Galaxy Funds
Galaxy Equity Funds
Annual Report
October 31, 1999
Galaxy Asset Allocation Fund
Galaxy Equity Income Fund
Galaxy Growth and Income Fund
Galaxy Strategic Equity Fund
Galaxy Equity Value Fund
Galaxy Equity Growth Fund
Galaxy International Equity Fund
Galaxy Small Cap Value Fund
Galaxy Small Company Equity Fund
[LOGO] Galaxy
Funds
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Chairman's Message
Dear Shareholder:
Enclosed is the annual report for the Galaxy Equity Funds that covers the
fiscal year ended October 31, 1999. The report includes a Market Overview that
explains the different economic and market factors influencing stock 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 October 31, 1999 appear at the end of the
report.
Unexpected economic strength, prompted in part by recoveries abroad,
pushed major stock indices sharply higher during the fiscal year. Stocks gained
despite concerns about inflation that caused the Federal Reserve to raise
interest rates and pushed bond yields higher. As uncertainty increased about the
direction of interest rates and growth in the second half of the reporting
period, stock prices became more volatile. After a broadening in market
leadership during the second quarter of 1999, investors moved back into stocks
with the strongest credit quality and liquidity. Although returns for most
sectors were better than their historic averages, some sectors outperformed
others by wide margins.
Given the many market changes of the past year, this may be a good time to
meet with a financial advisor who can help you determine whether your current
strategies suit your long-term goals. Investment professionals at Fleet Bank
branches can provide you with a no-obligation analysis that will help you make
this comparison and get the most from your portfolio.
If you are saving for a child's education, or are helping a family member
prepare for college, ask our representatives about the Galaxy College Investment
Program. Galaxy offers an Education IRA which allows for tax-free earnings to
accumulate on your investment if used to pay for qualified college expenses.
Remember that anyone, not just a child's parents, can make a contribution.
You might also consider a custodial account such as a Uniform
Gift/Transfer to Minor Account (UGMA/UTMA). The UGMA/UTMA account offers another
opportunity to transfer assets to minors with favorable tax consequences in
preparation for college expenses. Ask your investment professional or tax
advisor about this important gifting opportunity.
If you have any questions about college investing opportunities or the
information in this report, please contact the Galaxy Information Center
toll-free at 1-877-BUY-GALAXY (1-877-289-4252). You can also visit one of our
investment professionals located at Fleet Bank branches.
Sincerely,
/s/ Dwight E.Vicks, Jr.
Dwight E.Vicks, Jr.
Chairman of the Board of Trustees
Mutual Funds:
o are not bank deposits
o are not FDIC insured
o are not obligations of Fleet Bank
o are not guaranteed by Fleet Bank
o are subject to investment risk including possible loss of principal amount
invested
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Market Overview
EQUITY MARKET OVERVIEW
By Fleet Investment Advisors Inc.
Stock prices rose sharply over the 12-month period ending October 31, 1999
as economic recovery abroad helped growth at home. Most gains occurred in the
first half of the reporting period. Investors eventually worried that higher
inflation and interest rates would force growth to slow. Although current
inflation remained moderate, the Federal Reserve (the "Fed") boosted short-term
interest rates by a total of 50 basis points (0.50%) during the reporting period
to prevent higher inflation down the road. With rising bond yields and
uncertainty over how high interest rates might go, stocks traded in a relatively
narrow range during the second half of the period.
By historical standards, stock returns were quite strong, particularly
shares of growth-oriented firms. During the 12 months ended October 31, 1999,
the Standard & Poor's 500 Index (the "S&P 500 Index"), which represents
large-cap growth stocks, earned a total return of 25.67%. With robust rallies in
the fourth quarter of 1998 and the second quarter of 1999, small-cap stocks,
represented by the Russell 2000 Index (the "Russell 2000") had a total return of
14.87%. Continued improvements in economies abroad during that time helped give
the Morgan Stanley Europe, Australia and Far East Index ("EAFE Index") a total
return of 23.37%.
Economic Outlook Brightens at Home and Abroad
Following a growth rate of 3.7% in the third quarter of 1998, the Gross
Domestic Product ("GDP"), which measures the output of U.S. goods and services,
increased by 6% in the fourth quarter of 1998. The annualized rate of inflation
was about 1.6% at this time. While U.S. growth was strong, economies remained in
turmoil overseas. As many investors looked to U.S. Treasury bonds for safety,
demand for other securities fell. To prevent an international "credit crunch,"
the Fed cut rates by 25 basis points in November of 1998.
As bond yields edged lower and confidence about future growth improved,
many investors shifted from Treasury bonds into stocks. While corporate earnings
reports were disappointing, the change in market sentiment helped stock prices
rebound sharply.
A strong advance by large-company shares helped the Dow Jones Industrial
Average top 10,000 for the first time during the early part of 1999. Despite
reports of continued weakness in corporate earnings for the fourth quarter of
1998, investors were cheered by signs of further economic strength and low
inflation. (The Commerce Department later reported GDP growth of 4.3% in the
first quarter of 1999.) Stock prices were also rallying overseas at this time,
as improving economic prospects encouraged new investment.
Although the Commerce Department would eventually report that GDP growth
slowed to 1.8% in 1999's second quarter and inflation remained modest, there
were enough signals of faster growth ahead for the Fed to impose a rate hike of
25 basis points as the second quarter closed. While bond yields moved higher in
anticipation of that hike, stocks gained further ground. With added optimism
that the long-lived economic expansion would continue, investors expanded their
tastes beyond the large-company shares that had led the market for some time.
Issues of many small- and mid-sized companies outperformed in this environment,
along with "value-oriented" stocks and shares of companies in "cyclical" sectors
with heightened sensitivity to economic change.
Foreign stock prices continued to gain during this time.
This broadening in U.S. market sentiment did not continue into the third
quarter of 1999, as the likelihood of further rate increases by the Fed drove
investors back to large-cap shares. Although inflation had risen to an
annualized rate of just 2.8% by September largely due to rising oil prices, the
rate of GDP growth would eventually be estimated at 5.5%. With signs that growth
was accelerating, and concern that a weaker dollar might boost inflation, the
Fed raised rates another 25 basis points in August. Investors speculated about
further rate hikes through the end of the reporting period.
A Focus on Risk/Reward Discipline
In a changing economic environment, investors preferred stocks whose
earnings could continue to improve even if growth slowed. This climate favored
large-cap companies with accelerating earnings and small-cap firms in growth
sectors like technology. While value-oriented shares attracted many investors in
the second quarter of 1999, the group significantly underperformed for the
"Although the Commerce Department would eventually report that GDP growth slowed
to 1.8% in 1999's second quarter and inflation remained modest, there were
enough signals of faster growth ahead for the Fed to impose a rate hike of 25
basis points as the second quarter closed."
2
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"We expect GDP to grow at about 2.5% in 2000, versus 3.9% and 3.8% in 1998 and
1999, respectively."
reporting period as a whole.
In a market where high valuations for many stocks made them particularly
vulnerable to earnings disappointments, we routinely took profits in holdings of
the Galaxy Equity Funds that had achieved our price targets and invested the
proceeds in positions with better performance potential. Amid signs of excessive
optimism regarding the technology sector, we are maintaining our long-term
risk/reward discipline in structuring the Funds' portfolios.
Slower Growth, Correction Possible
Stock prices will probably remain volatile in coming months and may even
experience a temporary correction. Investors must digest significant uncertainty
in the final months of 1999 with year-end profit taking and market volatility
that Y2K concerns might bring.
Concern about the effect of higher interest rates on the economy should
add to stock fluctuations. With a third rate hike of 25 basis points on November
16, 1999, the Fed effectively erased the 75 basis points of rate cuts it made in
the fall of 1998. While we do not expect further rate increases during 1999, the
Fed may raise rates early in 2000 if continued tightness in the labor supply
puts upward pressure on inflation through higher wages.
There are many indications, however, that recent rate hikes may be
creating an environment for slower growth next year. We expect GDP to grow at
about 2.5% in 2000, versus 3.9% and 3.8% in 1998 and 1999, respectively. If
growth does slow, inflation should remain under control and interest rates and
bond yields could trend lower. With positive prospects for growth in years to
come, any stock price correction that results from slower growth in the near
term could lay the foundation for future gains from the many stocks that have
lagged the market averages over the last 18 months.
PERFORMANCE AT-A-GLANCE
AVERAGE ANNUAL TOTAL RETURNS -- TRUST SHARES
10 Years/
As of October 31, 1999 1 Year 3 Years 5 Years Life of Fund
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Asset Allocation Fund
(Inception date 12/30/91) 9.63% 14.61% 16.89% 12.25%
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Equity Income Fund
(Inception date 12/14/90) 10.60 16.56 18.40 14.78
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Growth and Income Fund
(Inception date 12/14/92) 14.85 18.15 18.80 16.25
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Strategic Equity Fund
(Inception date 3/4/98) 3.64 N/A N/A 0.11
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Equity Value Fund
(Inception date 9/1/88) 15.04 18.10 19.52 14.51
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Equity Growth Fund
(Inception date 12/14/90) 28.07 24.92 24.17 18.30
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International Equity Fund
(Inception date 12/30/91) 29.71 20.02 14.02 12.76
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Small Cap Value Fund
(Inception date 12/14/92) 6.02 10.31 15.35 13.10
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Small Company Equity Fund
(Inception date 12/30/91) 15.54 0.74 11.43 10.14
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3
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PERFORMANCE AT-A-GLANCE (continued)
AVERAGE ANNUAL TOTAL RETURNS -- RETAIL A SHARES*
10 Years/
As of October 31, 1999 1 Year 3 Years 5 Years Life of Fund
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Asset Allocation Fund
(Inception date 12/30/91) 5.42% 12.99% 15.79% 11.57%
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Equity Income Fund**
(Inception date 12/14/90) 5.99 14.62 16.97 13.99
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Growth and Income Fund
(Inception date 2/12/93) 10.26 16.39 17.59 15.71
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Strategic Equity Fund
(Inception date 3/4/98) -0.58 N/A N/A -2.65
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Equity Value Fund**
(Inception date 9/1/88) 10.35 16.22 18.16 13.85
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Equity Growth Fund**
(Inception date 12/14/90) 22.79 22.85 22.71 17.51
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International Equity Fund
(Inception date 12/30/91) 24.22 17.83 12.50 11.79
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Small Cap Value Fund
(Inception date 2/12/93) 1.70 8.52 14.09 12.48
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Small Company Equity Fund
(Inception date 12/30/91) 10.59 -0.98 10.04 9.25
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AVERAGE ANNUAL TOTAL RETURNS -- A PRIME SHARES***
10 Years/
As of October 31, 1999 1 Year 3 Years 5 Years Life of Fund
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Asset Allocation Fund
(Inception date 11/1/98) 3.66% N/A N/A 3.66%
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Growth and Income Fund
(Inception date 11/1/98) 8.47 N/A N/A 8.47
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Equity Growth Fund
(Inception date 11/1/98) 20.28 N/A N/A 20.28
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International Equity Fund
(Inception date 11/1/98) 22.60 N/A N/A 22.60
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Small Cap Value Fund
(Inception date 11/1/98) -0.02 N/A N/A -0.02
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* Return figures have been restated to include the effect of the maximum
3.75% front-end sales charge which became effective on December 1, 1995.
** Retail A Shares of the Equity Value Fund and Equity Growth Fund were first
issued during the fiscal year ended October 31, 1991 and Retail A Shares
of the Equity Income Fund were first issued during the fiscal year ended
October 31, 1992. The returns for prior periods represent the returns for
Trust Shares of the Funds. Prior to November 1, 1993, the returns for
Retail A Shares and Trust Shares of the Funds were the same because each
series of shares had the same expenses.
*** Return figures include the effect of the maximum 5.50% front-end sales
charge.
4
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PERFORMANCE AT-A-GLANCE (continued)
AVERAGE ANNUAL TOTAL RETURNS -- RETAIL B SHARES**
<TABLE>
<CAPTION>
1 Year 1 Year 3 Year 3 Year Life of Fund Life of Fund
Return Before Return After Return Before Return After Return Before Return After
Contingent Contingent Contingent Contingent Contingent Contingent
Deferred Sales Deferred Sales Deferred Sales Deferred Sales Deferred Sales Deferred Sales
As of October 31, 1999 Charge Deducted Charge Deducted* Charge Deducted Charge Deducted* Charge Deducted Charge Deducted*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Asset Allocation Fund
(Inception date 3/4/96) 8.76% 3.76% 13.66% 12.88% 13.35% 12.95%
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Equity Income Fund
(Inception date 11/1/98) 9.38 4.44 N/A N/A 9.38 4.44
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Growth and Income Fund
(Inception date 3/4/96) 13.72 8.72 17.00 16.27 15.81 15.44
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Strategic Equity Fund
(Inception date 3/4/98) 2.50 -2.50 N/A N/A -1.52 -4.06
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Equity Value Fund
(Inception date 3/4/96) 13.81 8.81 16.87 16.14 16.28 15.91
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Equity Growth Fund
(Inception date 3/4/96) 26.63 21.63 23.58 22.92 21.46 21.14
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International Equity Fund
(Inception date 11/1/98) 28.41 23.41 N/A N/A 28.41 23.41
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Small Cap Value Fund
(Inception date 11/1/98) 4.80 0.04 N/A N/A 4.80 0.04
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Small Company Equity Fund
(Inception date 3/4/96) 14.34 9.34 -0.31 -1.09 3.71 3.27
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</TABLE>
AVERAGE ANNUAL TOTAL RETURNS -- B PRIME SHARES**
<TABLE>
<CAPTION>
1 Year 1 Year Life of Fund Life of Fund
Return Before Return After Return Before Return After
Contingent Contingent Contingent Contingent
As of October 31, 1999 Charge Deducted Charge Deducted* Charge Deducted Charge Deducted*
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<S> <C> <C> <C> <C>
Asset Allocation Fund
(Inception date 11/1/98) 8.91% 3.91% 8.91% 3.91%
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Growth and Income Fund
(Inception date 11/1/98) 13.98 8.98 13.98 8.98
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Equity Growth Fund
(Inception date 11/1/98) 26.79 21.79 26.79 21.79
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International Equity Fund
(Inception date 11/1/98) 28.74 23.74 28.74 23.74
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Small Cap Value Fund
(Inception date 11/1/98) 4.96 0.18 4.96 0.18
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</TABLE>
* As if shares were redeemed at end of period.
** Retail B Shares and B Prime 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 B Prime
Shares automatically convert to A Prime Shares after eight years.
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.
5
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Portfolio Reviews
GALAXY ASSET ALLOCATION FUND
By Don Jones
Portfolio Manager
[PHOTO]
Don Jones became manager of the Galaxy Asset Allocation Fund in April 1995. He
has managed investment portfolios for Fleet Investment Advisors Inc., and its
predecessors, since 1977.
As the economic outlook changed over the past year, individual sectors of
the stock and bond markets responded differently. We tried to make the best of
this environment by routinely taking profits in investments that outperformed,
and adding securities that represented better value.
For the 12 months ended October 31, 1999, Trust Shares of the Galaxy Asset
Allocation Fund earned a total return of 9.63%. For the same period, the Fund's
Retail A Shares returned 9.53%, before deducting the maximum 3.75% front-end
sales charge, and its Retail B Shares returned 8.76%, before deducting the
maximum 5.00% contingent deferred sales charge. A Prime Shares of the Fund
returned 9.72% before deducting the maximum 5.50% front-end sales charge, and B
Prime Shares returned 8.91% before deducting the maximum 5.00% contingent
deferred sales charge. (Please see the charts on page 4 for total returns after
deducting the applicable front-end sales charge and the charts on page 5 for
total returns after deducting the applicable contingent deferred sales charge.)
These total returns compare with a total return of 13.59% for the average
flexible fund tracked by Lipper Analytical Services, Inc. ("Lipper"). During the
same time, the S&P 500 Index, which tracks the performance of stocks only,
returned a total of 25.67%.
Allocation Strategies
Early in the period, we found many new investment opportunities in stocks
resulting from the market's sharp correction in the fall of 1998. Using proceeds
from the sale of manufacturing shares, we bought stocks of financial and
technology companies. With investors nervous about the future of financial
markets here and abroad, we reduced the Fund's allocation to corporate bonds in
the fixed-income portfolio from 60% to 50%.
As a strong economy helped stocks rise briskly early in 1999, we continued
to benefit from our emphasis on individual stocks and market sectors that
investors favored, such as shares of consumer staples and technology firms. An
underweighting in economically sensitive issues, which were out of favor at the
time, further enhanced Fund returns. Using profits from medical and energy
stocks that had performed well, we increased shares of capital goods, oil
service, retail, transportation, and Internet firms.
During the second quarter of 1999, a shift away from large-cap growth
stocks into shares of smaller companies and economically sensitive issues
reduced Fund returns. Performance was particularly disappointing for drug and
technology stocks, which represent large portions of the portfolio. The Fund
benefited, however, from additions of capital goods shares that performed well.
We also bought shares of money-center banks and Internet firms at this time.
6
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Portfolio Reviews
As the period progressed, strong performance by individual stocks and
selected non-Treasury fixed-income issues helped offset the generally
disappointing returns from the Fund's stock and bond portfolios. We took
advantage of price fluctuations to add stocks that offered attractive investment
opportunities. These included stocks of money-center banks as well as shares of
technology, consumer cyclical, and capital goods firms. To finance these
purchases, we sold issues that had performed well or had otherwise reduced their
potential for gains.
Throughout the period, we maintained a 40% weighting in bonds, split
almost evenly between U.S. government and corporate issues.
A Positive Long-Term Outlook
We believe the long-term prospects for stocks are quite favorable, given
the positive outlook for inflation and earnings. In coming months, we may see a
short-term correction that could present attractive buying opportunities among
companies with good prospects for long-term growth. To take advantage of these
opportunities, we will likely reduce the Fund's cash reserves. If stock prices
become especially attractive, we may also trim the Fund's 40% weighting in
bonds.
Recent purchases in the technology area have focused on blue-chip Internet
stocks. Once current economic uncertainties ease, we may look for lesser
Internet names that could offer shareholders greater appreciation potential over
time. For now, we plan to keep the fixed-income portfolio split between
corporate bonds and U.S. Government securities. The higher yields from
corporates should help boost returns as bond prices continue to fluctuate.
Galaxy Asset Allocation Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was in a pie chart in the printed material.]
U.S. Government and Agency Obligations &
Net Other Assets and Liabilities 23%
Commercial Paper 8%
Corporate Notes and Bonds 14%
Asset-Backed and Mortgage-Backed Securities 2%
Common & Convertible Preferred Stocks 53%
Galaxy Asset Allocation Fund
Growth of $10,000 investment*
[The following information was in a mountain graph in the printed material.]
12/30/91 10/31/99
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S&P 500 Index $10,000 $38,978
Galaxy Asset Allocation Fund - Retail A Shares $ 9,625 $23,581
Galaxy Asset Allocation Fund - Retail B Shares $10,000 $15,618
Galaxy Asset Allocation Fund - Trust Shares $10,000 $24,736
Galaxy Asset Allocation Fund - A Prime Shares $ 9,450 $10,366
Galaxy Asset Allocation Fund - B Prime Shares $10,000 $10,391
* Since inception on 12/30/91 for Trust and Retail A Shares. Since inception
on 3/4/96 for Retail B Shares. Since inception on 11/1/98 for A Prime
Shares and B Prime Shares. Performance figures for Retail A Shares include
the effect of the maximum 3.75% front-end sales charge. Performance
figures for A Prime Shares include the effect of the maximum 5.50%
front-end sales charge. Performance figures for Retail B and B Prime
Shares reflect the deduction of the 3.00% contingent deferred sales charge
(applicable to shares redeemed during the fourth year after purchase) and
the maximum 5.00% contingent deferred sales charge, respectively, as if
shares were redeemed on October 31, 1999. The S&P 500 Index is an
unmanaged index in which investors cannot invest. Results for the index do
not reflect the investment management fees and other expenses incurred by
the Fund.
7
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Portfolio Reviews
[PHOTO]
Ed Klisiewicz has been portfolio manager of the Galaxy Equity Income Fund since
its inception in December of 1990. He has managed portfolios for Fleet
Investment Advisors Inc., and its predecessors, since 1970.
GALAXY EQUITY INCOME FUND
By Ed Klisiewicz
Portfolio Manager
With many economic and market changes in the past 12 months, the Galaxy
Equity Income Fund benefited from holding quality companies representing a broad
range of sectors. We further enhanced returns by emphasizing stocks with healthy
yields, at a time when yields for many stocks declined.
For the 12 months ending October 31, 1999, the Fund's Trust Shares had a
total return of 10.60%. Over the same time, Retail A Shares of the Fund had a
total return of 10.14%, before deducting the maximum 3.75% front-end sales
charge and Retail B Shares of the Fund earned a total return of 9.38% before
deducting the maximum 5.00% contingent deferred sales charge. (Please see the
chart on page 4 for total returns after deducting the front-end sales charge and
the chart on page 5 for total returns after deducting the contingent deferred
sales charge.) Those returns compare to a total return of 9.56% for the average
equity income fund tracked by Lipper. Over the same time the S&P 500 Index had a
total return of 25.67%.
Broad Diversification Helps Performance
We entered the reporting period looking for opportunities resulting from
an earlier market correction. We put cash to work in many existing positions,
especially shares of banks. In subsequent months, strong returns from these and
other holdings offset a disappointing performance by energy and utility shares.
With profits we took in banking stocks, we bought office-equipment shares with
better price potential.
Gains from consumer, telephone, utility, and rebounding energy stocks in
the first months of 1999 helped offset the negative effect of rising bond yields
on shares of financial firms and non-telephone utilities. In 1999's second
quarter, gains from energy, financial, utility, and basic materials shares
offset a disappointing performance by stocks of large drug companies.
In the final months of the period, the Fund's exposure to financials and
consumer staples hindered total returns, as both groups came under pressure.
However, energy stocks performed well with further gains in oil prices. In
October, the financial and drug sectors rebounded, reducing the poorer total
returns from utilities, REITs, and other higher-yielding shares. Although a
pullback in oil prices hurt energy stocks, the strong yields from these stocks
enhanced the Fund's total returns. We added selectively to insurance and bank
stocks at this time, which we felt represented good value.
Staying the Course
If slower growth eases fears of higher interest rates, as we expect,
higher-dividend stocks could enjoy an especially strong rebound as the market
recovers. With a well-diversified portfolio, and a slight overweighting in
utility and finance stocks because of their attractive dividends, we believe the
Fund could perform well in such an environment.
Galaxy Equity Income Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was in a pie chart in the printed material.]
U.S. Government Obligations, Repurchase
Agreement & Net Other Assets and Liabilities 12%
Basic Materials 3%
Consumer Staples 22%
Consumer Cyclical 8%
Utilities 10%
Capital Goods and Construction 6%
Technology 10%
Energy 11%
Finance 18%
Galaxy Equity Income Fund
Growth of $10,000 investment*
[The following information was in a mountain graph in the printed material.]
12/14/90 10/31/99
-------- --------
S&P 500 Index $10,000 $52,243
Galaxy Equity Income Fund - Retail A Shares $ 9,625 $31,988
Galaxy Equity Income Fund - Retail B Shares $10,000 $10,444
Galaxy Equity Income Fund - Trust Shares $10,000 $34,010
* Since inception on 12/14/90 for Retail A and Trust 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
maximum 5.00% contingent deferred sales charge as if shares were redeemed
on October 31 1999. The S&P 500 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.
8
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Portfolio Reviews
[PHOTO]
Greg Miller has managed the Galaxy Growth and Income Fund since July of 1998. He
has managed equity portfolios since 1988.
GALAXY GROWTH AND INCOME FUND
By Greg Miller
Portfolio Manager
During a time when growth stocks outperformed value-oriented issues, we
tried to make the most of the many attractive investment opportunities that were
available. As positions in the Galaxy Growth and Income Fund performed well, we
sold shares of those issues and invested the proceeds in stocks that we felt had
better potential. This strategy helped the Fund outperform other funds with
similar investment objectives.
For the 12 months ended October 31, 1999, the Fund's Trust Shares earned a
total return of 14.85%. Over the same time, the Fund's Retail A Shares earned
14.56% before deducting the maximum 3.75% front-end sales charge and Retail B
Shares earned 13.72% before deducting the maximum 5.00% contingent deferred
sales charge. A Prime Shares of the Fund earned 14.81% before deducting the
maximum 5.50% front-end sales charge and B Prime Shares earned a total return of
13.98% before deducting the maximum 5.00% contingent deferred sales charge.
(Please see the charts on page 4 for total returns after deducting the
applicable front-end sales charge and the charts on page 5 for total returns
after deducting the applicable contingent deferred sales charge.)
These results compare to a total return of 11.72% for the average
multi-cap value fund tracked by Lipper. For the same period, the S&P 500 Index,
which represents a more growth-oriented universe of stocks, had a total return
of 25.67%.
Sector Strategies Enhance Results
When the period began in the fourth quarter of 1998, we used the pullback
in stocks from the third quarter to increase positions in banking, retail, and
energy firms. The Fund benefited during this time from its specific selection of
technology and retail stocks. The strong gains by these shares helped to offset
disappointing results from an overweighted position in energy stocks hurt by
falling oil prices. As additional market fluctuations occurred, we traded
certain technology, health care, and telecommunications shares that had
performed well for stocks with better potential.
The Fund's overweighted position in energy stocks boosted performance in
the first months of 1999, when rising oil prices helped the sector rebound
strongly. During this time, the Fund also enjoyed strong returns from
overweighted positions in the capital goods and basic materials groups and from
its specific selection of capital goods, basic materials, and transportation
stocks. An underweighting in the lesser-performing consumer staples enhanced
returns, as
9
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Portfolio Reviews
well. With investors favoring issues with greater economic sensitivity, we
continued to take profits in health care issues. Because interest in technology
stocks was ebbing, we focused on shares in the sector with more reasonable
valuations.
As the rally broadened in the second quarter of 1999, the Fund benefited
further from its cyclical positions and from an underweighting in consumer
staples shares. Eventually we traded capital goods and consumer cyclical shares
that had performed well for stocks in the consumer staples area with better
value.
Although investors abandoned economically sensitive and value-oriented
issues in the final months of the period, the Fund's overweighted position in
energy shares and a strong performance from its technology holdings contributed
positively to total returns. During this time, we traded shares of technology,
drug, and banking stocks that had performed well for shares of energy, health
care and other firms with better potential.
Valuations Are Attractive
Many stocks in the Fund's portfolio are more attractive now than they have
been for some time. While it is difficult to know when value investing will be
in favor again, a strong outlook for corporate earnings should lay the
foundation for further gains. Once we get past the uncertainty surrounding
potential Y2K computer problems, we may see value stocks assume market
leadership in the first months of next year. Given our current emphasis on these
securities, the Fund would be well positioned to benefit from such a turnaround.
Galaxy Growth and Income Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was in a pie chart in the printed material.]
Other Preferred & Common Stocks 17%
Repurchase Agreement & Net Other Assets and Liabilities 7%
Consumer Staples 18%
Technology 16%
Consumer Cyclical 10%
Utilities 9%
Energy 10%
Finance 13%
Galaxy Growth and Income Fund
Growth of $10,000 investment*
[The following information was in a mountain graph in the printed material.]
12/14/92 10/31/99
-------- --------
S&P 500 Index $10,000 $36,669
Galaxy Growth and Income Fund - Retail A Shares $ 9,625 $26,641
Galaxy Growth and Income Fund - Retail B Shares $10,000 $16,912
Galaxy Growth and Income Fund - Trust Shares $10,000 $28,180
Galaxy Growth and Income Fund - A Prime Shares $ 9,450 $10,847
Galaxy Growth and Income Fund - B Prime Shares $10,000 $10,898
* Since inception on 12/14/92 for Trust Shares and 2/12/93 for Retail A
Shares. Since inception on 3/4/96 for Retail B Shares. Since inception on
11/1/98 for A Prime Shares and B Prime Shares. Performance figures for
Retail A Shares include the effect of the maximum 3.75% front-end sales
charge. Performance figures for A Prime Shares include the effect of the
maximum 5.50% front-end sales charge. Performance figures for Retail B and
B Prime Shares reflect the deduction of the 3.00% contingent deferred
sales charge (applicable to shares redeemed during the fourth year after
purchase) and the maximum 5.00% contingent deferred sales charge,
respectively, as if shares were redeemed on October 31, 1999. The S&P 500
is an unmanaged index in which investors cannot invest. Results for the
index do not reflect the investment management fees and other expenses
incurred by the Fund.
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Portfolio Reviews
[PHOTO]
Peter Hathaway has managed the Galaxy Strategic Equity Fund since its inception
in March of 1998. He has worked for Fleet Investment Advisors Inc., or its
predecessors, since 1965 and has managed investments since 1974.
GALAXY STRATEGIC EQUITY FUND
By Peter Hathaway
Portfolio Manager
For the 12 months ended October 31, 1999, Trust Shares of the Galaxy
Strategic Equity Fund earned a total return of 3.64%. For the same period,
Retail A Shares of the Fund returned 3.25%, before deducting the maximum 3.75%
front-end sales charge, and its Retail B Shares returned 2.50%, before deducting
the maximum 5.00% contingent deferred sales charge. (Please see the chart on
page 4 for total returns after deducting the front-end sales charge and the
chart on page 5 for total returns after deducting the contingent deferred sales
charge.)
Over the same time, the average multi-cap value fund tracked by Lipper
earned a return of 11.72% and the S&P 500 Index returned 25.67%. Lipper has
classified the Fund as "multi-cap core" pending a review requested by the
Advisor to include the Fund in the multi-cap value category, which would reflect
the Fund's value-biased investment process. Lipper's average multi-cap core fund
returned 23.12% for the 12 months ended October 31, 1999.
