fueling the rise in yields. By December 31, 1999, the yield
for long-term Treasuries had increased to 6.48%.
GDP growth failed to moderate in the first quarter of 2000, rising at an
estimated 5.4% annualized rate. On a year-over-year basis, economic growth stood
at 5%, the highest rate of growth in over 15 years and well beyond the Fed's
comfort range. As a result, the Fed imposed two more rate hikes of 25 basis
points each on February 2 and March 21. These actions brought the total rate
increase to 125 basis points since June 1999 and resulted in the highest level
of short-term rates since April 1991. It was thought that the "wealth effect"
from continued gains for stocks had contributed to excessive consumer demand.
Price increases broadened, with headline inflation peaking at 3.7% in March and
core inflation spiking to 2.4%.
Following their rise through the middle of January, long-term yields began
to decline as the U.S. Treasury began its buyback program. In addition, the
Treasury announced it would be issuing less long-term debt in the future.
Investors feared the supply of long Treasuries would dwindle in the years to
come and demand for these assets surged. These supply/demand imbalances helped
Treasuries rally through most of April. When the reporting period ended on April
30, 2000, long-term Treasury bonds were yielding 5.96%, down from a high of
6.75% in January.
While long-term Treasury rates declined, the yields for long-term agency
and corporate bonds remained high, resulting in widening risk premiums. The
widening was likely in sympathy with equity market volatility and a possible
turn in the credit cycle. This was most evident in lower quality paper.
Corporations are seeing input costs rise (from higher rates, commodity prices,
and labor costs) with pressure on profit margins the likely result. Default
ratios are rising and downgrades outnumber upgrades two to one. Spreads also
widened in government agency paper as news broke on legislative initiatives to
address their government sponsership.
TAKING ADVANTAGE OF CHANGES IN YIELDS
With a very favorable balance of supply and demand, Treasury bonds outpaced
other fixed-income issues for the six-month reporting period ended April 30,
2000. The Galaxy Taxable Bond Funds benefited in this market from an increased
emphasis on Treasury issues. As the prospect of slower economic growth helped
other issues of higher credit quality outperform, increased attention to those
investments further enhanced the Funds' total returns.
2
<PAGE>
[BEGIN SIDEBAR]
"ABSENT A SUBSTANTIAL SLOWDOWN IN ECONOMIC GROWTH, OR A STEEP DECLINE IN
STOCK PRICES, WE EXPECT THE FED TO CONTINUE RAISING INTEREST RATES THROUGH THE
SUMMER OF 2000."
[END SIDEBAR]
Of additional help were adjustments we made in the funds' maturity
structures that let us make the most of changes in yields.
THE PEAK IN RATES
Absent a substantial slowdown in economic growth, or a steep decline in
stock prices, we expect the Fed to continue raising interest rates through the
summer of 2000. Fed policy usually goes on hold for a period prior to elections
to avoid political questions. Thereafter, Fed policy will likely focus on labor
market conditions and inflationary pressures. While the peak in long-term rates
is behind us, stability in short-term rates is dependent on a moderation in
economic activity. We expect that evidence of this will be seen in the second
half of the year with only the degree of moderation in question. One or two more
tightenings may engineer the soft landing the Fed hopes to achieve, and this
remains our forecast. If not, the risks for a hard landing for the economy grow.
Long-term rates should range from 5.50% to 6.50%, with Fed Funds and short-term
rates possibly peaking around 7%. Furthermore, core inflation must stabilize in
order for this tightening cycle to end.
In keeping with our forecast, we expect to add to both government agencies
and corporate bonds as the year progresses. With risk premiums near recession
levels, these sectors offer attractive relative value. The barbell maturity
structure will also be repositioned. The inversion in the yield curve will
likely be with us for some time and tied to expectations for monetary policy and
budget surpluses. A substantial slowing in the economy would warrent less spread
product, a longer duration positioning, and an overweight in intermediate
maturities. A continuation of the buildup of inflationary pressures would
dictate a revaluation of our forecast.
PERFORMANCE AT-A-GLANCE
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS - RETAIL A SHARES*
10 YEARS/
AS OF APRIL 30, 2000 6 MONTHS(DAGGER) 1 YEAR 5 YEARS LIFE OF FUND***
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Bond Fund
(INCEPTION DATE 12/30/91) (2.07)% (1.10)% 4.42% 4.48%
...............................................................................................................
Intermediate Government
Income Fund**
(INCEPTION DATE 9/1/88) (1.85) (2.49) 4.72 6.32
...............................................................................................................
High Quality Bond Fund
(INCEPTION DATE 12/14/90) (1.95) (3.50) 5.51 6.53
---------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS - PRIME A SHARES*
AS OF APRIL 30, 2000 6 MONTHS(DAGGER) 1 YEAR 5 YEARS LIFE OF FUND
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
High Quality Bond Fund
(INCEPTION DATE 11/1/98) (2.95)% (4.43)% N/A (3.76)%
---------------------------------------------------------------------------------------------------------------
</TABLE>
(DAGGER) Unannualized total returns.
* Return figures for Retail A Shares have been restated to include the
effect of the maximum 3.75% front-end sales charge which became
effective on December 1, 1995. Return figures for Prime AShares include
the effect of the maximum 4.75% front-end sales charge.
** Retail A Shares of the Intermediate Government Income Fund were first
offered during the fiscal year ended October 31, 1992. The returns for
Retail A Shares for prior periods represent the returns for Trust
Shares of the Fund. Prior to November 1, 1993, the returns for Retail A
Shares and Trust Shares of the Fund were the same because each series
had the same expenses.
*** Return figures shown are average annual total returns for the 10 years
ended April 30, 2000 for the Intermediate Government Income Fund and
for the period from inception through April 30, 2000 for the Short-Term
Bond and High Quality Bond Funds.
3
<PAGE>
PERFORMANCE AT-A-GLANCE
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS - TRUST SHARES
10 YEARS/
AS OF APRIL 30, 2000 6 MONTHS(DAGGER) 1 YEAR 5 YEARS LIFE OF FUND***
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Bond Fund
(INCEPTION DATE 12/30/91) 1.83% 2.99% 5.46% 5.12%
---------------------------------------------------------------------------------------------------------------
Intermediate Government Income Fund
(INCEPTION DATE 9/1/88) 2.06 1.57 5.82 6.77
...............................................................................................................
Corporate Bond Fund
(INCEPTION DATE 12/12/94) 0.92 0.34 5.74 6.48
...............................................................................................................
High Quality Bond Fund
(INCEPTION DATE 12/14/90) 1.96 0.44 6.49 7.07
---------------------------------------------------------------------------------------------------------------
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS - RETAIL B SHARES**
<TABLE>
6 MONTH 6 MONTH 1 YEAR 1 YEAR LIFE OF FUND LIFE OF FUND
RETURNS RETURNS RETURNS RETURNS RETURNS RETURNS
BEFORE AFTER BEFORE AFTER BEFORE AFTER
CONTINGENT CONTINGENT CONTINGENT CONTINGENT CONTINGENT CONTINGENT
DEFERRED DEFERRED DEFERRED DEFERRED DEFERRED DEFERRED
AS OF SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE
APRIL 30, 2000 DEDUCTED(DAGGER) DEDUCTED*(DAGGER) DEDUCTED DEDUCTED* DEDUCTED DEDUCTED*
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Short-Term
Bond Fund
(INCEPTION DATE 3/4/96) 1.35% (3.59)% 2.03% (2.84)% 3.82% 3.61%
------------------------------------------------------------------------------------------------------------------------------------
Intermediate
Government
Income Fund
(INCEPTION DATE 11/1/98) 1.57 (3.38) 0.62 (4.17) (0.16) (2.66)
------------------------------------------------------------------------------------------------------------------------------------
High Quality
Bond Fund
(INCEPTION DATE 3/4/96) 1.56 (3.39) (0.33) (5.06) 3.92 3.72
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS - PRIME B SHARES**
6 MONTH 6 MONTH 1 YEAR 1 YEAR LIFE OF FUND
RETURN BEFORE RETURN AFTER RETURN BEFORE RETURN AFTER RETURN BEFORE
CONTINGENT CONTINGENT CONTINGENT CONTINGENT CONTINGENT
AS OF DEFERRED SALES DEFERRED SALES DEFERRED SALES DEFERRED SALES DEFERRED SALES
APRIL 30, 2000 CHARGE DEDUCTED(DAGGER) CHARGE DEDUCTED*(DAGGER) CHARGEDEDUCTED CHARGE DEDUCTED* CHARGE DEDUCTED
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
High Quality Bond Fund
(Inception date 11/1/98) 1.62% (3.33)% (0.33)% (5.07)% (1.27)%
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
LIFE OF FUND
RETURN AFTER
CONTINGENT
DEFERRED SALES
AS OF APRIL 30, 2000 CHARGE DEDUCTED*
------------------------------------------------
<S> <C>
High Quality Bond Fund
(Inception date 11/1/98) (3.73) %
------------------------------------------------
</TABLE>
(DAGGER) Unannualized total returns.
* As if shares were redeemed at end of period.
** Retail B Shares and Prime B Shares are subject to a 5.00% contingent
deferred sales charge if shares are redeemed within the first year. The
charge decreases to 4.00%, 3.00%, 3.00%, 2.00% and 1.00% for
redemptions made during the second through sixth years, respectively.
Retail B Shares automatically convert to Retail A Shares after six
years and Prime B Shares automatically convert to Prime A Shares after
eight years.
*** Return figures shown are average annual total returns for the 10 years
ended April 30, 2000 for the Intermediate Government Income Fund and
for the period from inception through April 30, 2000 for the Short-Term
Bond, Corporate Bond and High Quality Bond Funds.
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 INCLUDE THE DEDUCTION OF ANY SALES CHARGES, WHERE APPLICABLE,
UNLESS OTHERWISE INDICATED.
4
<PAGE>
PORTFOLIO REVIEWS
Galaxy Short-Term Bond Fund
BY GLENN MIGLIOZZI
MANAGING DIRECTOR
FIXED INCOME INVESTMENTS
[PHOTO OMITTED]
[BEGIN SIDEBAR]
GLENN MIGLIOZZI IS THE MANAGING DIRECTOR OF FIXED INCOME INVESTMENTS FOR FLEET
INVESTMENT ADVISORS INC. HE IS ALSO A MEMBER OF FLEET'S TAXABLE FIXED INCOME
STRATEGY COMMITTEE, WHICH HAS MANAGED THE GALAXY SHORT-TERM BOND FUND SINCE
OCTOBER OF 1999.
[END SIDEBAR]
As interest rates and bond yields edged higher in the past six months, the
Galaxy Short-Term Bond Fund benefited from a generally defensive strategy that
helped to protect the price of its shares while making the most of the increase
in yields.
With this strategy, the Fund's Trust Shares earned a total return of 1.83%
for the six months ended April 30, 2000, and its Retail A Shares had a total
return of 1.71% before deducting the 3.75% maximum front-end sales charge.
During this time, the Fund's Retail B Shares had a total return of 1.35% before
deducting the maximum 5.00% contingent deferred sales charge. (Please see the
chart on page 3 for total returns after deducting the front-end sales charge and
the chart on page 4 for total returns after deducting the contingent deferred
sales charge.). Over the same six-month period, the average short-term bond fund
tracked by Lipper Analytical Services ("Lipper") earned a total return of 1.73%,
and the Lehman Brothers One-to-Three-Year Government Bond Index had a total
return of 1.80%.
On April 30, 2000, when the reporting period ended, the Fund had an average
maturity near that of its benchmark, and the Fund's Trust Shares had a 30-day
Securities and Exchange Commission ("SEC") annualized yield of 5.92%. On the
same date, Retail A Shares of the Fund had a 30-day SEC annualized yield of
5.45%, and Retail B Shares of the Fund had a 30-day SEC annualized yield of
4.91%.
A FOCUS ON QUALITY
In the last two months of 1999, when rising interest rates and concerns
about potential Y2K computer problems made bond prices more volatile, the Fund
benefited from its emphasis on higher-quality securities. We had increased the
Fund's position in Treasuries before the reporting period began, in anticipation
of a possible year-end flight to quality. A relatively strong position in cash
investments atthe end of 1999, combined with a maturity structure that was
somewhat shorter than that of the Fund's benchmark, provided further stability
at a time of market volatility.
A sizable position in Treasuries continued to help returns in the first
months of 1999, when Treasury issues performed exceptionally well against other
fixed-income sectors. With a further increase in interest rates, which typically
discourages home-loan prepayments, the Fund also benefited from its investments
in mortgage-backed securities. A continued emphasis on investments with very
short maturities, whose prices tend to be less sensitive to changes in interest
rates, additionally enhanced the Fund's return.
As prices became more attractive for corporate bonds and issues of U.S.
government agencies, we added investments from these sectors to the Fund's
portfolio. These issues performed well later in the period, as the economy
remained stronger than investors had expected. Once it became more likely that
growth would slow later this year, we reduced the Fund's corporate exposure.
Within the corporate area, we made selective trades into longer maturities that
would let us lock in the higher yields that were available.
ANTICIPATING SLOWER GROWTH AND HIGHER YIELDS
With the Fed signaling a more aggressive attack on inflation through larger
hikes in interest rates, and an increased chance of a slowdown in growth, the
prices for corporate bonds have come under increased downward pressure. In this
environment, we expect to continue to look for corporates that are particularly
attractive, while maintaining a sizable position in Treasuries to take advantage
of the strong demand and decreasing supply in that sector.
With bond yields likely to rise further in coming months, we have started
to add floating-rate securities, whose coupons adjust at regular intervals.
5
<PAGE>
PORTFOLIO REVIEWS
GALAXY SHORT-TERM BOND FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF APRIL 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
U.S. GOVERNMENT AND AGFENCY
OBLIGATIONS 38%
CORPORATE NOTES AND BONDS 38%
ASSET-BACKED AND
MORTGAGE-BACKED SECURITIES 20%
REPURCHASE AGREEMENT & NET
OTHER ASSETS AND LIABILITIES 4%
GALAXY SHORT-TERM BOND FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
LEHMAN BROTHERS GALAXY SHORT- GALAXY SHORT- GALAXY SHORT-
ONE TO THREE YEAR TERM BOND FUND- TERM BOND FUND- TERM BOND FUND-
GOVERNMENT BOND INDEX RETAIL A SHARES TRUST SHARES RETAIL B SHARES
<S> <C> <C> <C> <C>
12/30/91 10000 9625 10000
1992 10542 10521 10521
1993 11150 11256 11256
1994 11280 11179 11181
1995 12276 12216 12249 10000
1996 13010 12302 12850 10212
1997 14055 12995 13592 10721
1998 15113 13829 14501 11336
1999 15562 14164 14888 11335
4/30/2000 15842 14406 15160 11590
</TABLE>
* SINCE INCEPTION ON 12/30/91 FOR TRUST AND RETAIL A SHARES. SINCE
INCEPTION ON 3/4/96 FOR RETAIL B SHARES. PERFORMANCE FIGURESFOR RETAIL
A SHARES INCLUDE THE EFFECT OF THE MAXIMUM 3.75% FRONT-END SALES
CHARGE. PERFORMANCE FIGURES FOR RETAIL B SHARES REFLECT THE DEDUCTION
OF THE 2.00% CONTINGENT DEFERRED SALES CHARGE (APPLICABLE TO SHARES
REDEEMED DURING THE FIFTH YEAR AFTER PURCHASE) AS IF SHARES WERE
REDEEMED ON APRIL 30, 2000. THE LEHMAN BROTHERS ONE TO THREE YEAR
GOVERNMENT BOND INDEX IS AN UNMANAGED INDEX IN WHICH INVESTORS CANNOT
INVEST. RESULTS FOR THE INDEX DO NOT REFLECT INVESTMENT MANAGEMENT FEES
AND OTHER EXPENSES INCURRED BY THE FUND.
GALAXY INTERMEDIATE GOVERNMENT INCOME FUND
BY MARIE SCHOFIELD
PORTFOLIO MANAGER
[PHOTO OMITTED]
[BEGIN SIDEBAR]
MARIE SCHOFIELD BECAME MANAGER OF THE GALAXY INTERMEDIATE GOVERNMENT INCOME FUND
IN DECEMBER OF 1996. SHE HAS MANAGED FIXED-INCOME INVESTMENTS SINCE 1975.
[END SIDEBAR]
In the six months ended April 30, 2000, the Galaxy Intermediate Government
Income Fund benefited from an increased emphasis on investments with higher
credit quality. Of further contribution were adjustments in the Fund's maturity
structure that helped make the most of fluctuations in yields.
For the six-month reporting period ended April 30, 2000, the Fund's Trust
Shares had a total return of 2.06%. Over the same time, the Fund's Retail A
Shares had a total return of 1.94% before deducting the maximum 3.75% front-end
sales charge. Retail B Shares of the Fund had a total return of 1.57% before
deducting the maximum 5.00% contingent deferred sales charge. (Please see the
chart on page 3 for total returns after deducting the front-end charge and the
chart on page 4 for total returns after deducting the contingent deferred sales
charge.). Those returns compare with a total return of 1.10% for the average
intermediate government bond fund tracked by Lipper, and a total return of 1.07%
for the Lehman Brothers Intermediate Government/Corporate Bond Index. As of
April 30, 2000, the Fund's Trust Shares had a 30-day SEC annualized yield of
6.07%. On the same date Retail A Shares of the Fund had a 30-day SEC annualized
yield of 5.57% and Retail B Shares of the Fund had a 30-day SEC annualized yield
of 5.01%.
ADJUSTING MATURITIES FOR CHANGING YIELDS
When the reporting period began in the final months of 1999, investments in
the Fund's portfolio were about one-half of a year longer, on average, than
those in the Fund's market benchmark. By using a "barbelled" maturity structure,
which overweights both long and short maturities, we were able to add income,
while keeping the value of Fund shares relatively stable, as yields rose. The
Fund also benefited at this time from a reduction in corporate bonds and an
increased allocation to Treasuries and asset-backed securities. Long-term
Treasuries were added early in the quarter, which extended portfolio duration to
three-quarters of a year longer than the Fund's benchmark.