Growth at a Reasonable Price
Fiscal 1999 proved to be a very difficult environment for value investors
seeking growth at a reasonable price. Since the end of 1997, the majority of the
market's returns have been highly concentrated in a few large stocks. While
earnings for the largest 50 stocks in the S&P 500 Index increased approximately
17% in 1999, market values jumped over 35%. Price to earnings ratios reached
levels lacking historical precedence, with large stocks valued at 28 times 1999
earnings as compared to 17 times 1999 earnings for the remaining 450 S&P 500
Index stocks. Technology was a dominant force with the 7 largest technology
stocks (excluding America On-Line) increasing more in market value than the
entire S&P 500 Index. Technology sector market values rose over 70% to nearly
one-quarter of the S&P 500 Index, up from 17% a year ago. Its price earnings
ratio now stands at 33 times estimated 1999 earnings, nearly twice that of the
Index average.
In this environment the Fund's value driven growth discipline was
maintained. Profits have been taken over time in the Fund's large cap stocks as
they approached relative and absolute price levels lacking historical valuation
precedence. The Fund's technology sector was pared back from its overweighted
position by mid-year. Sector returns were good but fell short of the highly
valued large-cap technology stocks that continue to dominate the S&P 500 Index.
The creation of the two tiered market since 1997 has provided attractive
investment opportunities in the "other 450" stocks of the S&P 500 Index. They
are valued at 30% to 40% discounts to the larger stocks yet offer competitive
long-term earnings growth potential. Median returns have been essentially zero
compared to 70% for the largest 50 stocks over the past two years, indicative of
the developing two tier market. As Fund investments in the larger companies and
technology sector have been reduced, the proceeds have been used to purchase
growth at a reasonable price in the "other 450" market sector.
The Fund closed the year with below market weightings in consumer staples,
technology and utilities and above market weightings in healthcare, capital
goods and energy. The energy sector was increased significantly in the second
fiscal quarter as weak oil prices severely depressed stocks of oil service and
exploration companies. Industry consolidation and favorable long-term
supply/demand fundamentals point toward an extended capital spending cycle
resulting in several years of exceptional earnings growth for these companies.
Portfolio returns were competitive through the third fiscal quarter
benefiting from the recovery in oil prices and a broadening of the market in the
spring. The final quarter brought a brief market correction, a tightening of
monetary policy by the Fed and rising interest rates. Investors again sought
refuge in technology stocks and large cap stocks having earnings visibility with
little regard for valuations. The Fund finished the fiscal year with a positive
return but shy of its peer benchmarks. Its discipline to growth at a reasonable
price was maintained, exposure to excessive market risk was minimized and there
was no style creep.
The Fund continues to have balance with approximately 50% of its assets
invested in growth companies, 25% in cyclically sensitive stocks and 25% in
value stocks. Seventy-five percent of the the Fund's portfolio is invested in
companies other than the largest 50 stocks compared to a 40% weighting for the
S&P 500 Index. Valuation para-
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Portfolio Reviews
meters continue to compare favorably with those of the market. Long-term
earnings growth forecasts for the Fund's stocks are higher than those for the
S&P 500 Index stocks and the price to earnings ratio is 18 times 1999 earnings
compared to 27 times. Measures of price to book and price to sales are less than
half that of the Index.
A More Optimistic Outlook for the "Other" 450 Stocks
At year-end, 15 of the largest stocks in the S&P 500 Index (comprising 30%
of the Index and including household names such as Microsoft, GE, Intel, IBM,
Wal-Mart, Exxon and Merck) have benefited from nearly a decade of rising price
to earnings ratios. Their average annual price to earnings ratios rose gradually
from 15 times in 1990 to 24 times in 1997, then jumped to 30 times in 1998 and
now stand at 35 times. During the past 18 months when this premium for large
blue chip stocks was rising rapidly (from 24 times to 35 times), value biased
investment processes lagged the market. The valuation of these select few stocks
are at an all time high and more than twice that of the "other 450". If the
premium valuation of the few largest stocks stabilizes or declines, then the
other 450 stocks should provide competitive or superior relative returns.
A second plus in the outlook is the continued growth of the global
economy. Companies with even modest cyclical sensitivity have lacked pricing
power due to sluggish demand and low inflation. The recovery in global
economies, tight labor markets and a weak dollar have the potential to translate
into better earnings comparisons for cyclically sensitive companies. These
companies fall into the other 450 stock category, sell at depressed valuations
and have been given increased emphasis in the portfolio.
Barring economic recession, the Fund's portfolio is well positioned for a
market sensitive to reasonable valuations based on fundamental earnings
prospects. Forecasted 12 to 18 month returns relative to the market are at the
high end of their historical range and the majority of the Fund's holdings offer
good absolute value as well as relative value.
Galaxy Strategic Equity Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was in a pie chart in the printed material.]
Repurchase Agreement & Net Other Assets and Liabilities 9%
Capital Goods and Construction 8%
Consumer Cyclical 13%
Other Common Stocks 4%
Consumer Staples 19%
Technology 15%
Basic Materials 4%
Finance 13%
Energy 15%
Galaxy Strategic Equity Fund
Growth of $10,000 investment*
[The following information was in a mountain graph in the printed material.]
3/4/98 10/31/99
------- --------
S&P 500 Index $10,000 $13,291
Galaxy Strategic Equity Fund - Retail A Shares $ 9,625 $ 9,564
Galaxy Strategic Equity Fund - Retail B Shares $10,000 $ 9,373
Galaxy Strategic Equity Fund - Trust Shares $10,000 $10,019
* Since inception on 3/4/98 for Trust, Retail A Shares and 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 October 31, 1999. The S&P 500 Index is an
unmanaged index in which investors cannot invest. Results for the index do
not reflect the investment management fees and other expenses incurred by
the Fund.
12
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Portfolio Reviews
[PHOTO]
G. Jay Evans has managed the Galaxy Equity Value Fund since April of 1993. He
has managed value-oriented portfolios for Fleet Investment Advisors Inc., and
its predecessors, since 1978.
GALAXY EQUITY VALUE FUND
By G. Jay Evans
Portfolio Manager
During the twelve months ended October 31, 1999, the Galaxy Equity Value
Fund performed well against the average multi-cap value fund tracked by Lipper.
Trust Shares of the Fund earned a return of 15.04%, Retail A Shares returned
14.63% before deducting the maximum 3.75% front-end sales charge and Retail B
Shares returned 13.81% before deducting the maximum 5.00% contingent deferred
sales charge as compared to 11.72% for the Lipper category. During the same time
the S&P 500 Index, which is more representative of growth-oriented firms,
returned 25.67%. (Please see the chart on page 4 for total returns after
deducting the front-end sales charge and the chart on page 5 for total returns
after deducting the contingent deferred sales charge.).
A Seesaw Market
Value portfolios performed well through the spring of 1999, as earnings
growth estimates increased and the long-lived economic expansion appeared more
sustainable. The Fund benefited during this time from strong performance by its
consumer cyclical and technology holdings, which represented overweighted
positions versus the Fund's benchmarks. Excellent selectivity in its energy and
health care positions further enhanced total returns. These factors helped
offset weaker total returns from financial holdings hurt by rising interest
rates and from underweighted positions in the soaring stocks of Internet,
personal communications and large-cap growth companies due to our ongoing
orientation toward value.
In June, the economy's strength triggered inflation concerns and higher
interest rates. Investors became less confident in their assessment of consumer
spending and found little sympathy for companies warning of even minor earnings
shortfalls. The Fund's financial stocks continued to suffer in this climate,
along with consumer cyclical issues. As we entered the fall, investors narrowed
their focus to technology and communications stocks with large market
capitalizations.
The Promise of Value
Productivity is defined as the ability to produce more goods and services
with the same or less amount of labor. Today, productivity gains are all that
stand between us and a traditional economic cycle that ends in rising inflation
and higher interest rates. If the Fed has to raise interest rates further to
control inflation, the recovery in value investing will be delayed. However, if
the global economic and e-commerce revolutions continue to raise productivity,
substantially offsetting the cyclical pressures of tight labor and materials
markets, the outlook for earnings and value investing will brighten.
Large-capitalization growth has led the market for several years. Many of
these issues now sell at unsupportable price/earnings premiums. Conversely, many
value stocks are priced as bargains. The valuation disparity between growth and
value and between large-cap and mid-cap issues has rarely been as wide. Value
stocks have
13
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Portfolio Reviews
taken the lead in past periods of rising earnings expectations, which have often
been characterized by pricing flexibility and competition.
This time around, more efficient markets aided by the Internet and
e-commerce could challenge companies that have been the traditional leaders in
market share. The Internet has opened markets to increased competition, a change
that should benefit value investors. Value investments have also outperformed
growth positions during periods of economic strength, when long-term interest
rates rise. Such conditions may develop next year as national elections
encourage an increase in government spending at home and demand strengthens in
the recovering economies of Asia and Europe.
As the outlook for value improves, the Fund will be supported by a strong
research effort focused on finding overlooked, undervalued companies that are
experiencing improvements in their levels of profitability. This effort will be
helped by a highly sophisticated valuation system designed to identify stocks
for our review.
Galaxy Equity Value Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was in a pie chart in the printed material.]
Other Common Stocks 5%
Energy 9%
Repurchase Agreement & Net Other Assets and Liabilities 3%
Technology 21%
Utilities 7%
Finance 18%
Consumer Staples 9%
Consumer Cyclical 23%
Capital Goods and Construction 5%
Galaxy Equity Value Fund
Growth of $10,000 investment*
[The following information was in a mountain graph in the printed material.]
9/1/88 10/31/99
------- --------
S&P 500 Index $10,000 $69,669
Galaxy Equity Value Fund - Retail A Shares $ 9,625 $43,486
Galaxy Equity Value Fund - Retail B Shares $10,000 $17,169
Galaxy Equity Value Fund - Trust Shares $10,000 $46,074
* Since inception on 9/1/88 for Trust and Retail A Shares. Since inception
on 3/4/96 for Retail B Shares. Performance figures for Retail A Shares
include the effect of the maximum 3.75% front-end sales charge.
Performance figures for Retail B Shares reflect the deduction of the 3.00%
contingent deferred sales charge (applicable to shares redeemed during the
fourth year after purchase) as if shares were redeemed on October 31,
1999. The S&P 500 Index is an unmanaged index in which investors cannot
invest. Results for the index do not reflect the investment management
fees and other expenses incurred by the Fund.
14
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Portfolio Reviews
[PHOTO]
Bob Armknecht has been managing the Galaxy Equity Growth Fund since its
inception in December of 1990. He has managed equity portfolios for Fleet
Investment Advisors Inc. since 1988.
GALAXY EQUITY GROWTH FUND
By Bob Armknecht
Portfolio Manager
In a climate that generally favored growth, we invested heavily in
industries where the growth outlook was particularly strong: technology, health
care, finance, and media/communications. This approach resulted in solid gains
for much of the period and helped the Galaxy Equity Growth Fund perform well
versus its market benchmarks.
For the 12 months ended October 31, 1999, the Fund's Trust Shares earned a
total return of 28.07%. Over the same time, Retail A Shares of the Fund earned
27.55%, before deducting the 3.75% maximum front-end sales charge, and Retail B
Shares earned 26.63%, before deducting the 5.00% maximum contingent deferred
sales charge. The Fund's A Prime Shares earned 27.30% before deducting the
maximum 5.50% front-end sales charge and B Prime Shares earned a total return of
26.79% before deducting the 5.00% maximum contingent deferred sales charge.
(Please see the charts on page 4 for total returns after deducting the
applicable front-end sales charge and the charts on page 5 for total returns
after deducting the applicable contingent deferred sales charge.)
Over the same period, the total return for large-cap core funds tracked by
Lipper was 26.12% and the S&P 500 Index earned a total return of 25.67%.
Focus on Growth Boosts Returns
The fiscal year began with investors concerned about both global and
domestic economic conditions. In this environment, we took advantage of
investment opportunities in the broadcasting, finance, and entertainment
sectors. We also traded securities within the technology sector to enhance the
earnings potential of Fund holdings in that group. This boosted returns in the
months that followed as technology stocks rallied.
When oil prices rebounded early in 1999, the Fund benefited from its
overweighted position in energy stocks, as well as from overweightings in the
strongly performing semiconductor and health care sectors. These gains helped
offset the disappointing returns from shares of broadcasting, retail, and
communications firms which occured at that time. With the proceeds from certain
technology and communications stocks that had performed well, we added shares of
broadcasting and other communications firms that were particularly attractive,
as well as shares of manufacturing, industrial, and financial firms. Many of
these additions made positive contributions to the Fund's performance later in
the reporting period.
While a shift of market attention away from growth stocks in the second
quarter of 1999 weakened the Fund's performance, holdings in energy and capital
goods shares made positive contributions. Superior stock selection in these
areas, as well as in the consumer cyclical, consumer staples, and financial
sectors, further improved returns. We reduced positions in technology, airlines,
and food stocks during this time and we added shares of cap-
15
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Portfolio Reviews
ital goods, consumer electronics, manufacturing, cable television and financial
firms.
Rising rates weighed on financial stocks in the third quarter, but the
Fund weathered the downturn relatively well, as outperformance by holdings in
the communications and energy sectors offset poor returns from financial shares.
At this point we used some cash reserves to take advantage of investment
opportunities in the drug, consumer electronics, and communications hardware
groups. In the final weeks of the period, we trimmed our exposure to the
disappointing financial and capital goods sectors and restructured the Fund's
financial holdings. We used price weakness in the technology and health care
sectors to increase positions there.
Long-Term Prospects Are Bright
Year-end profit-taking, unexpected earnings disappointments, Y2K concerns
and uncertainty about the direction of interest rates may keep stock prices
volatile in coming months. Slower growth, lower interest rates, and attractive
valuations could set the stage for a sustained market rebound in 2000. In the
meantime, the Fund should benefit from its emphasis on stocks with strong growth
potential and attractive prices.
We expect market leadership to remain dominated by stocks of companies in
fast-growing sectors. Where possible, we plan to take advantage of any new
investment opportunities in these issues that further price declines may bring.
As always, we plan to maintain a diversified portfolio of large-company growth
stocks whose underlying issuers have reliable earnings and solid growth
prospects.
Galaxy Equity Growth Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was in a pie chart in the printed material.]
Repurchase Agreement & Net Other Assets and Liabilities 5%
Capital Goods and Construction 8%
Finance 12%
Consumer Cyclical 7%
Energy 8%
Consumer Staples 18%
Technology 29%
Convertible Preferred & Other Common Stocks 13%
Galaxy Equity Growth Fund
Growth of $10,000 investment*
[The following information was in a mountain graph in the printed material.]
12/14/90 10/31/99
-------- --------
S&P 500 Index $10,000 $52,243
Galaxy Equity Growth Fund - Retail A Shares $ 9,625 $41,897
Galaxy Equity Growth Fund - Retail B Shares $10,000 $20,175
Galaxy Equity Growth Fund - Trust Shares $10,000 $44,474
Galaxy Equity Growth Fund - A Prime Shares $ 9,450 $12,028
Galaxy Equity Growth Fund - B Prime Shares $10,000 $12,179
* 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 A Prime
Shares and B Prime Shares. Performance figures for Retail A Shares include
the effect of the maximum 3.75% front-end sales charge. Performance
figures for A Prime Shares include the effect of the maximum 5.50%
front-end sales charge. Performance figures for Retail B and B Prime
Shares reflect the deduction of the 3.00% contingent deferred sales charge
(applicable to shares redeemed during the fourth year after purchase) and
the maximum 5.00% contingent deferred sales charge, respectively, as if
shares were redeemed on October 31, 1999. The S&P 500 is an unmanaged
index in which investors cannot invest. Results for the index do not
reflect the investment management fees and other expenses incurred by the
Fund.
16
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Portfolio Reviews
[PHOTO]
Thomas M. O'Neill is Chief Investment Officer of Fleet Investment Advisors Inc.
and Oechsle International Advisors, LLC, sub-advisor for the Fund. Oechsle is a
firm dedicated to international investing and has approximately $15 billion in
assets under management.
GALAXY INTERNATIONAL EQUITY FUND
By Thomas O'Neill, Chief Investment Officer, Fleet Investment Advisors Inc., and
Oechsle International Advisors, LLC, Sub-Advisor
As foreign economies recovered in the past year, the rebound for stocks in
Japan and other parts of Asia was generally stronger than stock reversals in
European markets. Because the outlook for Asian equities had been so uncertain,
the Galaxy International Equity Fund was underweighted in those securities
versus its market benchmark in the first part of the reporting period. With
exceptional performance by individual issues in Japan and elsewhere and a higher
weighting in Japan later in the period, the Fund performed well against its
benchmarks for the fiscal year.
During the 12 months ended October 31, 1999, the Fund's Trust Shares
earned a total return of 29.71%. Over the same time, Retail A Shares of the Fund
earned 29.04%, before deducting the maximum 3.75% front-end sales charge, and
Retail B Shares earned 28.41% before deducting the maximum 5.00% contingent
deferred sales charge. The Fund's A Prime Shares earned a total return of 29.73%
before deducting the maximum 5.50% front-end sales charge, and B Prime Shares
earned a total return of 28.74% before deducting the maximum 5.00% contingent
deferred sales charge. (Please see the charts on page 4 for total returns after
deducting the applicable front-end sales charge and the charts on page 5 for
total returns after deducting the applicable contingent deferred sales charge.)
Those total returns compare with 25.53% for the average international fund
tracked by Lipper, and 23.37% for the EAFE Index.
Japanese Stocks Help Lift Returns
In the final months of 1998 and the first months of 1999, the Fund enjoyed
strong performance by shares of Japanese telecommunications and financial
companies. Many European stocks also performed well, especially shares of
telecommunications firms and companies involved in mergers.
During this time, we added selectively to investments in Japan, seeking to
improve the earnings quality of shares that we owned. We gave particular
attention to consumer-finance companies and firms that can benefit from
corporate restructuring. In Europe, we reduced shares in French companies that
were particularly sensitive to a weak global economy.
The Fund's increased weighting in Japan, along with modest additions in
the emerging markets of Asia, enhanced performance in the second quarter of
1999. The shift in assets to Asia, reduced investments in Europe somewhat.
Strong stock selection in Asia and Europe further enhanced the Fund's total
returns during this time.
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Portfolio Reviews
By the final months of 1999, the Fund was slightly overweighted in
Japanese stocks, which rallied strongly. Outstanding performance by many
individual Japanese issues made further positive contributions to performance.
As in previous months, we focused on opportunities in stocks that could benefit
most over time from the expansion of economies abroad.
Favorable Growth Prospects
The recent improvement in economies overseas seem to have taken many
corporate purchasing managers by surprise, leading to an inadvertent depletion
in business inventories. Efforts by managers to rebuild those inventories, which
may be boosted by Y2K concerns, could spur further growth in months to come.
Growth may then slow, however, with a return to more normal inventory levels,
higher interest rates and actual Y2K disruptions.
Near term, the Fund should benefit from careful stock selection. Given our
favorable outlook for long-term growth, we plan to continue seeking
opportunities in stocks from economically sensitive sectors. We are particularly
optimistic about opportunities in Europe, where positive economic fundamentals
are not yet reflected in stock valuations. Japanese stocks could also continue
to perform well, if recent economic trends and corporate restructuring continue.
Galaxy International Equity Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was in a pie chart in the printed material.]
Repurchase Agreement & Net Other Assets and Liabilities 4%
Australia & New Zealand 3%
United Kingdom 16%
Europe 41%
Far East 32%
Canada 4%
Galaxy International Equity Fund
Growth of $10,000 investment*
[The following information was in a mountain graph in the printed material.]
12/30/91 10/31/99
-------- --------
EAFE Index $10,000 $20,349
Galaxy International Equity Fund - Retail A Shares $ 9,625 $23,949
Galaxy International Equity Fund - Retail B Shares $10,000 $12,341
Galaxy International Equity Fund - Trust Shares $10,000 $25,623
Galaxy International Equity Fund - A Prime Shares $ 9,450 $12,260
Galaxy International Equity Fund - B Prime Shares $10,000 $12,374
* Since inception on 12/30/91 for Trust and Retail A Shares. Since inception
on 11/1/98 for Retail B, A Prime Shares and B Prime Shares. Performance
figures for Retail A Shares include the effect of the maximum 3.75%
front-end sales charge. Performance figures for A Prime Shares include the
effect of the maximum 5.50% front-end sales charge. Performance figures
for Retail B and B Prime Shares reflect the deduction of the maximum 5.00%
contingent deferred sales charge as if shares were redeemed on October 31,
1999. The EAFE Index is an unmanaged index in which investors cannot
invest. Results for the index do not reflect the investment management
fees and other expenses incurred by the Fund.
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Portfolio Reviews
[PHOTO]
Peter Larson has managed the Galaxy Small Cap Value Fund, and its predecessor,
since 1993. He has managed small company portfolios since 1981.
GALAXY SMALL CAP VALUE FUND
By Peter Larson
Portfolio Manager
In a year of changing economic expectations, stocks of smaller firms
sometimes outperformed stocks of larger companies. For the most part, however,
economic uncertainty caused small-cap stocks to lag. This was particularly true
of value-oriented issues, where the Galaxy Small Cap Value Fund concentrates its
investments. By making the most of individual investment opportunities that
arose from short-term market fluctuations, we helped the Fund make the most of
this tumultuous period and earn total returns that were competitive with its
peers.
During the 12 months ended October 31, 1999, the Fund's Trust Shares
earned a total return of 6.02%. Over the same time, Retail A Shares of the Fund
earned 5.68%, before deducting the maximum 3.75% front-end sales charge, and
Retail B Shares earned 4.80% before deducting the maximum 5.00% contingent
deferred sales charge. The Fund's A Prime Shares earned a total return of 5.80%
before deducting the maximum 5.50% front-end sales charge, and B Prime Shares
earned a total return of 4.96% before deducting the maximum 5.00% contingent
deferred sales charge. (Please see the charts on page 4 for total returns after
deducting the applicable front-end sales charge and the charts on page 5 for
total returns after deducting the applicable contingent deferred sales charge.)
These total returns compare to 6.08% earned for the period by the average
small-company value fund tracked by Lipper. The Russell 2000, which represents
more growth-oriented shares, earned a total return of 14.87% during this time.
Small Cap Stocks Take Roller-Coaster Ride
As the period began, small-cap stocks were rebounding from their market
correction in the third quarter of 1998. The Fund enjoyed strong returns from
its technology, basic materials, and capital goods stocks that, along with gains
from positions involved in mergers, helped offset a disappointing performance by
energy stocks. As oil prices rose in the first months of 1999, energy stocks
rallied strongly. Gains from companies involved with mergers continued to add to
performance. As prices for small-cap stocks retreated at this time, we increased
shares of many existing positions. We placed special emphasis on additions to
the technology sector, which we felt had been greatly oversold.
As the small-cap sector rebounded again in the second quarter of 1999, the
Fund benefited from our continued focus on companies with sound fundamentals. Of
further help were increased holdings in the energy sector and strong performance
by other cyclical issues. Besides increasing investments in natural gas firms
and information technology companies during this time, we introduced stocks of
temporary-help agencies available at particularly attractive prices.
Although prices for small-cap issues as a whole retreated in the final
months of the reporting
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Portfolio Reviews
period, small-cap growth stocks significantly outperformed their value-oriented
counterparts. This was due largely to the continued dominance of the sector by
growth-oriented technology stocks. The Fund benefited during this time from
strong performance by its technology holdings and, in July and August, from its
energy positions. As profit-taking caused energy stocks to retreat in September
and October, we increased the Fund's position in the sector, believing that
positive changes in the balance of energy supply and demand give the sector a
strong potential for long-term growth. As market fluctuations made their prices
more attractive, we also added shares of information technology firms.
Many Good Values Available
Our long-term outlook for small-cap stocks remains positive, given their
attractive valuations relative to the market. The near-term outlook,
particularly for value-oriented shares is less certain. As the reporting period
came to a close, investors were focused on momentum plays in the technology
group, especially Internet stocks. Once those stocks come under pressure, a
fallout that could be quite severe given the extraordinarily high valuations of
those issues, investors' attention may turn to more traditional ways of
evaluating stocks. In this scenario, small-cap value stocks would very well be
poised for a sustainable rebound in price.
Galaxy Small Cap Value Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was in a pie chart in the printed material.]
Corporate Bond, Repurchase Agreement &
Net Other Assets and Liabilities 9%
Other Common Stocks 13%
Consumer Cyclical 12%
Finance 13%
Consumer Staples 18%
Technology 16%
Capital Goods and Construction 11%
Energy 8%
Galaxy Small Cap Value Fund
Growth of $10,000 investment*
[The following information was in a mountain graph in the printed material.]
12/14/92 10/31/99
-------- --------
Russell 2000 $10,000 $22,152
Galaxy Small Cap Value Fund - Retail A Shares $ 9,625 $22,026
Galaxy Small Cap Value Fund - Retail B Shares $10,000 $10,004
Galaxy Small Cap Value Fund - Trust Shares $10,000 $23,325
Galaxy Small Cap Value Fund - A Prime Shares $ 9,450 $ 9,998
Galaxy Small Cap Value Fund - B Prime Shares $10,000 $10,018
* Since inception on 12/14/92 for Trust Shares. Since inception on 2/12/93
for Retail A Shares. Since inception on 11/1/98 for Retail B, A Prime and
B Prime Shares. Performance figures for Retail A Shares include the effect
of the maximum 3.75% front-end sales charge. Performance figures for A
Prime Shares include the effect of the maximum 5.50% front-end sales
charge. Performance figures for Retail B and B Prime Shares reflect the
deduction of the maximum 5.00% contingent deferred sales charge as if
shares were redeemed on October 31, 1999. The Russell 2000 Index is an
unmanaged index in which investors cannot invest. Results for the index do
not reflect the investment management fees and other expenses incurred by
the Fund.
20
<PAGE>
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Portfolio Reviews
[PHOTO]
Steve Barbaro has managed the Galaxy Small Company Equity Fund since its
inception in December of 1991. He has managed small company portfolios for Fleet
Investment Advisors Inc., and its predecessors, since 1976.
GALAXY SMALL COMPANY EQUITY FUND
By Steven Barbaro
Portfolio Manager
For the 12 months ended October 31, 1999, Trust Shares of the Galaxy Small
Company Equity Fund had a total return of 15.54%. For the same period, Retail A
Shares of the Fund earned 14.89%, before deducting the maximum 3.75% sales
charge, and Retail B Shares earned 14.34%, before deducting the maximum 5.00%
contingent deferred sales charge. (Please see the chart on page 4 for total
returns after deducting the front-end sales charge and the chart on page 5 for
total returns after deducting the contingent deferred sales charge.) For the
same period, the Russell 2000 returned 14.87%.
These represent strong returns by historical standards and reflect greater
interest in the small-cap sector as economic conditions improved. However some
groups of small-cap stocks found greater favor with investors than others. In
the first half of the reporting period, small-cap stocks with greater
capitalizations fared particularly well, along with Internet stocks and other
shares with exceptionally high rates of earnings growth. While we gave added
weight to these issues during that time, the Fund was underweighted in the group
versus funds with similar investment objectives and so underperformed its peers.
Good stock selection and heavy weightings in the better-performing
technology and energy sectors helped the Fund's performance in the second half
of the period. Because its total returns had lagged significantly early on,
however, the Fund underperformed its peer group for the reporting period as a
whole. During that time small-cap growth funds tracked by Lipper earned a total
return of 45.86%.
A Focus on Fundamentals
We began to increase the size of companies in the Fund during the third
quarter of 1998, when a market correction had made small-cap growth shares more
attractive. These purchases, along with strong performance by the semiconductor
stocks that represented a large portion of the Fund's assets, increased the
weighting in technology shares over this time.
Gains by the Fund's technology holdings helped to boost performance in the
first months of 1999, along with good returns from several positions involved in
mergers. At this point we traded computer hardware, service, and software firms
that had performed well for networking and semiconductor shares that we felt had
better price potential.
In the second quarter of 1999, as the small-cap sector gained more
attention from investors, the Fund outperformed its market benchmarks. Of
particular benefit was our emphasis on companies with sound fundamentals and an
increased weighting in energy stocks helped by a rebound in the price of oil.
The Fund was further assisted by its overweighting in other sectors that
performed well,
21
<PAGE>
Portfolio Reviews
such as the capital goods and communications groups. An underweighting in the
then-disappointing Internet area also proved beneficial. During this period, we
took profits in selected semiconductor positions and added stocks of firms that
could benefit from an improving economy.
In the final months of the period, small-cap growth stocks significantly
outperformed their value-oriented counterparts. This was due largely to the
continued market dominance by technology shares. Of added benefit was a lack of
financial shares, which underperformed as interest rates rose. We continued to
increase technology investments during this time, while reducing consumer shares
that would be sensitive both to economic uncertainty and rising interest rates.
Growth Stocks Still Attractive
With valuations that remain appealing versus those for large-cap shares,
small-company stocks could rebound strongly if slower growth reduces interest
rates. In the meantime, small-cap growth stocks should continue to outperform
small-cap value stocks, as investors remain partial to technology issues and are
uncertain about where the economy will head. With its emphasis on technology and
energy positions, both of which can perform well if growth slows, we believe the
Fund is well positioned for this environment. As before, we plan to focus on
companies with visible earnings potential and take advantage of new investment
opportunities that market fluctuations may bring.
Galaxy Small Company Equity Fund
Distribution of Total Net Assets as of October 31, 1999
[The following information was in a pie chart in the printed material.]
Capital Goods and Construction 6%
Other Common Stocks & Net Other Assets and Liabilities 10%
Consumer Staples 10%
Energy 6%
Consumer Cyclical 14%
Technology 54%
Galaxy Small Company Equity Fund
Growth of $10,000 investment*
[The following information was in a mountain graph in the printed material.]
12/30/91 10/31/99
-------- --------
Russell 2000 $10,000 $52,243
Galaxy Small Company Equity Fund - Retail A Shares $ 9,625 $31,988
Galaxy Small Company Equity Fund - Retail B Shares $10,000 $10,332
Galaxy Small Company Equity Fund - Trust Shares $10,000 $34,010
* Since inception on 12/30/91 for Trust and Retail A Shares. Since inception
on 3/4/96 for Retail B Shares. Performance figures for Retail A Shares
include the effect of the maximum 3.75% front-end sales charge.