As the quarter progressed and yields began their dramatic decline, we took
profits in some of the longer-term issues. The peak rates coincided with the
initiation of Treasury buybacks in January. Intermediate-term and especially
long-term yields fell as investor demand surged. Conversely, short-term yields
rose with the Fed Funds rate. The Fed raised that target overnight rate twice in
the quarter. The result of these influences was an inversion
6
<PAGE>
PORTFOLIO REVIEWS
in the yield curve, with short rates rising above longer rates. Sales of longer
term issues in February and March shortened the Fund's duration positioning,
and assets were moved into short-term issues which boosted yield. By the end of
the reporting period, the Fund's portfolio duration was modestly longer than
that of its benchmark and the Fund's portfolio structure was less barbelled.
Because lower yields may increase the risk of home-loan prepayments, we
reduced investments in mortgage-backed securities in the final months of the
period and gave greater attention to lower-coupon securities that have less
prepayment risk. This left the Fund's weighting in mortgage-backed securities
about the same as it was when the reporting period began. Mortgage-backed
securities continued to be an attractive alternative to the overall corporate
market where credit quality trends are under pressure and higher default rates
are evident. However, risk premiums are already near recession levels and
selected high quality corporates offer good value.
STAYING DEFENSIVE
Inflationary pressures continue to build as evidenced by the recent spike
in the core Consumer Price Index. Furthermore, labor market tightness continues
to concern the Fed. With the prospect of additional rate hikes in months to
come, we expect to maintain a defensive allocation and investment strategy. The
Fund's duration positioning will be kept near that of its benchmark until we see
more concrete signs of a slowdown. At that time, we expect to reduce the Fund's
allocation to short-term issues and possibly mortgage-backed securities and move
into intermediate maturities, with increased exposure to agencies and
corporates. As a result, duration would be extended, allowing the Fund to lock
in attractive yields as rates decline.
GALAXY INTERMEDIATE GOVERNMENT INCOME FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF APRIL 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS 41%
CORPORATE NOTES AND BONDS 13%
ASSET-BACKED SECURITIES 11%
MORTGAGE-BACKED SECURITIES 33%
REPURCHASE AGREEMENT & NET
OTHER ASSETS AND LIABILITIES 2%
GALAXY INTERMEDIATE GOVERNMENT INCOME FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
LEHMAN BROTHERS LEHMAN BROTHERS GALAXY INTERMEDIATE GALAXY INTERMEDIATE GALAXY INTERMEDIATE
AGGREGATE INTERMEDIATE GOVERNMENT/ GOVERNMENT INCOME FUND GOVERNMENT INCOME FUND GOVERNMENT INCOME FUND
BOND INDEX CORPORATE BOND INDEX FUND-RETAIL A SHARES FUND-TRUST SHARES RETAIL B SHARES
<S> <C> <C> <C> <C> <C>
9/1/88 10000 10000 9625 10000
1988 10200 10312 10390 10390
1989 11190 11399 11451 11451
1990 11896 12240 11687 11687
1991 13777 13933 13482 13482
1992 15132 15326 14958 14958
1993 16928 16850 16014 16014
1994 16307 16524 15307 15310
1995 18859 18596 17274 17329
1996 19961 19866 17221 18022
1997 21736 21582 18483 19376
1998 23766 23548 19721 20732 10000
1999 23892 23781 20046 21038 9353
4/30/2000 24231 24035 20434 21471 9605
</TABLE>
* SINCE INCEPTION ON 9/1/88 FOR TRUST AND RETAIL A SHARES . SINCE
INCEPTION ON 11/1/98 FOR RETAIL B SHARES. PERFORMANCE FIGURES FOR
RETAIL A SHARES INCLUDE THE EFFECT OF THE MAXIMUM 3.75% FRONT-END SALES
CHARGE. PERFORMANCE FIGURES FOR RETAIL B SHARES REFLECT THE DEDUCTION
OF THE 4.00% CONTINGENT DEFERRED SALES CHARGE (APPLICABLE TO SHARES
REDEEMED DURING THE SECOND YEAR AFTER PURCHASE) AS IF SHARES WERE
REDEEMED ON APRIL 30, 2000. THE LEHMAN BROTHERS AGGREGATE BOND INDEX
AND THE LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX
ARE UNMANAGED INDICES IN WHICH INVESTORS CANNOT INVEST. RESULTS FOR THE
INDICES DO NOT REFLECT INVESTMENT MANAGEMENT FEES AND OTHER EXPENSES
INCURRED BY THE FUND.
7
<PAGE>
PORTFOLIO REVIEWS
GALAXY CORPORATE BOND FUND
BY DAVID LINDSAY
PORTFOLIO MANAGER
[PHOTO OMITTED]
[BEGIN SIDEBAR]
DAVID LINDSAY HAS MANAGED THE GALAXY CORPORATE BOND FUND SINCE ITS INCEPTION IN
DECEMBER OF 1994. HE HAS MANAGED OTHER FIXED-INCOME PORTFOLIOS FOR FLEET
INVESTMENT ADVISORS INC. SINCE 1986.
[END SIDEBAR]
With a greater increase in interest rates than investors had expected, the
market grew concerned over the past six months about the prospect of a slowdown
in economic growth and its impact on corporate earnings. This, plus the
advantage that Treasury bonds enjoyed from a federal budget surplus that reduced
the issuance of government debt, caused corporate bonds to underperform. In this
environment, corporate securities with higher credit quality tended to hold up
better in the face of rising interest rates than lower-quality corporates did.
By emphasizing higher-quality issues in the Galaxy Corporate Bond Fund, and
taking advantage of new investment opportunities that arose, we enabled the Fund
to perform relatively well for the six months ended April 30, 2000.
During the six-month reporting period ended April 30, 2000, Trust Shares of
the Galaxy Corporate Bond Fund earned a total return of 0.92%. That compares to
total returns of 0.90% for the average intermediate investment-grade bond fund
tracked by Lipper and 1.07% for the Lehman Brothers Intermediate
Government/Corporate Bond Index. At the end of the period, the Fund's Trust
Shares had a 30-day SEC annualized yield of 6.40%.
HIGHER-QUALITY ISSUES OUTPERFORM
Corporate bonds performed well against Treasuries at the start of the
reporting period, when economic growth was stronger than investors had expected.
The brighter economic outlook was particularly beneficial to corporate
securities with lower credit quality, which generally outperformed
higher-quality issues for a month or two.
Although higher-quality securities comprised the bulk of the Fund's
corporate investments during this early period, a substantial position in Yankee
bonds, which outperformed, helped returns. (Yankee bonds are dollar-denominated
obligations issued in the U.S. by foreign entities.) Because we continued to
believe that higher interest rates would eventually cause growth to slow, we
traded corporate securities for Treasury bonds, issues of U.S. government
agencies, and additional Yankee bonds at this time.
These trades, and the Fund's continued emphasis on higher-quality issues
within the corporate sector, served shareholders well after the end of 1999 into
the first months of 2000, when higher-quality bonds began to outperform. The
better returns from these investments helped to offset the weakness of shorter-
and intermediate-term bonds relative to longer-term issues. Further into the
year, as the prices of corporate bonds became increasingly attractive, we traded
some of the Fund's Treasury holdings for bonds of industrial and
telecommunications firms, whose earnings we believed would be less sensitive to
a further rise in interest rates. Because mortgage-backed securities had become
relatively expensive, we did not replace those that had paid down.
HIGHER-RATED ISSUES COULD CONTINUE TO OUTPERFORM
Although the Fed may raise interest rates further in coming months, we do
not expect higher short-term rates to seriously erode the prices of Treasuries
and high-quality corporate bonds of intermediate- and longer-term maturity. The
bond market appears to have compensated for future rate hikes in today's prices.
The prices of lower-quality corporates could suffer further, however, as
investors worry about the effect of higher rates on the profits of companies
that are less financially stable. While the prices for lower-quality corporates
have declined substantially, we plan to remain focused on better-rated issues.
8
<PAGE>
PORTFOLIO REVIEWS
GALAXY CORPORATE BOND FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF APRIL 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS 23%
CORPORATE NOTES AND BONDS 68%
ASSET-BACKED SECURITIES 6%
FOREIGN BOND, REPURCHASE
AGREEMENT & NET OTHER ASSETS
AND LIABILITIES 3%
GALAXY CORPORATE BOND FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
LEHMAN BROTHERS INTERMEDIATE GALAXY
GOVERNMENT/CORPORATE CORPORATE BOND
BOND INDEX FUND-TRUST SHARES
12/12/94 10000 10000
1995 10967 11385
1996 11658 11954
1997 12665 12858
1998 15113 14011
1999 15263 13896
4/30/2000 15426 14024
* SINCE INCEPTION ON 12/12/94. THE LEHMAN BROTHERS INTERMEDIATE
GOVERNMENT/CORPORATE BOND INDEX IS AN UNMANAGED INDEX IN WHICH
INVESTORS CANNOT INVEST. RESULTS FOR THE INDEX DO NOT REFLECT
INVESTMENT MANAGEMENT FEES AND OTHER EXPENSES INCURRED BY THE FUND.
GALAXY HIGH QUALITY BOND FUND
[PHOTO OMITTED]
[BEGIN SIDEBAR]
MARIE SCHOFIELD HAS MANAGED THE GALAXY HIGH QUALITY BOND FUND SINCE MARCH OF
1996. SHE HAS MANAGED FIXED-INCOME INVESTMENTS SINCE 1975.
[END SIDEBAR]
BY MARIE SCHOFIELD
PORTFOLIO MANAGER
As economic uncertainty and shrinking supplies of Treasury bonds helped
Treasuries and other issues of higher credit quality outperform, the Galaxy High
Quality Bond Fund benefited from a high relative weighting in government
securities and an emphasis on better-quality issues within the corporate sector.
A shift in the Fund's maturity structure further enhanced returns.
For the six months ended April 30, 2000, the Fund's Trust Shares earned a
total return of 1.96%. Over the same time, its Retail A Shares had a total
return of 1.88% before deducting the maximum 3.75% front-end sales charge, and
its Retail B shares had a total return of 1.56% before deducting the maximum
5.00% contingent deferred sales charge. Prime A Shares of the Fund had a total
return of 1.88% before deducting the maximum 4.75% front-end sales charge and
Prime B Shares of the Fund had a total return of 1.62% before deducting the
maximum 5.00% contingent deferred sales charge. (Please see the charts on page 3
for total returns after deducting the applicable front-end sales charge and the
charts on page 4 for total returns after deducting the applicable contingent
deferred sales charge.)
Over the same six-month period, the average A-rated corporate bond fund
tracked by Lipper had a total return of 0.73% and the Lehman Brothers
Government/Corporate Bond Index (the "Lehman Index") had a total return of
1.51%.
On April 30, 2000, the Fund's Trust Shares had a 30-day SEC annualized
yield of 6.12%, its Retail A Shares had a 30-day SEC annualized yield of 5.71%
and its Retail B Shares had a 30-day SEC annualized yield of 5.29%. On the same
date, the Fund's Prime A Shares had a 30-day SEC annualized yield of 5.83% and
its Prime B Shares had a 30-day SEC annualized yield of 5.22%.
9
<PAGE>
PORTFOLIO REVIEWS
ENHANCING PORTFOLIO QUALITY
Through year-end 1999, economic growth continued at a rapid pace despite
three tightening actions by the Fed. Corporate bonds performed well during this
time due to increased demand by investors and diminished supply due to Y2K
concerns. Interest rates rose, however, which increased the chance that growth
and corporate earnings would slow. We lightened corporate positions to an
underweighting as compared to the Lehman Index, in favor of asset-backed
securities and issues of government mortgage-backed securities. These trades
served the Fund well, as corporate bonds underperformed in the first months of
2000.
During the first quarter of 2000, the U.S. Treasury yield curve inverted
for the first time in nearly ten years. While the Fed raised the Fed Funds rates
twice in the period January through April and short-term rates rose over 40
basis points, long-term rates declined well over 50 basis points. Treasury
buybacks sparked the appetite for U.S. Treasury securities, as investors
realized that the supply of long-term, risk-free government issues was set to
decline dramatically over the next few years. This coincided with the peak in
short-term and long-term yields at around 6.75% in mid-January. As the year
began, we extended the average duration of the Fund's investments, purchasing
Treasury issues with maturities of 20 to 25 years that were yielding close to
7%. This added to our barbell maturity structure, with a concentration in short
maturities under two years and longer high-quality maturities, bringing the
Fund's duration positioning close to one year longer than that of the Lehman
Index.
As the scramble for long-term Treasuries gained momentum and yields fell
dramatically from their peak, we began to shorten our maturity structure and
take profits in longer-term issues. With overall inflation spiking to 3.7% in
March and expectations that core inflation would be under some pressure in the
coming months, real yields looked much less attractive at just over 2%, with
long-term Treasuries at 5.8%. Much of the Fund's long duration positioning was
removed during the last three months of the reporting period. Proceeds from the
sale of longer maturities were moved into short-term maturities and cash, which
resulted in a yield pick-up of nearly 50 basis points due to the yield curve
inversion. This inversion is expected to persist, due to continued Fed
tightening action to push up overnight rates and supply/demand imbalances
weighing on the long end of the yield curve. The Fund ended the period just
slightly long of the Lehman Index. We plan to remain close to neutral until we
see greater evidence that higher rates are having their desired effect of
slowing economic growth.
ADDING TO GOVERNMENT AGENCIES AND CORPORATE ISSUES
We plan to keep the Fund overweighted in government issues as a whole in
the coming months, albeit at a lower level than in the recent period. The
allocation to Treasuries is expected to fall as we plan to add to selected
corporate and government agency issues with intermediate maturities. The Fund is
currently underweight in both corporates and agencies, and with risk premiums
near recession levels, we feel it is an attractive time to add to these sectors.
If economic growth slows in an orderly fashion, we feel corporates will warrant
increased exposure and could possibly outperform. If the slowdown evolves more
quickly than expected, risk premiums could widen somewhat, but corporates have
the potential to make much of this up through their higher yields. In either
scenario, we would shift to more of a bulleted structure and probably lengthen
the Fund's duration positioning in the expectation of a steeper yield curve and
falling interest rates. Our forecast remains for a soft landing sometime in the
second half of the year depending on the resilience of both the economy and the
equity market.
10
<PAGE>
PORTFOLIO REVIEWS
GALAXY HIGH QUALITY BOND FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF APRIL 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS 38%
CORPORATE NOTES AND BONDS 31%
ASSET-BACKED SECURITIES 7%
MORTGAGE-BACKED SECURITIES 17%
FOREIGN BOND, REPURCHASE
AGREEMENT & NET OTHER ASSETS
AND LIABILITIES 7%
GALAXY HIGH QUALITY BOND FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
LEHMAN BROTHERS LEHMAN BROTHERS GALAXY GALAXY GALAXY
INTERMEDIATE GOVERNMENT/ GOVERNMENT/CORPORATE HIGH QUALIITY BOND HIGH QUALIITY BOND HIGH QUALIITY BOND
CORPORATE BOND INDEX BOND INDEX FUND-RETAIL A SHARES FUND-TRUST SHARES FUND-RETAIL B SHARES
<S> <C> <C> <C> <C> <C>
12/14/90 10000 10000 9625 10000
1991 11155 13517 10590 11003
1992 12329 14939 11684 12139
1993 14009 16975 13573 14037
1994 13359 16188 12490 12859
1995 16856 18803 14797 15259 10000
1996 17355 19817 15424 15939 10114
1997 18786 21563 16691 17271 10881
1998 20930 23779 18247 19084 11940
1999 20028 23623 17762 18602 11362
4/30/2000 18948 23980 18095 18968 11638
</TABLE>
<TABLE>
GALAXY GALAXY
HIGH QUALIITY BOND HIGH QUALIITY BOND
FUND-PRIME A SHARES FUND-PRIME B SHARES
<S> <C> <C>
1998 9525 10000
1999 9269 9197
4/30/2000 9443 9448
</TABLE>
* Since inception on 12/14/90 for Trust and Retail A Shares. Since
inception on 3/4/96 for Retail B Shares. Since inception on 11/1/98 for
Prime A and Prime B Shares. Performance figures for Retail A Shares
include the effect of the maximum 3.75% front-end sales charge.
Performance figures for Prime A Shares include the effect of the
maximum 4.75% front-end sales charge. Performance figures for Retail B
and Prime B Shares reflect the deduction of the 2.00% and 4.00%,
respectively, contingent deferred sales charges (applicable to shares
redeemed during the fifth and second years after purchase,
respectively), as if shares were redeemed on April 30, 2000. The Lehman
Brothers Intermediate Government/Corporate Bond Index and the Lehman
Brothers Government/Corporate Bond Index are unmanaged indices in which
investors cannot invest. Results for the indices do not reflect
investment management fees and other expenses incurred by the Fund.
11
<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 at no cost (as long as you exchange within
the same share class).
CONSOLIDATED STATEMENTS
Timely, comprehensive mutual fund account statements offer detailed information
on your individual account. If you have a FleetOne Gold or a Fleet Private
Banking Account, your Galaxy Fund information can be added to these statements.
24-HOUR ACCESS TO REGISTERED REPRESENTATIVES
24 hours a day, seven days a week, 365 days a year, we are ready and available
to help. Our toll-free telephone lines offer round-the-clock access to Fund
information and services. Call toll-free 1-877-BUY-GALAXY (1-877-289-4252) for
information on initial purchases and current performance.
--------------------------------------------------------------------------------
CERTAIN SHAREHOLDER SERVICES MAY NOT BE AVAILABLE TO TRUST, PRIME A AND PRIME B
SHARE INVESTORS. PLEASE CONSULT YOUR FUND PROSPECTUS.
SHARES OF THE FUNDS ARE DISTRIBUTED THROUGH PROVIDENT DISTRIBUTORS, MEMBER NASD
AND SIPC. INVESTMENT SPECIALISTS ARE REGISTERED REPRESENTATIVES OF
FISSECURITIES, INC., FLEET ENTERPRISES, INC., OR QUICK & REILLY, INC., MEMBERS
NASD AND SIPC.