Performance figures for Retail B Shares reflect the deduction of the 3.00%
contingent deferred sales charge (applicable to shares redeemed during the
fourth year after purchase) as if shares were redeemed on October 31,
1999. The Russell 2000 is an unmanaged index in which investors cannot
invest. Results for the index do not reflect the investment management
fees and other expenses incurred by the Fund.
22
<PAGE>
- --------------------------------------------------------------------------------
Shareholder Services
"A well-balanced asset allocation plan may help to control your risk while
pursuing your goals."
AUTOMATIC INVESTMENT PROGRAM
The Golden Rule of investing is "pay yourself first." That is easy to do with
Galaxy's Automatic Investment Program. For as little as $50 per month deducted
directly from your checking, savings or bank money market account, you can
consistently and conveniently add to your Galaxy investment. When you establish
an Automatic Investment Program, the $2,500 initial investment requirement for
Galaxy is waived. Of course, such a program does not assure a profit and does
not protect against loss in a declining market.
DIVERSIFICATION
A fundamental investment practice is "diversification." A well-balanced asset
allocation plan may help to control your risk while pursuing your goals. Many
mutual funds offer a low-cost way to diversify your investments while you
benefit from professional management. Galaxy's comprehensive array of invest
ment choices can be used in combination to match the needs of nearly everyone.
EXCHANGE PRIVILEGES
As your investment needs change, you can conveniently exchange your shares in
one fund for shares in another fund 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 service. 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, A Prime and B Prime
Share investors. Please consult your Fund Prospectus.
Shares of the Funds are distributed through Provident Distributors, Inc., member
NASD and SIPC.
23
<PAGE>
- --------------------------------------------------------------------------------
Shareholder Information
TRUSTEES
AND OFFICERS
Dwight E. Vicks, Jr.
Chairman and Trustee
John T. O'Neill
President, Treasurer
and Trustee
Louis DeThomasis,
F.S.C., Ph.D.
Trustee
Donald B. Miller
Trustee
James M. Seed
Trustee
Bradford S. Wellman
Trustee
W. Bruce
McConnel, III, Esq.
Secretary
Jylanne Dunne
Vice President and
Assistant Treasurer
William Greilich
Vice President
INVESTMENT ADVISOR
Fleet Investment
Advisors Inc.
75 State Street
Boston, MA
02109
DISTRIBUTOR
Provident
Distributors, Inc.
Four Falls Corporate Center
6th Floor
West Conshohocken, PA
19428-2961
ADMINISTRATOR
PFPC Inc.
4400 Computer Drive
Westborough,
Massachusetts 01581-5108
AUDITOR
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
LEGAL COUNSEL
Drinker Biddle & Reath LLP
One Logan Square
18th and Cherry Streets
Philadelphia, PA 19103
This report is submitted for the general information of shareholders of The
Galaxy Fund. It is not authorized for distribution to prospective investors
unless accompanied or preceded by an effective prospectus for each Fund of The
Galaxy Fund, which contains more information concerning the investment policies
and expenses of the Funds as well as other pertinent information. For complete
information, and before making an investment decision on any of the Funds of The
Galaxy Fund, you should request a prospectus from the Funds' distributor by
calling toll-free 1-877-BUY-GALAXY (1-877-289-4252). Read the prospectus
carefully before you invest.
Shares of the Funds are not bank deposits or obligations of, or guaranteed or
endorsed by, FleetBoston Corporation or any of its affiliates, Fleet Investment
Advisors Inc., or any Fleet Bank. Shares of the Funds are not federally insured
by, guaranteed by, obligations of or otherwise supported by the U.S. Government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other governmental agency. Investment return and principal value will vary as a
result of market conditions or other factors so that shares of the Funds, when
redeemed, may be worth more or less than their original cost. An investment in
the Funds involves investment risks, including the possible loss of principal
amount invested.
[RECYCLE LOGO]
This report was printed on recycled paper.
24
<PAGE>
- --------------------------------------------------------------------------------
Asset Allocation Fund
Portfolio of Investments
October 31, 1999
Shares Value
---------- ---------
COMMON STOCKS - 52.56%
Technology - 12.12%
100,000 America On Line, Inc.*...................... $ 12,968,750
180,000 Automatic Data Processing, Inc.............. 8,673,750
240,000 Cisco Systems, Inc.*........................ 17,760,000
150,000 Dell Computer Corp*......................... 6,018,750
180,000 EMC Corp.*.................................. 13,140,000
90,000 Hewlett-Packard Co.......................... 6,665,625
140,000 Intel Corp.................................. 10,841,250
160,000 Lucent Technologies, Inc.................... 10,280,000
50,000 Microsoft Corp.*............................ 4,628,125
----------------
90,976,250
----------------
Consumer Staples - 11.17%
190,000 Becton Dickinson & Co....................... 4,821,250
130,000 Bestfoods................................... 7,637,500
230,000 Boston Scientific Corp.*.................... 4,628,750
250,000 Coca-Cola Enterprises, Inc.................. 6,390,625
250,000 Elan Corp. Plc, ADR*........................ 6,437,500
120,000 Forest Laboratories, Inc.*.................. 5,505,000
80,000 Genzyme Corp.*.............................. 3,060,000
110,000 Gillette Co................................. 3,980,625
100,000 Lilly (Eli) & Co............................ 6,887,500
120,000 Merck & Co., Inc............................ 9,547,500
180,000 PepsiCo, Inc................................ 6,243,750
180,000 Pfizer, Inc................................. 7,110,000
50,000 Procter & Gamble Co......................... 5,243,750
80,000 Warner-Lambert Co........................... 6,385,000
----------------
83,878,750
----------------
Finance - 8.88%
151,250 American International Group, Inc........... 15,569,297
89,998 Associates First Capital Corp............... 3,284,927
42,000 Bank One Corp............................... 1,577,625
85,000 Chase Manhattan Corp........................ 7,426,875
260,000 Citigroup, Inc.............................. 14,072,500
130,000 Fannie Mae.................................. 9,197,500
120,000 Hartford Financial
Services Group, Inc......................... 6,217,500
100,000 Washington Mutual, Inc...................... 3,593,750
120,000 Wells Fargo & Co............................ 5,745,000
----------------
66,684,974
----------------
Consumer Cyclical - 6.93%
100,000 Black & Decker (The), Corp.................. 4,300,000
130,000 Comcast Corp.*.............................. 5,476,250
165,000 CVS Corp.................................... 7,167,188
80,000 Dayton Hudson Corp.......................... 5,170,000
220,000 Home Depot, Inc............................. 16,610,000
200,000 McDonald's Corp............................. 8,250,000
200,000 Walgreen Co................................. 5,037,500
----------------
52,010,938
----------------
Energy - 4.38%
160,000 Anadarko Petrolum Co........................ 4,930,000
40,000 Chevron Corp................................ 3,652,500
200,000 Halliburton Co.............................. 7,537,500
80,000 Mobil Corp.................................. 7,720,000
150,000 Schlumberger, Ltd........................... 9,084,375
----------------
32,924,375
----------------
Capital Goods and Construction - 4.11%
50,000 AlliedSignal, Inc........................... 2,846,875
170,000 Boeing Co................................... 7,830,625
90,000 General Electric Co......................... 12,200,625
200,000 Tyco International, Ltd..................... 7,987,500
----------------
30,865,625
----------------
Utilities - 2.91%
180,000 MCI WorldCom, Inc.*......................... 15,446,250
125,000 SBC Communications, Inc..................... 6,367,187
----------------
21,813,437
----------------
Transportation - 1.74%
100,000 AMR Corp.*.................................. 6,350,000
400,000 Southwest Airlines Co....................... 6,725,000
----------------
13,075,000
----------------
Basic Materials - 0.32%
100,000 Sonoco Products Co.......................... 2,400,000
----------------
Total Common Stocks......................... 394,629,349
----------------
(Cost $267,344,896)
Par Value
-------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 22.19%
U.S. Treasury Bonds - 8.47%
$ 1,500,000 7.63%, 02/15/07............................. 1,547,310
4,200,000 12.00%, 08/15/13............................ 5,757,948
6,450,000 7.50%, 11/15/16............................. 7,115,382
6,220,000 8.88%, 08/15/17............................. 7,755,531
2,500,000 8.88%, 02/15/19............................. 3,143,800
1,000,000 8.13%, 08/15/19............................. 1,178,090
750,000 8.50%, 02/15/20............................. 916,635
6,000,000 8.75%, 05/15/20............................. 7,510,320
6,200,000 7.88%, 02/15/21............................. 7,166,642
5,900,000 8.13%, 08/15/21............................. 7,000,232
3,250,000 7.63%, 11/15/22............................. 3,691,968
2,850,000 7.13%, 02/15/23............................. 3,072,613
3,500,000 6.13%, 11/15/27............................. 3,379,600
2,775,000 5.25%, 11/15/28............................. 2,385,501
2,245,000 5.25%, 02/15/29............................. 1,944,799
----------------
63,566,371
----------------
See Notes to Financial Statements.
25
<PAGE>
- --------------------------------------------------------------------------------
Asset Allocation Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
------------- ---------
U.S. Treasury Notes - 5.21%
$ 2,000,000 4.50%, 01/31/01............................. $ 1,971,800
3,000,000 5.63%, 02/28/01............................. 2,997,630
5,000,000 5.63%, 05/15/01............................. 4,991,500
1,500,000 6.25%, 10/31/01............................. 1,512,555
1,000,000 6.25%, 08/31/02............................. 1,009,410
2,555,000 5.88%, 09/30/02............................. 2,555,179
4,445,000 5.75%, 08/15/03............................. 4,411,796
1,800,000 4.25%, 11/15/03............................. 1,690,920
7,160,000 6.00%, 08/15/04............................. 7,179,833
1,500,000 7.00%, 07/15/06............................. 1,566,480
5,175,000 6.50%, 10/15/06............................. 5,267,219
1,085,000 6.13%, 08/15/07............................. 1,080,562
2,870,000 6.00%, 08/15/09............................. 2,867,561
----------------
39,102,445
----------------
Government National
Mortgage Association - 2.94%
229,436 6.50%, 05/15/13, Pool # 473566.............. 225,347
193,212 6.50%, 06/15/13, Pool # 476470.............. 189,769
311,661 6.50%, 08/15/13, Pool # 486453.............. 306,108
83,245 6.50%, 11/15/13, Pool # 454228.............. 81,736
473,495 6.50%, 11/15/13, Pool # 454234.............. 464,910
196,542 6.50%, 11/15/13, Pool # 477529.............. 193,040
1,002,783 6.50%, 11/15/13, Pool # 483663.............. 984,914
249,086 6.50%. 11/15/13, Pool # 493623.............. 244,570
2,873,046 7.00%, 11/15/13, Pool # 780921.............. 2,882,901
389,041 9.00%, 12/15/17, Pool # 780201.............. 410,435
541,201 7.50%, 01/15/26, Pool # 417191.............. 542,890
2,486,853 6.50%, 12/15/28, Pool # 495775.............. 2,376,487
194,123 6.50%, 01/15/29, Pool # 482909.............. 185,508
2,425,432 6.00%, 03/15/29, Pool # 476986.............. 2,251,092
942,292 6.50%, 03/15/29, Pool # 464613.............. 900,473
1,056,881 6.50%, 04/15/29, Pool # 473682.............. 1,011,127
926,137 6.50%, 04/15/29, Pool # 483349.............. 886,042
1,789,867 6.50%, 04/15/29, Pool # 488234.............. 1,710,433
996,483 7.00%, 04/15/29, Pool # 498082.............. 977,480
997,445 7.00%, 05/15/29, Pool # 507929.............. 978,423
1,548,822 7.50%, 09/15/29, Pool # 466164.............. 1,552,694
999,133 7.50%, 09/15/29, Pool # 478707.............. 1,001,631
101,489 7.50%, 09/15/29, Pool # 510409.............. 101,743
632,814 7.50%, 09/15/29, Pool # 510424.............. 634,396
999,257 7.50%, 09/15/29, Pool # 511482.............. 1,001,755
----------------
22,095,904
----------------
Federal National
Mortgage Association - 2.19%
1,000,000 6.74%, 09/19/01, MTN........................ 1,009,690
1,000,000 6.50%, 08/15/04............................. 1,002,480
1,000,000 6.49%, 01/19/06, MTN........................ 979,410
625,394 6.00%, 01/01/09, Pool # 269929.............. 608,383
2,055,000 6.38%, 06/15/09............................. 2,006,564
730,000 7.00%, 03/25/13............................. 728,403
162,697 6.00%, 06/01/14, Pool # 484967.............. 156,493
1,799,658 6.00%, 06/01/14, Pool # 499193.............. 1,731,037
789,001 6.00%, 06/01/14, Pool # 500131.............. 758,916
963,453 7.00%, 08/01/14, Pool # 492806.............. 961,941
225,359 6.50%, 01/01/26, Pool # 303676.............. 217,330
6,170,000 8.00%, 09/01/29............................. 6,285,688
----------------
16,446,335
----------------
Federal Home Loan
Mortgage Corporation - 1.99%
730,000 5.00%, 11/16/99 (B)......................... 728,424
2,000,000 5.00%, 01/15/04............................. 1,895,860
4,800,000 6.25%, 07/15/04............................. 4,764,000
1,000,000 7.05%, 06/08/05............................. 989,460
5,920,000 6.63%, 09/15/09............................. 5,890,400
708,072 7.00%, 04/01/29, Gold,
Pool # C00756............................... 695,680
----------------
14,963,824
----------------
Federal Home Loan Bank - 0.79%
5,975,000 5.88%, 08/15/01............................. 5,947,873
----------------
Federal Farm Credit Bank - 0.60%
4,500,000 5.88%, 07/02/01............................. 4,483,125
----------------
Total U.S. Government
and Agency Obligations...................... 166,605,877
----------------
(Cost $169,760,949)
CORPORATE NOTES AND BONDS - 13.97%
200,000 American Telephone & Telegraph Corp.
7.00%, 05/15/05............................. 199,000
3,250,000 Associates Corp. of North America
Senior Note
6.63%, 05/15/01............................. 3,254,062
1,000,000 Bank One Milwakee, MTN
6.35%, 03/19/01............................. 1,000,000
1,200,000 Becton Dickinson & Co.
7.15%, 10/01/09............................. 1,192,986
675,000 Becton Dickinson & Co., Debenture
7.00%, 08/01/27............................. 631,125
1,900,000 Becton Dickinson & Co., Senior Debenture
6.70%, 08/01/28............................. 1,712,375
200,000 Burlington Northern Santa Fe
6.88%, 02/15/16............................. 185,750
1,000,000 Caterpillar Financial Services Corp.
Series F, MTN
5.47%, 09/12/01............................. 980,000
1,700,000 Caterpillar Financial
Services Corp., MTN
6.00%, 05/23/02............................. 1,672,375
1,200,000 Citicorp, Senior MTN
8.63%, 11/01/04............................. 1,200,000
2,000,000 Coca-Cola Enterprises, Inc.
6.38%, 08/01/01............................. 1,992,500
1,000,000 Coca-Cola Enterprises, Inc.
7.13%, 08/01/17............................. 965,000
See Notes to Financial Statements.
26
<PAGE>
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Asset Allocation Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
------------- ---------
CORPORATE NOTES AND BONDS (continued)
$ 2,300,000 Colgate-Palmolive Co.
Series C, MTN
5.27%, 12/01/03............................. $ 2,180,262
1,400,000 Commercial Credit Co.
6.50%, 08/01/04............................. 1,370,250
3,500,000 Diageo Capital, Plc
6.00%, 03/27/03............................. 3,399,550
3,000,000 Diageo Capital, Plc
6.13%, 08/15/05............................. 2,880,000
1,000,000 Emerson Electric Co.
5.85%, 03/15/09............................. 926,250
250,000 Ford Motor Credit Co.
6.25%, 11/08/00............................. 249,777
1,000,000 Ford Motor Credit Co.
Senior Note
6.50%, 02/28/02............................. 996,250
1,615,000 Ford Motor Credit Co.
6.55%, 09/10/02............................. 1,602,887
3,195,000 Ford Motor Credit Co.
Senior Note
5.75%, 02/23/04............................. 3,055,219
405,000 Ford Motor Credit Co.
6.70%, 07/16/04............................. 400,950
800,000 G.E. Capital Corp., Series A, MTN
6.33%, 09/17/01............................. 799,000
385,000 G.E. Capital Corp., Series A, MTN
6.81%, 11/03/03............................. 386,463
4,000,000 General Motors Acceptance Corp.
6.88%, 07/15/01............................. 4,020,000
1,000,000 General Motors Acceptance Corp.
7.00%, 09/15/02............................. 1,006,250
250,000 GTE Corp.
6.46%, 04/15/08............................. 239,687
1,000,000 GTE North, Inc., Series H
5.65%, 11/15/08............................. 902,500
1,200,000 Goldman Sachs Group, Inc.
6.65%, 05/15/09............................. 1,143,000
3,000,000 Heinz (H.J.) Co., Euro Bond
5.75%, 02/03/03............................. 2,908,800
750,000 Heinz (H.J.) Co.
6.88%, 01/15/03............................. 756,562
500,000 Hershey Foods Corp.
6.70%, 10/01/05............................. 501,250
2,300,000 Hershey Foods Corp.
7.20%, 08/15/27............................. 2,254,000
1,000,000 Hertz Corp., Senior Note
7.00%, 04/15/01............................. 1,005,000
750,000 Illinois Tool Works
5.75%, 03/01/09............................. 688,125
1,000,000 International Business
Machines Corp.
7.50%, 06/15/13............................. 1,045,000
2,000,000 International Business
Machines Corp.
6.22%, 08/01/27............................. 1,962,500
2,000,000 International Business
Machines Credit Corp., MTN
6.64%, 10/29/01............................. 2,007,500
500,000 International Paper Co.
7.00%, 06/01/01............................. 500,625
1,500,000 Lockheed Martin Corp.
6.85%, 05/15/01............................. 1,492,500
500,000 May Department Stores Co.
6.88%, 11/01/05............................. 495,625
2,025,000 McDonald's Corp., Senior MTN
5.95%, 01/15/08............................. 1,916,156
500,000 McDonald's Corp.
8.88%, 04/01/11............................. 573,125
3,550,000 MCI WorldCom, Inc.
6.13%, 04/15/02............................. 3,492,312
500,000 Mead Corp.
6.84%, 03/01/37............................. 500,000
290,000 Merck & Co.
6.40%, 03/01/28............................. 264,262
2,500,000 Minnesota Mining & Manufacturing
6.38%, 02/15/28............................. 2,215,625
1,000,000 National City Bank of Kentucky
6.30%, 02/15/11............................. 911,250
1,000,000 National Rural Utilities
Cooperative Finance Corp.
6.38%, 10/15/04............................. 978,750
2,500,000 National Rural Utilities
Cooperative Finance Corp.
6.13%, 05/15/05............................. 2,387,500
1,025,000 National Rural Utilities
Cooperative Finance Corp.
5.75%, 11/01/08............................. 936,594
1,400,000 National Rural Utilities
Cooperative Finance Corp.
Collateral Trust
5.50%, 01/15/05............................. 1,303,750
1,000,000 NationsBank Corp.
7.00%, 09/15/01............................. 1,007,500
500,000 Northern Telecom, Ltd.
6.00%, 09/01/03............................. 486,250
1,620,000 PepsiCo, Inc., MTN
5.75%, 01/15/08............................. 1,500,525
1,590,000 Pitney Bowes Credit Corp.
6.63%, 06/01/02............................. 1,599,938
380,000 Pitney Bowes, Inc.
5.95%, 02/01/05............................. 366,225
1,800,000 Potomac Electric Power Co.
6.50%, 09/15/05............................. 1,743,750
2,000,000 Potomac Electric Power Co.
6.25%, 10/15/07............................. 1,932,500
325,000 Rite Aid Corp.
6.70%, 12/15/01............................. 264,875
1,000,000 Service Corp. International
7.38%, 04/15/04............................. 861,250
3,500,000 Sherwin-Williams Co.
6.50%, 02/01/02............................. 3,495,625
1,900,000 Sherwin-Williams Co.
6.85%, 02/01/07............................. 1,866,750
1,000,000 Southwest Airlines Co.
8.75%, 10/15/03............................. 1,066,250
1,500,000 Sprint Capital Corp.
5.88%, 05/01/04............................. 1,441,875
See Notes to Financial Statements.
27
<PAGE>
- --------------------------------------------------------------------------------
Asset Allocation Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
------------- ---------
CORPORATE NOTES AND BONDS (continued)
$ 1,000,000 Suntrust Bank of Atlanta, MTN
7.25%, 09/15/06............................. $ 1,002,500
300,000 Suntrust Bank of Central Florida, MTN
6.90%, 07/01/07............................. 296,625
1,000,000 Sysco Corp.
7.25%, 04/15/07............................. 1,017,500
1,250,000 Sysco Corp.
6.50%, 08/01/28............................. 1,118,750
3,250,000 Tele-Communication, Inc., Senior Note
7.25%, 08/01/05............................. 3,270,313
1,000,000 Texaco Capital, Inc.
8.50%, 02/15/03............................. 1,055,000
500,000 Texas Utilities Electric Co.
7.38%, 11/01/99............................. 500,000
2,000,000 United Telecommunications, Inc.
9.50%, 04/01/03............................. 2,147,500
2,000,000 Wachovia Bank, N.A.
6.30%, 03/15/01............................. 1,995,000
2,000,000 Wal-Mart Stores, Inc.
6.75%, 05/15/02............................. 2,012,500
575,000 Wal-Mart Stores, Inc.
6.88%, 08/10/09............................. 577,875
600,000 Xerox Corp.
8.13%, 04/15/02............................. 618,000
----------------
Total Corporate Notes and Bonds............. 104,885,155
----------------
(Cost $108,489,620)
ASSET-BACKED SECURITIES - 2.38%
2,950,000 Chemical Master Credit Card
Trust 1, Class A
5.55%, 09/15/03............................. 2,919,556
1,000,000 Citibank Credit Card Master Trust 1
Series 1999-1, Class A
5.50%, 02/15/06............................. 952,810
4,500,000 Discover Card Master Trust 1
Series 1999-1, Class A
5.30%, 08/15/04............................. 4,367,790
2,500,000 Ford Credit Auto Owner Trust
Series 1999-D, Class A-4
6.40%, 10/15/02............................. 2,498,425
25,000 Green Tree Financial Corp.
Series 1999-5, Class A-2
6.77%, 04/01/31............................. 24,984
1,975,000 MBNA Master Credit Card Trust
Series 1998-J, Class A
5.25%, 02/15/06............................. 1,877,474
2,500,000 MBNA Master Credit Card Trust
Series 1999-I, Class A
6.40%, 01/18/05............................. 2,490,625
440,000 Premier Auto Trust
Series 1999-2, Class A-4
5.59%, 02/09/04............................. 429,959
1,400,000 Premier Auto Trust
Series 1999-3, Class A-4
6.43%, 03/08/04............................. 1,401,470
365,625 Prudential Home Mortgage Securities
Class 1996-7, Series A-1, CMO
6.75%, 06/25/11............................. 364,711
553,898 Rural Housing Trust
Series 1987-1, Class 1-D, CMO
6.33%, 04/01/26............................. 542,906
----------------
Total Asset-Backed Securities............... 17,870,710
----------------
(Cost $18,049,220)
FOREIGN BONDS - 0.51%
2,500,000 Quebec Province
5.75%, 02/15/09 (C)......................... 2,276,525
1,570,000 Quebec Province
7.50%, 09/15/29 (C)......................... 1,575,888
----------------
Total Foreign Bonds......................... 3,852,413
----------------
(Cost $3,912,040)
Shares
----------
CONVERTIBLE PREFERRED STOCK (A) - 0.19%
30,000 Loral Space and
Communications, Ltd.,
Series C, 6.00%............................. 1,438,125
----------------
Total Convertible Preferred Stock........... 1,438,125
----------------
(Cost $1,627,725)
Par Value
-------------
COMMERCIAL PAPER (B) - 7.96%
$ 29,764,000 BP Amoco Capital
5.35%, 11/01/99............................. 29,764,000
30,000,000 Koch Industries, Inc.
5.35%, 11/01/99............................. 30,000,000
----------------
Total Commercial Paper...................... 59,764,000
----------------
(Cost $59,764,000)
Total Investments - 99.76%.................................. 749,045,629
----------------
(Cost $628,948,450)
Net Other Assets and Liabilities - 0.24%.................... 1,838,765
----------------
Net Assets - 100.00%........................................ $ 750,884,394
================
- ----------
* Non-income producing security.
(A) Security exempt from registration pursuant to Rule 144A under the
Securities Act of 1933, as amended. This security may only be resold, in
transactions exempt from registration, to qualified institutional buyers.
At October 31, 1999, this security amounted to $1,438,125, or 0.19% of net
assets.
(B) Discount yield at time of purchase.
(C) U.S. Dollar Denominated
ADR American Depositary Receipt
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
See Notes to Financial Statements.
28
<PAGE>
- --------------------------------------------------------------------------------
Equity Income Fund
Portfolio of Investments
October 31, 1999
Shares Value
---------- ---------
COMMON STOCKS - 87.95%
Consumer Staples - 21.88%
310,000 Becton Dickinson & Co....................... $ 7,866,250
175,000 Bestfoods................................... 10,281,250
135,000 Gillette Co................................. 4,885,312
95,000 Lilly (Eli) & Co............................ 6,543,125
200,000 McDonald's Corp............................. 8,250,000
90,000 Merck & Co., Inc............................ 7,160,625
255,000 PepsiCo, Inc................................ 8,845,313
170,000 Pfizer, Inc................................. 6,715,000
60,000 Procter & Gamble Co......................... 6,292,500
85,000 Warner-Lambert Co........................... 6,784,063
----------------
73,623,438
----------------
Finance - 18.47%
195,000 Associates First Capital Corp., Class A..... 7,117,500
162,000 Bank One Corp............................... 6,085,125
110,000 Fannie Mae.................................. 7,782,500
150,000 First Union Corp............................ 6,403,125
295,000 Hartford Financial Services Group, Inc...... 15,284,687
120,000 Highwoods Properties, Inc., REIT............ 2,902,500
80,000 Spieker Properties, Inc., REIT.............. 2,795,000
195,000 Washington Mutual, Inc...................... 7,007,813
141,000 Wells Fargo & Co............................ 6,750,375
----------------
62,128,625
----------------
Energy - 10.92%
108,000 Consolidated Natural Gas Co................. 6,912,000
84,000 Exxon Corp.................................. 6,221,250
136,000 Halliburton Co.............................. 5,125,500
65,000 Mobil Corp.................................. 6,272,500
93,000 Schlumberger Ltd............................ 5,632,313
107,000 Texaco, Inc................................. 6,567,125
----------------
36,730,688
----------------
Utilities - 10.22%
215,000 American Telephone &
Telegraph Corp.............................. 10,051,250
190,000 SBC Communications, Inc..................... 9,678,125
185,000 Texas Utilities Co.......................... 7,168,750
275,000 Washington Gas Light Co..................... 7,476,563
----------------
34,374,688
----------------
Technology - 10.14%
215,000 Automatic Data Processing, Inc.............. 10,360,312
40,000 Cisco Systems, Inc. *....................... 2,960,000
85,000 Hewlett-Packard Co.......................... 6,295,312
115,000 Intel Corp.................................. 8,905,312
200,000 Xerox Corp.................................. 5,600,000
----------------
34,120,936
----------------
Consumer Cyclical - 7.80%
130,000 Dayton Hudson Corp.......................... $ 8,401,250
160,000 Ford Motor Co............................... 8,780,000
360,000 Walgreen Co................................. 9,067,500
----------------
26,248,750
----------------
Capital Goods and Construction - 5.95%
140,000 Boeing Co................................... 6,448,750
100,000 General Electric Co......................... 13,556,250
----------------
20,005,000
----------------
Basic Materials - 2.57%
145,000 Weyerhauser Co.............................. 8,654,688
----------------
Total Common Stocks......................... 295,886,813
----------------
(Cost $243,220,120)
Par Value
-------------
U.S. GOVERNMENT OBLIGATIONS - 1.15%
U.S. Treasury Note - 0.59%
$ 2,000,000 5.50%, 04/15/00............................. 2,000,940
----------------
U.S. Treasury Bond - 0.56%
1,700,000 7.50%, 11/15/16............................. 1,875,372
----------------
Total U.S. Government
Obligations................................. 3,876,312
----------------
(Cost $3,662,781)
REPURCHASE AGREEMENT - 10.89%
36,620,000 Repurchase Agreement with:
Chase Manhattan Bank
5.20%, 11/01/99, dated 10/29/99
Repurchase Price $36,635,869
(Collateralized by U.S. Treasury Bond
11.25%, Due 02/15/15;
Total Par $25,370,000
Market Value $37,357,325)
Total Repurchase Agreement.................. 36,620,000
----------------
(Cost $36,620,000)
Total Investments - 99.99%.................................. 336,383,125
----------------
(Cost $283,502,901)
Net Other Assets and Liabilities - 0.01%.................... 49,330
----------------
Net Assets - 100.00%........................................ $ 336,432,455
================
- ----------
REIT Real Estate Investment Trust.
See Notes to Financial Statements.