12
<PAGE>
SHORT-TERM BOND FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 38.12%
U.S. TREASURY NOTES - 9.43%
$ 2,125,000 6.25%, 10/31/01 ........................... $ 2,112,463
1,000,000 5.88%, 09/30/02 ........................... 982,890
500,000 4.25%, 11/15/03 ........................... 464,330
100,000 5.88%, 02/15/04 ........................... 97,721
730,000 7.25%, 08/15/04 ........................... 747,922
285,000 5.88%, 11/15/04 ........................... 277,542
------------
4,682,868
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 6.67%
1,305,949 6.50%, 09/15/13, Pool # 476201............. 1,254,925
843,779 7.00%, 11/15/13, Pool # 780921............. 827,165
217,608 7.00%, 04/15/29, Pool # 458548............. 209,243
976,373 7.00%, 04/15/29, Pool # 458549............. 938,841
81,908 7.00%, 08/15/29, Pool # 509742............. 78,759
------------
3,308,933
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 6.41%
170,000 6.50%, 08/15/04 ........................... 165,318
1,500,000 7.13%, 02/15/05 ........................... 1,492,590
738,123 6.50%, 03/01/12, Pool # 313409............. 708,827
870,402 6.00%, 01/01/14, Pool # 482523............. 815,454
------------
3,182,189
------------
FEDERAL HOME LOAN BANK - 5.98%
1,000,000 5.63%, 03/19/01 ........................... 992,340
2,000,000 6.23%, 09/19/01 ........................... 1,976,880
------------
2,969,220
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 5.66%
916,399 5.50%, 08/01/00, Pool # M80285............. 908,857
1,200,000 6.25%, 07/15/04 ........................... 1,156,500
74,666 7.00%, 05/01/19, Pool # D29158............. 73,935
692,955 6.50%, 11/15/23, Pool # 002008............. 668,480
------------
2,807,772
------------
FEDERAL FARM CREDIT BANK - 3.97%
2,000,000 6.10%, 09/24/01, MTN....................... 1,973,440
------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS ........................ 18,924,422
------------
(Cost $19,442,756)
CORPORATE NOTES AND BONDS - 38.00%
FINANCE - 15.77%
1,000,000 Donaldson Lufkin & Jenrette, Inc., MTN
5.63%, 02/15/16 ......................... 987,500
PAR VALUE VALUE
----------- ------------
FINANCE (CONTINUED)
$ 1,600,000 General Electric Capital Corp.,
Series A, MTN
6.33%, 09/17/01 ......................... $ 1,582,000
255,000 General Electric Capital Corp., MTN
6.81%, 11/03/03 ......................... 251,812
515,000 General Electric Capital Corp.,
Series A, MTN
7.25%, 05/03/04 ......................... 513,069
2,000,000 IBM Credit Corp., MTN
7.00%, 01/28/02 ......................... 1,990,000
1,000,000 National Rural Utilities Cooperative
Finance Corp.
7.38%, 02/10/03 ......................... 1,001,250
1,500,000 Wells Fargo & Co.
6.35%, 09/15/01 (B)........................ 1,502,175
------------
7,827,806
------------
AUTOMOBILE FINANCE - 10.85%
1,000,000 Associates Corp. of North America
Senior Note
5.50%, 02/15/02 ......................... 966,250
1,200,000 Ford Motor Credit Co.
5.75%, 01/25/01 ......................... 1,188,000
250,000 Ford Motor Credit Co.
7.50%, 03/15/05 ......................... 246,875
500,000 Ford Motor Credit Co.
7.25%, 01/15/03 ......................... 495,625
500,000 General Motors Acceptance Corp.
5.63%, 02/15/01 ......................... 494,375
2,000,000 General Motors Acceptance Corp.
7.13%, 05/01/01 ......................... 1,997,500
------------
5,388,625
------------
INDUSTRIAL - 7.59%
2,000,000 Caterpillar Financial Services Corp.,
Series F, MTN
5.47%, 09/12/01 ......................... 1,950,000
1,820,000 Norfolk Southern Corp.
6.70%, 05/01/00 ......................... 1,820,000
------------
3,770,000
------------
UTILITIES - 1.90%
1,000,000 Sprint Capital Corp.
5.88%, 05/01/04 ......................... 941,250
------------
CONSUMER STAPLES - 1.89%
1,000,000 Pepsi Bottling Holdings, Inc.
5.38%, 02/17/04 (A)........................ 936,250
------------
TOTAL CORPORATE NOTES AND BONDS ........... 18,863,931
------------
(Cost $19,199,306)
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
SHORT-TERM BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES - 20.39%
$ 4,000,000 Chemical Master Credit Card Trust I
Series 1995-2, Class A
6.23%, 06/15/03 ......................... $ 3,987,480
1,500,000 Discover Card Master Trust I
Series 1999-1, Class A
5.30%, 08/15/04 ......................... 1,449,375
1,000,000 MBNA Master Credit Card Trust II
Series 1995-F, Class A
6.60%, 01/15/03 ......................... 1,000,620
1,174,681 Norwest Asset Securities Corp.
Series 1997-17, Class A1, CMO
6.75%, 11/25/27 ......................... 1,167,339
671,521 Prudential Home Mortgage Securities
Series 1993-38, Class A-3, CMO
6.15%, 09/25/23 ......................... 652,215
881,501 Prudential Home Mortgage Securities
Series 1996-7, Class A-1, CMO
6.75%, 06/25/11 ......................... 873,506
1,001,012 Ryland Mortgage Securities Corp.
Series 1993-3, Class A, CMO
6.71%, 08/25/08 ......................... 993,814
------------
TOTAL ASSET-BACKED AND
MORTGAGE-BACKED SECURITIES ................ 10,124,349
------------
(Cost $10,201,712)
PAR VALUE VALUE
----------- ------------
REPURCHASE AGREEMENT - 2.45%
$ 1,217,000 Repurchase Agreement with:
State Street Bank
5.71%, 05/01/00, dated 04/28/00
Repurchase Price $1,217,579
(Collateralized by U.S. Treasury Note
5.88%, Due 11/30/01;
Total Par $1,225,000
Market Value $1,243,015)................... $ 1,217,000
------------
TOTAL REPURCHASE AGREEMENT ................ 1,217,000
------------
(Cost $1,217,000)
TOTAL INVESTMENTS - 98.96%................................... 49,129,702
------------
(Cost $50,060,774)
NET OTHER ASSETS AND LIABILITIES - 1.04%..................... 514,434
------------
NET ASSETS - 100.00%......................................... $ 49,644,136
============
-----------------------------------------------------
(A) Security exempt from registration under Rule 144A of the Securities
Act of 1933. This security may only be resold, in a transaction
exempt from registration, to qualified institutional buyers. At April
30, 2000, this security amounted to $936,250 or 1.89% of net assets.
(B) Floating rate note. Interest rate shown reflects rate in effect at
April 30, 2000.
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
INTERMEDIATE GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 41.37%
U.S. TREASURY BONDS - 14.80%
$ 500,000 11.13%, 08/15/03 .......................... $ 565,220
1,200,000 11.88%, 11/15/03 .......................... 1,394,748
2,350,000 12.00%, 08/15/13 .......................... 3,146,297
1,500,000 11.25%, 02/15/15 .......................... 2,198,010
960,000 8.75%, 05/15/17 ........................... 1,201,200
6,735,000 8.88%, 08/15/17 ........................... 8,536,478
3,000,000 8.50%, 02/15/20 ........................... 3,744,150
3,000,000 8.75%, 05/15/20 ........................... 3,833,940
1,500,000 8.75%, 08/15/20 ........................... 1,921,470
3,500,000 7.88%, 02/15/21 ........................... 4,147,185
3,750,000 8.13%, 08/15/21 ........................... 4,560,825
4,000,000 6.88%, 08/15/25 ........................... 4,336,600
1,500,000 6.38%, 08/15/27 ........................... 1,534,155
1,500,000 5.25%, 11/15/28 ........................... 1,317,585
------------
42,437,863
------------
U.S. GOVERNMENT-BACKED BONDS - 10.22%
6,450,000 A.I.D. Israel, Series 8-B
6.05%, 08/15/00 ......................... 6,441,679
5,000,000 A.I.D. Israel, Series 8-B
6.38%, 08/15/01 ......................... 4,979,250
5,000,000 A.I.D. Israel, Series 8-C
6.63%, 08/15/03 ......................... 4,946,850
4,830,000 A.I.D. Israel, Series 2-D
5.63%, 09/15/03 ......................... 4,637,814
6,200,000 Private Export Funding Corp., Series B
6.49%, 07/15/07 ......................... 5,952,000
2,452,194 Small Business Administration
Participation Certificates
Series SBIC-PS 1955-10B
7.25%, 05/10/05 ......................... 2,354,106
------------
29,311,699
------------
U.S. Treasury Notes - 9.15%
2,200,000 6.38%, 03/31/01 ........................... 2,198,196
4,500,000 6.63%, 06/30/01 ........................... 4,507,155
1,840,000 6.50%, 05/31/02 ........................... 1,834,222
1,500,000 6.00%, 08/15/04 ........................... 1,469,925
3,000,000 7.50%, 02/15/05 ........................... 3,112,650
2,000,000 6.50%, 05/15/05 ........................... 1,998,220
3,500,000 5.88%, 11/15/05 ........................... 3,394,755
3,720,000 7.00%, 07/15/06 ........................... 3,809,429
3,000,000 6.50%, 10/15/06 ........................... 2,998,290
960,000 5.63%, 05/15/08 ........................... 913,200
------------
26,236,042
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 4.15%
5,000,000 6.25%, 07/15/04 ........................... 4,818,750
7,410,000 6.63%, 09/15/09 ........................... 7,067,287
------------
11,886,037
------------
PAR VALUE VALUE
----------- ------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.28%
$ 4,885,000 5.25%, 01/15/09 ........................... $ 4,237,249
565,000 6.38%, 06/15/09 ........................... 529,823
1,795,000 7.13%, 01/15/30 ........................... 1,777,337
------------
6,544,409
------------
U.S. TREASURY STRIPS (A) - 0.77%
1,400,000 7.03%, 08/15/15 Interest only, (B)......... 537,446
5,000,000 1.78%, 11/15/17 Interest only, (B)......... 1,681,750
------------
2,219,196
------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS ........................ 118,635,246
------------
(Cost $121,332,445)
MORTGAGE-BACKED SECURITIES - 32.72%
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 14.80%
5,000,550 6.50%, 07/15/09, Pool # 780357............. 4,849,083
19,962 6.50%, 06/15/13, Pool # 462795............. 19,194
401,836 6.50%, 07/15/13, Pool # 468077............. 386,389
938,160 6.50%, 09/15/13, Pool # 464192............. 901,506
316,064 6.50%, 09/15/13, Pool # 476619............. 303,716
445,971 6.50%, 09/15/13, Pool # 487907............. 428,547
461,360 7.00%, 09/15/13, Pool # 484233............. 452,276
1,828,831 6.50%, 10/15/13, Pool # 477500............. 1,757,379
446,407 6.50%, 10/15/13, Pool # 481575............. 428,966
83,386 5.50%, 12/15/13, Pool # 495780............. 76,411
398,188 5.50%, 01/15/14, Pool # 464491............. 364,880
472,430 5.50%, 02/15/14, Pool # 464568............. 432,912
465,354 5.50%, 03/15/14, Pool # 487579............. 426,427
350,445 5.50%, 03/15/14, Pool # 501523............. 321,130
64,918 5.50%, 04/15/14, Pool # 496599............. 59,488
512,089 5.50%, 04/15/14, Pool # 505596............. 469,253
449,294 5.50%, 04/15/14, Pool # 506448............. 411,710
614,425 5.50%, 05/15/14, Pool # 480524............. 563,028
480,661 5.50%, 05/15/14, Pool # 505667............. 440,453
535,585 5.50%, 06/15/14, Pool # 434398............. 490,783
439,014 5.50%, 06/15/14, Pool # 507142............. 402,290
1,040,000 6.50%, 05/01/15, Pool # 4596............... 998,889
669,689 6.75%, 07/20/21, Pool # 008809 (D)......... 676,493
2,397,702 6.38%, 04/20/22, Pool # 008956 (D)......... 2,417,195
3,861,880 7.00%, 12/15/28, Pool # 483886............. 3,714,627
310,532 7.00%, 01/15/29, Pool # 499333............. 298,595
1,435,028 6.50%, 02/15/29, Pool # 485951............. 1,343,990
3,227,678 7.00%, 02/15/29, Pool # 486937............. 3,103,606
3,350,469 6.00%, 03/15/29, Pool # 464632............. 3,041,590
3,372,746 6.00%, 04/15/29, Pool # 499445............. 3,061,813
989,035 6.50%, 04/15/29, Pool # 506494............. 926,290
5,912,754 7.50%, 09/15/29, Pool # 508805............. 5,814,780
3,102,375 7.50%, 09/15/29, Pool # 508811............. 3,050,968
------------
42,434,657
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 9.22%
5,000,000 6.70%, 07/15/06, Pool # 1233-G............. 4,954,650
6,593,198 5.00%, 12/01/13, Pool # E73815............. 5,927,615
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
INTERMEDIATE GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
FEDERAL HOME LOAN MORTGAGE CORPORATION (CONTINUED)
$ 5,000,000 6.00%, 04/15/22, Pool # 2118QC............. $ 4,626,550
5,977,872 6.50%, 10/15/23, Pool # 001990............. 5,783,591
5,274,021 7.50%, 10/01/29, Pool # C32288............. 5,165,218
------------
26,457,624
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 8.70%
293,383 6.50%, 01/25/01, Pool # 1996-9............. 289,073
2,058,586 5.00%, 05/01/09, Pool # 326584............. 1,885,070
1,558 8.00%, 12/01/09, Pool # 313180............. 1,570
1,400,884 6.00%, 04/01/11, Pool # 398072............. 1,337,705
1,914,541 6.50%, 06/01/13, Pool # 430204............. 1,833,173
517,223 6.00%, 06/01/14, Pool # 484967............. 484,250
3,125,780 6.00%, 06/01/14, Pool # 495200............. 2,928,450
680,491 6.00%, 06/01/14, Pool # 500131............. 637,109
1,745,649 6.75%, 04/25/21, Pool # 0096-4............. 1,733,098
535,172 8.00%, 02/01/30, Pool # 525961............. 534,332
2,198,526 8.00%, 02/01/30, Pool # 529898............. 2,195,074
966,161 8.00%, 02/01/30, Pool # 531766............. 964,644
497,190 8.00%, 03/01/30, Pool # 533977............. 496,409
1,000,200 8.00%, 04/01/30, Pool # 526425............. 998,630
5,092,900 8.50%, 04/01/30, Pool # 535270............. 5,162,927
2,598,483 8.00%, 04/01/30, Pool # 536553............. 2,594,403
887,065 8.00%, 05/01/30, Pool # 534205............. 885,672
------------
24,961,589
------------
TOTAL MORTGAGE-BACKED SECURITIES .......... 93,853,870
------------
(Cost $96,557,294)
CORPORATE NOTES AND BONDS - 13.43%
FINANCE - 7.59%
1,000,000 American Express
6.75%, 06/23/04 ......................... 975,000
7,500,000 Bank One Wisconsin, Bank Note
6.35%, 03/19/01 ......................... 7,443,750
925,000 Ford Motor Credit Co.
7.25%, 01/15/03 ......................... 916,906
2,550,000 Ford Motor Credit Co.
6.70%, 07/16/04 ......................... 2,454,375
1,650,000 National Rural Utilities
5.50%, 01/15/05 ......................... 1,515,938
6,000,000 NationsBank Texas,
National Association, MTN
6.35%, 03/15/01 ......................... 5,955,000
2,500,000 Pitney Bowes Credit Corp. Series C, MTN
6.78%, 07/16/01 ......................... 2,490,625
------------
21,751,594
------------
UTILITIES - 2.57%
5,125,000 Baltimore Gas & Electric, First Mortgage
6.50%, 02/15/03 ......................... 5,009,688
2,500,000 Potomac Electric Power Co.,
First Mortgage
6.25%, 10/15/07 ......................... 2,359,375
------------
7,369,063
------------
PAR VALUE VALUE
----------- ------------
CONSUMER CYCLICAL - 1.64%
$ 2,500,000 Stanford University
5.85%, 03/15/09 ......................... $ 2,300,375
2,500,000 Wal-Mart Stores, Inc.
6.88%, 08/10/09 ......................... 2,409,375
------------
4,709,750
------------
CONSUMER STAPLES - 1.63%
5,000,000 Pepsi Bottling Holdings, Inc.