29
<PAGE>
- --------------------------------------------------------------------------------
Growth and Income Fund
Portfolio of Investments
October 31, 1999
Shares Value
---------- ---------
COMMON STOCKS - 91.65%
Consumer Staples - 17.77%
150,000 American Home Products Corp................. $ 7,837,500
118,000 Anheuser-Busch Cos., Inc.................... 8,473,875
140,000 Bestfoods................................... 8,225,000
430,600 Elan Corp. Plc, ADR*........................ 11,087,950
170,000 Forest Laboratories, Inc.*.................. 7,798,750
225,000 Genzyme Corp.*.............................. 8,606,250
1,200,000 HEALTHSOUTH Corp.*.......................... 6,900,000
162,000 International Flavors &
Fragances, Inc.............................. 6,196,500
84,000 Johnson & Johnson........................... 8,799,000
180,000 McDonald's Corp............................. 7,425,000
126,000 Merck & Co., Inc............................ 10,024,875
190,000 PepsiCo, Inc................................ 6,590,625
130,000 Pharmacia & Upjohn, Inc..................... 7,011,875
265,000 Rite Aid Corp............................... 2,318,750
----------------
107,295,950
----------------
Technology - 16.19%
146,300 Avnet, Inc.................................. 7,945,919
173,000 Cisco Systems, Inc.*........................ 12,802,000
269,000 Compaq Computer Corp........................ 5,111,000
92,000 Computer Sciences Corp.*.................... 6,319,250
226,000 Electronic Data Systems Corp................ 13,221,000
270,000 Harris Corp................................. 6,058,125
150,000 Hewlett-Packard Co.......................... 11,109,375
105,000 International Business
Machines Corp............................... 10,329,375
122,000 Motorola, Inc............................... 11,887,375
145,000 Texas Instruments, Inc...................... 13,013,750
----------------
97,797,169
----------------
Finance - 13.05%
172,000 Bank of America Corp........................ 11,072,500
200,000 Bank One Corp............................... 7,512,500
96,000 Chase Manhattan Corp........................ 8,388,000
96,000 Chubb Corp.................................. 5,268,000
198,000 Citigroup, Inc.............................. 10,716,750
170,000 Countrywide Credit Industries, Inc.......... 5,769,375
110,000 Hartford Financial
Services Group, Inc......................... 5,699,375
136,000 Lincoln National Corp....................... 6,273,000
54,000 Morgan (J.P.) & Co., Inc.................... 7,067,250
230,000 Wells Fargo & Co............................ 11,011,250
----------------
78,778,000
----------------
Consumer Cyclical - 9.85%
215,000 Circuit City Stores......................... 9,177,812
392,000 Cooper Tire & Rubber Co..................... 6,590,500
90,000 Eastman Kodak Co............................ 6,204,375
98,000 Ford Motor Co............................... 5,377,750
220,000 Lowe's Cos., Inc............................ 12,100,000
635,000 Office Depot, Inc.*......................... 7,897,813
140,000 Penney (J.C.) Co., Inc...................... 3,552,500
385,000 Sherwin-Williams Co......................... 8,614,375
----------------
59,515,125
----------------
Energy - 9.79%
90,000 Atlantic Richfield Co....................... 8,386,875
200,000 Baker Hughes, Inc........................... 5,587,500
172,032 BP Amoco, Plc, ADR.......................... 9,934,848
225,000 Halliburton Co.............................. 8,479,687
160,000 Kerr-McGee Corp............................. 8,600,000
97,000 Mobil Corp.................................. 9,360,500
144,400 Schlumberger, Ltd........................... 8,745,225
----------------
59,094,635
----------------
Utilities - 8.96%
159,000 American Telephone &
Telegraph Corp.............................. 7,433,250
205,500 Century Telephone Enterprises, Inc.......... 8,309,906
199,000 Entergy Corp................................ 5,957,563
122,000 GTE Corp.................................... 9,150,000
170,000 MCI WorldCom, Inc.*......................... 14,588,125
170,000 SBC Communications, Inc..................... 8,659,375
----------------
54,098,219
----------------
Capital Goods and Construction - 7.67%
176,500 Boeing Co................................... 8,130,031
64,000 General Electric Co......................... 8,676,000
66,500 Honeywell, Inc.............................. 7,011,594
172,000 Hubbell, Inc., Class A...................... 4,794,500
272,632 Tyco International, Ltd..................... 10,888,240
370,000 Waste Management, Inc....................... 6,798,750
----------------
46,299,115
----------------
Basic Materials - 5.82%
38,100 Crown Cork & Seal, Inc...................... 912,019
190,000 Goodrich (B.F.) Co.......................... 4,500,625
90,000 Minnesota Mining &
Manufacturing Co............................ 8,555,625
300,000 Pall Corp................................... 6,581,250
190,000 Praxair, Inc................................ 8,882,500
200,000 Sigma Aldrich Corp.......................... 5,700,000
----------------
35,132,019
----------------
Transportation - 2.55%
101,500 British Airways Plc, ADR.................... 5,265,313
318,000 Burlington Northern Santa Fe Corp........... 10,136,250
----------------
15,401,563
----------------
Total Common Stocks......................... 553,411,795
----------------
(Cost $448,471,497)
See Notes to Financial Statements.
30
<PAGE>
- --------------------------------------------------------------------------------
Growth and Income Fund
Portfolio of Investments (continued)
October 31, 1999
Shares Value
---------- ---------
CONVERTIBLE PREFERRED STOCKS - 1.42%
135,000 Crown Cork & Seal Co., Inc., 4.50%.......... $ 2,978,437
37,000 Loral Space and
Communications, Ltd.,
Series C, 6.00%............................. 1,773,688
80,000 Loral Space and
Communications, Ltd., 6.00% (A)............. 3,835,000
----------------
Total Convertible Preferred Stocks.......... 8,587,125
----------------
(Cost $12,414,478)
Par Value
-------------
REPURCHASE AGREEMENT - 7.14%
$ 43,135,000 Repurchase Agreement with:
Chase Manhattan Bank
5.20%, 11/01/99, dated 10/29/99
Repurchase Price $43,153,692
(Collateralized by U.S. Treasury Bond
10.63%, Due 08/15/15;
Total Par $31,095,000
Market Value $43,999,425)................... 43,135,000
----------------
Total Repurchase Agreement.................. 43,135,000
----------------
(Cost $43,135,000)
Total Investments - 100.21%................................. 605,133,920
----------------
(Cost $504,020,975)
Net Other Assets and Liabilities - (0.21)%.................. (1,271,845)
----------------
Net Assets - 100.00%........................................ $ 603,862,075
================
- ----------
* Non-income producing security.
(A) Security exempt from registration pursuant to Rule 144A under the
Securities Act of 1933, as amended. This security may only be resold, in
transactions exempt from registration, to qualified institutional buyers.
At October 31, 1999, this security amounted to $3,835,000 or 0.64% of net
assets.
ADR American Depositary Receipt
See Notes to Financial Statements.
31
<PAGE>
- --------------------------------------------------------------------------------
Strategic Equity Fund
Portfolio of Investments
October 31, 1999
Shares Value
---------- ---------
COMMON STOCKS - 91.27%
Consumer Staples - 18.93%
22,300 Albertsons, Inc............................. $ 809,769
40,000 Becton Dickinson & Co....................... 1,015,000
78,000 Boston Scientific Corp.*.................... 1,569,750
50,000 ConAgra, Inc................................ 1,303,125
108,000 Elan Corp. Plc, ADR*........................ 2,781,000
21,000 Genzyme Corp.*.............................. 803,250
200,000 HEALTHSOUTH Corp.*.......................... 1,150,000
25,000 Kimberly Clark Corp......................... 1,578,125
50,000 Manpower, Inc............................... 1,756,250
12,000 Merck & Co., Inc............................ 954,750
25,000 Stryker Corp................................ 1,543,750
----------------
15,264,769
----------------
Energy - 15.40%
40,000 Anadarko Petroleum Corp..................... 1,232,500
52,000 Baker Hughes, Inc........................... 1,452,750
35,000 BJ Services Co.*............................ 1,200,938
30,000 Burlington Resources, Inc................... 1,046,250
35,000 Coastal Corp................................ 1,474,375
40,000 Cooper Cameron Corp.*....................... 1,547,500
24,000 Halliburton Co.............................. 904,500
50,000 Noble Affiliates, Inc....................... 1,265,625
22,000 Schlumberger, Ltd........................... 1,332,375
40,000 Sunoco, Inc................................. 965,000
----------------
12,421,813
----------------
Technology - 14.86%
91,000 Cambridge Technology Partners, Inc.*........ 1,006,688
77,000 Diebold, Inc................................ 2,021,250
14,000 Hewlett-Packard Co.......................... 1,036,875
11,000 International Business Machines Corp........ 1,082,125
65,000 Loral Space and
Communications, Ltd.*....................... 979,062
100,000 Molex, Inc., Class A........................ 3,300,000
40,000 3Com Corp.*................................. 1,160,000
50,000 Xerox Corp.................................. 1,400,000
----------------
11,986,000
----------------
Finance - 13.27%
41,000 Associates First Capital Corp., Class A..... 1,496,500
40,000 Bank One Corp............................... 1,502,500
34,000 Equity Office Properties REIT............... 752,250
13,000 Equity Residential Properties REIT.......... 543,562
25,000 Hartford Financial
Services Group, Inc......................... 1,295,313
25,500 MBIA, Inc................................... 1,455,094
15,000 Spieker Properties, Inc., REIT.............. 524,062
35,000 UnumProvident Corp.......................... 1,152,813
55,000 Washington Mutual, Inc...................... 1,976,562
----------------
10,698,656
----------------
Consumer Cyclical - 13.05%
60,000 ACNielsen Corp.*............................ 1,320,000
80,000 Cooper Tire & Rubber Co..................... 1,345,000
26,000 Dana Corp................................... 768,625
66,000 McKesson HBOC, Inc.......................... 1,324,125
35,000 Meredith Corp............................... 1,249,063
35,000 Newell Rubbermaid, Inc...................... 1,211,875
160,000 Office Depot, Inc.*......................... 1,990,000
150,000 Rite Aid Corp............................... 1,312,500
----------------
10,521,188
----------------
Capital Goods and Construction - 7.63%
30,000 AES Corp.*.................................. 1,693,125
20,000 Emerson Electric Co......................... 1,201,250
40,000 Hubbell, Inc., Class B...................... 1,107,500
116,900 Waste Management, Inc....................... 2,148,037
----------------
6,149,912
----------------
Basic Materials - 4.08%
50,000 Crown Cork & Seal Co., Inc.................. 1,196,875
28,000 Eastman Chemical Co......................... 1,079,750
23,000 Potash Corp. of Saskatchewan, Inc........... 1,016,312
----------------
3,292,937
----------------
Transportation - 2.60%
35,000 Burlington Northern Santa Fe Corp........... 1,115,625
40,000 Norfolk Southern Corp....................... 977,500
----------------
2,093,125
----------------
Utilities - 1.45%
25,000 American Telephone & Telegraph Corp......... 1,168,750
----------------
Total Common Stocks......................... 73,597,150
----------------
(Cost $77,202,228)
See Notes to Financial Statements.
32
<PAGE>
- --------------------------------------------------------------------------------
Strategic Equity Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
------------- ---------
REPURCHASE AGREEMENT - 9.19%
$ 7,414,000 Repurchase Agreement with:
Chase Manhattan Bank
5.20%, 11/01/99, dated 10/29/99
Repurchase Price $7,417,213
(Collateralized by U.S. Treasury Note
6.50%, Due 10/15/06;
Total Par $7,425,000
Market Value $7,564,219).................... $ 7,414,000
----------------
Total Repurchase Agreement.................. 7,414,000
----------------
(Cost $7,414,000)
Total Investments - 100.46%................................. 81,011,150
----------------
(Cost $84,616,228)
Net Other Assets and Liabilities - (0.46)%.................. (371,864)
----------------
Net Assets - 100.00%........................................ $ 80,639,286
================
- ----------
* Non-income producing security.
ADR American Depositary Receipt
REIT Real Estate Investment Trust
See Notes to Financial Statements.
33
<PAGE>
Equity Value Fund
Portfolio of Investments
October 31, 1999
Shares Value
---------- ---------
COMMON STOCKS - 96.23%
Consumer Cyclical - 22.96%
250,000 Abercrombie & Fitch Co.*.................... $ 6,812,500
225,100 Brunswick Corp.............................. 5,092,887
363,100 Carnival Corp., Class A..................... 16,157,950
220,625 Gap, Inc.................................... 8,190,703
41,600 General Motors Corp......................... 2,922,400
600,000 Hasbro, Inc................................. 12,375,000
452,000 Jones Apparel Group, Inc.*.................. 14,294,500
451,100 Kaufman & Broad Home Corp................... 9,050,194
326,800 Lowe's Cos., Inc............................ 17,974,000
505,650 Office Depot, Inc.*......................... 6,289,022
693,200 Shaw Industries, Inc........................ 10,701,275
522,900 TJX Cos., Inc............................... 14,183,663
245,600 Tommy Hilfiger Corp.*....................... 6,938,200
----------------
130,982,294
----------------
Technology - 20.71%
141,200 Altera Corp.*............................... 6,865,850
65,100 Applied Materials, Inc.*.................... 5,846,794
338,000 Cadence Design Systems, Inc.*............... 5,133,375
40,450 Cisco Systems, Inc.*........................ 2,993,300
134,100 Citrix Systems, Inc.*....................... 8,599,162
489,121 Compaq Computer Corp........................ 9,293,299
233,300 Computer Associates
International, Inc.......................... 13,181,450
126,000 EMC Corp.*.................................. 9,198,000
102,200 Intel Corp.................................. 7,914,113
38,100 International Business Machines Corp........ 3,748,087
135,100 Microsoft Corp.*............................ 12,505,194
166,800 Oracle Corp.*............................... 7,933,425
271,100 Parametric Technology Corp.*................ 5,167,844
403,500 PeopleSoft, Inc.*........................... 6,052,500
216,700 Tellabs, Inc.*.............................. 13,706,275
----------------
118,138,668
----------------
Finance - 17.56%
73,900 Bank of America Corp........................ 4,757,313
122,660 Bank One Corp............................... 4,607,416
128,900 Bear Stearns Cos., Inc...................... 5,494,362
128,900 Chase Manhattan Corp........................ 11,262,638
134,875 Citigroup, Inc.............................. 7,300,109
91,500 Fannie Mae.................................. 6,473,625
131,500 Household International, Inc................ 5,868,187
203,500 Marsh & McLennan Cos., Inc.................. 16,089,219
158,600 MBIA, Inc................................... 9,050,113
339,500 MBNA Corp................................... 9,378,687
113,100 Merrill Lynch & Co., Inc.................... 8,878,350
224,950 SLM Holding Corp............................ 11,008,491
----------------
100,168,510
----------------
Consumer Staples - 9.43%
198,900 Albertson's, Inc............................ $ 7,222,556
422,000 Boston Scientific Corp.*.................... 8,492,750
352,800 Brinker International, Inc.*................ 8,224,650
72,300 Bristol-Myers Squibb Co..................... 5,553,544
281,400 CVS Corp.................................... 12,223,312
70,000 Gannett Co., Inc............................ 5,398,750
40,000 Manor Care, Inc............................. 630,000
104,500 Wellpoint Health Networks, Inc.*............ 6,061,000
----------------
53,806,562
----------------
Energy - 8.67%
308,100 Baker Hughes, Inc........................... 8,607,544
282,400 Coastal Corp................................ 11,896,100
266,100 Diamond Offshore Drilling, Inc.............. 8,448,675
40,000 Enron Corp.................................. 1,597,500
114,900 Kerr-McGee Corp............................. 6,175,875
54,000 Phillips Petroleum Co....................... 2,511,000
350,000 USX-Marathon Group.......................... 10,193,750
----------------
49,430,444
----------------
Utilities - 7.47%
142,800 Bell Atlantic Corp.......................... 9,273,075
210,700 FPL Group, Inc.............................. 10,600,844
43,200 GTE Corp.................................... 3,240,000
94,000 Public Service Enterprise Group, Inc........ 3,718,875
151,100 SBC Communications, Inc..................... 7,696,656
131,900 US WEST Communications Group................ 8,054,144
----------------
42,583,594
----------------
Capital Goods and Construction - 4.75%
105,100 Ingersoll-Rand Co........................... 5,491,475
74,000 Owens-Corning............................... 1,517,000
194,200 PACCAR, Inc................................. 9,151,675
163,100 TRW, Inc.................................... 6,992,913
65,300 United Technologies Corp.................... 3,950,650
----------------
27,103,713
----------------
Basic Materials - 3.77%
405,800 Georgia-Pacific Group....................... 16,105,187
102,300 International Paper Co...................... 5,383,537
----------------
21,488,724
----------------
Transportation - 0.91%
25,200 AMR Corp.*.................................. 1,600,200
178,200 Hunt (J.B.) Transport Services, Inc......... 2,294,325
50,000 Northwest Airlines Corp.*................... 1,265,625
----------------
5,160,150
----------------
Total Common Stocks......................... 548,862,659
----------------
(Cost $462,740,700)
See Notes to Financial Statements.
34
<PAGE>
- --------------------------------------------------------------------------------
Equity Value Fund
Portfolio of Investments (continued)
October 31, 1999
Par Value Value
------------- ---------
REPURCHASE AGREEMENT - 2.71%
$ 15,451,000 Repurchase Agreement with:
Chase Manhattan Bank
5.20%, 11/01/99, dated 10/29/99
Repurchase Price $15,457,695
(Collateralized by U.S. Treasury Bond
11.25%, Due 02/15/15;
Total Par $10,705,000
Market Value $15,763,113)................... $ 15,451,000
----------------
Total Repurchase Agreement.................. 15,451,000
----------------
(Cost $15,451,000)
Total Investments - 98.94%.................................. 564,313,659
----------------
(Cost $478,191,700)
Net Other Assets and Liabilities - 1.06%.................... 6,070,373
----------------
Net Assets - 100.00%........................................ $ 570,384,032
================
- ----------
* Non-income producing security.
See Notes to Financial Statements.
35
<PAGE>
- --------------------------------------------------------------------------------
Equity Growth Fund
Portfolio of Investments
October 31, 1999
Shares Value
---------- ---------
COMMON STOCKS - 93.94%
Technology - 29.41%
25,500 America On Line, Inc.*...................... $ 3,307,031
550,000 American Tower Corp., Class A*.............. 10,484,375
200,000 Applied Materials, Inc.*.................... 17,962,500
625,000 Automatic Data Processing, Inc.............. 30,117,187
450,000 Cisco Systems, Inc.*........................ 33,300,000
300,000 EchoStar Communications Corp.
Class A*.................................... 18,562,500
485,000 EMC Corp.*.................................. 35,405,000
137,700 Fairchild Semiconductor Corp.*.............. 3,476,925
200,000 Hewlett-Packard Co.......................... 14,812,500
250,000 Intel Corp.................................. 19,359,375
225,000 International Business
Machines Corp............................... 22,134,375
250,000 Lucent Technologies, Inc.................... 16,062,500
361,500 Maxim Integrated Products, Inc.*............ 28,535,906
320,000 Microsoft Corp.*............................ 29,620,000
190,400 Nokia Corp., Class A, ADR................... 22,003,100
325,000 Nortel Networks Corp........................ 20,129,688
500,000 PeopleSoft, Inc.*........................... 7,500,000
425,000 Tandy....................................... 26,748,438
325,000 Tellabs, Inc.*.............................. 20,556,250
600,000 Teradyne, Inc.*............................. 23,100,000
285,000 Texas Instruments, Inc...................... 25,578,750
400,000 Unisys Corp.*............................... 9,700,000
500,000 Xerox Corp.................................. 14,000,000
30,000 Yahoo!, Inc.*............................... 5,371,875
----------------
457,828,275
----------------
Consumer Staples - 18.21%
300,000 American Home Products Corp................. 15,675,000
250,000 Baxter International, Inc................... 16,218,750
312,500 Bristol-Myers Squibb Co..................... 24,003,906
690,000 CVS Corp.................................... 29,971,875
750,000 Elan Corp. Plc, ADR*........................ 19,312,500
325,000 Forest Laboratories, Inc.*.................. 14,909,375
300,000 Guidant Corp................................ 14,812,500
175,000 Johnson & Johnson........................... 18,331,250
300,000 Lilly (Eli) & Co............................ 20,662,500
400,000 McDonald's Corp............................. 16,500,000
350,000 Merck & Co., Inc............................ 27,846,875
350,000 PepsiCo, Inc................................ 12,140,625
325,000 Pfizer, Inc................................. 12,837,500
175,000 Procter & Gamble Co......................... 18,353,125
275,000 Warner-Lambert Co........................... 21,948,437
----------------
283,524,218
----------------
Finance - 11.51%
325,000 American International Group, Inc........... $ 33,454,688
660,000 Associates First Capital Corp.
Class A..................................... 24,090,000
350,000 Chase Manhattan Corp........................ 30,581,250
650,000 Citigroup, Inc.............................. 35,181,250
500,000 Cornerstone Properties, Inc., REIT.......... 7,281,250
350,000 Fannie Mae.................................. 24,762,500
500,000 Wells Fargo & Co............................ 23,937,500
----------------
179,288,438
----------------
Energy - 8.34%
600,000 Anadarko Petroleum Corp..................... 18,487,500
175,000 Atlantic Richfield Co....................... 16,307,812
350,000 Cooper Cameron Corp.*....................... 13,540,625
400,000 Halliburton Co.............................. 15,075,000
390,000 Mobil Corp.................................. 37,635,000
250,000 Schlumberger, Ltd........................... 15,140,625
500,000 Transocean Offshore, Inc.................... 13,593,750
----------------
129,780,312
----------------
Capital Goods and Construction - 8.29%
138,000 AlliedSignal, Inc........................... 7,857,375
400,000 General Electric Co......................... 54,225,000
150,000 Honeywell, Inc.............................. 15,815,625
750,000 Tyco International, Ltd..................... 29,953,125
350,000 United Technologies Corp.................... 21,175,000
----------------
129,026,125
----------------
Consumer Cyclical - 6.51%
400,000 Circuit City Stores......................... 17,075,000
250,000 Dayton Hudson Corp.......................... 16,156,250
265,000 Ford Motor Co............................... 14,541,875
125,000 Harley-Davidson, Inc........................ 7,414,063
360,000 Home Depot, Inc............................. 27,180,000
700,000 TJX Cos., Inc............................... 18,987,500
----------------
101,354,688
----------------
Broadcasting - 5.64%
321,678 AMFM, Inc.*................................. 22,517,460
250,000 AT&T Corp., Liberty Media Group*............ 9,921,875
400,000 Comcast Corp., Class A...................... 16,850,000
500,000 Infinity Broadcasting Corp.. Class A*....... 17,281,250
300,000 MediaOne Group, Inc.*....................... 21,318,750
----------------
87,889,335
----------------
See Notes to Financial Statements.
36
<PAGE>
- --------------------------------------------------------------------------------
Equity Growth Fund
Portfolio of Investments (continued)
October 31, 1999
Shares Value
---------- ---------
Utilities - 4.18%
60,000 AES Corp.................................... $ 3,386,250
350,000 MCI WorldCom, Inc.*......................... 30,034,375
300,000 SBC Communications, Inc..................... 15,281,250
270,000 U S West, Inc............................... 16,486,875
----------------
65,188,750
----------------
Basic Materials - 1.85%
200,000 duPont (E.I.) deNemours & Co................ 12,887,500
400,000 Georgia-Pacific Group....................... 15,875,000
----------------
28,762,500
----------------
Total Common Stocks......................... 1,462,642,641
----------------
(Cost $882,159,089)
CONVERTIBLE PREFERRED STOCKS - 1.56%
140,000 AES Trust I, Series A....................... 11,060,000
275,000 Loral Space and
Communications, Ltd.,
Series C, 6.00% (A)......................... 13,182,813
----------------
Total Convertible Preferred Stocks.......... 24,242,813
----------------
(Cost $20,750,000)
Par Value Value
------------- ---------
REPURCHASE AGREEMENT - 5.66%
$ 88,038,000 Repurchase Agreement with:
Chase Manhattan Bank
5.20%, 11/01/99, dated 10/29/99
Repurchase Price $88,076,150
(Collateralized by U.S. Treasury Bond
11.25%, Due 02/15/15;
Total Par $60,985,000
Market Value $89,800,413)................... $ 88,038,000
----------------
Total Repurchase Agreement.................. 88,038,000
----------------
(Cost $88,038,000)
Total Investments - 101.16%................................. 1,574,923,454
----------------
(Cost $990,947,089)
Net Other Assets and Liabilities - (1.16)%.................. (18,027,922)
----------------
Net Assets - 100.00%........................................ $ 1,556,895,532
================
- ----------
* Non-income producing security.
(A) Security exempt from registration pursuant to Rule 144A under the
Securities Act of 1933, as amended. This security may only be resold, in
transactions exempt from registration, to qualified institutional buyers.
At October 31, 1999, this security amounted to $13,182,813, or 0.85% of
net assets.
ADR American Depositary Receipt
REIT Real Estate Investment Trust
See Notes to Financial Statements.
37
<PAGE>
- --------------------------------------------------------------------------------
International Equity Fund
Portfolio of Investments
October 31, 1999
Shares Value
---------- ---------
COMMON STOCKS - 95.76%
Australia - 1.43%
760,884 Australia & New Zealand..................... $ 5,022,284
1,124,169 Coca-Cola Amatil, Ltd....................... 3,470,255
----------------
8,492,539
----------------
Canada - 3.91%
222,800 BCE, Inc.................................... 13,414,937
158,200 Manulife Financial Corp.*................... 1,902,915
159,100 Seagram Co., Ltd............................ 7,887,424
----------------
23,205,276
----------------
France - 8.00%
50,430 Carrefour SA................................ 9,334,999
43,223 Equant*..................................... 4,205,032
249,913 Rhodia SA................................... 4,823,226
79,490 Suez Lyonnaise.............................. 12,833,158
80,041 Valeo SA.................................... 5,749,709
139,029 Vivendi..................................... 10,535,424
----------------
47,481,548
----------------
Germany - 10.75%
253,604 Bayerische Motoren Werke (BMW) AG........... 8,081,861
20,760 Celanese AG*................................ 327,515
207,600 Hoechst AG.................................. 9,137,670
116,853 Mannesmann AG............................... 18,404,302
263,592 Metallgesellschaft AG....................... 5,489,213
19,895 SAP AG...................................... 8,767,396
93,070 Siemens AG.................................. 8,354,604
97,781 Veba AG..................................... 5,286,038
----------------
63,848,599
----------------
Greece - 0.46%
128,360 Hellenic Telecommunications
Organization SA (OTE)....................... 2,719,232
----------------
Hong Kong - 1.31%
1,496,000 China Telecom, Ltd.*........................ 5,122,298
262,000 Hutchison Whampoa, Ltd...................... 2,630,556
----------------
7,752,854
----------------
Hungary - 0.36%
46,270 Gedeon Richter, GDR......................... 2,111,263
----------------
Italy - 5.89%
3,022,460 Banca Nazionale del Lavoro*................. 10,235,972
141,700 Banca Popolare di Bergamo................... 3,047,725
1,287,569 Unicredito Italiano SPA..................... 6,026,195
1,026,881 Mediaset SPA................................ 10,249,413
630,504 Telecom Italia SPA*......................... 5,444,320
----------------
35,003,625
----------------
Japan - 29.74%
1,283,000 Fuji Bank, Ltd.............................. 17,595,569
265,000 Fujitsu, Ltd................................ 7,980,244
80,000 Ito-Yokado Co., Ltd......................... 6,398,772
226,000 KAO Corp.................................... 6,892,491
107,000 Murata Manufacturing Co., Ltd............... 13,750,839
649,000 Nikko Securities............................ 6,099,741
592 Nippon Telegraph &
Telephone Corp.............................. 9,084,109
252,000 Nomura Securities Co., Ltd.................. 4,159,317
1,356 NTT Mobile Communications................... 36,023,017
64,000 Rohm Co., Ltd............................... 14,362,712
1,566,000 Sakura Bank, Ltd............................ 13,456,757
403,000 The Sanwa Bank, Ltd......................... 5,994,562
9,338 Shoskoh Fund & Co., Ltd..................... 5,713,670
168,000 Takeda Chemical Industries.................. 9,651,098
44,100 Takefuji Corp............................... 5,709,696
82,000 TDK Corp.................................... 8,029,347
125,000 Yamanouchi Pharmaceutical Co., Ltd.......... 5,670,375
----------------
176,572,316
----------------
Netherlands - 9.23%
123,870 Gucci Group................................. 10,002,503
402,418 Koninklijke Ptt............................. 20,650,039
71,105 Laurus NV................................... 1,581,697
119,332 Royal Dutch Petroleum....................... 7,132,590
196,098 Vendex International*....................... 5,723,330
287,346 VNU NV...................................... 9,716,252
----------------
54,806,411
----------------
New Zealand - 0.97%
1,438,887 Telecom Corp. of New Zealand................ 5,791,211
----------------
Philippines - 0.30%
234,590 Metropolitan Bank & Trust Co................ 1,755,040
----------------
South Korea - 0.63%
106,700 Korea Telecom Corp., ADR*................... 3,761,175
----------------
See Notes to Financial Statements.