5.38%, 02/17/04 (C)........................ 4,681,250
------------
TOTAL CORPORATE NOTES AND BONDS ........... 38,511,657
------------
(Cost $39,429,162)
ASSET-BACKED SECURITIES - 10.94%
2,000,000 American Express Credit Account Master
Trust Series 1999-1, Class A
5.60%, 11/15/06 ......................... 1,878,120
3,000,000 Chase Credit Card Master Trust
Series 1998-6, Class A
6.39%, 09/15/04 (D)........................ 3,004,680
6,000,000 Chemical Master Credit Card Trust I
Series 1996-1, Class A
5.55%, 09/15/03 ......................... 5,940,000
1,400,000 Daimler-Benz Vehicle Owner Trust
Series 1998-A, Class A-4
5.22%, 12/20/03 ......................... 1,360,079
2,500,000 Discover Card Master Trust I
Series 1995-3, Class A
6.34%, 03/16/05 (D)........................ 2,506,250
4,600,000 Ford Credit Auto Owner Trust
Series 1999-D, Class A-4
6.40%, 10/15/02 ......................... 4,542,500
500,000 MBNA Master Credit Card Trust
Series 1998-J, Class A
5.25%, 02/15/06 ......................... 468,590
360,000 Premier Auto Trust
Series 1999-2, Class A-4
5.59%, 02/09/04 ......................... 346,835
1,400,000 Premier Auto Trust
Series 1999-3, Class A-4
6.43%, 03/08/04 ......................... 1,370,250
1,469,169 Prudential Home Mortgage Securities
Series 1996-7, Class A-1, CMO
6.75%, 06/25/11 ......................... 1,455,843
2,854,528 Rural Housing Trust Series 1987-1,
Class 1-D, CMO
6.33%, 04/01/26 ......................... 2,742,131
1,917,722 Sallie Mae Student Loan Trust
Series 1999-3, Class A-1
6.12%, 01/25/07 (D)........................ 1,918,614
4,000,000 Standard Credit Card Master Trust
Series 1993-2, Class A
5.95%, 10/07/04 ......................... 3,832,480
------------
TOTAL ASSET-BACKED SECURITIES ............. 31,366,372
------------
(Cost $31,722,109)
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
INTERMEDIATE GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
REPURCHASE AGREEMENT - 1.31%
$ 3,770,000 Repurchase Agreement with:
State Street Bank
5.71%, 05/01/00, dated 04/28/00
Repurchase Price $3,771,794
(Collateralized by U.S. Treasury Bond
6.00%, Due 02/15/26;
Total Par $3,930,000
Market Value $3,846,488)................... $ 3,770,000
------------
TOTAL REPURCHASE AGREEMENT ................ 3,770,000
------------
(Cost $3,770,000)
TOTAL INVESTMENTS - 99.77%................................... 286,137,145
------------
(Cost $292,811,010)
NET OTHER ASSETS AND LIABILITIES - 0.23%..................... 647,428
------------
NET ASSETS - 100.00%......................................... $286,784,573
============
-------------------------------------------------
(A) Discount yield at time of purchase.
(B) Stripped securities represent the splitting of cash flows into
interest and principal. Holders, as indicated, are entitled to that
portion of the payment representing interest only or principal only.
(C) Security exempt from registration under Rule 144A of the Securities
Act of 1933. This security may only be resold, in a transaction
exempt from registration, to qualified institutional buyers. At April
30, 2000, this security amounted to $4,681,250 or 1.63% of net
assets.
(D) Floating rate note. Interest rate shown reflects rate in effect at
April 30, 2000.
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
CORPORATE NOTES AND BONDS - 67.97%
FINANCE - 22.67%
$ 500,000 Associates Corp. of North America,
Senior Note
6.00%, 04/15/03 ......................... $ 478,750
500,000 Associates Corp. of North America,
Senior Note
6.88%, 08/01/03 ......................... 489,375
1,000,000 Bank One Wisconsin, Bank Note
6.35%, 03/19/01 ......................... 992,500
175,000 Barclays Bank Plc, Yankee
7.40%, 12/15/09 (C)........................ 168,219
2,000,000 Branch Banking & Trust Co.,
Senior Bank Note
5.70%, 02/01/01 ......................... 1,980,000
500,000 CIT Group, Inc
7.38%, 03/15/03 ......................... 496,250
1,000,000 Commercial Credit Co.
6.20%, 11/15/01 ......................... 983,750
720,000 Commercial Credit Co.
6.45%, 07/01/02 ......................... 705,600
250,000 CitiGroup, Inc.
6.63%, 09/15/05 ......................... 239,375
1,000,000 CitiGroup, Inc.
6.88%, 06/01/25 ......................... 963,750
500,000 Dean Witter Discover & Co.
6.75%, 08/15/00 ......................... 499,895
1,000,000 Ford Motor Credit Co.,
Senior Unsubordinated Note
6.50%, 02/28/02 ......................... 981,250
180,000 Ford Motor Credit Co.
7.25%, 01/15/03 ......................... 178,425
250,000 Ford Motor Credit Co.
6.70%, 07/16/04 ......................... 240,625
200,000 General Motors Acceptance Corp.
9.63%, 12/15/01 ......................... 206,750
760,000 General Motors Acceptance Corp.,
Senior Unsubordinated Note
6.75%, 02/07/02 ......................... 749,550
265,000 Goldman Sachs Group, Series B,
Senior Unsubordinated, MTN
7.80%, 01/28/10 ......................... 260,694
1,000,000 Hartford Financial Services Group
6.38%, 11/01/02 ......................... 972,500
1,000,000 IBM Credit Corp., MTN
7.00%, 01/28/02 ......................... 995,000
500,000 National City Bank of Kentucky,
Subordinated Bank Note
6.30%, 02/15/11 ......................... 442,500
1,000,000 National Rural Utilities Cooperative
Finance Corp.
7.38%, 02/10/03 ......................... 1,001,250
500,000 National Rural Utilities Cooperative
Finance Corp., Collateral Trust
6.13%, 05/15/05 ......................... 470,625
450,000 Norwest Financial, Inc., Senior Note
6.13%, 08/01/03 ......................... 431,438
PAR VALUE VALUE
----------- ------------
FINANCE (CONTINUED)
$ 2,400,000 Paccar Financial Corp., Series H,
Senior MTN
5.86%, 03/15/01 ......................... $ 2,373,000
1,020,000 Pitney Bowes Credit Corp.
6.63%, 06/01/02 ......................... 1,009,800
500,000 SunTrust Bank, Atlanta,
Subordinated Note
7.25%, 09/15/06 ......................... 487,500
500,000 Wells Fargo & Co.
6.50%, 09/03/02 ......................... 490,000
-----------
19,288,371
-----------
UTILITIES - 11.62%
500,000 AT&T Corp.
5.63%, 03/15/04 ......................... 469,375
750,000 AT&T Corp.
6.50%, 03/15/29 ......................... 635,625
1,000,000 Baltimore Gas & Electric Co., Mortgage
8.38%, 08/15/01 ......................... 1,012,500
455,000 GTE California, Inc., Series B, Debenture
6.75%, 03/15/04 ......................... 444,194
350,000 GTE Corp., Debenture
9.38%, 12/01/00 ......................... 353,500
925,000 GTE Corp., Debenture
6.46%, 04/15/08 ......................... 856,781
1,000,000 GTE Southwest, Inc., Debenture
6.00%, 01/15/06 ......................... 926,250
1,000,000 Hydro-Quebec, Yankee
8.88%, 03/01/26 (C)........................ 1,121,250
2,000,000 MCI WorldCom, Inc.
6.13%, 04/15/02 ......................... 1,947,500
1,000,000 PacifiCorp, Series H, MTN
6.38%, 05/15/08 ......................... 910,000
1,000,000 Potomac Electric Power Co.,
First Mortgage
6.25%, 10/15/07 ......................... 943,750
305,000 Sprint Capital Corp.
6.90%, 05/01/19 ......................... 271,831
-----------
9,892,556
-----------
CONSUMER STAPLES - 11.60%
150,000 Becton Dickinson & Co., Debenture
8.80%, 03/01/01 ......................... 151,875
1,275,000 Becton Dickinson & Co., Debenture
6.70%, 08/01/28 ......................... 1,117,219
1,000,000 Coca-Cola Enterprises, Inc.
7.88%, 02/01/02 ......................... 1,005,000
1,000,000 Coca-Cola Enterprises, Inc., Debenture
7.13%, 08/01/17 ......................... 931,250
1,000,000 Diageo Capital Plc, Yankee
6.00%, 03/27/03 (C)........................ 962,050
1,000,000 Diageo Capital Plc, Yankee
6.13%, 08/15/05 (C)........................ 937,500
1,100,000 Hershey Foods Corp., Debenture
7.20%, 08/15/27 ......................... 1,047,750
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
CONSUMER STAPLES (CONTINUED)
$ 750,000 Pepsi Bottling Holdings, Inc.
5.38%, 02/17/04 (A)........................ $ 702,188
1,000,000 PepsiCo, Inc., MTN
5.75%, 01/02/03 ......................... 961,250
250,000 Procter & Gamble Co.
6.60%, 12/15/04 ......................... 243,438
1,000,000 Procter & Gamble Co.
6.88%, 09/15/09 ......................... 966,250
968,000 Sysco Corp., Debenture
6.50%, 08/01/28 ......................... 842,160
------------
9,867,930
------------
CONSUMER CYCLICAL - 8.58%
500,000 DaimlerChrysler N.A. Holding Corp.
7.13%, 04/10/03 ......................... 494,375
1,000,000 McDonald's Corp., MTN
5.95%, 01/15/08 ......................... 917,500
1,000,000 New York Times Co.
7.63%, 03/15/05 ......................... 1,015,000
300,000 Seagram Co., Ltd., Yankee
6.50%, 04/01/03 (C)........................ 288,750
300,000 Southwest Airlines Co.
8.00%, 03/01/05 ......................... 307,875
1,005,000 Tele-Communications, Inc.,
Senior Note
8.25%, 01/15/03 ......................... 1,022,587
750,000 Tele-Communications, Inc.,
Senior Note
7.25%, 08/01/05 ......................... 738,750
1,000,000 Time Warner Entertainment Co.,
Debenture
8.38%, 03/15/23 ......................... 1,016,250
1,000,000 Wal-Mart Stores, Inc.
8.63%, 04/01/01 ......................... 1,011,250
500,000 Wal-Mart Stores, Inc., Senior Note
6.55%, 08/10/04 ......................... 486,250
------------
7,298,587
------------
INDUSTRIAL - 6.50%
1,000,000 Burlington Northern Santa Fe Corp.
6.13%, 03/15/09 ......................... 870,000
500,000 Crown Cork & Seal Co., Inc.
8.38%, 01/15/05 ......................... 498,750
1,000,000 Emerson Electric Co.
5.85%, 03/15/09 ......................... 906,250
1,000,000 Honeywell International, Inc.
7.50%, 03/01/10 ......................... 988,750
1,500,000 Minnesota Mining & Manufacturing Co.,
Debenture
6.38%, 02/15/28 ......................... 1,293,750
1,000,000 Snap-On, Inc.
6.63%, 10/01/05 ......................... 978,750
------------
5,536,250
------------
PAR VALUE VALUE
----------- ------------
BASIC MATERIALS - 3.53%
$ 1,000,000 International Paper Co.
7.63%, 08/01/04 ......................... $ 991,250
1,000,000 Mead Corp., Debenture
6.84%, 03/01/37 ......................... 976,250
1,000,000 Weyerhaeuser Co., Debenture
8.38%, 02/15/07 ......................... 1,036,250
------------
3,003,750
------------
TECHNOLOGY - 2.80%
1,000,000 International Business Machines Corp.,
Debenture
6.22%, 08/01/27 ......................... 958,750
500,000 Loral Corp., Senior Note
7.63%, 06/15/04 ......................... 495,625
1,000,000 Raytheon Co.
6.50%, 07/15/05 ......................... 925,000
------------
2,379,375
------------
ENERGY - 0.67%
500,000 Atlantic Richfield Co., Debenture
10.88%, 07/15/05 ......................... 573,125
------------
TOTAL CORPORATE NOTES AND BONDS ........... 57,839,944
------------
(Cost $60,547,059)
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 23.00%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 5.44%
5,914 8.75%, 08/01/01, Pool # 220011............. 5,903
1,000,000 5.75%, 07/15/03 ........................... 958,130
44,236 7.00%, 06/01/04, Pool # 189683............. 43,506
1,215,000 6.25%, 07/15/04 ........................... 1,170,956
980,000 6.88%, 01/15/05 ........................... 965,643
35,086 7.50%, 08/01/08, Pool # 181313............. 34,740
900,000 6.63%, 09/15/09 ........................... 858,375
140,820 7.00%, 02/01/17, Pool # 289284............. 135,301
134,622 7.00%, 10/01/22, Pool # C00184............. 129,814
139,616 7.00%, 02/01/23, Pool # C00213............. 134,630
215,212 6.00%, 09/01/23, Pool # D41208............. 196,850
------------
4,633,848
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 4.95%
55,188 7.50%, 11/01/07, Pool # 188629............. 54,877
1,075,000 6.38%, 06/15/09 ........................... 1,008,071
74,943 5.00%, 08/01/10, Pool # 006893,
Series A-1, CMO............................ 68,386
875,439 7.50%, 06/01/13, Pool # 457543............. 870,510
1,781,777 6.00%, 11/01/23, Pool # 050940............. 1,628,099
620,454 6.50%, 03/01/28, Pool # 412263............. 580,124
------------
4,210,067
------------
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
U.S. TREASURY BONDS - 4.93%
$ 1,000,000 11.63%, 11/15/02 .......................... $ 1,113,410
1,000,000 12.00%, 08/15/13 .......................... 1,338,850
660,000 8.75%, 05/15/17 ........................... 825,825
600,000 8.88%, 08/15/17 ........................... 760,488
175,000 5.25%, 02/15/29 ........................... 154,063
------------
4,192,636
------------
U.S. TREASURY NOTES - 4.35%
1,760,000 7.25%, 08/15/04 ........................... 1,803,208
2,000,000 5.63%, 05/15/08 ........................... 1,902,500
------------
3,705,708
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 2.85%
47,168 9.00%, 09/15/04, Pool # 003669............. 48,168
37,537 9.00%, 12/15/08, Pool # 027562............. 38,759
88,034 8.00%, 05/15/22, Pool # 319062............. 88,501
484,020 6.00%, 05/20/28, Pool # 002589............. 437,283
474,562 6.00%, 03/15/29, Pool # 487061............. 430,812
664,944 6.50%, 03/15/29, Pool # 464613............. 622,760
770,889 7.50%, 09/15/29, Pool # 466172............. 758,115
------------
2,424,398
------------
FEDERAL HOME LOAN BANK - 0.48%
410,000 6.75%, 02/01/02 ........................... 407,950
------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS ........................ 19,574,607
------------
(Cost $20,283,484)
ASSET-BACKED SECURITIES - 6.16%
500,000 American Express Credit Account Master
Trust Series 1999-1, Class A
5.60%, 11/15/06 ......................... 469,530
2,000,000 Chemical Master Credit Card Trust I
Series 1996-1, Class A
5.55%, 09/15/03 ......................... 1,980,000
400,000 Daimler-Benz Vehicle Owner Trust
Series 1998-A, Class A-4
5.22%, 12/22/03 ......................... 388,594
600,000 Ford Credit Auto Owner Trust
Series 1999-D, Class A-4
6.40%, 10/15/02 ......................... 592,500
893,617 Guaranteed Export Trust Certificates
Series 1993-D, Class A-3
5.23%, 05/15/05 ......................... 845,972
600,000 Premier Auto Trust Series 1999-2,
Class A-4
5.59%, 02/09/04 ......................... 578,058
400,000 Premier Auto Trust Series 1999-3,
Class A-4
6.43%, 03/08/04 ......................... 391,500
------------
TOTAL ASSET-BACKED SECURITIES ............. 5,246,154
------------
(Cost $5,321,123)
PAR VALUE VALUE
----------- ------------
FOREIGN BOND (B) - 1.12%
$ 1,000,000 Heinz (H.J.) Co.
5.75%, 02/03/03 ......................... $ 955,700
------------
TOTAL FOREIGN BOND ........................ 955,700
------------
(Cost $987,560)
REPURCHASE AGREEMENT - 0.84%
714,000 Repurchase Agreement with:
State Street Bank
5.71%, 05/01/00, dated 04/28/00
Repurchase Price $714,340
(Collateralized by U.S. Treasury Bond
8.50%, Due 02/15/20;
Total Par $580,000
Market Value $728,625)..................... 714,000
------------
TOTAL REPURCHASE AGREEMENT ................ 714,000
------------
(Cost $714,000)
TOTAL INVESTMENTS - 99.09%................................... 84,330,405
------------
(Cost $87,853,226)
NET OTHER ASSETS AND LIABILITIES - 0.91%..................... 773,140
------------
NET ASSETS - 100.00%......................................... $ 85,103,545
============
------------------------------------------------
(A) Security exempt from registration under Rule 144A of the Securities
Act of 1933. This security may only be resold, in a transaction
exempt from registration, to qualified institutional buyers. At April
30, 2000, this security amounted to $702,188, or 0.83% of net assets.
(B) Euro-Dollar Bond
(C) U.S. Dollar-Denominated
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
HIGH QUALITY BOND FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 38.59%
U.S. TREASURY BONDS - 23.22%
$ 3,450,000 12.00%, 08/15/13 .......................... $ 4,619,032
4,000,000 13.25%, 05/15/14 .......................... 5,785,520
3,000,000 11.25%, 02/15/15 .......................... 4,396,020
640,000 8.75%, 05/15/17 ........................... 800,800
6,760,000 8.88%, 08/15/17 ........................... 8,568,165
3,550,000 9.00%, 11/15/18 ........................... 4,589,440
5,500,000 8.75%, 05/15/20 ........................... 7,028,890
6,000,000 7.88%, 02/15/21 ........................... 7,109,460
1,000,000 8.13%, 05/15/21 ........................... 1,215,080
3,500,000 8.13%, 08/15/21 ........................... 4,256,770
5,975,000 6.38%, 08/15/27 ........................... 6,111,051
7,340,000 6.13%, 11/15/27 ........................... 7,277,023
4,250,000 5.50%, 08/15/28 ........................... 3,870,730
2,190,000 5.25%, 02/15/29 ........................... 1,927,988
------------
67,555,969
------------
U.S. TREASURY NOTES - 6.50%
1,200,000 6.38%, 03/31/01 ........................... 1,199,016
11,050,000 6.63%, 06/30/01 ........................... 11,067,569
2,000,000 7.50%, 11/15/01 ........................... 2,023,220
2,100,000 6.25%, 02/28/02 ........................... 2,084,418
2,500,000 6.00%, 08/15/04 ........................... 2,449,875
100,000 5.63%, 05/15/08 ........................... 95,125
------------
18,919,223
------------
U.S. GOVERNMENT-BACKED BONDS - 4.30%
5,000,000 A.I.D. Israel, Series 8-C
6.63%, 08/15/03 ......................... 4,946,850
1,800,000 A.I.D. State of Israel, Series 7-A
5.45%, 02/15/01 ......................... 1,787,382
4,000,000 Private Export Funding Corp., Series B
6.49%, 07/15/07 ......................... 3,840,000
2,000,000 Private Export Funding Corp., Series H
6.45%, 09/30/04 ......................... 1,945,000
------------
12,519,232
------------
U.S. TREASURY STRIP (A) - 1.85%
9,000,000 4.86%, 05/15/08 Interest only, (B) ........ 5,381,820
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 1.64%
3,199,000 6.38%, 06/15/09 ........................... 2,999,830
1,795,000 7.13%, 01/15/30 ........................... 1,777,337
------------
4,777,167
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 1.08%
1,000,000 6.25%, 07/15/04 ........................... 963,750
2,295,000 6.63%, 09/15/09 ........................... 2,188,856
------------
3,152,606
------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS ........................ 112,306,017
------------
(Cost $115,897,061)
PAR VALUE VALUE
----------- ------------
CORPORATE NOTES AND BONDS - 30.83%
FINANCE - 8.38%
$ 1,500,000 Associates Corp. of North America
6.63%, 05/15/01 ......................... $ 1,492,500
2,000,000 Associates Corp. of North America, MTN
7.40%, 05/03/02 ......................... 1,995,000
4,000,000 Bank One Wisconsin, Bank Note
6.35%, 03/19/01 ......................... 3,970,000
1,000,000 Chase Manhattan Corp.