38
<PAGE>
- --------------------------------------------------------------------------------
International Equity Fund
Portfolio of Investments (continued)
October 31, 1999
Shares Value
---------- ---------
Spain - 2.05%
69,265 Banco Popular Espnol SA..................... $ 4,662,367
457,884 Telefonica de Espana SA*.................... 7,531,906
----------------
12,194,273
----------------
Sweden - 1.78%
398,926 Hennes & Mauritz AB, Class B................ 10,597,609
----------------
Switzerland - 2.80%
18,092 Clariant AG................................. 7,918,737
5,831 Novartis AG, Registered..................... 8,724,116
----------------
16,642,853
----------------
United Kingdom - 16.15%
184,433 AstraZeneca Group, Plc...................... 8,340,722
616,723 B.A.T. Industries, Plc...................... 4,084,245
2,058,624 British Aerospace, Plc...................... 12,026,333
593,326 British Sky Broadcasting, Plc............... 6,371,703
926,084 Diageo, Plc................................. 9,359,272
398,541 Glaxo Wellcome, Plc......................... 11,762,399
465,400 Imperial Chemical Industries, Plc........... 4,626,988
460,085 Railtrack Group, Plc........................ 9,314,625
1,266,999 Reed International, Plc..................... 7,391,306
1,322,829 Somerfield, Plc............................. 2,771,599
4,262,925 Vodafone Group, Plc......................... 19,824,886
----------------
95,874,078
----------------
Total Common Stocks......................... 568,609,902
----------------
(Cost $420,431,536)
- --------------------------------------------------------------------------------
INDUSTRY CONCENTRATION OF COMMON STOCKS
AS PERCENTAGE OF NET ASSETS:
Communication Services 24.59%
Consumer Staples 23.31
Finance 14.87
Basic Materials 10.88
Technology 7.30
Capital Goods 5.83
Consumer Cyclicals 3.29
Aerospace 2.03
Transportation 1.57
Energy 1.20
Utilities 0.89
-----
95.76%
=====
Par Value Value
------------- ---------
REPURCHASE AGREEMENT - 4.84%
$ 28,704,000 Repurchase Agreement with:
Chase Manhattan Bank
5.20%, 11/01/99, dated 10/29/99
Repurchase Price $28,716,438
(Collateralized by U.S. Treasury Note
6.50%, Due 10/15/06;
Total Par $28,740,000
Market Value $29,278,875)................... $ 28,704,000
----------------
Total Repurchase Agreement.................. 28,704,000
----------------
(Cost $28,704,000)
Total Investments - 100.60%................................. 597,313,902
----------------
(Cost $449,135,536)
Net Other Assets and Liabilities - (0.60)%.................. (3,551,803)
----------------
Net Assets - 100.00%........................................ $ 593,762,099
================
- ----------
* Non-income producing security.
ADR American Depositary Receipt
GDR Global Depositary Receipt
FORWARD FOREIGN CURRENCY CONTRACTS PURCHASED:
Unrealized
Currency Contract To Settlement Contract Appreciation
Value Receive Dates At Value (Depreciation)
-------- ----------- ---------- -------- --------------
40,523 EMU 11/02/99 $ 42,626 $ (69)
282,487 GBP 11/02/99 464,212 (2,946)
116,170 GBP 11/03/99 190,902 (708)
190,389 GBP 11/04/99 312,868 817
238,354 GBP 11/05/99 391,689 (1,168)
27,763,200 HKD 11/02/99 3,573,578 221
281,353,541 JPY 11/01/99 2,698,746 (7,747)
------------ ------------
$ 7,674,621 $ (11,600)
============ ============
- ----------
EMU Euro Monetary Unit
GBP Great British Pounds
HKD Hong Kong Dollars
JPY Japanese Yen
See Notes to Financial Statements.
39
<PAGE>
- --------------------------------------------------------------------------------
Small Cap Value Fund
Portfolio of Investments
October 31, 1999
Shares Value
---------- ---------
COMMON STOCKS - 91.07%
Consumer Staples - 18.21%
65,400 American Healthcorp, Inc.*.................. $ 367,875
102,250 Apple Orthodontix, Inc.*.................... 76,687
128,100 Applebee's International, Inc............... 3,690,881
47,500 Barrett Business Services, Inc.*............ 326,563
222,666 Bindley Western Industries, Inc............. 2,797,242
24,900 Bioanalytical Systems, Inc.*................ 59,138
74,400 Burns International Services Corp.*......... 748,650
57,100 Capital Senior Living Corp.*................ 292,637
45,000 CBRL Group, Inc............................. 601,875
70,600 CEC Entertainment, Inc.*.................... 2,263,613
63,100 Cooker Restaurant Corp...................... 201,131
18,240 Cordiant Communications
Group, ADR.................................. 264,480
87,400 CTB International Corp.*.................... 546,250
130,200 Datascope Corp.*............................ 4,687,200
169,300 Friendly Ice Cream Corp.*................... 825,338
162,000 Health Management Systems, Inc.*............ 698,625
225,826 ICN Pharmaceuticals, Inc.................... 5,193,998
65,000 Ingles Markets, Inc., Class A............... 840,937
134,000 Invacare Corp............................... 2,797,250
77,000 Korn/Ferry International*................... 1,713,250
94,300 Lifecore Biomedical, Inc.*.................. 1,178,750
100,200 Marketing Specialists Corp.*................ 275,550
65,700 Michael Foods, Inc.......................... 1,675,350
139,875 Minntech Corp............................... 1,451,203
194,133 Morrison Management
Specialists, Inc............................ 4,149,593
403,100 Nextera Enterprises, Inc. Class A*.......... 2,141,469
98,000 Northland Cranberries, Inc., Class A........ 545,125
68,000 Noven Pharmaceuticals, Inc.*................ 667,250
142,505 O'Charley's, Inc.*.......................... 2,182,108
143,700 Paracelsus Healthcare Corp.*................ 53,888
108,500 Performance Food Group Co.*................. 2,943,062
110,200 PSS World Medical, Inc.*.................... 854,050
204,225 Res-Care, Inc.*............................. 2,974,027
130,921 Respironics, Inc.*.......................... 1,104,646
186,400 Romac Inernational, Inc.*................... 1,258,200
49,100 Ruby Tuesday, Inc........................... 935,969
158,500 Ryan's Family Steak Houses, Inc.*........... 1,659,297
241,000 SOS Staffing Services, Inc.*................ 1,220,063
3,201 SUPERVALU, INC.............................. 67,221
386,800 Unilab Corp.*............................... 2,199,925
169,100 Vlasic Foods International, Inc.*........... 1,299,956
111,100 Westaff, Inc.*.............................. 944,350
34,000 Worthington Foods, Inc...................... 805,375
----------------
61,580,047
----------------
Technology - 15.63%
77,600 Acxiom Corp.*............................... 1,280,400
133,000 Analogic Corp............................... 3,491,250
107,200 Analysts International Corp................. 1,252,900
50,000 Bell & Howell Co.*.......................... 1,406,250
196,000 Benchmark Electronics, Inc.*................ 3,136,000
120,700 Chyron Corp.*............................... 98,069
165,000 Clare (C.P.) Corp.*......................... 876,563
169,500 Coherent, Inc.*............................. 3,485,344
323,200 Computer Task Group, Inc.................... 4,080,400
174,300 Condor Technology Solutions, Inc.*.......... 305,025
15,000 Hadco Corp.................................. 551,250
193,400 Hypercom Corp.*............................. 1,547,200
263,000 Hyperion Solutions Corp.*................... 6,410,625
228,200 Infinium Software, Inc.*.................... 948,456
73,800 Keithley Instruments, Inc................... 1,171,575
56,400 K-Tron International, Inc................... 838,950
108,200 Landmark Systems Corp.*..................... 946,750
126,100 MapInfo Corp.*.............................. 2,340,731
119,500 Mentor Graphics Corp.*...................... 963,469
103,600 Metamor Worldwide, Inc.*.................... 1,955,450
70,700 Methode Electronics, Inc., Class A.......... 1,131,200
132,800 Metro Information Services, Inc.*........... 1,809,400
149,200 MSC.Software Corp.*......................... 969,800
57,500 Nashua Corp.*............................... 481,562
117,900 PairGain Technology, Inc.*.................. 1,444,275
18,900 Pericom Semiconductor Corp.*................ 304,763
103,600 S3, Inc.*................................... 1,036,000
173,600 Sybase, Inc.*............................... 2,343,600
35,800 Tegal Corp.*................................ 91,738
67,900 Tekelec*.................................... 861,481
148,600 Teltrend, Inc.*............................. 2,693,375
138,100 Vantive Corp.*.............................. 1,605,412
50,100 Viasoft, Inc.*.............................. 236,409
84,900 Wood's (T.B.), Inc.......................... 758,794
----------------
52,854,466
----------------
Finance - 13.45%
70,000 American Annuity Group, Inc................. 1,255,625
103,600 Americredit Corp.*.......................... 1,800,050
113,120 Amerus Life Holdings, Inc., Class A......... 2,729,020
50,400 Annuity & Life Re (Holdings), Ltd........... 1,184,400
61,800 Brandywine Realty Trust, REIT............... 1,039,013
55,150 Brown & Brown, Inc., Class A................ 1,861,313
16,000 Colorado Business Bankshares................ 206,000
111,800 Corporate Office
Properties Trust, Inc., REIT................ 810,550
43,900 Equity One, Inc., REIT...................... 452,719
17,400 GBC Bancorp................................. 355,613
37,560 Hanmi Bank*................................. 554,010
318,500 HealthCare Financial
Partners, Inc., REIT (A)*................... 6,370,000
127,400 Healthcare Financial
Partners, Inc., WTS, (A)*
Expires 04/29/2001.......................... 0
65,650 Healthcare Realty Trust, Inc., REIT......... 1,263,763
167,383 Heller Financial, Inc....................... 3,975,346
77,500 Innkeepers USA Trust, REIT.................. 668,437
50,000 IRT Property Co., REIT...................... 421,875
24,400 Kansas City Life Insurance Co............... 948,550
45,000 LaSalle Re Holdings, Ltd.................... 582,188
79,900 Life Financial Corp.*....................... 359,550
114,600 Matrix Bancorp, Inc.*....................... 1,389,525
12,500 Medford Bancorp, Inc........................ 221,875
60,000 Ohio Casualty Corp.......................... 1,001,250
See Notes to Financial Statements.
40
<PAGE>
- --------------------------------------------------------------------------------
Small Cap Value Fund
Portfolio of Investments (continued)
October 31, 1999
Shares Value
---------- ---------
Finance (continued)
42,000 Pacific Bank................................ $ 1,134,000
18,300 PICO Holdings, Inc.*........................ 300,806
28,200 Prime Group Realty Trust, REIT.............. 405,375
40,900 Reliance Bancorp, Inc....................... 1,650,059
310,673 Republic Bancorp, Inc....................... 4,077,588
90,000 Scottish Annuity & Life Holdings, Ltd....... 905,625
97,500 Seacoast Financial Services Corp............ 1,072,500
110,000 Selective Insurance Group, Inc.............. 2,055,625
40,800 SL Green Realty Corp., REIT................. 742,050
126,900 Superior Financial Corp.*................... 1,403,831
39,700 Texas Regional Bancshares, Inc.
Class A..................................... 1,109,119
22,677 UMB Financial Corp.......................... 921,253
50,600 Willis Lease Finance Corp.*................. 249,838
----------------
45,478,341
----------------
Consumer Cyclical - 12.49%
145,450 ADVO, Inc.*................................. 2,572,647
194,100 American Homestar Corp.*.................... 770,334
57,900 ASI Solutions, Inc.*........................ 166,462
71,650 Bassett Furniture Industries, Inc........... 1,289,700
61,300 Beazer Homes USA, Inc.*..................... 1,172,363
159,800 Children's Comprehensive Services*.......... 1,118,600
1 Cintas Corp................................. 60
78,100 CLARCOR, Inc................................ 1,332,581
86,700 Culp, Inc................................... 601,481
33,000 Engle Homes, Inc............................ 334,125
42,314 Fresh Foods, Inc.*.......................... 401,983
138,100 Goody's Family Clothing, Inc.*.............. 1,398,262
57,100 Happy Kids, Inc.*........................... 606,687
39,700 Houghton Mifflin Co......................... 1,682,288
104,900 infoUSA, Inc.*.............................. 580,228
161,400 InterTAN, Inc.*............................. 3,631,500
178,600 Iterim Services, Inc.*...................... 2,935,737
190,200 ITI Technologies, Inc.*..................... 5,159,175
48,600 ITT Educational Services, Inc.*............. 959,850
176,300 Jostens, Inc................................ 3,724,338
92,800 K2, Inc..................................... 742,400
103,500 Kroll-O'Gara (The) Co.*..................... 1,643,062
46,500 Newmark Homes Corp.*........................ 261,563
95,400 Protection One, Inc......................... 196,763
164,900 R & B, Inc.*................................ 762,663
83,600 Rocky Shoes & Boots, Inc.*.................. 585,200
20,000 Toll Brothers, Inc.*........................ 350,000
84,100 Toro Co..................................... 3,017,088
264,600 Unifirst Corp............................... 3,241,350
29,700 Wackenhut Corp., Class A.................... 558,731
114,300 York Group, Inc............................. 428,625
----------------
42,225,846
----------------
Capital Goods and Construction - 10.81%
149,000 ABC-NACO, Inc.*............................. 1,601,750
80,050 Advanced Technical Products, Inc.*.......... 1,100,687
22,000 Atchison Casting Corp....................... 229,625
133,900 Brown & Sharpe
Manufacturing Co., Class A*................. 393,331
139,300 Capital Environmental Resource, Inc.*....... 713,912
127,550 Chicago Bridge & Iron Co. N.V............... 1,554,516
102,500 Comptek Research, Inc.*..................... 1,050,625
34,000 Cuno, Inc.*................................. 680,000
142,900 Dayton Superior Corp.*...................... 2,286,400
107,800 Denison International Plc, ADR*............. 990,412
51,400 Evans & Sutherland
Computer Corp.*............................. 613,587
154,075 Farr Co.*................................... 1,155,562
73,700 Giga-Tronics, Inc.*......................... 202,675
55,500 Global Industrial Technologies, Inc.*....... 679,875
100,100 Kaman Corp.................................. 1,101,100
70,600 Key Technology, Inc.*....................... 555,975
75,100 Ladish Co., Inc.*........................... 525,700
104,000 Layne Christensen, Inc.*.................... 851,500
38,800 Lindberg Co................................. 349,200
197,300 LSI Industries, Inc......................... 4,747,531
171,700 NCI Building Systems, Inc.*................. 2,715,006
90,900 Reliance Steel & Aluminum Co................ 1,908,900
52,600 Service Experts, Inc.*...................... 315,600
129,750 Shaw Group, Inc.*........................... 2,951,812
53,600 SunSource, Inc.............................. 257,950
156,544 Terex Corp.*................................ 4,138,632
87,400 TransTechnology Corp........................ 841,225
117,600 Valmont Industries, Inc..................... 2,043,300
----------------
36,556,388
----------------
Energy - 8.09%
108,700 Bellwether Exploration Co................... 655,597
44,200 Berry Petroleum Co., Class A................ 552,500
125,100 Callon Petroleum Co.*....................... 1,602,844
121,000 Cross Timbers Oil Co........................ 1,346,125
68,900 Devon Energy Corp........................... 2,678,488
81,300 Evergreen Resources, Inc.*.................. 1,758,112
137,400 Houston Exploration Co.*.................... 2,687,888
134,700 Key Production Co., Inc.*................... 1,195,463
145,100 Louis Dreyfus Natural Gas Corp.*............ 2,902,000
85,300 Marine Drilling Cos., Inc.*................. 1,380,794
30,000 MarkWest Hydrocarbon, Inc.*................. 228,750
171,020 Meridian Resource Corp.*.................... 758,901
112,200 Midcoast Energy Resources, Inc.............. 2,047,650
40,000 Nuevo Energy Co.*........................... 567,500
58,500 Oceaneering International, Inc.*............ 793,406
133,200 Pennaco Energy, Inc.*....................... 1,473,525
44,800 Pogo Producing Co........................... 898,800
53,700 Pride International, Inc.*.................. 738,375
125,618 Range Resources............................. 471,067
90,000 Triton Energy Ltd.*......................... 1,490,625
102,000 Vintage Petroleum, Inc...................... 1,109,250
----------------
27,337,660
----------------
Utilities - 4.11%
100,550 Atmos Energy Corp........................... 2,281,228
99,650 Cascade Natural Gas Corp.................... 1,806,156
78,800 CT Communications, Inc...................... 3,792,250
20,000 Middlesex Water Co., Inc.................... 620,000
See Notes to Financial Statements.
41
<PAGE>
- --------------------------------------------------------------------------------
Small Cap Value Fund
Portfolio of Investments (continued)
October 31, 1999
Shares Value
---------- ---------
Utilities (continued)
44,500 New Jersey Resources Corp................... $ 1,810,594
39,500 NUI Corp.................................... 980,094
34,500 South Jersey Industries, Inc................ 897,000
73,000 Southwest Gas Corp.......................... 1,697,250
----------------
13,884,572
----------------
Basic Materials - 3.88%
30,000 Centex Construction Products................ 1,066,875
73,700 Dexter Corp................................. 2,584,106
123,500 Grief Brothers Corp., Class A............... 3,519,750
47,400 JPS Packaging Co.*.......................... 183,675
116,300 Longview Fibre Co........................... 1,322,912
119,600 MPW Industrial
Services Group, Inc.*....................... 956,800
177,900 Northwest Pipe Co.*......................... 2,401,650
86,650 Peak International, Ltd.*................... 812,344
400 Rogers Corp.*............................... 14,500
10,900 Sybron Chemicals, Inc.*..................... 151,237
50,100 Transmation, Inc............................ 112,725
----------------
13,126,574
----------------
Transportation - 2.37%
170,700 AirNet Systems, Inc.*....................... 960,187
116,700 Budget Group, Inc., Class A*................ 816,900
38,875 Cannon Express, Inc.*....................... 102,047
96,400 Gulfmark Offshore, Inc.*.................... 1,494,200
74,000 Midwest Express Holdings, Inc.*............. 2,169,125
154,800 RailTex, Inc.*.............................. 2,476,800
----------------
8,019,259
----------------
Communication Services - 2.03%
75,700 Jones Intercable, Inc., Class A*............ 4,135,113
59,000 Young Broadcasting, Inc. Class A*........... 2,736,125
----------------
6,871,238
----------------
Total Common Stocks......................... 307,934,391
----------------
(Cost $334,461,787)
Par Value Value
------------- ---------
CORPORATE BOND - 0.09%
$ 369,900 MSC.Software Corp.
Convertible Subordinated Debenture
7.88%, 08/18/04............................. $ 321,813
----------------
Total Corporate Bond........................ 321,813
----------------
(Cost $369,900)
REPURCHASE AGREEMENT - 8.61%
29,099,000 Repurchase Agreement with:
Chase Manhattan Bank
5.20%, 11/01/99, dated 10/29/99
Repurchase Price $29,111,610
(Collateralized by U.S. Treasury Bond
9.25%, Due 02/15/16;
Total Par $23,145,000
Market Value $29,683,463)................... 29,099,000
----------------
Total Repurchase Agreement.................. 29,099,000
----------------
(Cost $29,099,000)
Total Investments - 99.77%.................................. 337,355,204
----------------
(Cost $363,930,687)
Net Other Assets and Liabilities - 0.23%.................... 783,875
----------------
Net Assets - 100.00%........................................ $ 338,139,079
================
- ----------
* Non-income producing security.
(A) Securities exempt from registration persuant to Rule 144A under the
Securities Act of 1933, as amended. These securities may only be resold,
in a transaction exempt from registration, to qualified institutional
buyers. At October 31, 1999, these securities amounted to $6,370,000 or
1.88% of net assets.
ADR American Depositary Receipt
REIT Real Estate Investment Trust
WTS Warrants
See Notes to Financial Statements.
42
<PAGE>
- --------------------------------------------------------------------------------
Small Company Equity Fund
Portfolio of Investments
October 31, 1999
Shares Value
---------- ---------
COMMON STOCKS - 99.67%
Technology - 53.80%
117,100 Able Telecom Holding Corp.*................. $ 1,031,944
123,600 Advanced Fibre Communication*............... 2,703,750
115,200 Advanced Radio Telecom Corp.*............... 1,260,000
5,300 Aether Systems, Inc.*....................... 368,681
175,100 Amkor Technology, Inc.*..................... 3,534,831
71,100 Ancor Communications, Inc.*................. 2,252,981
17,400 AnswerThink Consulting Group, Inc.*......... 287,100
19,000 Applied Mirco Circuits Corp.*............... 1,478,437
62,600 Ardent Software, Inc.*...................... 1,381,112
11,600 Art Technology Group, Inc.*................. 626,400
85,200 Artesyn Technologies, Inc.*................. 1,682,700
87,500 Asyst Technologies, Inc.*................... 3,390,625
97,800 BEA Systems, Inc.*.......................... 4,462,125
70,900 Best Software, Inc.*........................ 1,422,431
62,800 BindView Development Corp.*................. 1,884,000
33,600 BISYS Group, Inc.*.......................... 1,713,600
84,600 Brio Technology, Inc.*...................... 2,051,550
58,000 Cambridge Technology Partners, Inc.*........ 641,625
75,100 Clarify, Inc.*.............................. 5,801,475
58,700 Cognex Corp.*............................... 1,757,331
58,700 Complete Business Solutions, Inc.*.......... 851,150
57,200 Computer Network Technology Corp.*.......... 918,775
34,350 Concord Communications, Inc.*............... 1,784,053
232,400 Condor Technology Solutions*................ 406,700
35,932 Cree Research, Inc.*........................ 1,533,847
11,300 Crossroads Systems, Inc.*................... 803,712
51,900 Cybex Computer Products Corp.*.............. 2,027,344
138,000 Deltek Systems, Inc.*....................... 1,604,250
56,800 Documentum, Inc.*........................... 1,611,700
7,100 Efficient Networks, Inc.*................... 301,750
62,100 Emulex Corp.*............................... 9,683,719
87,000 Etec Systems, Inc.*......................... 3,322,312
56,900 Exchange Applications, Inc.*................ 1,550,525
94,700 Forrester Research, Inc.*................... 4,510,087
86,900 Galileo Technology, Ltd.*................... 1,987,838
83,500 Genesys Telecommunications
Laboratories, Inc.*......................... 4,101,937
89,700 Gentex Corp.*............................... 1,541,719
40,900 Great Plains Software, Inc.*................ 2,269,950
87,300 Helix Technology Corp.*..................... 3,519,281
170,200 HTE, Inc.*.................................. 351,037
121,700 Hyperion Solutions Corp.*................... 2,966,438
32,100 Ibis Technology Corp.*...................... 1,464,563
86,200 ICG Communications, Inc.*................... 1,411,525
139,225 IMRglobal Corp.*............................ 1,427,056
56,800 Inso Corp.*................................. 766,800
62,900 Interactive Pictures Corp................... 1,482,081
168,850 International Telecommunications
Data Systems, Inc.*......................... 1,677,947
28,400 InterVU, Inc.*.............................. 1,558,450
173,800 IntraNet Solutions, Inc.*................... 2,987,188
11,300 JNI Corp.*.................................. 603,844
70,600 Kopin Corp.*................................ 2,965,200
24,200 Legato Systems, Inc.*....................... 1,300,750
86,000 LTX Corp.*.................................. 1,359,875
33,500 Mercury Interactive Corp.*.................. 2,717,688
178,550 META Group, Inc.*........................... 2,566,656
96,000 Metro Information Services, Inc.*........... 1,308,000
63,100 MMC Networks, Inc.*......................... 2,011,313
85,300 National Instruments Corp.*................. 2,564,331
87,000 Netegrity, Inc.*............................ 2,349,000
16,200 Optical Coating Laboratory, Inc............. 1,731,375
57,300 PairGain Technologies, Inc.*................ 701,925
294,900 Per-Se Technologies, Inc.*.................. 893,916
155,300 Pervasive Software, Inc.*................... 1,514,175
85,100 PRI Automation, Inc.*....................... 3,414,638
41,650 Probusiness Services, Inc.*................. 1,046,456
205,600 ProSoft I-Net Solutions, Inc.*.............. 616,800
14,300 Quest Software, Inc.*....................... 1,054,625
72,600 QLogic Corp.*............................... 7,559,475
114,900 RSA Security, Inc.*......................... 4,078,950
56,800 Santa Cruz Operation (The), Inc.*........... 749,050
45,000 ScanSource, Inc.*........................... 1,524,375
21,500 SeaChange International, Inc.*.............. 408,500
71,245 SPSS, Inc.*................................. 1,264,599
86,000 Sterling Software, Inc.*.................... 1,886,625
115,600 Tekelec*.................................... 1,466,675
127,400 Teletech Holdings*.......................... 1,807,488
34,200 Terayon Communication
Systems, Inc.*.............................. 1,496,250
180,700 Tier Technologies, Inc.*.................... 1,174,550
97,300 Tollgrade Communications, Inc.*............. 2,201,413
22,500 Transwitch Corp.*........................... 1,058,906
312,500 TSI International Software, Ltd.*........... 7,500,000
91,400 Veeco Instruments, Inc.*.................... 3,101,888
17,300 Vignette Corp.*............................. 2,733,400
42,900 Visual Networks, Inc.*...................... 1,785,713
87,300 Whittman-Hart, Inc.*........................ 3,355,594
204,000 Zygo Corp.*................................. 3,378,750
----------------
179,409,200
----------------
Consumer Cyclical - 14.03%
145,500 American Classic Voyages Co.*............... 3,637,500
117,500 ASI Solutions, Inc.*........................ 337,812
186,100 Bally's Total Fitness Corp.*................ 4,478,031
282,300 Brass Eagle, Inc.*.......................... 3,352,312
117,100 Cash America International, Inc............. 1,105,131
113,800 Charles River Associates, Inc.*............. 2,873,450
60,300 Cheap Tickets, Inc.*........................ 964,800
33,800 Consolidated Graphics, Inc.*................ 676,000
44,925 Cost Plus, Inc.*............................ 1,639,762
222,200 Funco, Inc.*................................ 4,055,150
104,900 Hollywood Park, Inc.*....................... 1,816,081
57,200 InterTAN, Inc.*............................. 1,287,000
69,200 Kroll-O'Gara Co.*........................... 1,098,550
109,700 Men's Warehouse (The), Inc.*................ 2,406,544
126,600 Metamor Worldwide, Inc.*.................... 2,389,575
See Notes to Financial Statements.
43
<PAGE>
- --------------------------------------------------------------------------------
Small Company Equity Fund
Portfolio of Investments (continued)
October 31, 1999
Shares Value
---------- ---------
Consumer Cyclical (continued)
99,100 Pacific Sunwear of California, Inc.*........ $ 2,991,581
76,800 Pegasus Systems, Inc.*...................... 3,283,200
78,300 Players International, Inc.*................ 577,463
84,070 Pre-Paid Legal Services, Inc.*.............. 2,038,698
47,900 Silverleaf Resorts, Inc.*................... 299,375
159,900 Source Information Management Co.*.......... 1,918,800
74,700 Steiner Leisure, Ltd.*...................... 1,414,631
66,800 Student Advantage, Inc.*.................... 964,425
114,600 Travis Boats & Motors, Inc.*................ 1,174,650
----------------
46,780,521
----------------
Consumer Staples - 10.08%
116,200 ATS Medical, Inc.*.......................... 1,074,850
87,500 CEC Entertainment, Inc.*.................... 2,805,469
76,800 Education Management Corp.*................. 729,600
114,600 FirstService Corp.*......................... 1,296,412
118,400 Isis Pharmaceuticals, Inc.*................. 1,369,000
49,525 King Pharmaceuticals, Inc.*................. 1,498,131
126,750 Labor Ready, Inc.*.......................... 1,291,266
71,100 Modis Professional Services, Inc.*.......... 795,431
112,700 Natrol, Inc.*............................... 1,007,256
65,000 Ocular Sciences, Inc.*...................... 1,194,375
76,412 On Assignment, Inc.*........................ 2,196,845
161,800 Orthodontic Center of America, Inc.*........ 2,224,750
72,100 Osteotech, Inc.*............................ 941,806
38,000 Patterson Dental Co.*....................... 1,712,375
58,100 Province Healthcare Co.*.................... 936,863
126,350 Renal Care Group, Inc.*..................... 2,353,269
89,300 Rexall Sundown, Inc.*....................... 943,231
225,864 Romac International, Inc.*.................. 1,524,582
89,400 Sonic Corp.*................................ 2,503,200
100,600 Thoratec Laboratories Corp.*................ 716,775
43,500 USWeb Corp.*................................ 1,685,625
57,200 Varian Medical Systems, Inc................. 1,204,775
47,500 Whole Foods Market, Inc.*................... 1,615,000
----------------
33,620,886
----------------
Energy - 6.59%
141,700 Cabot Oil & Gas Corp........................ 2,284,912
55,700 Devon Energy Corp.*......................... 2,165,337
60,500 Evergreen Resources, Inc.*.................. 1,308,312
87,400 Global Industries, Ltd.*.................... 699,200
149,167 Magin Energy, Inc.*......................... 293,975
157,300 Marine Drilling Cos., Inc.*................. 2,546,294
92,000 Newfield Exploration Co.*................... 2,708,250
100,800 Noble Affiliates, Inc....................... 2,551,500
164,300 Pennaco Energy, Inc.*....................... 1,817,569
3,900 Prima Energy Corp.*......................... 85,313
229,400 Santa Fe Energy Resources, Inc.*............ 1,978,575
35,700 Stone Energy Corp.*......................... 1,735,913
172,400 Swift Energy Co.*........................... 1,788,650
----------------
21,963,800
----------------
Capital Goods and Construction - 5.82%
94,100 AAR Corp.................................... 1,570,294
87,300 Aeroflex, Inc.*............................. 485,606
20,800 Astec Industries, Inc.*..................... 487,500
62,200 Aviation Sales Co.*......................... 1,080,725
69,000 Casella Waste Systems, Inc.*................ 927,187
105,275 Cuno, Inc.*................................. 2,105,500
43,200 HEICO Corp.................................. 753,300
44,100 HEICO Corp., Class A........................ 669,769
115,500 Hexcel Corp.*............................... 620,813
116,500 Maverick Tube Corp.*........................ 2,155,250
145,500 Motivepower Industries, Inc.*............... 1,736,906
248,800 Newpark Resources, Inc.*.................... 1,601,650
284,110 PCD, Inc.*.................................. 1,669,146
58,600 Presstek, Inc.*............................. 472,463
119,100 Tower Automotive*........................... 1,942,819
71,600 Wabash National Corp........................ 1,136,650
----------------
19,415,578
----------------
Transportation - 3.20%
103,900 Atlas Air, Inc.*............................ 2,805,300
175,425 Dynamex, Inc.*.............................. 175,425
70,800 Eagle USA Airfreight, Inc.*................. 2,088,600
54,900 Expeditors International of
Washington, Inc............................. 2,051,887
71,500 Tidewater, Inc.............................. 2,145,000
203,500 Trico Marine Services, Inc.*................ 1,411,781
----------------
10,677,993
----------------
Basic Materials - 1.91%
123,600 Millipore Corp.............................. 3,939,750
95,200 NS Group, Inc.*............................. 963,900
58,300 RTI International Metals, Inc.*............. 422,675
173,700 Titanium Metal Corp.*....................... 1,042,200
----------------
6,368,525
----------------
Utilities - 1.86%
120,500 Davel Communication Corp.................... 534,719
57,300 Intermedia Communications, Inc.*............ 1,489,800
25,700 Powertel, Inc.*............................. 1,513,088
68,500 WinStar Communications, Inc.*............... 2,658,656
----------------
6,196,263
----------------
Communication Services - 1.71%
31,100 Hispanic Broadcasting Corp.*................ 2,519,100
42,900 IXnet, Inc.*................................ 608,644
11,300 Radio Unica Corp.*.......................... 323,463
62,400 SportsLine USA, Inc.*....................... 2,242,500
----------------
5,693,707
----------------
See Notes to Financial Statements.
44
<PAGE>
- --------------------------------------------------------------------------------
Small Company Equity Fund
Portfolio of Investments (continued)
October 31, 1999
Shares Value
---------- ---------
Finance - 0.67%
86,200 MFC Bancorp, Ltd.*.......................... $ 700,375
85,800 Riggs National Corp......................... 1,297,725
88,840 Towne Services, Inc.*....................... 244,310
----------------
2,242,410
----------------
Total Common Stocks......................... 332,368,883
----------------
(Cost $284,727,645)
Total Investments - 99.67%.................................. 332,368,883
----------------
(Cost $284,727,645)
Net Other Assets and Liabilities - 0.33%.................... 1,089,442
----------------
Net Assets - 100.00%........................................ $ 333,458,325
================
- ----------
* Non-income producing security.
See Notes to Financial Statements.
45
<PAGE>
- --------------------------------------------------------------------------------
Galaxy Equity Funds
Statements of Assets and Liabilities
October 31, 1999
<TABLE>
<CAPTION>
Asset Allocation Equity Income Growth and Income
Fund Fund Fund
---------------- ------------- -----------------
<S> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost ........................................ $628,948,450 $246,882,901 $460,885,975
Repurchase agreement ....................................... -- 36,620,000 43,135,000
Net unrealized appreciation (depreciation) on investments .. 120,097,179 52,880,224 101,112,945
------------ ------------ ------------
Total investments at value ................................. 749,045,629 336,383,125 605,133,920
Cash ........................................................... 3,145 447 345
Receivable for investments sold ................................ 12,820,671 -- 2,886,699
Receivable for shares sold ..................................... 678,348 191,175 250,664
Interest and dividends receivable .............................. 4,764,568 601,588 480,135
Tax reclaim receivable ......................................... -- -- --
Deferred organizational expense (Note 2) ....................... -- -- --
------------ ------------ ------------
Total Assets ............................................... 767,312,361 337,176,335 608,751,763
------------ ------------ ------------
LIABILITIES:
Payable for open forward foreign currency contracts ............ -- -- --
Payable for investments purchased .............................. 13,926,364 -- 3,065,371
Payable to custodian ........................................... -- -- --
Payable for shares repurchased ................................. 1,585,754 356,844 1,263,762
Advisory fee payable (Note 3) .................................. 467,232 206,542 336,545
Payable to Fleet affiliates (Note 3) ........................... 198,664 55,898 83,093
Payable to Administrator (Note 3) .............................. 121,085 61,008 71,345
Trustees' fees and expenses payable (Note 3) ................... 17,145 9,670 15,235
Accrued expenses and other payables ............................ 111,723 53,918 54,337
------------ ------------ ------------
Total Liabilities .......................................... 16,427,967 743,880 4,889,688
------------ ------------ ------------
NET ASSETS .......................................................... $750,884,394 $336,432,455 $603,862,075
============ ============ ============
</TABLE>
See Notes to Financial Statements.
46
<PAGE>
<TABLE>
<CAPTION>
Strategic Equity Equity Value Equity Growth
Fund Fund Fund
---------------- ------------ --------------
<S> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost ........................................ $ 77,202,228 $462,740,700 $ 902,909,089
Repurchase agreement ....................................... 7,414,000 15,451,000 88,038,000
Net unrealized appreciation (depreciation) on investments .. (3,605,078) 86,121,959 583,976,365
------------ ------------ --------------
Total investments at value ................................. 81,011,150 564,313,659 1,574,923,454
Cash ........................................................... 314 -- 15
Receivable for investments sold ................................ 599,280 8,948,057 4,350,479
Receivable for shares sold ..................................... 32,514 345,976 1,532,974
Interest and dividends receivable .............................. 31,428 508,954 1,124,194
Tax reclaim receivable ......................................... -- -- --
Deferred organizational expense (Note 2) ....................... 11,349 -- --
------------ ------------ --------------
Total Assets ............................................... 81,686,035 574,116,646 1,581,931,116
------------ ------------ --------------
LIABILITIES:
Payable for open forward foreign currency contracts ............ -- -- --
Payable for investments purchased .............................. 982,072 2,147,865 21,414,981
Payable to custodian ........................................... -- 26 --
Payable for shares repurchased ................................. 200 900,787 2,061,209
Advisory fee payable (Note 3) .................................. 36,160 354,237 949,851
Payable to Fleet affiliates (Note 3) ........................... 398 104,538 198,071
Payable to Administrator (Note 3) .............................. 9,262 107,301 189,885
Trustees' fees and expenses payable (Note 3) ................... 1,095 16,570 38,617
Accrued expenses and other payables ............................ 17,562 101,290 182,970
------------ ------------ --------------
Total Liabilities .......................................... 1,046,749 3,732,614 25,035,584
------------ ------------ --------------
NET ASSETS .......................................................... $ 80,639,286 $570,384,032 $1,556,895,532
============ ============ ==============
<CAPTION>
International Small Cap Small Company
Equity Fund Value Fund Equity Fund
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost ........................................ $420,431,536 $ 334,831,687 $284,727,645
Repurchase agreement ....................................... 28,704,000 29,099,000 --
Net unrealized appreciation (depreciation) on investments .. 148,178,366 (26,575,483) 47,641,238
------------ ------------- ------------
Total investments at value ................................. 597,313,902 337,355,204 332,368,883
Cash ........................................................... 315 675 --
Receivable for investments sold ................................ -- 3,030,691 4,125,318
Receivable for shares sold ..................................... 4,036,525 613,397 705,757
Interest and dividends receivable .............................. 513,995 86,335 24,228
Tax reclaim receivable ......................................... 231,577 -- --
Deferred organizational expense (Note 2) ....................... -- -- --
------------ ------------- ------------
Total Assets ............................................... 602,096,314 341,086,302 337,224,186
------------ ------------- ------------
LIABILITIES:
Payable for open forward foreign currency contracts ............ 11,600 -- --
Payable for investments purchased .............................. 7,674,328 2,413,888 809,225
Payable to custodian ........................................... -- -- 1,829,203
Payable for shares repurchased ................................. 106,611 267,018 778,860
Advisory fee payable (Note 3) .................................. 306,628 167,045 205,883
Payable to Fleet affiliates (Note 3) ........................... 44,754 12,768 68,770
Payable to Administrator (Note 3) .............................. 71,473 35,195 66,300
Trustees' fees and expenses payable (Note 3) ................... 12,406 8,058 7,620
Accrued expenses and other payables ............................ 106,415 43,251 --
------------ ------------- ------------
Total Liabilities .......................................... 8,334,215 2,947,223 3,765,861
------------ ------------- ------------
NET ASSETS .......................................................... $593,762,099 $ 338,139,079 $333,458,325
============ ============= ============
</TABLE>
47
<PAGE>
- --------------------------------------------------------------------------------
Galaxy Equity Funds
Statements of Assets and Liabilities (continued)
October 31, 1999
<TABLE>
<CAPTION>
Asset Allocation Equity Income Growth and Income
Fund Fund Fund
---------------- ------------- -----------------
<S> <C> <C> <C>
NET ASSETS consists of:
Par value (Note 5) ........................................... $ 42,354 $ 17,248 $ 37,754
Paid in capital in excess of par value ....................... 615,825,668 233,046,173 469,193,571
Undistributed net investment income .......................... 2,165,168 399,503 148,148
Accumulated net realized gain (loss) on investments sold ..... 12,754,025 50,089,307 33,369,657
Net unrealized appreciation (depreciation) of investments .... 120,097,179 52,880,224 101,112,945
------------ ------------ ------------
TOTAL NET ASSETS ................................................ $750,884,394 $336,432,455 $603,862,075
============ ============ ============
Retail A Shares:
Net Assets ................................................... $389,077,216 $213,040,891 $232,110,404
Shares of beneficial interest outstanding .................... 21,935,139 10,925,405 14,524,500
NET ASSET VALUE and redemption price per share ............... $ 17.74 $ 19.50 $ 15.98
Sales charge - 3.75% of offering price ....................... 0.69 0.76 0.62
------------ ------------ ------------
Maximum offering price per share ............................. $ 18.43 $ 20.26 $ 16.60
============ ============ ============
Retail B Shares:
Net Assets ................................................... $ 91,199,117 $ 3,212,779 $ 62,365,649
Shares of beneficial interest outstanding .................... 5,153,727 166,894 3,921,763
------------ ------------ ------------
NET ASSET VALUE and offering price per share* ................ $ 17.70 $ 19.25 $ 15.90
============ ============ ============
Trust Shares:
Net Assets ................................................... $269,850,784 $120,178,785 $309,106,303
Shares of beneficial interest outstanding .................... 15,222,769 6,156,145 19,290,157
------------ ------------ ------------
NET ASSET VALUE, offering and redemption price per share ..... $ 17.73 $ 19.52 $ 16.02
============ ============ ============
A Prime Shares:
Net Assets ................................................... $ 237,778 N/A $ 150,276
Shares of beneficial interest outstanding .................... 13,412 N/A 9,392
NET ASSET VALUE and redemption price per share ............... $ 17.73 N/A $ 16.00
Sales charge - 5.50% of offering price ....................... 1.03 N/A 0.93
------------ ------------ ------------
Maximum offering price per share ............................. $ 18.76 N/A $ 16.93
============ ============ ============
B Prime Shares:
Net Assets ................................................... $ 519,499 N/A $ 129,443
Shares of beneficial interest outstanding .................... 29,328 N/A 8,107
------------ ------------ ------------
NET ASSET VALUE and offering price per share* ................ $ 17.71 N/A $ 15.97
============ ============ ============
</TABLE>
- ----------
* Redemption price per share is equal to the Net Asset Value per share less
any applicable contingent deferred sales charge.
See Notes to Financial Statements.
48
<PAGE>
<TABLE>
<CAPTION>
Strategic Equity Equity Value Equity Growth
Fund Fund Fund
---------------- ------------ --------------
<S> <C> <C> <C>
NET ASSETS consists of:
Par value (Note 5) ........................................... $ 8,150 $ 31,164 $ 53,578
Paid in capital in excess of par value ....................... 74,574,589 413,021,309 880,633,166
Undistributed net investment income .......................... 80,428 -- 256,052
Accumulated net realized gain (loss) on investments sold ..... 9,581,197 71,209,600 91,976,371
Net unrealized appreciation (depreciation) of investments .... (3,605,078) 86,121,959 583,976,365
----------- ------------ --------------
TOTAL NET ASSETS ................................................ $80,639,286 $570,384,032 $1,556,895,532
=========== ============ ==============
Retail A Shares:
Net Assets ................................................... $ 8,228,538 $258,331,914 $ 443,639,472
Shares of beneficial interest outstanding .................... 832,168 14,133,678 15,304,980
NET ASSET VALUE and redemption price per share ............... $ 9.89 $ 18.28 $ 28.99
Sales charge - 3.75% of offering price ....................... 0.39 0.71 1.13
----------- ------------ --------------
Maximum offering price per share ............................. $ 10.28 $ 18.99 $ 30.12
=========== ============ ==============
Retail B Shares:
Net Assets ................................................... $ 1,348,198 $ 30,987,678 $ 71,525,307
Shares of beneficial interest outstanding .................... 137,020 1,713,506 2,530,147
----------- ------------ --------------
NET ASSET VALUE and offering price per share* ................ $ 9.84 $ 18.08 $ 28.27
=========== ============ ==============
Trust Shares:
Net Assets ................................................... $71,062,550 $281,064,440 $1,041,378,110
Shares of beneficial interest outstanding .................... 7,180,725 15,316,866 35,730,935
----------- ------------ --------------
NET ASSET VALUE, offering and redemption price per share ..... $ 9.90 $ 18.35 $ 29.15
=========== ============ ==============
A Prime Shares:
Net Assets ................................................... N/A N/A $ 106,593
Shares of beneficial interest outstanding .................... N/A N/A 3,682
NET ASSET VALUE and redemption price per share ............... N/A N/A $ 28.95
Sales charge - 5.50% of offering price ....................... N/A N/A 1.68
----------- ------------ --------------
Maximum offering price per share ............................. N/A N/A $ 30.63
=========== ============ ==============
B Prime Shares:
Net Assets ................................................... N/A N/A $ 246,050
Shares of beneficial interest outstanding .................... N/A N/A 8,533
----------- ------------ --------------
NET ASSET VALUE and offering price per share* ................ N/A N/A $ 28.84
=========== ============ ==============
<CAPTION>
International Small Cap Small Company
Equity Fund Value Fund Equity Fund
------------- ------------ -------------
<S> <C> <C> <C>
NET ASSETS consists of:
Par value (Note 5) ........................................... $ 28,097 $ 25,907 $ 20,878
Paid in capital in excess of par value ....................... 407,249,303 329,774,964 322,557,583
Undistributed net investment income .......................... 3,972,887 130,953 --
Accumulated net realized gain (loss) on investments sold ..... 34,334,139 34,782,738 (36,761,374)
Net unrealized appreciation (depreciation) of investments .... 148,177,673 (26,575,483) 47,641,238
------------ ------------ ------------
TOTAL NET ASSETS ................................................ $593,762,099 $338,139,079 $333,458,325
============ ============ ============
Retail A Shares:
Net Assets ................................................... $ 89,326,639 $ 80,869,956 $ 87,920,586
Shares of beneficial interest outstanding .................... 4,282,082 6,228,694 5,613,672
NET ASSET VALUE and redemption price per share ............... $ 20.86 $ 12.98 $ 15.66
Sales charge - 3.75% of offering price ....................... 0.81 0.51 0.61
------------ ------------ ------------
Maximum offering price per share ............................. $ 21.67 $ 13.49 $ 16.27
============ ============ ============
Retail B Shares:
Net Assets ................................................... $ 2,188,744 $ 1,636,970 $ 12,212,021
Shares of beneficial interest outstanding .................... 105,225 126,261 797,863
------------ ------------ ------------
NET ASSET VALUE and offering price per share* ................ $ 20.80 $ 12.96 $ 15.31
============ ============ ============
Trust Shares:
Net Assets ................................................... $501,776,006 $255,268,097 $233,325,718
Shares of beneficial interest outstanding .................... 23,687,146 19,523,759 14,466,793
------------ ------------ ------------
NET ASSET VALUE, offering and redemption price per share ..... $ 21.18 $ 13.07 $ 16.13
============ ============ ============
A Prime Shares:
Net Assets ................................................... $ 12,255 $ 174,521 N/A
Shares of beneficial interest outstanding .................... 584 13,387 N/A
NET ASSET VALUE and redemption price per share ............... $ 20.98 $ 13.04 N/A
Sales charge - 5.50% of offering price ....................... 1.22 0.76 N/A
------------ ------------ ------------
Maximum offering price per share ............................. $ 22.20 $ 13.80 N/A
============ ============ ============
B Prime Shares:
Net Assets ................................................... $ 458,455 $ 189,535 N/A
Shares of beneficial interest outstanding .................... 21,986 14,598 N/A
------------ ------------ ------------
NET ASSET VALUE and offering price per share* ................ $ 20.85 $ 12.98 N/A
------------ ------------ ------------
</TABLE>
49
<PAGE>
- --------------------------------------------------------------------------------
Galaxy Equity Funds
Statements of Operations
For the year ended October 31, 1999
<TABLE>
<CAPTION>
Asset Allocation Equity Income Growth and Income
Fund Fund Fund
---------------- ------------- -----------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) ..................................................... $ 21,285,878 $ 2,322,495 $ 2,381,072
Dividends (Note 2) .................................................... 3,132,775 5,680,126 8,692,757
Less: foreign taxes withheld (Note 2) ................................. -- -- --
------------ ------------ ------------
Total investment income ............................................ 24,418,653 8,002,621 11,073,829
------------ ------------ ------------
EXPENSES:
Investment advisory fee (Note 3) ...................................... 5,338,301 2,608,376 4,577,393
Administration fee (Note 3) ........................................... 533,921 259,413 456,860
Custodian fee ......................................................... 80,573 20,484 34,257
Fund accounting fee (Note 3) .......................................... 135,247 61,930 97,808
Professional fees (Note 3) ............................................ 47,338 31,318 42,945
Transfer agent fee (Note 3) ........................................... 1,185,238 334,274 1,087,365
Shareholder servicing and 12b-1 fees (Note 3) ......................... 1,761,758 637,473 1,246,576
Trustees' fees and expenses (Note 3) .................................. 20,029 8,461 15,416
Amortization of organization cost (Note 2) ............................ -- -- --
Amortization of prepaid expenses ...................................... -- -- --
Reports to shareholders ............................................... 151,125 85,983 155,349
Miscellaneous ......................................................... 139,893 54,506 106,323
------------ ------------ ------------
Total expenses before reimbursement/waiver ......................... 9,393,423 4,102,218 7,820,292
------------ ------------ ------------
Less:reimbursement/waiver (Note 4) ................................. (764) (3,774) (255,890)
------------ ------------ ------------
Total expenses net of reimbursement/waiver ......................... 9,392,659 4,098,444 7,564,402
------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) ............................................. 15,025,994 3,904,177 3,509,427
------------ ------------ ------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (Notes 2 &6):
Net realized gain (loss)on investments sold ........................... 12,946,175 50,110,091 33,835,048
Net realized loss on forward foreign currency
contracts and foreign currency ..................................... -- -- --
Net change in unrealized appreciation (depreciation) on investments,
foreign currency and forward foreign currency contracts ............ 30,773,026 (20,073,324) 38,430,506
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS .......................... 43,719,201 30,036,767 72,265,554
------------ ------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................... $ 58,745,195 $ 33,940,944 $ 75,774,981
============ ============ ============
</TABLE>
See Notes to Financial Statements.
50
<PAGE>
<TABLE>
<CAPTION>
Strategic Equity Equity Value Equity Growth
Fund Fund Fund
---------------- ------------ --------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) ..................................................... $ 352,746 $ 685,602 $ 3,146,515
Dividends (Note 2) .................................................... 975,759 6,531,664 12,156,570
Less: foreign taxes withheld (Note 2) ................................. -- -- --
----------- ------------ -------------
Total investment income ............................................ 1,328,505 7,217,266 15,303,085
----------- ------------ -------------
EXPENSES:
Investment advisory fee (Note 3) ...................................... 621,730 4,468,558 10,553,344
Administration fee (Note 3) ........................................... 62,309 446,506 1,055,020
Custodian fee ......................................................... 18,495 41,520 38,442
Fund accounting fee (Note 3) .......................................... 47,548 112,875 163,952
Professional fees (Note 3) ............................................ 10,922 66,162 86,418
Transfer agent fee (Note 3) ........................................... 25,645 937,479 1,483,560
Shareholder servicing and 12b-1 fees (Note 3) ......................... 27,267 1,033,179 1,589,187
Trustees' fees and expenses (Note 3) .................................. 2,079 15,893 38,372
Amortization of organization cost (Note 2) ............................ 3,398 -- --
Amortization of prepaid expenses ...................................... 24,466 -- --
Reports to shareholders ............................................... 3,730 152,694 236,652
Miscellaneous ......................................................... 38,703 70,823 156,137
----------- ------------ -------------
Total expenses before reimbursement/waiver ......................... 886,292 7,345,689 15,401,084
----------- ------------ -------------
Less:reimbursement/waiver (Note 4) ................................. (184,218) (4,444) (17,470)
----------- ------------ -------------
Total expenses net of reimbursement/waiver ......................... 702,074 7,341,245 15,383,614
----------- ------------ -------------
NET INVESTMENT INCOME (LOSS) ............................................. 626,431 (123,979) (80,529)
----------- ------------ -------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (Notes 2 &6):
Net realized gain (loss)on investments sold ........................... 9,902,448 72,106,510 93,657,340
Net realized loss on forward foreign currency
contracts and foreign currency ..................................... -- -- --
Net change in unrealized appreciation (depreciation) on investments,
foreign currency and forward foreign currency contracts ............ (8,471,056) 2,099,234 229,314,651
----------- ------------ -------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS .......................... 1,431,392 74,205,744 322,971,991
----------- ------------ -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................... $ 2,057,823 $ 74,081,765 $ 322,891,462
=========== ============ =============
<CAPTION>
International Small Cap Small Company
Equity Fund Value Fund Equity Fund
------------- ------------ -------------
<S>
INVESTMENT INCOME:
Interest (Note 2) ..................................................... $ 713,887 $ 1,976,470 $ 68,838
Dividends (Note 2) .................................................... 7,503,713 2,813,447 327,862
Less: foreign taxes withheld (Note 2) ................................. (875,473) -- --
------------- ------------ ------------
Total investment income ............................................ 7,342,127 4,789,917 396,700
------------- ------------ ------------
EXPENSES:
Investment advisory fee (Note 3) ...................................... 4,336,206 2,487,806 2,481,560
Administration fee (Note 3) ........................................... 365,677 248,680 248,980
Custodian fee ......................................................... 498,586 36,131 41,744
Fund accounting fee (Note 3) .......................................... 111,998 71,316 69,210
Professional fees (Note 3) ............................................ 44,453 30,809 28,419
Transfer agent fee (Note 3) ........................................... 526,428 479,787 860,570
Shareholder servicing and 12b-1 fees (Note 3) ......................... 214,168 250,452 339,946
Trustees' fees and expenses (Note 3) .................................. 14,105 6,796 7,641
Amortization of organization cost (Note 2) ............................ -- -- --
Amortization of prepaid expenses ...................................... -- -- --
Reports to shareholders ............................................... 94,558 83,069 97,373
Miscellaneous ......................................................... 114,870 101,451 49,648
------------- ------------ ------------
Total expenses before reimbursement/waiver ......................... 6,321,049 3,796,297 4,225,091
------------- ------------ ------------
Less:reimbursement/waiver (Note 4) ................................. (1,221,508) (248,783) (33,020)
------------- ------------ ------------
Total expenses net of reimbursement/waiver ......................... 5,099,541 3,547,514 4,192,071
------------- ------------ ------------
NET INVESTMENT INCOME (LOSS) ............................................. 2,242,586 1,242,403 (3,795,371)
------------- ------------ ------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (Notes 2 &6):
Net realized gain (loss)on investments sold ........................... 34,349,686 34,790,874 (3,418,136)
Net realized loss on forward foreign currency
contracts and foreign currency ..................................... (4,120,655) -- --
Net change in unrealized appreciation (depreciation) on investments,
foreign currency and forward foreign currency contracts ............ 94,656,598 (19,900,548) 56,108,824
------------- ------------ ------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS .......................... 124,885,629 14,890,326 52,690,688
------------- ------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................... $ 127,128,215 $ 16,132,729 $ 48,895,317
============= ============ ============
</TABLE>
51
<PAGE>
- --------------------------------------------------------------------------------
Galaxy Equity Funds
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Asset Allocation Fund
------------------------------
Years ended October 31,
1999 1998
------------- -------------
<S> <C> <C>
NET ASSETS at beginning of the period ..................................... $ 600,040,305 $ 379,667,751
------------- -------------
Increase in Net Assets resulting from operations:
Net investment income .................................................. 15,025,994 12,249,136
Net realized gain on investments sold .................................. 12,946,175 15,626,374
Net change in unrealized appreciation (depreciation) on investments .... 30,773,026 32,906,427
------------- -------------
Net increase in net assets resulting from operations ................. 58,745,195 60,781,937
------------- -------------
Dividends to shareholders from:
Retail A Shares:
Net investment income .................................................. (7,777,489) (6,075,376)
Net realized gain on investments ....................................... (8,515,996) (13,560,204)
------------- -------------
Total Dividends ...................................................... (16,293,485) (19,635,580)
------------- -------------
Retail B Shares:
Net investment income .................................................. (1,070,246) (791,253)
Net realized gain on investments ....................................... (1,510,323) (2,342,924)
------------- -------------
Total Dividends ...................................................... (2,580,569) (3,134,177)
------------- -------------
Trust Shares:
Net investment income .................................................. (5,707,139) (5,157,025)
Net realized gain on investments ....................................... (5,671,923) (13,004,072)
------------- -------------
Total Dividends ...................................................... (11,379,062) (18,161,097)
------------- -------------
A Prime Shares:
Net investment income .................................................. (3,417) N/A
Net realized gain on investments ....................................... (880) N/A
------------- -------------
Total Dividends ...................................................... (4,297) N/A
------------- -------------
B Prime Shares:
Net investment income .................................................. (4,760) N/A
Net realized gain on investments ....................................... (3,982) N/A
------------- -------------
Total Dividends ...................................................... (8,742) N/A
------------- -------------
Total Dividends to shareholders ...................................... (30,266,155) (40,930,854)
------------- -------------
Net increase from share transactions(1) ................................... 122,365,049 200,521,471
------------- -------------
Net increase in net assets ............................................. 150,844,089 220,372,554
------------- -------------
Net assets at end of the period (including line A) ........................ $ 750,884,394 $ 600,040,305
============= =============
(A) Undistributed net investment income ................................... $ 2,165,168 $ 1,673,336
============= =============
</TABLE>
- ----------
(1) For detail on share transactions by series, see Statements of Changes in
Net Assets - Capital Stock Activity on pages 58-59.
See Notes to Financial Statements.
52
<PAGE>
<TABLE>
<CAPTION>
Equity Income Fund Growth and Income Fund
---------------------------- ----------------------------
Years ended October 31, Years ended October 31,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
NET ASSETS at beginning of the period .................................. $ 335,217,600 $ 288,780,499 $ 521,385,834 $ 423,715,404
------------- ------------- ------------- -------------
Increase in Net Assets resulting from operations:
Net investment income ............................................... 3,904,177 4,804,077 3,509,427 4,180,366
Net realized gain on investments sold ............................... 50,110,091 31,256,958 33,835,048 31,756,496
Net change in unrealized appreciation (depreciation) on investments.. (20,073,324) 8,105,519 38,430,506 4,195,055
------------- ------------- ------------- -------------
Net increase in net assets resulting from operations .............. 33,940,944 44,166,554 75,774,981 40,131,917
------------- ------------- ------------- -------------
Dividends to shareholders from:
Retail A Shares:
Net investment income ............................................... (2,242,878) (2,568,825) (1,218,495) (1,497,114)
Net realized gain on investments .................................... (19,453,842) (14,397,057) (13,044,487) (24,191,677)
------------- ------------- ------------- -------------
Total Dividends ................................................... (21,696,720) (16,965,882) (14,262,982) (25,688,791)
------------- ------------- ------------- -------------
Retail B Shares:
Net investment income ............................................... (5,615) N/A -- (88,866)
Net realized gain on investments .................................... (10,594) N/A (3,253,512) (5,994,237)
------------- ------------- ------------- -------------
Total Dividends ................................................... (16,209) N/A (3,253,512) (6,083,103)
------------- ------------- ------------- -------------
Trust Shares:
Net investment income ............................................... (1,851,694) (2,137,883) (2,242,502) (2,841,771)
Net realized gain on investments .................................... (11,818,814) (9,987,624) (15,292,610) (41,422,903)
------------- ------------- ------------- -------------
Total Dividends ................................................... (13,670,508) (12,125,507) (17,535,112) (44,264,674)
------------- ------------- ------------- -------------
A Prime Shares:
Net investment income ............................................... N/A N/A (598) N/A
Net realized gain on investments .................................... N/A N/A (1,743) N/A
------------- ------------- ------------- -------------
Total Dividends ................................................... N/A N/A (2,341) N/A
------------- ------------- ------------- -------------
B Prime Shares:
Net investment income ............................................... N/A N/A (8) N/A
Net realized gain on investments .................................... N/A N/A (300) N/A
------------- ------------- ------------- -------------
Total Dividends ................................................... N/A N/A (308) N/A
------------- ------------- ------------- -------------
Total Dividends to shareholders ................................... (35,383,437) (29,091,389) (35,054,255) (76,036,568)
------------- ------------- ------------- -------------
Net increase from share transactions(1) ................................ 2,657,348 31,361,936 41,755,515 133,575,081
------------- ------------- ------------- -------------
Net increase in net assets .......................................... 1,214,855 46,437,101 82,476,241 97,670,430
------------- ------------- ------------- -------------
Net assets at end of the period (including line A) ..................... $ 336,432,455 $ 335,217,600 $ 603,862,075 $ 521,385,834
============= ============= ============= =============
(A) Undistributed net investment income ................................ $ 399,503 $ 601,021 $ 148,148 $ 78,104
============= ============= ============= =============
</TABLE>
53
<PAGE>
- --------------------------------------------------------------------------------
Galaxy Equity Funds
Statements of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
Strategic Equity Fund
-------------------------------------------------
Year ended October 31, Period ended October 31,
1999 1998*
------------ ------------
<S> <C> <C>
NET ASSETS at beginning of the period ..................................... $ 67,694,596 $ 30(a)
------------ ------------
Increase in Net Assets resulting from operations:
Net investment income (loss) ........................................... 626,431 21,691
Net realized gain (loss) on investments sold ........................... 9,902,448 (240,711)
Net change in unrealized appreciation (depreciation) on investments .... (8,471,056) 4,865,978
------------ ------------
Net increase in net assets resulting from operations ................. 2,057,823 4,646,958
------------ ------------
Dividends to shareholders from:
Retail A Shares:
Net investment income .................................................. (21,093) (1,095)
Dividends in excess of net investment income ........................... -- --
Net realized gain on investments ....................................... (4,996) --
------------ ------------
Total Dividends ...................................................... (26,089) (1,095)
------------ ------------
Retail B Shares:
Net investment income .................................................. -- --
Net realized gain on investments ....................................... (642) --
------------ ------------
Total Dividends ...................................................... (642) --
------------ ------------
Trust Shares:
Net investment income .................................................. (537,251) (13,906)
Dividends in excess of net investment income ........................... -- --
Net realized gain on investments ....................................... (74,902) --
------------ ------------
Total Dividends ...................................................... (612,153) (13,906)
------------ ------------
A Prime Shares:
Net investment income .................................................. N/A N/A
Net realized gain on investments ....................................... N/A N/A
------------ ------------
Total Dividends ...................................................... N/A N/A
------------ ------------
B Prime Shares:
Net investment income .................................................. N/A N/A
Net realized gain on investments ....................................... N/A N/A
------------ ------------
Total Dividends ...................................................... N/A N/A
------------ ------------
Total Dividends to shareholders ...................................... (638,884) (15,001)
------------ ------------
Net increase from share transactions(1) ................................... 11,525,751 63,062,609
------------ ------------
Net increase in net assets ............................................. 12,944,690 67,694,566
------------ ------------
Net assets at end of the period (including line A) ....................... $ 80,639,286 $ 67,694,596
============ ============
(A) Undistributed net investment income ................................... $ 80,428 $ 8,943
============ ============
</TABLE>
- ----------
(1) For detail on share transactions by series, see Statements of Changes in
Net Assets - Capital Stock Activity on pages 60-61.