6.50%, 08/01/05 ......................... 943,750
1,000,000 Comerica Bank
7.25%, 06/15/07 ......................... 956,250
3,550,000 Ford Motor Credit Co.
6.70%, 07/16/04 ......................... 3,416,875
250,000 General Electric Capital Corp.
8.30%, 09/20/09 ......................... 262,812
1,110,000 Goldman Sachs Group, Series B,
Senior Unsubordinated, MTN
7.80%, 01/28/10 ......................... 1,091,962
2,000,000 Key Bank of North America
7.13%, 08/15/06 ......................... 1,935,000
3,500,000 National Rural Utilities
5.50%, 01/15/05 ......................... 3,215,625
1,025,000 National Rural Utilities Cooperative
Finance Corp.
6.20%, 02/01/08 ......................... 946,844
3,000,000 SunTrust Bank, Atlanta,
Subordinated Note
7.25%, 09/15/06 ......................... 2,925,000
1,300,000 SunTrust Bank of Central Florida, MTN
6.90%, 07/01/07 ......................... 1,226,875
------------
24,378,493
------------
UTILITIES - 7.68%
1,400,000 AT&T Corp.
6.50%, 03/15/29 ......................... 1,186,500
1,950,000 GTE Corp., Debenture
6.46%, 04/15/08 ......................... 1,806,188
6,500,000 GTE Florida, Inc., Series A, Debenture
6.31%, 12/15/02 ......................... 6,345,625
3,000,000 MCI WorldCom, Inc.
6.13%, 04/15/02 ......................... 2,921,250
5,000,000 PacifiCorp, Series H, MTN
6.38%, 05/15/08 ......................... 4,550,000
2,750,000 Potomac Electric Power Co.,
First Mortgage
6.25%, 10/15/07 ......................... 2,595,313
1,000,000 Sprint Capital Corp.
5.88%, 05/01/04 ......................... 941,250
2,250,000 Sprint Capital Corp.
6.90%, 05/01/19 ......................... 2,005,313
------------
22,351,439
------------
CONSUMER STAPLES - 7.06%
800,000 Abbott Laboratories
6.40%, 12/01/06 ......................... 769,000
1,750,000 Becton Dickinson & Co., Debenture
6.70%, 08/01/28 ......................... 1,533,438
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
HIGH QUALITY BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
CONSUMER STAPLES (CONTINUED)
$ 1,650,000 Coca-Cola Enterprises, Inc., Debenture
7.13%, 08/01/17 ......................... $ 1,536,562
1,900,000 Colgate-Palmolive Co., Series C, MTN
5.27%, 12/01/03 ......................... 1,764,625
4,050,000 Hershey Foods Corp., Debenture
7.20%, 08/15/27 ......................... 3,857,625
1,800,000 Pepsi Bottling Holdings, Inc.
5.38%, 02/17/04 (D)........................ 1,685,250
250,000 Procter & Gamble Co.
8.50%, 08/10/09 ......................... 268,125
3,000,000 Sara Lee Corp., MTN
7.40%, 03/22/02 ......................... 2,988,750
3,000,000 Sysco Corp.
7.00%, 05/01/06 ......................... 2,943,750
3,675,000 Sysco Corp., Debenture
6.50%, 08/01/28 ......................... 3,197,250
------------
20,544,375
------------
CONSUMER CYCLICAL - 2.72%
1,650,000 McDonald's Corp., MTN
5.95%, 01/15/08 ......................... 1,513,875
1,500,000 Tele-Communications, Inc., Senior Note
7.25%, 08/01/05 ......................... 1,477,500
2,500,000 Wal-Mart Stores, Inc.
6.88%, 08/10/09 ......................... 2,409,375
2,500,000 Wal-Mart Stores, Inc.
7.55%, 02/15/30 ......................... 2,506,250
------------
7,907,000
------------
TECHNOLOGY - 2.68%
2,500,000 IBM Corp.
7.25%, 11/01/02 ......................... 2,490,625
3,300,000 Telecom De Puerto Rico Co., Senior Note
6.15%, 05/15/02 ......................... 3,193,324
2,250,000 Telecom De Puerto Rico Co., Senior Note
6.65%, 05/15/06 ......................... 2,126,250
------------
7,810,199
------------
Industrial - 2.31%
1,500,000 Burlington Northern Santa Fe Corp.
7.00%, 12/15/25 ......................... 1,286,250
1,500,000 Caterpillar Financial Services Corp.,
Series F, MTN
5.47%, 09/12/01 ......................... 1,462,500
500,000 Emerson Electric Co.
5.85%, 03/15/09 ......................... 453,125
2,000,000 Illinois Tool Works
5.75%, 03/01/09 ......................... 1,795,000
2,000,000 Minnesota Mining & Manufacturing Co.,
Debenture
6.38%, 02/15/28 ......................... 1,725,000
------------
6,721,875
------------
TOTAL CORPORATE NOTES AND BONDS . 89,713,381
------------
(Cost $94,630,375)
PAR VALUE VALUE
----------- ------------
MORTGAGE-BACKED SECURITIES - 16.72%
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 8.84%
$ 221,656 6.50%, 03/15/13, Pool # 458165............. $ 213,136
71,267 6.50%, 03/15/13, Pool # 463723............. 68,527
235,019 6.50%, 04/15/13, Pool # 466013............. 225,985
268,819 6.50%, 04/15/13, Pool # 473476............. 258,486
293,101 6.50%, 05/15/13, Pool # 433742............. 281,834
132,303 6.50%, 05/15/13, Pool # 476292............. 127,218
324,735 6.50%, 10/15/13, Pool # 434017............. 312,048
1,921,378 6.50%, 10/15/13, Pool # 471586............. 1,846,310
119,476 6.50%, 10/15/13, Pool # 484576............. 114,808
1,038,203 6.50%, 11/15/13, Pool # 454228............. 997,640
753,005 6.50%, 11/15/13, Pool # 477529............. 723,585
1,174,000 6.50%, 05/01/15, Pool # 4596............... 1,127,592
838,170 6.75%, 07/20/22, Pool # 008022 (C)......... 845,898
1,304,374 7.00%, 11/15/22, Pool # 330551............. 1,261,225
958,510 6.50%, 01/15/29, Pool # 482909............. 897,702
3,215,165 7.00%, 01/15/29, Pool # 499333............. 3,091,574
3,378,740 7.00%, 02/15/29, Pool # 486937............. 3,248,861
1,935,956 6.50%, 03/15/29, Pool # 503051............. 1,813,139
23,850 6.50%, 03/15/29, Pool # 464613............. 22,337
1,913,857 6.50%, 04/15/29, Pool # 483349............. 1,792,442
1,523,426 7.00%, 08/15/29, Pool # 509742............. 1,464,865
1,392,802 7.50%, 09/15/29, Pool # 466158............. 1,369,723
1,132,027 7.00%, 09/15/29, Pool # 510394............. 1,088,512
400,171 7.00%, 09/15/29, Pool # 517865............. 384,789
514,652 7.00%, 10/15/29, Pool # 510559............. 494,868
226,270 7.00%, 02/15/30, Pool # 516433............. 217,572
1,497,623 7.00%, 02/15/30, Pool # 528631............. 1,440,055
------------
25,730,731
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 4.56%
616,184 6.50%, 05/01/06, Pool # 348137............. 607,040
1,745,649 6.75%, 04/25/21, Pool # 0096-4............. 1,733,098
805,039 8.00%, 02/01/30, Pool # 529898............. 803,775
2,997,954 8.00%, 03/01/30, Pool # 533977............. 2,993,247
2,399,760 8.50%, 04/01/30, Pool # 533999............. 2,432,757
4,623,200 8.50%, 04/01/30, Pool # 535270............. 4,686,769
------------
13,256,686
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 2.15%
3,000,000 6.00%, 04/15/22, Pool # 2118QC............. 2,775,930
3,497,222 8.00%, 03/01/30, Pool # C00934............. 3,496,103
------------
6,272,033
------------
STRUCTURED MORTGAGE PRODUCT - 1.17%
1,011,485 Prudential Home Mortgage Securities
Series 1993-38, Class A-3, CMO
6.15%, 09/25/23 ......................... 982,405
2,523,862 Rural Housing Trust Series 1987-1,
Class 1-D, CMO
6.33%, 04/01/26 ......................... 2,424,485
------------
3,406,890
------------
TOTAL MORTGAGE-BACKED SECURITIES .......... 48,666,340
------------
(Cost $49,932,523)
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
HIGH QUALITY BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
ASSET-BACKED SECURITIES - 6.76%
$ 2,050,000 American Express Credit Account Master
Trust Series 1999-1, Class A
5.60%, 11/15/06 ......................... $ 1,925,073
700,000 Chemical Master Credit Card Trust I
Series 1996-2, Class A
5.98%, 09/15/08 ......................... 656,250
6,000,000 Citibank Credit Card Master Trust I
Series 1998-6
5.85%, 04/10/03 ......................... 5,938,080
2,000,000 Discover Card Master Trust
Series 1999-3, Class A
6.24%, 09/15/04 ......................... 2,000,000
3,500,000 Ford Credit Auto Owner Trust
Series 1999-D, Class A5
6.52%, 09/15/03 ......................... 3,440,920
3,000,000 MBNA Master Credit Card Trust
Series 1998-J, Class A
5.25%, 02/15/06 ......................... 2,811,540
3,000,000 MBNA Master Credit Card Trust
Series 1999-M, Class A
6.60%, 04/16/07 ......................... 2,914,785
------------
TOTAL ASSET-BACKED SECURITIES ............. 19,686,648
------------
(Cost $20,014,362)
FOREIGN BONDS - 1.77%
1,500,000 Heinz (H.J.) Co.
5.75%, 02/03/03 (E)........................ 1,433,550
1,800,000 Province of Quebec
7.00%, 01/30/07 (F)........................ 1,748,142
2,200,000 Province of Quebec
5.75%, 02/15/09 (F)........................ 1,955,250
------------
TOTAL FOREIGN BONDS ....................... 5,136,942
------------
(Cost $5,290,635)
PAR VALUE VALUE
----------- ------------
REPURCHASE AGREEMENT - 4.56%
$13,287,000 Repurchase Agreement with:
State Street Bank
5.71%, 05/01/00, dated 04/28/00
Repurchase Price $13,293,322
(Collateralized by U.S. Treasury Note
7.00%, Due 07/15/06;
Total Par $12,935,000
Market Value $13,553,215).................. $ 13,287,000
------------
TOTAL REPURCHASE AGREEMENT ................ 13,287,000
------------
(Cost $13,287,000)
TOTAL INVESTMENTS - 99.23%................................... 288,796,328
------------
(Cost $299,051,956)
NET OTHER ASSETS AND LIABILITIES - 0.77%..................... 2,235,717
------------
NET ASSETS - 100.00%......................................... $291,032,045
============
-----------------------------------------------
(A) Discount yield at time of purchase.
(B) Stripped securities represent the splitting of cash flows into
interest and principal. Holders, as indicated, are entitled to that
portion of the payment representing interest only or principal only.
(C) Floating rate note. Interest rate shown reflects rate in effect at
April 30, 2000.
(D) Security exempt from registration under Rule 144A of the Securities
Act of 1933. This security may only be resold, in a transaction
exempt from registration, to qualified institutional buyers. At April
30, 2000, this security amounted to $1,685,250 or 0.58% of net
assets.
(E) Euro-Dollar Bond
(F) U.S. Dollar-Denominated
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
GALAXY TAXABLE BOND FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
<TABLE>
INTERMEDIATE
SHORT-TERM GOVERNMENT CORPORATE HIGH QUALITY
BOND FUND INCOME FUND BOND FUND BOND FUND
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost......................................... $ 48,843,774 $ 289,041,010 $ 87,139,226 $ 285,764,956
Repurchase Agreements....................................... 1,217,000 3,770,000 714,000 13,287,000
Net unrealized (depreciation) on investments................ (931,072) (6,673,865) (3,522,821) (10,255,628)
------------- ------------- -------------- -------------
Total investments at value................................ 49,129,702 286,137,145 84,330,405 288,796,328
Cash.......................................................... 31,185 -- 4,541 13,493
Receivable for investments sold............................... 513,435 91,718 -- 1,616,865
Receivable for shares sold.................................... 114,945 50,031 59,616 155,059
Interest and dividends receivable............................. 592,548 3,087,728 1,245,591 4,374,703
Other assets.................................................. -- -- 42,526 --
------------- ------------- -------------- -------------
Total Assets.............................................. 50,381,815 289,366,622 85,682,679 294,956,448
------------- ------------- -------------- -------------
LIABILITIES:
Dividends payable............................................. 86,250 915,959 225,821 521,389
Payable for investments purchased............................. 514,717 1,011,992 -- 2,923,076
Payable for shares redeemed................................... 95,553 379,535 266,251 279,518
Advisory fee payable (Note 3)................................. 20,674 130,723 38,718 131,946
Payable to Fleet affiliates (Note 3).......................... 6,356 11,723 5,714 30,136
Payable to Administrator (Note 3)............................. 6,910 27,578 7,395 24,616
Trustees' fees and expenses payable (Note 3).................. 3,008 10,435 3,415 9,667
Payable to Custodian.......................................... - 76,482 -- --
Accrued expenses and other payables........................... 4,211 17,622 31,820 4,055
------------- ------------- -------------- -------------
Total Liabilities......................................... 737,679 2,582,049 579,134 3,924,403
------------- ------------- -------------- -------------
NET ASSETS....................................................... $ 49,644,136 $ 286,784,573 $ 85,103,545 291,032,045
============= ============= ============== =============
NET ASSETS CONSIST OF:
Par value (Note 3)............................................ $ 5,098 $ 29,421 $ 8,524 $ 28,706
Paid-in capital in excess of par value....................... 56,554,859 323,162,207 91,744,626 304,649,789
Undistributed (overdistributed) net investment income (loss) 52 -- -- (24)
Accumulated net realized (loss) on investments sold.... ...... (5,984,801) (29,733,190) (3,126,784) (3,390,798)
Unrealized (depreciation) of investments...................... (931,072) (6,673,865) (3,522,821) (10,255,628)
------------- ------------- -------------- -------------
TOTAL NET ASSETS................................................. $ 49,644,136 $ 286,784,573 $ 85,103,545 $ 291,032,045
============= ============= ============== =============
Retail A shares:
Net Assets.................................................... $ 19,851,376 $ 49,318,900 $ -- $ 37,081,817
Shares of beneficial interest outstanding..................... 2,038,376 5,059,638 -- 3,657,553
NET ASSET VALUE and redemption price per share................ $ 9.74 $ 9.75 $ -- $ 10.14
Sales charge - 3.75% of offering price........................ 0.38 0.38 -- 0.40
------------- ------------- -------------- -------------
Maximum offering price per share.............................. $ 10.12 $ 10.13 $ -- $ 10.54
============= ============= ============== =============
Retail B shares:
Net Assets.................................................... $ 842,833 $ 1,342,260 $ N/A $ 5,816,925
Shares of beneficial interest outstanding..................... 86,535 137,702 N/A 573,754
------------- ------------- -------------- -------------
NET ASSET VALUE and offering price per share*................. $ 9.74 $ 9.75 $ N/A $ 10.14
============= ============= ============== =============
Trust shares:
Net Assets.................................................... $ 28,949,927 $ 236,123,413 $ 85,103,545 $ 247,868,339
Shares of beneficial interest outstanding..................... 2,973,127 24,224,033 8,524,189 24,448,533
------------- ------------- -------------- -------------
NET ASSET VALUE, offering and redemption price per share ..... $ 9.74 $ 9.75 $ 9.98 $ 10.14
============= ============= ============== =============
Prime A shares:
Net Assets.................................................... $ -- $ -- $ N/A $ 14,246
Shares of beneficial interest outstanding..................... -- -- N/A 1,405
NET ASSET VALUE and redemption price per share................ $ -- $ -- $ N/A $ 10.14
Sales charge - 4.75% of offering price........................ -- -- N/A 0.51
------------- ------------- -------------- -------------
Maximum offering price per share.............................. $ -- $ -- $ N/A $ 10.65
============= ============= ============== =============
Prime B shares:
Net Assets.................................................... $ -- $ -- $ N/A $ 250,718
Shares of beneficial interest outstanding..................... -- -- N/A 24,730
------------- ------------- -------------- -------------
NET ASSET VALUE and offering price per share*................. $ -- $ -- $ N/A $ 10.14
============= ============= ============== =============
----------------------------------------------------------------
<FN>
*Redemption price per share is equal to the Net Asset Value per share less any applicable contingent deferred sales charge.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
GALAXY TAXABLE BOND FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
<TABLE>
INTERMEDIATE
SHORT-TERM GOVERNMENT CORPORATE HIGH QUALITY
BOND FUND INCOME FUND BOND FUND BOND FUND
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2)................................. $ 1,663,057 $ 9,506,978 $ 2,811,489 $ 9,619,361
------------- ------------- -------------- -------------
Total investment income......................... 1,663,057 9,506,978 2,811,489 9,619,361
------------- ------------- -------------- -------------
EXPENSES:
Investment advisory fee (Note 3).................. 200,607 1,084,782 309,337 1,072,249
Administration fee (Note 3)....................... 19,726 106,650 30,409 105,410
Custodian fee..................................... 9,650 17,575 12,791 24,346
Fund accounting fee (Note 3)...................... 27,244 36,586 24,107 41,885
Professional fees (Note 3)........................ 8,836 14,370 8,360 16,905
Transfer agent fee (Note 3)....................... 11,411 54,876 23,921 189,064
Shareholder services and 12b-1 fees (Note 3)...... 19,530 41,388 -- 55,288
Trustees' fees and expenses (Note 3).............. 591 3,417 999 4,143
Amortization of organization costs (Note 2)....... -- -- 448 --
Reports to shareholders........................... 4,945 13,539 13,076 16,552
Miscellaneous..................................... 14,801 17,704 6,810 36,972
------------- ------------- -------------- -------------
Total expenses before reimbursement/waiver...... 317,341 1,390,887 430,258 1,562,814
------------- ------------- -------------- -------------
Less: reimbursement/waiver (Note 4)............. (57,235) (290,699) (82,490) (288,545)
------------- ------------- -------------- -------------
Total expenses net of reimbursement/waiver...... 260,106 1,100,188 347,768 1,274,269
------------- ------------- -------------- -------------
NET INVESTMENT INCOME................................ 1,402,951 8,406,790 2,463,721 8,345,092
------------- ------------- -------------- -------------
NET REALIZED AND UNREALIZED
(LOSS) ON INVESTMENTS (Note 2):
Net realized (loss) on investments sold........... (120,182) (2,331,168) (388,753) (1,723,516)
Net change in unrealized (depreciation)
of investments.................................. (366,801) (506,586) (1,198,204) (1,009,217)
------------- ------------- -------------- -------------
NET REALIZED AND UNREALIZED (LOSS)
ON INVESTMENTS.................................... (486,983) (2,837,754) (1,586,957) (2,732,733)
------------- ------------- -------------- -------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS......................... $ 915,968 $ 5,569,036 $ 876,764 $ 5,612,359
============= ============= ============== =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
GALAXY TAXABLE BOND FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
INTERMEDIATE GOVERNMENT
SHORT-TERM BOND FUND INCOME FUND
-------------------------- ---------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, APRIL 30, 2000 OCTOBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD................................... $56,903,078 $68,224,850 $292,417,679 $306,627,909
----------- ----------- ------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income............................................ 1,402,951 3,035,700 8,406,790 16,672,797
Net realized gain (loss) on investments sold..................... (120,182) 51,351 (2,331,168) (3,699,849)
Net change in unrealized (depreciation) of investments........... (366,801) (1,554,809) (506,586) (15,849,529)
----------- ----------- ------------ ------------
Net increase (decrease) in net assets resulting from operations 915,968 1,532,242 5,569,036 (2,876,581)
----------- ----------- ------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
RETAIL A SHARES:
Net investment income.......................................... (646,618) (1,268,353) (1,551,079) (3,300,117)
----------- ----------- ------------ ------------
RETAIL B SHARES:
Net investment income.......................................... (24,786) (35,835) (31,339) (27,129)
----------- ----------- ------------ ------------
TRUST SHARES:
Net investment income.......................................... (933,256) (1,693,636) (7,243,030) (13,345,551)
----------- ----------- ------------ ------------
Total Dividends to shareholders.................................. (1,604,660) (2,997,824) (8,825,448) (16,672,797)
----------- ----------- ------------ ------------
NET INCREASE (DECREASE) FROM SHARE TRANSACTIONS (1)................. (6,570,250) (9,856,190) (2,376,694) 5,339,148
----------- ----------- ------------ ------------
Net (decrease) in net assets..................................... (7,258,942) (11,321,772) (5,633,106) (14,210,230)
----------- ----------- ------------ ------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A)...................... $49,644,136 $56,903,078 $286,784,573 $292,417,679
=========== =========== ============ ============
(A) Undistributed net investment income............................. $ 52 $ 201,761 $ -- $ 418,658
=========== =========== ============ ============
-------------------------------------------------------
<FN>
(1) For detail on share transactions by series, see Statements of Changes in Net Assets - Capital Stock Activity on page 28.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
GALAXY TAXABLE BOND FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
CORPORATE BOND FUND HIGH QUALITY BOND FUND
-------------------------- ---------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, APRIL 30, 2000 OCTOBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD................................... $79,382,000 $83,564,654 $287,566,327 $268,441,362
----------- ----------- ------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income............................................ 2,463,721 4,640,572 8,345,092 15,219,378
Net realized (loss) on investments sold.......................... (388,753) (559,771) (1,723,516) (1,517,657)
Net change in unrealized (depreciation) of investments........... (1,198,204) (4,858,917) (1,009,217) (21,199,859)
----------- ----------- ------------ ------------
Net increase (decrease) in net assets resulting from operations 876,764 (778,116) 5,612,359 (7,498,138)
----------- ----------- ------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
RETAIL A SHARES:
Net investment income.......................................... -- -- (1,160,392) (2,585,461)
Net realized gain on investments............................... -- -- -- (406,430)
----------- ----------- ------------ ------------
Total Dividends.............................................. -- -- (1,160,392) (2,991,891)
----------- ----------- ------------ ------------
RETAIL B SHARES:
Net investment income.......................................... N/A N/A (162,758) (313,178)
Net realized gain on investments............................... N/A N/A -- (48,125)
----------- ----------- ------------ ------------
Total Dividends.............................................. N/A N/A (162,758) (361,303)
----------- ----------- ------------ ------------
TRUST SHARES:
Net investment income.......................................... (2,724,104) (4,640,572) (7,294,617) (12,365,223)
Net realized gain on investments............................... -- -- -- (1,827,182)
----------- ----------- ------------ ------------
Total Dividends.............................................. (2,724,104) (4,640,572) (7,294,617) (14,192,405)
----------- ----------- ------------ ------------
PRIME A SHARES:
Net investment income.......................................... N/A N/A (521) (1,308)
Net realized gain on investments............................... N/A N/A -- (411)
----------- ----------- ------------ ------------
Total Dividends.............................................. N/A N/A (521) (1,719)
----------- ----------- ------------ ------------
PRIME B SHARES:
Net investment income.......................................... N/A N/A (7,297) (10,096)
Net realized gain on investments............................... N/A N/A -- (494)
----------- ----------- ------------ ------------
Total Dividends.............................................. N/A N/A (7,297) (10,590)
----------- ----------- ------------ ------------
Total Dividends to shareholders.................................. (2,724,104) (4,640,572) (8,625,585) (17,557,908)
----------- ----------- ------------ ------------
NET INCREASE FROM SHARE TRANSACTIONS (1)............................ 7,568,885 1,236,034 6,478,944 44,181,011
----------- ----------- ------------ ------------
Net increase (decrease) in net assets............................ 5,721,545 (4,182,654) 3,465,718 19,124,965
----------- ----------- ------------ ------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A)....................... $85,103,545 $79,382,000 $291,032,045 $287,566,327
=========== =========== ============ ============
(A) Undistributed (overdistributed) net investment income (loss) $ -- $ 260,383 $ (24) $ 280,469
=========== =========== ============ ============
--------------------------------------------------------
<FN>
(1) For detail on share transactions by series, see Statements of Changes in Net Assets - Capital Stock Activity on page 29.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
GALAXY TAXABLE BOND FUNDS
STATEMENTS OF CHANGES IN NET ASSETS -
CAPITAL STOCK ACTIVITY
<TABLE>
INTERMEDIATE GOVERNMENT
SHORT-TERM BOND FUND BOND FUND
-------------------------- ---------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, APRIL 30, 2000 OCTOBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
RETAIL A SHARES:
Sold ......................................................... $10,691,422 $26,400,028 $ 1,912,285 $ 10,176,855
Issued to shareholders in reinvestment of dividends........... 535,725 1,090,190 1,221,067 2,559,568
Repurchased................................................... (15,741,534) (31,264,721) (9,658,464) (19,108,917)
----------- ----------- ------------ ------------
Net (decrease) in shares outstanding........................ $(4,514,387) $(3,774,503) $ (6,525,112) $ (6,372,494)
=========== =========== ============ ============
RETAIL B SHARES:
Sold ......................................................... $ 370,087 $ 314,056 $ 442,020 $ 1,457,973
Issued to shareholders in reinvestment of dividends........... 20,417 29,447 28,831 22,337
Repurchased................................................... (347,022) (596,974) (201,897) (362,484)
----------- ----------- ------------ ------------
Net increase (decrease) in shares outstanding............... $ 43,482 $ (253,471) $ 268,954 $ 1,117,826
=========== =========== ============ ============
TRUST SHARES:
Sold ......................................................... $ 2,745,505 $ 5,131,414 $ 25,897,050 $ 43,486,208
Issued to shareholders in reinvestment of dividends........... 429,074 765,143 1,886,680 3,528,720
Repurchased................................................... (5,273,924) (11,724,773) (23,904,266) (36,421,112)
----------- ----------- ------------ ------------
Net increase (decrease) in shares outstanding............... $(2,099,345) $(5,828,216) $ 3,879,464 $ 10,593,816
=========== =========== ============ ============
SHARE ACTIVITY
RETAIL A SHARES:
Sold ......................................................... 1,091,309 2,649,070 196,652 991,566
Issued to shareholders in reinvestment of dividends........... 54,850 111,011 125,424 254,097
Repurchased................................................... (1,607,013) (3,137,758) (990,793) (1,884,668)
----------- ----------- ------------ ------------
Net (decrease) in shares outstanding........................ (460,854) (377,677) (668,717) (639,005)
=========== =========== ============ ============
RETAIL B SHARES:
Sold ......................................................... 37,596 31,480 45,371 143,750
Issued to shareholders in reinvestment of dividends........... 2,090 2,980 2,956 2,260
Repurchased................................................... (35,506) (59,672) (20,727) (35,908)
----------- ----------- ------------ ------------
Net increase (decrease) in shares outstanding............... 4,180 (25,212) 27,600 110,102
=========== =========== ============ ============
TRUST SHARES:
Sold ......................................................... 281,040 513,395 2,651,991 4,284,192
Issued to shareholders in reinvestment of dividends........... 43,937 77,948 193,803 349,318
Repurchased................................................... (539,622) (1,172,148) (2,455,559) (3,631,847)
----------- ----------- ------------ ------------
Net increase (decrease) in shares outstanding............... (214,645) (580,805) 390,235 1,001,663
=========== =========== ============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
GALAXY TAXABLE BOND FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
CAPITAL STOCK ACTIVITY
<TABLE>
CORPORATE BOND FUND HIGH QUALITY BOND FUND
-------------------------- --------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, APRIL 30, 2000 OCTOBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
RETAIL A SHARES:
Sold ......................................................... $ -- $ -- $ 3,160,843 $21,457,219
Issued to shareholders in reinvestment of dividends........... -- -- 1,031,724 2,682,994
Repurchased................................................... -- -- (9,554,718) (22,644,891)
----------- ----------- ----------- -----------
Net increase (decrease) in shares outstanding.............. $ -- $ -- $(5,362,151) $ 1,495,322
=========== =========== =========== ===========
RETAIL B SHARES:
Sold ......................................................... $ N/A N/A $ 592,356 $ 3,562,927
Issued to shareholders in reinvestment of dividends........... N/A N/A 119,587 282,560
Repurchased................................................... N/A N/A (1,377,107) (2,119,922)
----------- ----------- ----------- -----------
Net increase (decrease) in shares outstanding.............. N/A N/A $ (665,164) $ 1,725,565
=========== =========== =========== ===========
TRUST SHARES:
Sold ......................................................... $17,341,121 $16,506,253 $40,209,576 $80,582,877
Issued to shareholders in reinvestment of dividends........... 1,307,873 2,407,438 4,439,592 9,324,509
Repurchased................................................... (11,080,109) (17,677,657) (32,072,709) (49,305,977)
----------- ----------- ----------- -----------
Net increase in shares outstanding......................... $ 7,568,889 $ 1,236,034 $12,576,459 $40,601,409
=========== =========== =========== ===========
PRIME A SHARES:
Sold ......................................................... N/A N/A $ 4,727 $ 52,116
Issued to shareholders in reinvestment of dividends........... N/A N/A 171 70
Repurchased................................................... N/A N/A (6,579) (33,508)
----------- ----------- ----------- -----------
Net increase (decrease) in shares outstanding.............. N/A N/A $ (1,681) $ 18,678
=========== =========== =========== ===========
PRIME B SHARES:
Sold ......................................................... N/A N/A $ 8,763 $ 359,496
Issued to shareholders in reinvestment of dividends........... N/A N/A 6,686 9,403
Repurchased................................................... N/A N/A (83,968) (28,862)
----------- ----------- ----------- -----------
Net increase (decrease) in shares outstanding.............. N/A N/A $ (68,519) $ 340,037
=========== =========== =========== ===========
SHARE ACTIVITY
RETAIL A SHARES:
Sold ......................................................... -- -- 312,859 1,977,732
Issued to shareholders in reinvestment of dividends........... -- -- 102,019 251,778
Repurchased................................................... -- -- (944,463) (2,138,328)
----------- ----------- ----------- -----------
Net increase (decrease) in shares outstanding.............. -- -- (529,585) 91,182
=========== =========== =========== ===========
RETAIL B SHARES:
Sold ......................................................... N/A N/A 58,580 329,766
Issued to shareholders in reinvestment of dividends........... N/A N/A 11,826 26,426
Repurchased................................................... N/A N/A (135,901) (200,809)
----------- ----------- ----------- -----------
Net increase (decrease) in shares outstanding.............. N/A N/A (65,495) 155,383
=========== =========== =========== ===========
TRUST SHARES:
Sold ......................................................... 1,727,582 1,552,757 3,976,707 7,573,939
Issued to shareholders in reinvestment of dividends........... 130,374 225,160 439,011 881,636
Repurchased................................................... (1,103,577) (1,674,792) (3,170,937) (4,636,948)
----------- ----------- ----------- -----------
Net increase in shares outstanding......................... 754,379 103,125 1,244,781 3,818,627
=========== =========== =========== ===========
PRIME A SHARES:
Sold ......................................................... N/A N/A 466 4,700
Issued to shareholders in reinvestment of dividends........... N/A N/A 17 6
Repurchased................................................... N/A N/A (647) (3,137)
----------- ----------- ----------- -----------
Net increase (decrease) in shares outstanding.............. N/A N/A (164) 1,569
=========== =========== =========== ===========
PRIME B SHARES:
Sold ......................................................... N/A N/A 870 33,422
Issued to shareholders in reinvestment of dividends........... N/A N/A 661 897
Repurchased................................................... N/A N/A (8,310) (2,810)
----------- ----------- ----------- -----------
Net increase (decrease) in shares outstanding.............. N/A N/A (6,779) 31,509
=========== =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
SHORT-TERM BOND FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
RETAIL A SHARES
<TABLE>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 2000 ---------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ...................... $ 9.86 $ 10.10 $ 10.01 $ 9.99 $ 10.06 $ 9.73
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) ............................... 0.25 0.49 0.51 0.53 0.52 0.55
Net realized and unrealized gain (loss) on investments .. (0.08) (0.25) 0.11 0.02 (0.07) 0.33
--------- --------- --------- --------- --------- ---------
Total from Investment Operations ...................... 0.17 0.24 0.62 0.55 0.45 0.88
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income .................... (0.29) (0.48) (0.53) (0.53) (0.52) (0.55)
--------- --------- --------- --------- --------- ---------
Total Dividends ....................................... (0.29) (0.48) (0.53) (0.53) (0.52) (0.55)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ................ (0.12) (0.24) 0.09 0.02 (0.07) 0.33
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ............................ $ 9.74 $ 9.86 $ 10.10 $ 10.01 $ 9.99 $ 10.06
========= ========= ========= ========= ========= =========
Total Return(2) ........................................... 1.71%** 2.43% 6.42% 5.64% 4.63% 9.28%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ......................... $ 19,851 $ 24,653 $ 29,067 $ 27,961 $ 33,388 $ 31,542
Ratios to average net assets:
Net investment income including
reimbursement/waiver ................................ 5.12%* 4.86% 5.07% 5.29% 5.22% 5.54%
Operating expenses including reimbursement/waiver ..... 1.09%* 1.10% 1.11% 1.00% 1.11% 0.99%
Operating expenses excluding reimbursement/waiver ..... 1.31%* 1.30% 1.31% 1.21% 1.35% 1.32%
Portfolio Turnover Rate ................................... 36%** 151% 133% 173% 214% 289%
</TABLE>
<TABLE>
TRUST SHARES
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 2000 ---------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ...................... $ 9.86 $ 10.10 $ 10.01 $ 9.99 $ 10.06 $ 9.73
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) ............................... 0.26 0.51 0.54 0.54 0.55 0.57
Net realized and unrealized gain (loss) on investments .. (0.08) (0.25) 0.11 0.02 (0.07) 0.33
--------- --------- --------- --------- --------- ---------
Total from Investment Operations ...................... 0.18 0.26 0.65 0.56 0.48 0.90
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income .................... (0.30) (0.50) (0.56) (0.54) (0.55) (0.57)
--------- --------- --------- --------- --------- ---------
Total Dividends ....................................... (0.30) (0.50) (0.56) (0.54) (0.55) (0.57)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ................ (0.12) (0.24) 0.09 0.02 (0.07) 0.33
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ............................ $ 9.74 $ 9.86 $ 10.10 $ 10.01 $ 9.99 $ 10.06
========= ========= ========= ========= ========= =========
Total Return(2) ........................................... 1.83%** 2.67% 6.68% 5.77% 4.91% 9.55%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ......................... $ 28,950 $ 31,438 $ 38,071 $ 49,837 $ 58,227 $ 35,088
Ratios to average net assets:
Net investment income including
reimbursement/waiver ................................ 5.35%* 5.10% 5.33% 5.43% 5.49% 5.79%
Operating expenses including reimbursement/waiver ..... 0.86%* 0.86% 0.85% 0.86% 0.84% 0.74%
Operating expenses excluding reimbursement/waiver ..... 1.07%* 1.06% 1.05% 1.07% 1.08% 1.02%
Portfolio Turnover Rate ................................... 36%** 151% 133% 173% 214% 289%
</TABLE>
<TABLE>
RETAIL B SHARES
SIX MONTHS ENDED YEARS ENDED OCTOBER 31, PERIOD ENDED
APRIL 30, 2000 --------------------------------- OCTOBER 31,
(UNAUDITED) 1999 1998 1997 1996(1)
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ...................... $ 9.86 $ 10.10 $ 10.01 $ 9.99 $ 10.09
--------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) ............................... 0.21 0.42 0.45 0.46 0.31
Net realized and unrealized gain (loss) on investments .. (0.08) (0.25) 0.11 0.03 (0.10)
--------- --------- --------- --------- ---------
Total from Investment Operations ...................... 0.13 0.17 0.56 0.49 0.21
--------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income .................... (0.25) (0.41) (0.47) (0.47) (0.31)
--------- --------- --------- --------- ---------
Total Dividends ....................................... (0.25) (0.41) (0.47) (0.47) (0.31)
--------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ................ (0.12) (0.24) 0.09 0.02 (0.10)
--------- --------- --------- --------- ---------
Net Asset Value, End of Period ............................ $ 9.74 $ 9.86 $ 10.10 $ 10.01 $ 9.99
========= ========= ========= ========= =========
Total Return(2) ........................................... 1.35%** 1.71% 5.73% 4.99% 2.12%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ......................... $ 843 $ 812 $ 1,087 $ 905 $ 260
Ratios to average net assets:
Net investment income including
reimbursement/waiver ................................ 4.42%* 4.17% 4.40% 4.56% 4.73%*
Operating expenses including reimbursement/waiver ..... 1.79%* 1.79% 1.78% 1.75% 1.77%*
Operating expenses excluding reimbursement/waiver ..... 2.04%* 2.08% 1.99% 2.01% 1.98%*
Portfolio Turnover Rate ................................... 36%** 151% 133% 173% 214%**
----------------------------------------------------------------------
<FN>
* Annualized
** Not Annualized
(1) The Fund began offering Retail B Shares on March 4, 1996.