(a) Represents initial seed money.
* The Strategic Equity Fund commenced operations on March 4, 1998.
See Notes to Financial Statements.
54
<PAGE>
<TABLE>
<CAPTION>
Equity Value Fund Equity Growth Fund
-------------------------- ------------------------------
Years ended October 31, Years ended October 31,
1999 1998 1999 1998
------------ ------------ -------------- --------------
<S> <C> <C> <C> <C>
NET ASSETS at beginning of the period .................................. $512,264,110 $439,131,322 $1,163,399,747 $ 992,229,709
------------ ------------ -------------- --------------
Increase in Net Assets resulting from operations:
Net investment income (loss) ........................................ (123,979) 1,507,455 (80,529) 3,055,413
Net realized gain (loss) on investments sold ........................ 72,106,510 18,125,207 93,657,340 89,513,054
Net change in unrealized appreciation (depreciation) on investments.. 2,099,234 21,688,342 229,314,651 55,319,656
------------ ------------ -------------- --------------
Net increase in net assets resulting from operations .............. 74,081,765 41,321,004 322,891,462 147,888,123
------------ ------------ -------------- --------------
Dividends to shareholders from:
Retail A Shares:
Net investment income ............................................... -- (476,968) -- (289,751)
Dividends in excess of net investment income ........................ -- -- -- (15,743)
Net realized gain on investments .................................... (8,586,482) (32,768,243) (24,495,721) (35,424,489)
------------ ------------ -------------- --------------
Total Dividends ................................................... (8,586,482) (33,245,211) (24,495,721) (35,729,983)
------------ ------------ -------------- --------------
Retail B Shares: -- -- -- --
Net investment income ...............................................
Net realized gain on investments .................................... (858,586) (2,708,059) (2,777,725) (3,245,295)
------------ ------------ -------------- --------------
Total Dividends ................................................... (858,586) (2,708,059) (2,777,725) (3,245,295)
------------ ------------ -------------- --------------
Trust Shares:
Net investment income ............................................... -- (1,186,963) -- (3,238,930)
Dividends in excess of net investment income ........................ -- -- -- (176,015)
Net realized gain on investments .................................... (9,364,080) (42,454,539) (63,315,181) (113,959,378)
------------ ------------ -------------- --------------
Total Dividends ................................................... (9,364,080) (43,641,502) (63,315,181) (117,374,323)
------------ ------------ -------------- --------------
A Prime Shares:
Net investment income ............................................... N/A N/A -- N/A
Net realized gain on investments .................................... N/A N/A (1,724) N/A
------------ ------------ -------------- --------------
Total Dividends ................................................... N/A N/A (1,724) N/A
------------ ------------ -------------- --------------
B Prime Shares:
Net investment income ............................................... N/A N/A -- N/A
Net realized gain on investments .................................... N/A N/A (551) N/A
------------ ------------ -------------- --------------
Total Dividends ................................................... N/A N/A (551) N/A
------------ ------------ -------------- --------------
Total Dividends to shareholders ................................... (18,809,148) (79,594,772) (90,590,902) (156,349,601)
------------ ------------ -------------- --------------
Net increase from share transactions(1) ................................ 2,847,305 111,406,556 161,195,225 179,631,516
------------ ------------ -------------- --------------
Net increase in net assets .......................................... 58,119,922 73,132,788 393,495,785 171,170,038
------------ ------------ -------------- --------------
Net assets at end of the period (including line A) .................... $570,384,032 $512,264,110 $1,556,895,532 $1,163,399,747
============ ============ ============== ==============
(A) Undistributed net investment income ................................ $ -- $ -- $ 256,052 $ --
============ ============ ============== ==============
</TABLE>
55
<PAGE>
- --------------------------------------------------------------------------------
Galaxy Equity Funds
Statements of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
International Equity Fund
------------------------------
Years ended October 31,
1999 1998
------------- -------------
<S> <C> <C>
NET ASSETS at beginning of the period ..................................... $ 412,233,003 $ 321,715,516
------------- -------------
Increase (Decrease) in Net Assets resulting from operations:
Net investment income (loss) ........................................... 2,242,586 3,112,383
Net realized gain (loss) on investments sold ........................... 34,349,686 13,739,754
Net realized gain (loss) on forward foreign currency
contracts and foreign currency ....................................... (4,120,655) 5,322,536
Net change in unrealized appreciation (depreciation) on investments,
foreign currency and forward foreign currency contracts .............. 94,656,598 21,492,799
------------- -------------
Net increase (decrease) in net assets resulting from operations ...... 127,128,215 43,667,472
------------- -------------
Dividends to shareholders from:
Retail A Shares:
Net investment income .................................................. (216,041) (239,530)
Net realized gain on investments, forward foreign
currency contracts and foreign currency .............................. (2,270,202) (1,235,651)
In excess of net realized gains on investments ......................... -- --
------------- -------------
Total Dividends ...................................................... (2,486,243) (1,475,181)
------------- -------------
Retail B Shares:
Net investment income .................................................. (1,893) N/A
Net realized gain on investments, forward foreign
currency contracts and foreign currency .............................. (8,529) N/A
In excess of net realized gains on investments ......................... -- N/A
------------- -------------
Total Dividends ...................................................... (10,422) N/A
------------- -------------
Trust Shares:
Net investment income .................................................. (2,952,897) (1,544,939)
Net realized gain on investments, forward foreign
currency contracts and foreign currency .............................. (11,473,155) (6,265,777)
In excess of net realized gains on investments ......................... -- --
------------- -------------
Total Dividends ...................................................... (14,426,052) (7,810,716)
------------- -------------
A Prime Shares:
Net investment income .................................................. (40) N/A
Net realized gain on investments, forward foreign
currency contracts and foreign currency .............................. (145) N/A
------------- -------------
Total Dividends ...................................................... (185) N/A
------------- -------------
B Prime Shares:
Net investment income .................................................. (226) N/A
Net realized gain on investments, forward foreign
currency contracts and foreign currency .............................. (990) N/A
------------- -------------
Total Dividends ...................................................... (1,216) N/A
------------- -------------
Total Dividends to shareholders ...................................... (16,924,118) (9,285,897)
------------- -------------
Net increase (decrease) from share transactions(1) ........................ 71,324,999 56,135,912
------------- -------------
Net increase (decrease) in net assets .................................. 181,529,096 90,517,487
------------- -------------
NET ASSETS at end of the period (including line A) ........................ $ 593,762,099 $ 412,233,003
============= =============
(A) Undistributed net investment income ................................... $ 3,972,887 $ 9,022,053
============= =============
</TABLE>
- ----------
(1) For detail on share transactions by series, see Statements of Changes in
Net Assets - Capital Stock Activity on pages 62-63.
See Notes to Financial Statements.
56
<PAGE>
<TABLE>
<CAPTION>
Small Cap Value Fund Small Company Equity Fund
-------------------------- ---------------------------
Years ended October 31, Years ended October 31,
1999 1998 1999 1998
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
NET ASSETS at beginning of the period .................................... $290,165,115 $252,915,472 $331,071,417 $ 461,077,407
------------ ------------ ------------ -------------
Increase (Decrease) in Net Assets resulting from operations:
Net investment income (loss) .......................................... 1,242,403 1,806,802 (3,795,371) (3,835,593)
Net realized gain (loss) on investments sold .......................... 34,790,874 27,382,595 (3,418,136) (33,381,616)
Net realized gain (loss) on forward foreign currency
contracts and foreign currency ...................................... -- -- -- --
Net change in unrealized appreciation (depreciation) on investments,
foreign currency and forward foreign currency contracts ............. (19,900,548) (70,528,722) 56,108,824 (78,673,832)
------------ ------------ ------------ -------------
Net increase (decrease) in net assets resulting from operations ..... 16,132,729 (41,339,325) 48,895,317 (115,891,041)
------------ ------------ ------------ -------------
Dividends to shareholders from:
Retail A Shares:
Net investment income ................................................. (181,459) (335,684) -- --
Net realized gain on investments, forward foreign
currency contracts and foreign currency ............................. (8,121,983) (9,778,432) -- (13,856,463)
In excess of net realized gains on investments ........................ -- -- -- (2,617)
------------ ------------ ------------ -------------
Total Dividends ..................................................... (8,303,442) (10,114,116) -- (13,859,080)
------------ ------------ ------------ -------------
Retail B Shares:
Net investment income ................................................. -- N/A -- --
Net realized gain on investments, forward foreign
currency contracts and foreign currency ............................. (6,269) N/A -- (1,647,828)
In excess of net realized gains on investments ........................ -- N/A -- (312)
------------ ------------ ------------ -------------
Total Dividends ..................................................... (6,269) N/A -- (1,648,140)
------------ ------------ ------------ -------------
Trust Shares:
Net investment income ................................................. (1,192,133) (1,582,494) -- --
Net realized gain on investments, forward foreign
currency contracts and foreign currency ............................. (19,251,259) (28,007,227) -- (33,024,373)
In excess of net realized gains on investments ........................ -- -- -- (6,237)
------------ ------------ ------------ -------------
Total Dividends ..................................................... (20,443,392) (29,589,721) -- (33,030,610)
------------ ------------ ------------ -------------
A Prime Shares:
Net investment income ................................................. (549) N/A -- N/A
Net realized gain on investments, forward foreign
currency contracts and foreign currency ............................. (3,618) N/A -- N/A
------------ ------------ ------------ -------------
Total Dividends ..................................................... (4,167) N/A -- N/A
------------ ------------ ------------ -------------
B Prime Shares:
Net investment income ................................................. -- N/A -- N/A
Net realized gain on investments, forward foreign
currency contracts and foreign currency ............................. (7,602) N/A -- N/A
------------ ------------ ------------ -------------
Total Dividends ..................................................... (7,602) N/A -- N/A
------------ ------------ ------------ -------------
Total Dividends to shareholders ..................................... (28,764,872) (39,703,837) -- (48,537,830)
------------ ------------ ------------ -------------
Net increase (decrease) from share transactions(1) ....................... 60,606,107 118,292,805 (46,508,409) 34,422,881
------------ ------------ ------------ -------------
Net increase (decrease) in net assets ................................. 47,973,964 37,249,643 2,386,908 (130,005,990)
------------ ------------ ------------ -------------
NET ASSETS at end of the period (including line A) ....................... $338,139,079 $290,165,115 $333,458,325 $ 331,071,417
============ ============ ============ =============
(A) Undistributed net investment income .................................. $ 130,953 $ 240,012 $ -- $ --
============ ============ ============ =============
</TABLE>
57
<PAGE>
- --------------------------------------------------------------------------------
Galaxy Equity Funds
Statements of Changes in Net Assets --
Capital Stock Activity
<TABLE>
<CAPTION>
Asset Allocation Fund
----------------------------
Years ended October 31,
1999 1998
------------- -------------
<S> <C> <C>
DOLLAR AMOUNTS
Retail A Shares:
Sold ................................................. $ 118,271,361 $ 165,898,714
Issued to shareholders in reinvestment of dividends .. 16,019,107 19,205,127
Repurchased .......................................... (84,133,228) (49,327,967)
------------- -------------
Net increase in shares outstanding ................... $ 50,157,240 $ 135,775,874
============= =============
Retail B Shares:
Sold ................................................. $ 39,055,990 $ 28,201,780
Issued to shareholders in reinvestment of dividends .. 2,523,396 3,057,363
Repurchased .......................................... (11,038,602) (5,925,878)
------------- -------------
Net increase in shares outstanding ................... $ 30,540,784 $ 25,333,265
============= =============
Trust Shares:
Sold ................................................. $ 102,114,779 $ 72,415,149
Issued to shareholders in reinvestment of dividends .. 10,601,826 16,323,828
Repurchased .......................................... (71,793,820) (49,326,645)
------------- -------------
Net increase (decrease) in shares outstanding ........ $ 40,922,785 $ 39,412,332
============= =============
A Prime Shares:
Sold ................................................. $ 303,889 N/A
Issued to shareholders in reinvestment of dividends .. 3,112 N/A
Repurchased .......................................... (74,220) N/A
------------- -------------
Net increase in shares outstanding ................... $ 232,781 N/A
============= =============
B Prime Shares:
Sold ................................................. $ 550,948 N/A
Issued to shareholders in reinvestment of dividends .. 8,523 N/A
Repurchased .......................................... (48,012) N/A
------------- -------------
Net increase in shares outstanding ................... $ 511,459 N/A
============= =============
SHARE ACTIVITY
Retail A Shares:
Sold ................................................. 6,738,970 10,096,211
Issued to shareholders in reinvestment of dividends .. 928,441 1,234,122
Repurchased .......................................... (4,817,875) (3,012,818)
------------- -------------
Net increase in shares outstanding ................... 2,849,536 8,317,515
============= =============
Retail B Shares:
Sold ................................................. 2,215,628 1,720,422
Issued to shareholders in reinvestment of dividends .. 146,021 197,145
Repurchased .......................................... (629,222) (363,558)
------------- -------------
Net increase in shares outstanding ................... 1,732,427 1,554,009
============= =============
Trust Shares:
Sold ................................................. 5,748,985 4,431,090
Issued to shareholders in reinvestment of dividends .. 613,319 1,053,874
Repurchased .......................................... (4,035,968) (3,019,092)
------------- -------------
Net increase (decrease) in shares outstanding ........ 2,326,336 2,465,872
============= =============
A Prime Shares:
Sold ................................................. 17,410 N/A
Issued to shareholders in reinvestment of dividends .. 179 N/A
Repurchased .......................................... (4,177) N/A
------------- -------------
Net increase in shares outstanding ................... 13,412 N/A
============= =============
B Prime Shares:
Sold ................................................. 31,529 N/A
Issued to shareholders in reinvestment of dividends .. 494 N/A
Repurchased .......................................... (2,695) N/A
------------- -------------
Net increase in shares outstanding ................... 29,328 N/A
============= =============
</TABLE>
See Notes to Financial Statements.
58
<PAGE>
<TABLE>
<CAPTION>
Equity Income Fund Growth and Income Fund
-------------------------- ---------------------------
Years ended October 31, Years ended October 31,
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
Retail A Shares:
Sold ................................................. $ 26,175,419 $ 47,393,968 $ 39,277,116 $ 99,093,005
Issued to shareholders in reinvestment of dividends .. 21,026,250 16,360,921 14,154,903 25,378,015
Repurchased .......................................... (41,266,164) (33,988,418) (52,667,374) (38,410,144)
------------ ------------ ------------ ------------
Net increase in shares outstanding ................... $ 5,935,505 $ 29,766,471 $ 764,645 $ 86,060,876
============ ============ ============ ============
Retail B Shares:
Sold ................................................. $ 3,330,934 N/A $ 10,392,695 $ 21,007,328
Issued to shareholders in reinvestment of dividends .. 18,467 N/A 3,188,793 5,973,835
Repurchased .......................................... (138,311) N/A (8,355,288) (5,571,374)
------------ ------------ ------------ ------------
Net increase in shares outstanding ................... $ 3,211,090 N/A $ 5,226,200 $ 21,409,789
============ ============ ============ ============
Trust Shares:
Sold ................................................. $ 11,824,496 $ 14,958,563 $ 82,183,977 $ 56,352,388
Issued to shareholders in reinvestment of dividends .. 7,623,489 6,743,274 16,323,263 41,712,836
Repurchased .......................................... (25,937,232) (20,106,372) (63,026,313) (71,960,808)
------------ ------------ ------------ ------------
Net increase (decrease) in shares outstanding ........ $ (6,489,247) $ 1,595,465 $ 35,480,927 $ 26,104,416
============ ============ ============ ============
A Prime Shares:
Sold ................................................. N/A N/A $ 155,747 N/A
Issued to shareholders in reinvestment of dividends .. N/A N/A 5,154 N/A
Repurchased .......................................... N/A N/A (7,970) N/A
------------ ------------ ------------ ------------
Net increase in shares outstanding ................... N/A N/A $ 152,931 N/A
============ ============ ============ ============
B Prime Shares:
Sold ................................................. N/A N/A $ 138,816 N/A
Issued to shareholders in reinvestment of dividends .. N/A N/A 307 N/A
Repurchased .......................................... N/A N/A (8,311) N/A
------------ ------------ ------------ ------------
Net increase in shares outstanding ................... N/A N/A $ 130,812 N/A
============ ============ ============ ============
SHARE ACTIVITY
Retail A Shares:
Sold ................................................. 1,338,664 2,432,108 2,434,191 6,417,123
Issued to shareholders in reinvestment of dividends .. 1,117,084 908,536 943,079 1,806,453
Repurchased .......................................... (2,099,686) (1,764,920) (3,254,588) (2,556,615)
------------ ------------ ------------ ------------
Net increase in shares outstanding ................... 356,062 1,575,724 122,682 5,666,961
============ ============ ============ ============
Retail B Shares:
Sold ................................................. 173,216 N/A 640,709 1,368,708
Issued to shareholders in reinvestment of dividends .. 1,006 N/A 213,284 425,584
Repurchased .......................................... (7,328) N/A (519,908) (374,402)
------------ ------------ ------------ ------------
Net increase in shares outstanding ................... 166,894 N/A 334,085 1,419,890
============ ============ ============ ============
Trust Shares:
Sold ................................................. 605,220 780,277 5,028,472 3,666,013
Issued to shareholders in reinvestment of dividends .. 416,735 376,283 1,023,222 2,916,670
Repurchased .......................................... (1,334,883) (1,031,181) (3,807,714) (4,690,328)
------------ ------------ ------------ ------------
Net increase (decrease) in shares outstanding ........ (312,928) 125,379 2,243,980 1,892,355
============ ============ ============ ============
A Prime Shares:
Sold ................................................. N/A N/A 9,535 N/A
Issued to shareholders in reinvestment of dividends .. N/A N/A 341 N/A
Repurchased .......................................... N/A N/A (484) N/A
------------ ------------ ------------ ------------
Net increase in shares outstanding ................... N/A N/A 9,392 N/A
============ ============ ============ ============
B Prime Shares:
Sold ................................................. N/A N/A 8,603 N/A
Issued to shareholders in reinvestment of dividends .. N/A N/A 20 N/A
Repurchased .......................................... N/A N/A (516) N/A
------------ ------------ ------------ ------------
Net increase in shares outstanding ................... N/A N/A 8,107 N/A
============ ============ ============ ============
</TABLE>
59
<PAGE>
- --------------------------------------------------------------------------------
Galaxy Equity Funds
Statements of Changes in Net Assets --
Capital Stock Activity (continued)
<TABLE>
<CAPTION>
Strategic Equity Fund
---------------------------
Year ended Period ended
October 31, October 31,
1999 1998(1)
------------ ------------
<S> <C> <C>
DOLLAR AMOUNTS
Retail A Shares:
Sold .................................................. $ 5,532,236 $ 4,292,625
Issued to shareholders in reinvestment of dividends ... 26,010 1,069
Repurchased ........................................... (1,186,925) (220,560)
------------ ------------
Net increase (decrease) in shares outstanding ......... $ 4,371,321 $ 4,073,134
============ ============
Retail B Shares:
Sold .................................................. $ 1,083,391 $ 597,208
Issued to shareholders in reinvestment of dividends ... 641 --
Repurchased ........................................... (240,922) (17,158)
------------ ------------
Net increase in shares outstanding .................... $ 843,110 $ 580,050
============ ============
Trust Shares:
Sold .................................................. $ 6,208,177 $ 58,395,708
Issued to shareholders in reinvestment of dividends ... 602,374 13,717
Repurchased ........................................... (499,231) --
------------ ------------
Net increase (decrease) in shares outstanding ......... $ 6,311,320 $ 58,409,425
============ ============
A Prime Shares:
Sold .................................................. N/A N/A
Issued to shareholders in reinvestment of dividends ... N/A N/A
Repurchased ........................................... N/A N/A
------------ ------------
Net increase in shares outstanding .................... N/A N/A
============ ============
B Prime Shares:
Sold .................................................. N/A N/A
Issued to shareholders in reinvestment of dividends ... N/A N/A
Repurchased ........................................... N/A N/A
------------ ------------
Net increase in shares outstanding .................... N/A N/A
============ ============
SHARE ACTIVITY
Retail A Shares:
Sold .................................................. 521,862 445,623
Issued to shareholders in reinvestment of dividends ... 2,248 112
Repurchased ........................................... (112,927) (24,750)
------------ ------------
Net increase (decrease) in shares outstanding ......... 411,183 420,985
============ ============
Retail B Shares:
Sold .................................................. 100,197 62,555
Issued to shareholders in reinvestment of dividends ... 66 --
Repurchased ........................................... (23,924) (1,874)
------------ ------------
Net increase in shares outstanding .................... 76,339 60,681
============ ============
Trust Shares:
Sold .................................................. 621,301 6,546,472
Issued to shareholders in reinvestment of dividends ... 56,785 1,438
Repurchased ........................................... (45,271) --
------------ ------------
Net increase (decrease) in shares outstanding ......... 632,815 6,547,910
============ ============
A Prime Shares:
Sold .................................................. N/A N/A
Issued to shareholders in reinvestment of dividends ... N/A N/A
Repurchased ........................................... N/A N/A
------------ ------------
Net increase in shares outstanding .................... N/A N/A
============ ============
B Prime Shares:
Sold .................................................. N/A N/A
Issued to shareholders in reinvestment of dividends ... N/A N/A
Repurchased ........................................... N/A N/A
------------ ------------
Net increase in shares outstanding .................... N/A N/A
============ ============
</TABLE>
- ----------
(1) The Strategic Equity Fund commenced operations on March 4, 1998.
See Notes to Financial Statements.
60
<PAGE>
<TABLE>
<CAPTION>
Equity Value Fund Equity Growth Fund
----------------------------- --------------------------------
Years ended October 31, Years ended October 31,
1999 1998 1999 1998
------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
Retail A Shares:
Sold .................................................. $ 45,762,951 $ 71,563,855 $ 114,977,854 $ 98,981,024
Issued to shareholders in reinvestment of dividends ... 8,453,667 32,705,099 24,158,813 35,167,848
Repurchased ........................................... (56,515,286) (35,674,663) (72,719,333) (45,458,821)
------------- ------------- -------------- --------------
Net increase (decrease) in shares outstanding ......... $ (2,298,668) $ 68,594,291 $ 66,417,334 $ 88,690,051
============= ============= ============== ==============
Retail B Shares:
Sold .................................................. $ 8,314,738 $ 9,284,286 $ 34,935,971 $ 14,385,751
Issued to shareholders in reinvestment of dividends ... 854,307 2,694,779 2,738,197 3,227,617
Repurchased ........................................... (3,409,825) (2,282,148) (8,517,659) (3,051,869)
------------- ------------- -------------- --------------
Net increase in shares outstanding .................... $ 5,759,220 $ 9,696,917 $ 29,156,509 $ 14,561,499
============= ============= ============== ==============
Trust Shares:
Sold .................................................. $ 69,099,037 $ 56,562,120 $ 174,347,614 $ 119,883,832
Issued to shareholders in reinvestment of dividends ... 7,684,111 34,594,314 53,167,673 93,593,644
Repurchased ........................................... (77,396,395) (58,041,086) (162,227,177) (137,097,510)
------------- ------------- -------------- --------------
Net increase (decrease) in shares outstanding ......... $ (613,247) $ 33,115,348 $ 65,288,110 $ 76,379,966
============= ============= ============== ==============
A Prime Shares:
Sold .................................................. N/A N/A $ 99,300 N/A
Issued to shareholders in reinvestment of dividends ... N/A N/A 1,711 N/A
Repurchased ........................................... N/A N/A (1,323) N/A
------------- ------------- -------------- --------------
Net increase in shares outstanding .................... N/A N/A $ 99,688 N/A
============= ============= ============== ==============
B Prime Shares:
Sold .................................................. N/A N/A $ 233,056 N/A
Issued to shareholders in reinvestment of dividends ... N/A N/A 528 N/A
Repurchased ........................................... N/A N/A -- N/A
------------- ------------- -------------- --------------
Net increase in shares outstanding .................... N/A N/A $ 233,584 N/A
============= ============= ============== ==============
SHARE ACTIVITY
Retail A Shares:
Sold .................................................. 2,433,370 4,201,249 4,204,098 4,078,424
Issued to shareholders in reinvestment of dividends ... 484,075 2,147,298 976,169 1,625,130
Repurchased ........................................... (3,013,975) (2,145,298) (2,662,892) (1,917,325)
------------- ------------- -------------- --------------
Net increase (decrease) in shares outstanding ......... (96,530) 4,203,249 2,517,375 3,786,229
============= ============= ============== ==============
Retail B Shares:
Sold .................................................. 441,934 547,518 1,291,210 603,613
Issued to shareholders in reinvestment of dividends ... 49,076 176,860 112,861 150,964
Repurchased ........................................... (182,489) (139,566) (315,473) (130,378)
------------- ------------- -------------- --------------
Net increase in shares outstanding .................... 308,521 584,812 1,088,598 624,199
============= ============= ============== ==============
Trust Shares:
Sold .................................................. 3,627,023 3,384,178 6,246,300 5,054,546
Issued to shareholders in reinvestment of dividends ... 431,433 2,265,774 2,140,810 4,313,303
Repurchased ........................................... (4,154,201) (3,499,469) (5,924,861) (5,715,179)
------------- ------------- -------------- --------------
Net increase (decrease) in shares outstanding ......... (95,745) 2,150,483 2,462,249 3,652,670
============= ============= ============== ==============
A Prime Shares:
Sold .................................................. N/A N/A 3,655 N/A
Issued to shareholders in reinvestment of dividends ... N/A N/A 73 N/A
Repurchased ........................................... N/A N/A (46) N/A
------------- ------------- -------------- --------------
Net increase in shares outstanding .................... N/A N/A 3,682 N/A
============= ============= ============== ==============
B Prime Shares:
Sold .................................................. N/A N/A 8,512 N/A
Issued to shareholders in reinvestment of dividends ... N/A N/A 21 N/A
Repurchased ........................................... N/A N/A -- N/A
------------- ------------- -------------- --------------
Net increase in shares outstanding .................... N/A N/A 8,533 N/A
============= ============= ============== ==============
</TABLE>
61
<PAGE>
- --------------------------------------------------------------------------------
Galaxy Equity Funds
Statements of Changes in Net Assets --
Capital Stock Activity (continued)
<TABLE>
<CAPTION>
International Equity Fund
--------------------------------
Years ended October 31,
1999 1998
-------------- --------------
<S> <C> <C>
DOLLAR AMOUNTS
Retail A Shares:
Sold ................................................. $ 63,996,029 $ 238,332,225
Issued to shareholders in reinvestment of dividends .. 2,371,667 1,448,658
Repurchased .......................................... (60,811,773) (236,467,330)
-------------- --------------
Net increase (decrease) in shares outstanding ........ $ 5,555,923 $ 3,313,553
============== ==============
Retail B Shares:
Sold ................................................. $ 52,822,549 N/A
Issued to shareholders in reinvestment of dividends .. 1,254 N/A
Repurchased .......................................... (51,002,543) N/A
-------------- --------------
Net increase (decrease) in shares outstanding ........ $ 1,821,260 N/A
============== ==============
Trust Shares:
Sold ................................................. $ 339,364,891 $ 248,673,207
Issued to shareholders in reinvestment of dividends .. 8,378,059 4,418,249
Repurchased .......................................... (284,220,019) (200,269,097)
-------------- --------------
Net increase (decrease) in shares outstanding ........ $ 63,522,931 $ 52,822,359
============== ==============
A Prime Shares:
Sold ................................................. $ 14,519 N/A
Issued to shareholders in reinvestment of dividends .. 566 N/A
Repurchased .......................................... (4,960) N/A
-------------- --------------
Net increase in shares outstanding ................... $ 10,125 N/A
============== ==============
B Prime Shares:
Sold ................................................. $ 418,549 N/A
Issued to shareholders in reinvestment of dividends .. 1,217 N/A
Repurchased .......................................... (5,006) N/A
-------------- --------------
Net increase in shares outstanding ................... $ 414,760 N/A
============== ==============
SHARE ACTIVITY
Retail A Shares:
Sold ................................................. 3,393,407 13,783,137
Issued to shareholders in reinvestment of dividends .. 142,822 99,496
Repurchased .......................................... (3,226,391) (13,638,723)
-------------- --------------
Net increase (decrease) in shares outstanding ........ 309,838 243,910
============== ==============
Retail B Shares:
Sold ................................................. 2,792,826 N/A
Issued to shareholders in reinvestment of dividends .. 73 N/A
Repurchased .......................................... (2,687,674) N/A
-------------- --------------
Net increase (decrease) in shares outstanding ........ 105,225 N/A
============== ==============
Trust Shares:
Sold ................................................. 17,587,176 14,546,109
Issued to shareholders in reinvestment of dividends .. 484,004 300,561
Repurchased .......................................... (14,718,280) (11,806,941)
-------------- --------------
Net increase (decrease) in shares outstanding ........ 3,352,900 3,039,729
============== ==============
A Prime Shares:
Sold ................................................. 815 N/A
Issued to shareholders in reinvestment of dividends .. 33 N/A
Repurchased .......................................... (264) N/A
-------------- --------------
Net increase in shares outstanding ................... 584 N/A
============== ==============
B Prime Shares:
Sold ................................................. 22,188 N/A
Issued to shareholders in reinvestment of dividends .. 71 N/A
Repurchased .......................................... (273) N/A
-------------- --------------
Net increase in shares outstanding ................... 21,986 N/A
============== ==============
</TABLE>
See Notes to Financial Statements.