(2) Calculation does not include the effect of any sales charge for Retail A Shares and Retail B Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail
A Shares for the six months ended April 30, 2000 (unaudited) and the years ended October 31, 1999, 1998, 1997, 1996 and 1995
were $0.24, $0.47, $0.49, $0.51, $0.50 and $0.52, respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for Trust Shares for the six months ended April 30, 2000 (unaudited)
and the years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.25 $0.49, $0.52, $0.52, $0.53, and $0.54,
respectively. Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Retail B Shares for the six months ended April 30, 2000 (unaudited), the years ended October 31, 1999, 1998
and 1997 and the period ended October 31, 1996 were $0.20, $0.39, $0.42, $0.44 and $0.29, respectively.
</FN>
</TABLE>
See Notes to Financial Statements
30-31
<PAGE>
INTERMEDIATE GOVERNMENT INCOME FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
RETAIL A SHARES
<TABLE>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 2000 ---------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ....................... $ 9.86 $ 10.50 $ 10.18 $ 10.06 $ 10.28 $ 9.68
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) ............................... 0.28 0.54 0.57 0.59 0.57 0.61
Net realized and unrealized gain (loss) on investments .. (0.10) (0.65) 0.34 0.12 (0.22) 0.60
--------- --------- --------- --------- --------- ---------
Total from Investment Operations ...................... 0.18 (0.11) 0.91 0.71 0.35 1.21
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income .................... (0.29) (0.53) (0.59) (0.59) (0.57) (0.61)
--------- --------- --------- --------- --------- ---------
Total Dividends ....................................... (0.29) (0.53) (0.59) (0.59) (0.57) (0.61)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ................. (0.11) (0.64) 0.32 0.12 (0.22) 0.60
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ............................. $ 9.75 $ 9.86 $ 10.50 $ 10.18 $ 10.06 $ 10.28
========= ========= ========= ========= ========= =========
Total Return(2) ............................................ 1.94%** (1.11)% 9.22% 7.33% 3.58% 12.85%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .......................... $ 49,319 $ 56,454 $ 66,865 $ 65,626 $ 79,741 $ 79,558
Ratios to average net assets:
Net investment income including reimbursement/waiver .... 5.61%* 5.28% 5.49% 5.90% 5.69% 6.10%
Operating expenses including reimbursement/waiver ....... 0.95%* 0.97% 1.01% 1.02% 1.04% 1.02%
Operating expenses excluding reimbursement/waiver ....... 1.15%* 1.17% 1.21% 1.22% 1.24% 1.26%
Portfolio Turnover Rate .................................... 52%** 184% 205% 128% 235% 145%
</TABLE>
<TABLE>
TRUST SHARES
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 2000 ---------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ....................... $ 9.85 $ 10.50 $ 10.18 $ 10.06 $ 10.28 $ 9.68
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) ............................... 0.29 0.56 0.59 0.62 0.60 0.64
Net realized and unrealized gain (loss) on investments .. (0.09) (0.65) 0.35 0.12 (0.22) 0.60
--------- --------- --------- --------- --------- ---------
Total from Investment Operations ...................... 0.20 (0.09) 0.94 0.74 0.38 1.24
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income .................... (0.30) (0.56) (0.62) (0.62) (0.60) (0.64)
--------- --------- --------- --------- --------- ---------
Total Dividends ....................................... (0.30) (0.56) (0.62) (0.62) (0.60) (0.64)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ................. (0.10) (0.65) 0.32 0.12 (0.22) 0.60
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ............................. $ 9.75 $ 9.85 $ 10.50 $ 10.18 $ 10.06 $ 10.28
========= ========= ========= ========= ========= =========
Total Return(2) ............................................ 2.06%** (0.86)% 9.52% 7.63% 3.88% 13.18%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .......................... $ 236,123 $ 234,880 $ 239,763 $ 209,215 $ 213,750 $ 186,037
Ratios to average net assets:
Net investment income including reimbursement/waiver .... 5.85%* 5.53% 5.77% 6.19% 5.98% 6.39%
Operating expenses including reimbursement/waiver ....... 0.71%* 0.72% 0.73% 0.74% 0.75% 0.73%
Operating expenses excluding reimbursement/waiver ....... 0.91%* 0.92% 0.93% 0.94% 0.95% 0.94%
Portfolio Turnover Rate .................................... 52%** 184% 205% 128% 235% 145%
</TABLE>
<TABLE>
RETAIL B SHARES
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31,
(UNAUDITED) 1999(1)
----------- -----------
<S> <C> <C>
Net Asset Value, Beginning of Period .............................. $ 9.85 $ 10.50
----------- -----------
Income from Investment Operations:
Net investment income (A) ...................................... 0.24 0.47
Net realized and unrealized gain (loss) on investments ......... (0.09) (0.66)
----------- -----------
Total from Investment Operations ............................. 0.15 (0.19)
----------- -----------
Less Dividends:
Dividends from net investment income ........................... (0.25) (0.46)
----------- -----------
Total Dividends .............................................. (0.25) (0.46)
----------- -----------
Net increase (decrease) in net asset value ........................ (0.10) (0.65)
----------- -----------
Net Asset Value, End of Period .................................... $ 9.75 $ 9.85
=========== ===========
Total Return(2) ................................................... 1.57%** (1.78)%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ................................. $ 1,342 $ 1,084
Ratios to average net assets:
Net investment income including reimbursement/waiver ........... 4.89%* 4.61%
Operating expenses including reimbursement/waiver .............. 1.67%* 1.64%
Operating expenses excluding reimbursement/waiver .............. 2.10%* 2.14%
Portfolio Turnover Rate ........................................... 52%** 184%
----------------------------------------------------------------------
<FN>
* Annualized
** Not Annualized
(1) The Fund began offering Retail B Shares on November 1, 1998.
(2) Calculation does not include the effect of any sales charge for Retail A Shares and Retail B Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail
A Shares for the six months ended April 30, 2000 (unaudited) and the years ended October 31, 1999, 1998, 1997, 1996 and 1995
were $0.27, $0.52, $0.55, $0.57, $0.55 and $0.58, respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for Trust Shares for the six months ended April 30, 2000 (unaudited)
and the years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.28, $0.54, $0.57, $0.60, $0.58 and $0.62,
respectively. Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Retail B Shares for the period ended April 30, 2000 (unaudited) and the year ended October 31, 1999 were
$0.22 and $0.42., respectively.
</FN>
</TABLE>
See Notes to Financial Statements
32-33
<PAGE>
CORPORATE BOND FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
TRUST SHARES
<TABLE>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31, PERIOD ENDED
APRIL 30, 2000 --------------------------------------------- OCTOBER 31
(UNAUDITED) 1999 1998 1997 1996 1995(1)
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ..................... $ 10.22 $ 10.90 $ 10.63 $ 10.53 $ 10.74 $10.00
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) ............................. 0.30 0.59 0.62 0.66 0.64 0.61
Net realized and unrealized gain (loss) on investments (0.21) (0.68) 0.30 0.11 (0.13) 0.74
--------- --------- --------- --------- --------- ---------
Total from Investment Operations .................... 0.09 (0.09) 0.92 0.77 0.51 1.35
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income .................. (0.33) (0.59) (0.65) (0.66) (0.64) (0.61)
Dividends from net realized capital gains ............. -- -- -- (0.01) (0.08) --
--------- --------- --------- --------- --------- ---------
Total Dividends ..................................... (0.33) (0.59) (0.65) (0.67) (0.72) (0.61)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ............... (0.24) (0.68) 0.27 0.10 (0.21) 0.74
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ........................... $ 9.98 $ 10.22 $ 10.90 $ 10.63 $ 10.53 $ 10.74
========= ========= ========= ========= ========= =========
Total Return ............................................. 0.92%** (0.82)% 8.96% 7.56% 5.00% 13.85%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ........................ $ 85,104 $ 79,382 $ 83,565 $ 91,728 $ 107,728 $ 37,391
Ratios to average net assets:
Net investment income including reimbursement/waiver .. 5.96%* 5.62% 5.80% 6.27% 6.13% 6.61%*
Operating expenses including reimbursement/waiver ..... 0.84%* 0.85% 0.82% 0.80% 0.85% 1.06%*
Operating expenses excluding reimbursement/waiver ..... 1.04%* 1.05% 1.02% 1.00% 1.05% 1.26%*
Portfolio Turnover Rate .................................. 50%** 206% 155% 37% 84% 41%**
--------------------------------------------------------------------
<FN>
* Annualized
** Not Annualized
(1) The Fund commenced operations on December 12, 1994.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for the
six months ended April 30, 2000 (unaudited), the years ended October 31, 1999, 1998, 1997 and 1996 and the period ended
October 31, 1995 were $0.29, $0.57, $0.60, $0.64, $0.62 and $0.57, respectively.
</FN>
</TABLE>
See Notes to Financial Statements
34
<PAGE>
HIGH QUALITY BOND FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
RETAIL A SHARES
<TABLE>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 2000 ---------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ....................... $ 10.25 $ 11.20 $ 10.70 $ 10.47 $ 10.63 $ 9.54
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) ............................... 0.29 0.57 0.58 0.60 0.59 0.62
Net realized and unrealized gain (loss) on investments .. (0.10) (0.86) 0.50 0.23 (0.16) 1.09
--------- --------- --------- --------- --------- ---------
Total from Investment Operations .................... 0.19 (0.29) 1.08 0.83 0.43 1.71
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income .................... (0.30) (0.57) (0.58) (0.60) (0.59) (0.62)
Dividends from net realized capital gains ............... -- (0.09) -- -- -- --
--------- --------- --------- --------- --------- ---------
Total Dividends ..................................... (0.30) (0.66) (0.58) (0.60) (0.59) (0.62)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ................. (0.11) (0.95) 0.50 0.23 (0.16) 1.09
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ............................. $ 10.14 $ 10.25 $ 11.20 $ 10.70 $ 10.47 $ 10.63
========= ========= ========= ========= ========= =========
Total Return(1) ............................................ 1.88%** (2.66)% 10.35% 8.22% 4.24% 18.46%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .......................... $ 37,082 $ 42,906 $ 45,879 $ 27,950 $ 30,984 $ 30,093
Ratios to average net assets:
Net investment income including reimbursement/waiver .... 5.70%* 5.32% 5.30% 5.73% 5.66% 6.16%
Operating expenses including reimbursement/waiver ....... 1.02%* 0.99% 1.00% 1.01% 1.07% 1.02%
Operating expenses excluding reimbursement/waiver ....... 1.22%* 1.20% 1.20% 1.21% 1.28% 1.26%
Portfolio Turnover Rate..................................... 51%** 226% 253% 182% 163% 110%
----------------------------------------------------------------------
<FN>
* Annualized
** Not Annualized
(1) Calculation does not include the effect of any sales charge for Retail A Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail
A Shares for the six months ended April 30, 2000 (unaudited) and the years ended October 31, 1999, 1998, 1997, 1996 and 1995
were $0.28, $0.55, $0.56, $0.58, $0.57 and $0.59, respectively.
</FN>
</TABLE>
See Notes to Financial Statements
35
<PAGE>
HIGH QUALITY BOND FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
TRUST SHARES
<TABLE>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 2000 ---------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....................... $ 10.25 $ 11.20 $ 10.70 $ 10.47 $ 10.63 $ 9.54
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) .............................. 0.30 0.58 0.59 0.61 0.62 0.64
Net realized and unrealized gain (loss) on investments.. (0.10) (0.86) 0.50 0.23 (0.16) 1.09
--------- --------- --------- --------- --------- ---------
Total from Investment Operations ................... 0.20 (0.28) 1.09 0.84 0.46 1.73
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income ................... (0.31) (0.58) (0.59) (0.61) (0.62) (0.64)
Dividends from net realized capital gains .............. -- (0.09) -- -- -- --
--------- --------- --------- --------- --------- ---------
Total Dividends .................................... (0.31) (0.67) (0.59) (0.61) (0.62) (0.64)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ................ (0.11) (0.95) 0.50 0.23 (0.16) 1.09
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ............................ $ 10.14 $ 10.25 $ 11.20 $ 10.70 $ 10.47 $ 10.63
========= ========= ========= ========= ========= =========
Total Return(2) ........................................... 1.96%** (2.52)% 10.50% 8.36% 4.46% 18.66%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ......................... $ 247,868 $ 237,772 $ 217,143 $ 182,398 $ 149,075 $ 134,631
Ratios to average net assets:
Net investment income including reimbursement/waiver ... 5.87%* 5.46% 5.43% 5.88% 5.88% 6.33%
Operating expenses including reimbursement/waiver ...... 0.85%* 0.84% 0.87% 0.87% 0.85% 0.85%
Operating expenses excluding reimbursement/waiver ...... 1.05%* 1.04% 1.07% 1.09% 1.06% 1.07%
Portfolio Turnover Rate ................................... 51%** 226% 253% 182% 163% 110%
</TABLE>
<TABLE>
RETAIL B SHARES
SIX MONTHS ENDED YEARS ENDED OCTOBER 31, PERIOD ENDED
APRIL 30, 2000 --------------------------------- OCTOBER 31,
(UNAUDITED) 1999 1998 1997 1996(1)
---------------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....................... $ 10.25 $ 11.20 $ 10.70 $ 10.47 $ 10.72
--------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) .............................. 0.26 0.50 0.51 0.53 0.36
Net realized and unrealized gain (loss) on investments.... (0.10) (0.86) 0.51 0.24 (0.25)
--------- --------- --------- --------- ---------
Total from Investment Operations ................... 0.16 (0.36) 1.02 0.77 0.11
--------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income ................... (0.27) (0.50) (0.52) (0.54) (0.36)
Dividends from net realized capital gains .............. -- (0.09) -- -- --
--------- --------- --------- --------- ---------
Total Dividends .................................... (0.27) (0.59) (0.52) (0.54) (0.36)
--------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ................ (0.11) (0.95) 0.50 0.23 (0.25)
--------- --------- --------- --------- ---------
Net Asset Value, End of Period ............................ $ 10.14 $ 10.25 $ 11.20 $ 10.70 $ 10.47
========= ========= ========= ========= =========
Total Return(2) ........................................... 1.56%** (3.25)% 9.73% 7.59% 1.14%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ......................... $ 5,817 $ 6,550 $ 5,420 $ 1,998 $ 646
Ratios to average net assets:
Net investment income including reimbursement/waiver ... 5.07%* 4.72% 4.69% 5.07% 5.34%*
Operating expenses including reimbursement/waiver ...... 1.65%* 1.59% 1.61% 1.69% 1.60%*
Operating expenses excluding reimbursement/waiver ...... 1.92%* 1.88% 1.81% 1.95% 1.81%*
Portfolio Turnover Rate ................................... 51%** 226% 253% 182% 163%
</TABLE>
<TABLE>
PRIME A SHARES PRIME B SHARES
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, APRIL 30. 2000 OCTOBER 31,
(UNAUDITED) 1999(1) (UNAUDITED) 1999(1)
---------------- ---------- ---------------- -----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....................... $ 10.25 $ 11.20 $ 10.24 $ 11.20
------------ ------------ ------------ ------------
Income from Investment Operations:
Net investment income (A) .............................. 0.29 0.60 0.25 0.49
Net realized and unrealized gain (loss) on investments.... (0.10) (0.89) (0.09) (0.87)
------------ ------------ ------------ ------------
Total from Investment Operations ................... 0.19 (0.29) 0.16 (0.38)
------------ ------------ ------------ ------------
Less Dividends:
Dividends from net investment income ................... (0.30) (0.57) (0.26) (0.49)
Dividends from net realized capital gains .............. -- (0.09) -- (0.09)
------------ ------------ ------------ ------------
Total Dividends .................................... (0.30) (0.66) (0.26) (0.58)
------------ ------------ ------------ ------------
Net increase (decrease) in net asset value ................ (0.11) (0.95) (0.10) (0.96)
------------ ------------ ------------ ------------
Net Asset Value, End of Period ............................ $ 10.14 10.25 $ 10.14 $ 10.24
------------ ------------ ------------ ------------
Total Return(2) ........................................... 1.88%** (2.68)% 1.62%** (3.46)%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ......................... $ 14 $ 16 $ 251 $ 323
Ratios to average net assets:
Net investment income including reimbursement/waiver ... 5.70%* 5.35% 4.99%* 4.60%
Operating expenses including reimbursement/waiver ...... 1.02%* 0.96% 1.73%* 1.71%
Operating expenses excluding reimbursement/waiver ...... 1.47%* 1.52% 2.03%* 2.07%
Portfolio Turnover Rate ................................... 51%** 226% 51%** 226%
--------------------------------------------------------------------------------
<FN>
* Annualized
** Not Annualized
(1) The Fund began offering Retail B Shares on March 4, 1996 and Prime A Shares and Prime B Shares, on November 1, 1998.
(2) Calculation does not include the effect of any sales charge for Retail B Shares, Prime A Shares and Prime B Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Trust
Shares for the six months ended April 30, 2000 (unaudited) and the years ended October 31, 1999, 1998, 1997, 1996 and 1995
were $0.29, $0.56, $0.56, $0.59, $0.60 and $0.62, respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for Retail B Shares for the six months ended April 30, 2000
(unaudited), and the years ended October 31, 1999, 1998 and 1997 and the period ended October 31, 1996 were $0.24, $0.47,
$0.49, $0.51 and $0.34, respectively. Net investment income per share before reimbursement/waiver of fees by the Investment
Advisor and/or Administrator for Prime A Shares for the period ended April 30, 2000 (unaudited) and the year ended October
31, 1999 were $0.27 and $0.54, respectively. Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Prime B Shares for the periods ended April 30, 2000 (unaudited) and the year
ended October 31, 1999 were $0.24 and $0.45, respectively.
</FN>
</TABLE>
See Notes to Financial Statements
36-37
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION
The Galaxy Fund, a Massachusetts business trust (the "Trust"), is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company. As of the date of this report, the Trust offered twenty-nine
managed investment portfolios. The accompanying financial statements and
financial highlights are those of the Short-Term Bond, Intermediate Government
Income, Corporate Bond and High Quality Bond Funds (individually, a "Fund",
collectively, the "Funds") only.
The Short-Term Bond, Intermediate Government Income and High Quality Bond
Funds are authorized to issue six series of shares (Trust Shares, Retail A
Shares, Retail B Shares, Prime A Shares, Prime B Shares and BKB Shares). The
Corporate Bond Fund is authorized to issue two series of shares (Trust Shares
and Retail A Shares). Currently, the High Quality Bond Fund offers all six
series of shares, the Short-Term Bond and Intermediate Government Income Funds
offer Trust Shares, Retail A Shares, Retail B Shares and BKB Shares and the
Corporate Bond Fund offers Trust Shares only. Trust Shares, Retail A Shares,
Retail B Shares, Prime A Shares, Prime B Shares and BKB Shares are substantially
the same except that (i) Retail A Shares are subject to a maximum 3.75%
front-end sales charge, (ii) Prime A Shares are subject to a maximum 4.75%
front-end sales charge, (iii) Retail B Shares and Prime B Shares are subject to
a maximum 5.00% contingent deferred sales charge, and (iv) each series of shares
bears the following series specific expenses: distribution fees and/or
shareholder servicing fees and transfer agency charges. Six years after
purchase, Retail B Shares will convert automatically to Retail A Shares and
eight years after purchase, Prime B Shares will automatically convert to Prime A
Shares. BKBShares of the Short-Term Bond, Intermediate Government Income and
High Quality Bond 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. No BKB Shares of the Short-Term Bond, Intermediate Government
Income and High Quality Bond Funds were issued prior to the date of this report.
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: Investment securities are valued by an independent
pricing service approved by the Trust's Board of Trustees. When, in the judgment
of the service, quoted bid prices are readily available and are representative
of the bid side of the market, investments are valued at the mean between quoted
bid prices and asked prices. Other investments are carried at fair value as
determined by the service based on methods which include consideration of yields
or prices of bonds of comparable quality, coupon maturity and type; indications
as to values from dealers; and general market conditions. Short-term obligations
that mature in 60 days or less are valued at amortized cost, which approximates
fair value. All other securities and other assets are appraised at their fair
value as determined in good faith under consistently applied procedures
established by and under the general supervision of the Board of Trustees.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
accounted for on a trade date basis. Net realized gains or losses on sales of
securities are determined by the identified cost method. Interest income is
recorded on the accrual basis. Investment income and realized and unrealized
gains and losses are allocated to the separate series of a Fund based upon the
relative net assets of each series.
DIVIDENDS TO SHAREHOLDERS: Dividends from net investment income are determined
separately for each series and 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.
38
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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.
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 relative net assets of each series. Operating expenses directly
attributable to a series of shares of a Fund are charged to the operations of
that series.
ORGANIZATION COSTS: Each Fund bears all costs in connection with its
organization, including the fees and expenses of registering and qualifying its
initial shares for distribution under federal and state securities laws. All
such costs are deferred and amortized using the straight-line method over a
period of five years beginning with the commencement of each Fund's operations.
In the event that any of the initial shares purchased by a Fund's sponsor are
redeemed during such period by any holder thereof, the Fund involved will be
reimbursed by such holder for any unamortized organization costs in the same
proportion as the number of initial shares being redeemed bears to the number of
initial shares outstanding at the time of redemption.
3. INVESTMENT ADVISORY, ADMINISTRATION, DISTRIBUTION, SHAREHOLDER SERVICES 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 services for a fee, computed daily and paid monthly, at the annual rate
of 0.75% of the average daily net assets of each Fund (See Note 4).
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 and 0.0575% of combined average daily net assets in excess of $18
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 susidiary of PNC Bank
Corp., acquired all of the outstanding stock of First Data Investor Services
Group, Inc. As part of that 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 it's name to PFPC Inc.
In addition, PFPC Inc. also provides certain fund accounting, custody
administration and transfer agency services in accordance with certain fee
arrangements. Pursuant to these 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
the 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 0.30% of the average daily net asset value
of the outstanding Retail A Shares of each Fund beneficially owned by such
customers. The Trust, under the direction of the Board of Trustees, is currently
limiting fees payable under the Services Plan with respect to each Fund to an
aggregate annual rate not to exceed 0.15% of the average daily net asset value
of the outstanding Retail A Shares beneficially owned by such customers.
39
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The Trust has adopted a distribution and services plan (the "12b-1 Plan") with
respect to Retail B Shares of the Short-Term Bond, Intermediate Government
Income and High Quality Bond Funds. Under the 12b-1 Plan, the Trust may pay (i)
the Distributor or another person for expenses and activities primarily intended
to result in the sale of Retail B Shares, (ii) institutions for shareholder
liaison services and (iii) institutions for administrative support services.
Currently, payments under the 12b-1 Plan for distribution services are being
made solely to broker-dealer affiliates of Fleet Bank and payments under the
12b-1 Plan for shareholder liaison and administrative support services are being
made solely to Fleet Bank and its affiliates. Payments for distribution expenses
may not exceed an annual rate of 0.65% of the average daily net assets
attributable to each of the Funds' outstanding Retail B Shares. The fees paid
for shareholder liaison services and administrative support services may not
exceed the annual rates of 0.15% and 0.15%, respectively, of the average daily
net assets attributable to each of the Funds' outstanding Retail B Shares owned
of record or beneficially by customers of institutions. The Trust, under the
direction of the Board of Trustees, is currently limiting each Fund's payments
for shareholder liaison and administrative support services under the 12b-1 Plan
to an aggregate fee of not more than 0.15% of the average daily net asset value
of Retail B Shares owned of record or beneficially by the customers of
institutions. For the six months ended April 30, 2000, the Funds paid fees under
the Services Plan and 12b-1 Plan as follows:
SERVICES 12B-1 PLAN
----------
FUND PLAN SERVICES DISTRIBUTION
---- ---- -------- ------------
Short-Term Bond ............. $ 15,814 $ 632 $ 3,084
Intermediate Government Income 36,497 917 3,974
High Quality Bond ........... 29,453 4,305 20,109
The Trust has adopted a Distribution Plan (the "Prime A Shares Plan") with
respect to Prime A Shares of the Short-Term Bond, Intermediate Government Income
and High Quality Bond Funds. Under the Prime A Shares Plan, the Trust may pay
the Distributor or another person for expenses and activities primarily intended
to result in the sale of Prime A Shares. Payments by the Trust under the Prime A
Shares Plan may not exceed the annual rate of 0.30% of the average daily net
assets attributable to each Fund's outstanding Prime A Shares. The Trust, under
the direction of the Board of Trustees, is currently limiting the Funds'
payments under the Prime A Shares Plan to an annual rate of not more than 0.25%
of the average daily net asset value of each Fund's outstanding Prime A Shares.
The Trust has adopted a Distribution and Services Plan (the "Prime B Shares
Plan") with respect to Prime B Shares of the Short-Term Bond, Intermediate
Government Income and High Quality Bond Funds. Under the Prime B Shares Plan,
the Trust may pay (i) the Distributor or another person for expenses and
activities primarily intended to result in the sale of Prime B Shares, (ii)
institutions for shareholder liaison services, and (iii) institutions for
administrative support services. Payments for distribution expenses may not
exceed an annual rate of 0.75% of the average daily net assets attributable to
each Fund's outstanding Prime B Shares. The fees paid to institutions for
shareholder liaison services and/or administrative support services may not
exceed the annual rates of 0.25% and 0.25%, respectively, of the average daily
net assets attributable to each Fund's outstanding Prime B Shares owned of
record or beneficially by customers of institutions. The Trust, under the
direction of the Board of Trustees, is currently limiting each Fund's payments
for shareholder liaison and administrative support services under the Prime B
Shares Plan to an aggregate fee of not more than 0.25% of the average daily net
asset value of Prime B Shares owned of record or beneficially by customers of
institutions. For the six months ended April 30, 2000, the Funds paid fees under
the Prime A Shares Plan and Prime B Shares Plan as follows:
PRIME A PRIME B SHARES PLAN
-------------------
FUND SHARES PLAN SERVICES DISTRIBUTION
---- ---------- -------- ------------
High Quality Bond $ 22 $ 350 $ 1,049
The Trust has adopted a shareholder services plan (the "BKBPlan") with respect
to BKB Shares of the Short-Term Bond, Intermediate Government Income and High
Quality Bond Funds. The BKB Plan provides compensation to institutions
(including Fleet Bank and its affiliates) which provide shareholder liaison
and/or administrative support services to their customers who beneficially own
BKBShares at an aggregate annual rate not to exceed 0.30% 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 aggregate annual rate not to exceed 0.15% of the average daily net asset
value of the outstanding BKB Shares beneficially owned by such customers. As of
the date of this report, no payments have been made under the BKB Plan.
Retail A Shares, Retail B Shares, Trust Shares, Prime A Shares, Prime B Shares
and BKB Shares of the Funds each bear series specific transfer agent charges
based upon the number of shareholder accounts for each series. In addition,
Trust Shares also bear additional transfer agency fees in order to compensate
PFPC Inc. for payments made to Fleet Bank, an affiliate of the Investment
Advisor, for performing certain sub-accounting 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 six months ended April 30, 2000, transfer
40
<PAGE>
NOTES TO FINANCIAL STATEMENTS
agent charges for each series (other than BKB Shares which had not been issued
prior to the date of this report) were as follows:
FUND RETAIL A RETAIL B TRUST
---- -------- -------- -----
Short-Term Bond ........... $ 10,517 $ 894 $ --
Intermediate Government
Income ................ 30,904 2,523 21,449
Corporate Bond ............ N/A N/A 23,921
High Quality Bond ......... 29,215 6,372 153,305
FUND PRIME A PRIME B
---- -------- --------
High Quality Bond ......... $ 26 $ 146
Certain officers of the Trust may be officers of the Administrator. Such
officers receive no compensation from the Trust for serving in their respective
roles. No officer, director or employee of the Investment Advisor serves as an
officer, trustee or employee of the Trust. Each Trustee is entitled to receive
for services as a trustee of the Trust, The Galaxy VIP Fund ("VIP") and Galaxy
Fund II ("Galaxy II") an aggregate fee of $45,000 per annum plus certain other
fees for attending or participating in meetings as well as reimbursement for
expenses incurred in attending meetings. 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 six months ended April 30, 2000 include legal fees paid to
Drinker Biddle & Reath LLP. A partner of that firm is Secretary to the Trust.
4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
The Investment Advisor and/or its affiliates and/or the Administrator
voluntarily agreed to waive a portion of their fees and/or reimburse the Funds
for certain expenses so that total expenses would not exceed certain expense
limitations established for each Fund. The respective parties, at their
discretion, may revise or discontinue the voluntary fee waivers and expense
reimbursements at any time. For the six months ended April 30, 2000, the fees
waived and/or expenses reimbursed with respect to the Funds were as follows:
EXPENSES
FUND FEES WAIVED REIMBURSED
---- ------------- ------------
Short-Term Bond ........... $ 55,566 $ 1,669
Intermediate Government
Income ................ 289,832 867
Corporate Bond ............ 82,490 --
High Quality Bond ......... 286,092 2,453
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an unlimited
number of shares of beneficial interest, each with a par value of $0.001. Shares
of the Trust are currently classified into forty 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, Prime A Shares of a Fund bear the
expense of payments under the Prime A Shares Plan, Prime B Shares of a Fund bear
the expense of payments under the Prime B Shares Plan, BKB Shares of a Fund bear
the expense of payments under the BKB Plan and Trust Shares, Retail A Shares,
Retail B Shares, Prime A Shares, Prime B Shares and BKB Shares of a Fund each
bear series specific transfer agent charges) and are entitled to such dividends
and distributions of income earned as are declared at the discretion of the
Trust's Board of Trustees.
Shareholders are entitled to one vote for each full share held, and a
proportionate fractional vote for each fractional share held, and will vote in
the aggregate and not by class or series, except as otherwise expressly required
by law or when the Board of Trustees determines that the matter to be voted on
affects only the interests of shareholders of a particular class or series.
6. PURCHASES AND SALES OF SECURITIES
The cost of purchases and proceeds from sales of securities, excluding
short-term investments, for the six months ended April 30, 2000 were as follows:
FUND PURCHASES GOVERNMENT OTHER
-------------- ---------- -----
Short-Term Bond ........... $ 9,021,022 $ 8,260,109
Intermediate Government
Income ................. 130,176,092 17,290,225
Corporate Bond ............ 29,080,309 19,279,371
High Quality Bond ......... 99,566,481 42,134,270
41
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FUND SALES
----------
Short-Term Bond ........... $ 7,726,600 $ 9,595,699
Intermediate Government
Income ................. 124,219,764 28,249,500
Corporate Bond ............ 29,578,732 11,170,734
High Quality Bond ......... 103,337,327 40,022,702
The aggregate gross unrealized appreciation and (depreciation), net unrealized
appreciation (depreciation), and cost for all securities as computed on a
federal income tax basis at April 30, 2000 for each Fund is as follows:
FUND APPRECIATION (DEPRECIATION)
---- ------------ --------------
Short-Term Bond ........... $ 34,077 $ (965,149)
Intermediate Government
Income ................. 667,836 (7,341,701)
Corporate Bond ............ 217,949 (3,740,770)
High Quality Bond ......... 940,248 (11,195,876)
FUND NET COST
---- --- ----
Short-Term Bond ........... $ (931,072) $ 50,060,774
Intermediate Government
Income ................. (6,673,865) 292,811,010
Corporate Bond ............ (3,522,821) 87,853,226
High Quality Bond ......... (10,255,628) 299,051,956
7. FEDERAL TAX INFORMATION
At October 31, 1999, the following Funds had capital loss carryforwards:
FUND AMOUNT EXPIRATION
---- ------ ----------
Short-Term Bond ........... $ 1,789,957 2001
2,843,359 2002
1,206,932 2003
10,917 2004
9,409 2005
Intermediate Government
Income ................. 17,636,357 2002
3,291,626 2003
2,479,060 2004
3,831,476 2007
Corporate Bond ............ 288,371 2002
1,309,536 2003
450,363 2005
662,376 2007
High Quality Bond ......... 1,291,551 2007
8. LINE OF CREDIT
Each Fund and other affiliated funds participate in a $150 million unsecured
line of credit pursuant to a credit agreementdated as of December 29, 1999.
Borrowings may be made under the credit agreement only for temporary or
emergency purposes, such as repurchase or redemption of shares of the Funds.
Interest is charged to each Fund based on its borrowings. In addition, a
commitment fee based on the average daily unused portion of the line of credit
is computed daily and paid quarterly at an annual rate of 0.10%, and allocated
among the Funds based on average daily net assets. For the period ended April
30, 2000, no borrowings have been made by the Funds against the line of credit.
42
<PAGE>
SHAREHOLDER INFORMATION
[BEGIN SIDEBAR]
TRUSTEES
AND OFFICERS
Dwight E. Vicks, Jr.
CHAIRMAN AND TRUSTEE
John T. O'Neill
PRESIDENT, TREASURER
AND TRUSTEE
Louis DeThomasis,
F.S.C., Ph.D.
TRUSTEE
Donald B. Miller
TRUSTEE
James M. Seed
TRUSTEE
Bradford S. Wellman
TRUSTEE
Jylanne Dunne
VICE PRESIDENT AND
ASSISTANT TREASURER
William Greilich
VICE PRESIDENT
W. Bruce
McConnel, Esq.
SECRETARY
INVESTMENT ADVISOR
Fleet Investment
Advisors Inc.
75 State Street
Boston,
Massachusetts 02109
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 andCherry Streets
Philadelphia, PA 19103
[END SIDEBAR]
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 THE POSSIBLE
LOSS OF PRINCIPAL AMOUNT INVESTED.
[GRAPHIC OMITTED]
This report was printed on recycled paper.
43
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<PAGE>
[Galaxy Funds Logo]
4400 Computer Drive
P.O. Box 5108
Westborough, MA 01581-5108
SEMIABND(7/1/00)
-------------------
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