62
<PAGE>
<TABLE>
<CAPTION>
Small Cap Value Fund Small Company Equity Fund
------------------------------- ------------------------------
Years ended October 31, Years ended October 31,
1999 1998 1999 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
DOLLAR AMOUNTS
Retail A Shares:
Sold ................................................. $ 19,008,974 $ 106,572,187 $ 325,325,171 $ 512,095,154
Issued to shareholders in reinvestment of dividends .. 8,277,731 10,065,718 -- 13,430,846
Repurchased .......................................... (30,861,975) (69,195,926) (347,667,128) (522,137,062)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding ........ $ (3,575,270) $ 47,441,979 $ (22,341,957) $ 3,388,938
============== ============== ============== ==============
Retail B Shares:
Sold ................................................. $ 1,771,843 N/A $ 34,581,558 $ 7,810,194
Issued to shareholders in reinvestment of dividends .. 6,178 N/A -- 1,613,677
Repurchased .......................................... (87,689) N/A (36,619,640) (5,481,887)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding ........ $ 1,690,332 N/A $ (2,038,082) $ 3,941,984
============== ============== ============== ==============
Trust Shares:
Sold ................................................. $ 109,425,380 $ 74,813,946 $ 197,458,863 $ 277,438,222
Issued to shareholders in reinvestment of dividends .. 15,839,896 25,163,148 -- 24,548,356
Repurchased .......................................... (63,150,650) (29,126,268) (219,587,233) (274,894,619)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding ........ $ 62,114,626 $ 70,850,826 $ (22,128,370) $ 27,091,959
============== ============== ============== ==============
A Prime Shares:
Sold ................................................. $ 208,140 N/A N/A N/A
Issued to shareholders in reinvestment of dividends .. 1,965 N/A N/A N/A
Repurchased .......................................... (31,567) N/A N/A N/A
-------------- -------------- -------------- --------------
Net increase in shares outstanding ................... $ 178,538 N/A N/A N/A
============== ============== ============== ==============
B Prime Shares:
Sold ................................................. $ 207,595 N/A N/A N/A
Issued to shareholders in reinvestment of dividends .. 7,596 N/A N/A N/A
Repurchased .......................................... (17,310) N/A N/A N/A
-------------- -------------- -------------- --------------
Net increase in shares outstanding ................... $ 197,881 N/A N/A N/A
============== ============== ============== ==============
SHARE ACTIVITY
Retail A Shares:
Sold ................................................. 1,438,795 6,791,402 22,169,167 29,780,474
Issued to shareholders in reinvestment of dividends .. 648,595 666,385 -- 787,731
Repurchased .......................................... (2,345,235) (4,451,699) (23,587,237) (30,011,680)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding ........ (257,845) 3,006,088 (1,418,070) 556,525
============== ============== ============== ==============
Retail B Shares:
Sold ................................................. 132,583 N/A 2,388,029 458,341
Issued to shareholders in reinvestment of dividends .. 487 N/A -- 95,825
Repurchased .......................................... (6,809) N/A (2,528,697) (326,209)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding ........ 126,261 N/A (140,668) 227,957
============== ============== ============== ==============
Trust Shares:
Sold ................................................. 8,188,452 4,874,052 13,075,068 15,624,925
Issued to shareholders in reinvestment of dividends .. 1,235,136 1,629,237 -- 1,410,015
Repurchased .......................................... (4,764,801) (1,941,937) (14,555,648) (15,661,716)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding ........ 4,658,787 4,561,352 (1,480,580) 1,373,224
============== ============== ============== ==============
A Prime Shares:
Sold ................................................. 15,569 N/A N/A N/A
Issued to shareholders in reinvestment of dividends .. 153 N/A N/A N/A
Repurchased .......................................... (2,335) N/A N/A N/A
-------------- -------------- -------------- --------------
Net increase in shares outstanding ................... 13,387 N/A N/A N/A
============== ============== ============== ==============
B Prime Shares:
Sold ................................................. 15,302 N/A N/A N/A
Issued to shareholders in reinvestment of dividends .. 594 N/A N/A N/A
Repurchased .......................................... (1,298) N/A N/A N/A
-------------- -------------- -------------- --------------
Net increase in shares outstanding ................... 14,598 N/A N/A N/A
============== ============== ============== ==============
</TABLE>
63
<PAGE>
- --------------------------------------------------------------------------------
Asset Allocation Fund
Financial Highlights
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
------------------------------------- -----------------------------------------
Net
Net Realized and Dividends Distributions Net
Asset Value, Net Unrealized Total from from Net from Increase
Beginning Investment Gain on Investment Investment Net Realized Total in Net
of Period Income(B) Investments Operations Income Capital Gains Distributions Asset Value
------------ ----------- ------------ ---------- ---------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail A
10/31/99 $16.95 $ 0.37 $ 1.21 $ 1.58 $(0.36) $(0.43) $(0.79) $ 0.79
10/31/98 16.46 0.38 1.72 2.10 (0.40) (1.21) (1.61) 0.49
10/31/97 14.52 0.40 2.43 2.83 (0.38) (0.51) (0.89) 1.94
10/31/96 12.82 0.30 1.83 2.13 (0.30) (0.13) (0.43) 1.70
10/31/95 10.67 0.30 2.16 2.46 (0.31) -- (0.31) 2.15
Retail B
10/31/99 16.92 0.25 1.21 1.46 (0.25) (0.43) (0.68) 0.78
10/31/98 16.43 0.29 1.71 2.00 (0.30) (1.21) (1.51) 0.49
10/31/97 14.51 0.29 2.42 2.71 (0.28) (0.51) (0.79) 1.92
10/31/96(1) 13.59 0.13 0.91 1.04 (0.12) -- (0.12) 0.92
Trust
10/31/99 16.96 0.40 1.20 1.60 (0.40) (0.43) (0.83) 0.77
10/31/98 16.47 0.42 1.71 2.13 (0.43) (1.21) (1.64) 0.49
10/31/97 14.53 0.43 2.42 2.85 (0.40) (0.51) (0.91) 1.94
10/31/96 12.83 0.33 1.83 2.16 (0.33) (0.13) (0.46) 1.70
10/31/95 10.68 0.32 2.16 2.48 (0.33) -- (0.33) 2.15
A Prime
10/31/99(2) 16.95 0.44 1.17 1.61 (0.40) (0.43) (0.83) 0.78
B Prime
10/31/99(2) 16.95 0.29 1.19 1.48 (0.29) (0.43) (0.72) 0.76
</TABLE>
- ----------
* Annualized.
** Not Annualized.
(1) The Fund began issuing Retail B Shares on March 4, 1996.
(2) The Fund began issuing A Prime and B Prime Shares on November 1, 1998.
(A) Calculation does not include the effect of any sales charge for Retail A
Shares, Retail B Shares, A Prime Shares and B Prime Shares.
(B) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail A Shares for the years
ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.37, $0.38,
$0.40, $0.30 and $0.30, respectively. Net investment income per share
before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Retail B Shares for the years ended October 31, 1999,
1998 and 1997 and the period ended October 31, 1996 were $0.25, $0.29,
$0.28 and $0.12, respectively. Net investment income per share before
reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Trust Shares for the years ended October 31, 1999, 1998,
1997, 1996 and 1995 were $0.40, $0.42, $0.43, $0.33 and $0.32,
respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for A Prime Shares
for the year ended October 31, 1999 was $0.41. Net investment income per
share before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for B Prime Shares for the year ended October 31, 1999 was
$0.26.
See Notes to Financial Statements.
64
<PAGE>
<TABLE>
<CAPTION>
Ratios to Average Net Assets/Supplemental Data
----------------------------------------------
Ratio of Net Ratio of Ratio of
Investment Operating Operating
Income Expenses Expenses
Net Assets, Including Including Excluding
Net Asset Value, End of Period Reimbursement/ Reimbursement/ Reimbursement/ Portfolio
End of Period Total Return(A) (in 000's) Waiver Waiver Waiver Turnover Rate
---------------- --------------- ------------- --------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Retail A
10/31/99 $17.74 9.53% $389,077 2.11% 1.32% 1.32% 135%
10/31/98 16.95 13.85% 323,498 2.43% 1.33% 1.33% 108%
10/31/97 16.46 20.23% 177,239 2.66% 1.37% 1.37% 58%
10/31/96 14.52 16.92% 116,852 2.29% 1.42% 1.42% 48%
10/31/95 12.82 23.42% 76,368 2.52% 1.48% 1.50% 41%
Retail B
10/31/99 17.70 8.76% 91,199 1.43% 2.00% 2.00% 135%
10/31/98 16.92 13.14% 57,876 1.77% 1.99% 1.99% 108%
10/31/97 16.43 19.34% 30,688 1.95% 2.10% 2.19% 58%
10/31/96(1) 14.51 7.71%** 3,557 1.73%* 1.95%* 2.15%* 48%
Trust
10/31/99 17.73 9.63% 269,851 2.31% 1.12% 1.12% 135%
10/31/98 16.96 14.05% 218,666 2.63% 1.13% 1.13% 108%
10/31/97 16.47 20.42% 171,741 2.82% 1.21% 1.22% 58%
10/31/96 14.53 17.19% 123,603 2.52% 1.19% 1.21% 48%
10/31/95 12.83 23.68% 76,771 2.74% 1.26% 1.30% 41%
A Prime
10/31/99(2) 17.73 9.72% 238 2.27% 1.16% 1.29% 135%
B Prime
10/31/99(2) 17.71 8.91% 519 1.53% 1.90% 2.08% 135%
</TABLE>
65
<PAGE>
- --------------------------------------------------------------------------------
Equity Income Fund
Financial Highlights
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
-------------------------------------- ------------------------------------------
Net
Net Realized and Dividends Distributions Net
Asset Value, Net Unrealized Total from from Net from Increase (Decrease)
Beginning Investment Gain on Investment Investment Net Realized Total in Net
of Period Income(B) Investments Operations Income Capital Gains Distributions Asset Value
------------ ---------- ------------ ---------- ---------- ------------- ------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail A
10/31/99 $19.67 $ 0.19 $ 1.69 $ 1.88 $(0.20) $(1.85) $(2.05) $(0.17)
10/31/98 18.82 0.25 2.43 2.68 (0.25) (1.58) (1.83) 0.85
10/31/97 16.91 0.30 3.35 3.65 (0.30) (1.44) (1.74) 1.91
10/31/96 14.98 0.30 2.47 2.77 (0.30) (0.54) (0.84) 1.93
10/31/95 12.74 0.28 2.47 2.75 (0.30) (0.21) (0.51) 2.24
Retail B
10/31/99(1) 19.48 0.11 1.62 1.73 (0.11) (1.85) (1.96) (0.23)
Trust
10/31/99 19.69 0.28 1.69 1.97 (0.29) (1.85) (2.14) (0.17)
10/31/98 18.84 0.34 2.42 2.76 (0.33) (1.58) (1.91) 0.85
10/31/97 16.93 0.38 3.35 3.73 (0.38) (1.44) (1.82) 1.91
10/31/96 14.99 0.37 2.48 2.85 (0.37) (0.54) (0.91) 1.94
10/31/95 12.75 0.36 2.45 2.81 (0.36) (0.21) (0.57) 2.24
</TABLE>
- ----------
(1) The Fund began issuing Retail B Shares on November 1, 1998.
(A) Calculation does not include the effect of any sales charge for Retail A
Shares and Retail B Shares.
(B) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail A Shares for the years
ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.19, $0.25,
$0.30, $0.30 and $0.28, respectively. Net investment income per share
before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Retail B Shares for the year ended October 31, 1999 was
$0.08. Net investment income per share before reimbursement/waiver of fees
by the Investment Advisor and/or Administrator for Trust Shares for the
years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.28, $0.34,
$0.38, $0.37 and $0.36, respectively.
See Notes to Financial Statements.
66
<PAGE>
<TABLE>
<CAPTION>
Ratios to Average Net Assets/Supplemental Data
-----------------------------------------------------
Ratio of Net Ratio of Ratio of
Investment Operating Operating
Income Expenses Expenses
Net Assets, Including Including Excluding
Net Asset Value, End of Period Reimbursement/ Reimbursement/ Reimbursement/ Portfolio
End of Period Total Return(A) (in 000's) Waiver Waiver Waiver Turnover Rate
---------------- --------------- ------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$19.50 10.14% $213,041 0.97% 1.33% 1.33% 38%
19.67 15.23% 207,850 1.30% 1.34% 1.34% 46%
18.82 23.28% 169,276 1.70% 1.39% 1.41% 37%
16.91 19.01% 126,952 1.86% 1.40% 1.40% 45%
14.98 22.23% 81,802 2.08% 1.49% 1.51% 21%
19.25 9.38% 3,213 0.33% 1.97% 2.23% 38%
19.52 10.60% 120,179 1.39% 0.91% 0.91% 38%
19.69 15.67% 127,367 1.72% 0.92% 0.92% 46%
18.84 23.80% 119,505 2.14% 0.95% 0.97% 37%
16.93 19.65% 106,094 2.32% 0.94% 0.94% 45%
14.99 22.81% 87,819 2.60% 0.98% 1.00% 21%
</TABLE>
67
<PAGE>
- --------------------------------------------------------------------------------
Growth and Income Fund
Financial Highlights
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
---------------------------------------- ----------------------------------------
Net
Net Net Realized and Dividends Distributions Net
Asset Value, Investment Unrealized Total from from Net from Increase (Decrease)
Beginning Income Gain on Investment Investment Net Realized Total in Net
of Period (Loss)(B) Investments Operations Income Capital Gains Distributions Asset Value
------------ ---------- ------------ ---------- --------- ------------- ------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail A
10/31/99 $14.87 $ 0.08(5) $ 2.02 $ 2.10 $(0.08) $(0.91) $(0.99) $ 1.11
10/31/98 16.24 0.12 1.32 1.44 (0.13) (2.68) (2.81) (1.37)
10/31/97 13.78 0.18 3.67 3.85 (0.20) (1.19) (1.39) 2.46
10/31/96(1) 12.35 0.21 2.16 2.37 (0.21) (0.73) (0.94) 1.43
10/31/95 11.15 0.24 1.70 1.94 (0.25) (0.49) (0.74) 1.20
Retail B
10/31/99 14.83 (0.04)(5) 2.02 1.98 -- (0.91) (0.91) 1.07
10/31/98 16.23 --(4) 1.31 1.31 (0.03) (2.68) (2.71) (1.40)
10/31/97 13.77 0.10 3.65 3.75 (0.10) (1.19) (1.29) 2.46
10/31/96(2) 12.97 0.07 0.81 0.88 (0.08) -- (0.08) 0.80
Trust
10/31/99 14.90 0.13(5) 2.02 2.15 (0.12) (0.91) (1.03) 1.12
10/31/98 16.28 0.15 1.31 1.46 (0.16) (2.68) (2.84) (1.38)
10/31/97 13.80 0.22 3.68 3.90 (0.23) (1.19) (1.42) 2.48
10/31/96(1) 12.35 0.27 2.16 2.43 (0.25) (0.73) (0.98) 1.45
10/31/95 11.15 0.28 1.69 1.97 (0.28) (0.49) (0.77) 1.20
A Prime
10/31/99(3) 14.88 0.11(5) 2.03 2.14 (0.11) (0.91) (1.02) 1.12
B Prime
10/31/99(3) 14.88 (0.01)(5) 2.03 2.02 (0.02) (0.91) (0.93) 1.09
</TABLE>
- ----------
* Annualized
** Not Annualized
(1) The Fund commenced operations on December 14, 1992 as a separate
investment portfolio (the "Predecessor Fund") of The Shawmut Funds. On
December 4, 1995, the Predecessor Fund was reorganized as a new portfolio
of the Trust. Prior to the reorganization, the Predecessor Fund offered
and sold two series of shares, Investment Shares and Trust Shares, that
were similar to the Fund's Retail A and Trust Shares, respectively. In
connection with the reorganization, shareholders of the Predecessor Fund
exchanged Investment Shares and Trust Shares for Retail A Shares and Trust
Shares, respectively, in the Galaxy Growth and Income Fund.
(2) The Fund began issuing Retail B Shares on March 4, 1996.
(3) The Fund began issuing A Prime and B Prime Shares on November 1, 1998.
(4) Net investment income per share is less than $0.005.
(5) The selected per share data was calculated using the weighted average
shares outstanding method for the period.
(A) Calculation does not include the effect of any sales charge for Retail A
Shares, Retail B Shares, A Prime Shares and B Prime Shares.
(B) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail A Shares for the years
ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.07, $0.10,
$0.18, $0.19 and $0.22, respectively. Net investment income (loss) per
share before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Retail B Shares for the years ended October 31, 1999,
1998 and 1997 and the period ended October 31, 1996 were $(0.04), $0.00,
$0.08 and $0.05, respectively. Net investment income per share before
reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Trust Shares for the years ended October 31, 1999, 1998,
1997, 1996 and 1995 were $0.13, $0.15, $0.21, $0.27 and $0.25,
respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for A Prime Shares
for the year ended October 31, 1999 was $0.09. Net investment (loss) per
share before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for B Prime Shares for the year ended October 31, 1999 was
$(0.05).
See Notes to Financial Statements.
68
<PAGE>
<TABLE>
<CAPTION>
Ratios to Average Net Assets/Supplemental Data
------------------------------------------------------
Ratio of Net Ratio of Ratio of
Investment Operating Operating
Income (Loss) Expenses Expenses
Net Assets, Including Including Excluding
Net Asset Value, End of Period Reimbursement/ Reimbursement/ Reimbursement/ Portfolio
End of Period Total Return(A) (in 000's) Waiver Waiver Waiver Turnover Rate
- ---------------- --------------- ------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$15.98 14.56% $232,110 0.53% 1.28% 1.38% 20%
14.87 9.93% 214,110 0.75% 1.28% 1.35% 38%
16.24 30.10% 141,884 1.18% 1.27% 1.45% 93%
13.78 20.25% 77,776 1.65% 1.34% 1.45% 59%
12.35 18.52% 51,078 2.10% 1.32% 1.77% 51%
15.90 13.72% 62,366 (0.22)% 2.03% 2.04% 20%
14.83 9.09% 53,216 0.01% 2.02% 2.02% 38%
16.23 29.11% 35,178 0.31% 2.05% 2.28% 93%
13.77 6.83%** 4,562 0.79%* 1.96%* 2.11%* 59%
16.02 14.85% 309,106 0.76% 1.05% 1.05% 20%
14.90 10.10% 254,060 1.00% 1.03% 1.03% 38%
16.28 30.43% 246,654 1.44% 1.03% 1.06% 93%
13.80 20.77% 186,708 2.01% 1.02% 1.03% 59%
12.35 18.80% 189,011 2.42% 1.07% 1.27% 51%
16.00 14.81% 150 0.66% 1.15% 1.30% 20%
15.97 13.98% 129 (0.09)% 1.90% 2.17% 20%
</TABLE>
69
<PAGE>
- --------------------------------------------------------------------------------
Strategic Equity Fund
Financial Highlights
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
---------------------------------------- ------------------------------------------
Net
Net Net Realized and Dividends Distributions Net
Asset Value, Investment Unrealized Total from from Net from Increase (Decrease)
Beginning Income Gain (Loss) on Investment Investment Net Realized Total in Net
of Period (Loss)(B) Investments Operations Income Capital Gains Distributions Asset Value
------------ ---------- -------------- ---------- ---------- ------------- ------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail A
10/31/99 $ 9.62 $ 0.04(3) $ 0.27 $ 0.31 $(0.03) $(0.01) $(0.04) $ 0.27
10/31/98(1) 10.00 --(2) (0.38) (0.38) -- -- -- (0.38)
Retail B
10/31/99 9.61 (0.02)(3) 0.26 0.24 -- (0.01) (0.01) 0.23
10/31/98(1) 10.00 (0.02) (0.37) (0.39) -- -- -- (0.39)
Trust
10/31/99 9.63 0.09(3) 0.27 0.36 (0.08) (0.01) (0.09) 0.27
10/31/98(1) 10.00 0.01 (0.37) (0.36) (0.01) -- (0.01) (0.37)
</TABLE>
- ----------
* Annualized
** Not Annualized
(1) The Fund commenced operations on March 4, 1998.
(2) Net investment income per share is less than $0.005.
(3) The selected per share data was calculated using the weighted average
shares outstanding method for the year.
(A) Calculation does not include the effect of any sales charge for Retail A
Shares and Retail B Shares.
(B) Net investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail A Shares for the year
ended October 31, 1999 and the period ended October 31, 1998 were $0.00
and $0.00, respectively. Net investment (loss) per share before
reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Retail B Shares for year ended October 31, 1999, and the
period ended October 31, 1998 were $(0.08) and $(0.06), respectively. Net
investment income per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Trust Shares for the year
ended October 31, 1999 and the period ended October 31, 1998 were $0.06
and $0.00, respectively.
See Notes to Financial Statements.
70
<PAGE>
<TABLE>
<CAPTION>
Ratios to Average Net Assets/Supplemental Data
-----------------------------------------------------
Ratio of Net Ratio of Ratio of
Investment Operating Operating
Income (Loss) Expenses Expenses
Net Assets, Including Including Excluding
Net Asset Value, End of Period Reimbursement/ Reimbursement/ Reimbursement/ Portfolio
End of Period Total Return(A) (in 000's) Waiver Waiver Waiver Turnover Rate
- ---------------- --------------- ------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$9.89 3.25% $ 8,229 0.41% 1.19% 1.63% 79%
9.62 (3.75)%** 4,051 0.06%* 1.40%* 2.41%* 30%**
9.84 2.50% 1,348 (0.24)% 1.84% 2.40% 79%
9.61 (4.76)%** 583 (0.55)%* 2.01%* 3.05%* 30%**
9.90 3.64% 71,063 0.80% 0.80% 1.00% 79%
9.63 (3.62)%** 63,061 0.19%* 1.27%* 1.47%* 30%**
</TABLE>
71
<PAGE>
- --------------------------------------------------------------------------------
Equity Value Fund
Financial Highlights
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
--------------------------------------- --------------------------------------
Net
Net Net Realized and Dividends Dividends Net
Asset Value, Investment Unrealized Total from from Net from Increase (Decrease)
Beginning Income Gain on Investment Investment Net Realized Total in Net
of Period (Loss)(B) Investments Operations Income Capital Gains Dividends Asset Value
------------ ---------- ---------- ---------- ---------- ------------- --------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail A
10/31/99 $16.50 $(0.03) $ 2.42 $ 2.39 $ -- $(0.61) $(0.61) $ 1.78
10/31/98 18.21 0.03 1.50 1.53 (0.04) (3.20) (3.24) (1.71)
10/31/97 15.96 0.11 4.16 4.27 (0.12) (1.90) (2.02) 2.25
10/31/96 14.33 0.14 2.74 2.88 (0.14) (1.11) (1.25) 1.63
10/31/95 13.31 0.22 2.24 2.46 (0.23) (1.21) (1.44) 1.02
Retail B
10/31/99 16.44 (0.15) 2.40 2.25 -- (0.61) (0.61) 1.64
10/31/98 18.24 (0.08) 1.48 1.40 -- (3.20) (3.20) (1.80)
10/31/97 15.99 -- 4.17 4.17 (0.02) (1.90) (1.92) 2.25
10/31/96(1) 14.74 0.04 1.25 1.29 (0.04) -- (0.04) 1.25
Trust
10/31/99 16.51 0.03 2.42 2.45 -- (0.61) (0.61) 1.84
10/31/98 18.21 0.08 1.49 1.57 (0.07) (3.20) (3.27) (1.70)
10/31/97 15.96 0.17 4.16 4.33 (0.18) (1.90) (2.08) 2.25
10/31/96 14.33 0.21 2.74 2.95 (0.21) (1.11) (1.32) 1.63
10/31/95 13.32 0.28 2.24 2.52 (0.30) (1.21) (1.51) 1.01
</TABLE>
- ----------
* Annualized
** Not Annualized
(1) The Fund began issuing Retail B Shares on March 4, 1996.
(A) Calculation does not include the effect of any sales charge for Retail A
Shares and Retail B shares.
(B) Net investment income (loss) per share before reimbursement/waiver of fees
by the Investment Advisor and/or Administrator for Retail A Shares for the
years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $(0.03)
$0.03, $0.11, $0.14 and $0.22, respectively. Net investment income (loss)
per share before reimbursement/waiver of fees by the Investment Advisor
and/or Administrator for Retail B Shares for the years ended October 31,
1999, 1998 and 1997 and the period ended October 31, 1996 were $(0.15),
$(0.08), $(0.03) and $0.01, respectively. Net investment income per share
before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Trust Shares for the years ended October 31, 1999, 1998,
1997, 1996 and 1995 were $0.03, $0.08, $0.17, $0.21 and $0.28,
respectively.
See Notes to Financial Statements.
72
<PAGE>
<TABLE>
<CAPTION>
Ratios to Average Net Assets/Supplemental Data
-----------------------------------------------------
Ratio of Net Ratio of Ratio of
Investment Operating Operating
Income (Loss) Expenses Expenses
Net Assets, Including Including Excluding
Net Asset Value, End of Period Reimbursement/ Reimbursement/ Reimbursement/ Portfolio
End of Period Total Return(A) (in 000's) Waiver Waiver Waiver Turnover Rate
- ---------------- --------------- ------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$18.28 14.63% $258,332 (0.16)% 1.37% 1.37% 75%
16.50 9.88% 234,730 0.15% 1.37% 1.37% 82%
18.21 29.48% 182,641 0.63% 1.38% 1.38% 111%
15.96 21.49% 131,998 1.00% 1.45% 1.45% 116%
14.33 20.81% 96,555 1.62% 1.49% 1.50% 76%
18.08 13.81% 30,988 (0.87)% 2.08% 2.08% 75%
16.44 9.07% 23,103 (0.54)% 2.06% 2.06% 82%
18.24 28.60% 14,958 (0.13)% 2.07% 2.38% 111%
15.99 8.80%** 1,916 0.43%* 1.94%* 2.24%* 116%
18.35 15.04% 281,064 0.19% 1.02% 1.03% 75%
16.51 10.27% 254,432 0.49% 1.03% 1.03% 82%
18.21 29.87% 241,532 0.98% 1.04% 1.04% 111%
15.96 22.05% 194,827 1.42% 1.03% 1.03% 116%
14.33 21.31% 165,330 2.10% 1.02% 1.02% 76%
</TABLE>
73
<PAGE>
- --------------------------------------------------------------------------------
Equity Growth Fund
Financial Highlights
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
--------------------------------------- ----------------------------------------
Net Dividends
Net Net Realized and Dividends in Excess Dividends
Asset Value, Investment Unrealized Total from from Net of Net from Net
Beginning Income Gain on Investment Investment Investment Realized Total
of Period (Loss)(B) Investments Operations Income Income Capital Gains Dividends
------------ ---------- ------------ ---------- ---------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail A
10/31/99 $24.47 $(0.06) $ 6.48 $ 6.42 $ -- $ -- $(1.90) $(1.90)
10/31/98 25.14 0.01 3.19 3.20 (0.03) --(3) (3.84) (3.87)
10/31/97 20.37 0.07 6.05 6.12 (0.07) -- (1.28) (1.35)
10/31/96 17.29 0.10 3.39 3.49 (0.11) -- (0.30) (0.41)
10/31/95 14.18 0.14 3.28 3.42 (0.14) -- (0.17) (0.31)
Retail B
10/31/99 24.07 (0.20) 6.30 6.10 -- -- (1.90) (1.90)
10/31/98 24.91 (0.16)(2) 3.16 3.00 -- --(3) (3.84) (3.84)
10/31/97 20.26 (0.09)(2) 6.02 5.93 -- -- (1.28) (1.28)
10/31/96(1) 18.77 (0.01) 1.50 1.49 -- -- -- --
Trust
10/31/99 24.52 0.03 6.50 6.53 -- -- (1.90) (1.90)
10/31/98 25.17 0.09 3.20 3.29 (0.09) (0.01) (3.84) (3.94)
10/31/97 20.39 0.16 6.06 6.22 (0.16) -- (1.28) (1.44)
10/31/96 17.30 0.17 3.40 3.57 (0.18) -- (0.30) (0.48)
10/31/95 14.19 0.20 3.28 3.48 (0.20) -- (0.17) (0.37)
A Prime
10/31/99(4) 24.49 (0.01) 6.37 6.36 -- -- (1.90) (1.90)
B Prime
10/31/99(4) 24.49 (0.10) 6.35 6.25 -- -- (1.90) (1.90)
</TABLE>
- ----------
* Annualized
** Not Annualized
(1) The Fund began issuing Retail B Shares on March 4, 1996.
(2) The selected per share data was calculated using the weighted average
shares outstanding method for the year.
(3) Dividends in excess of net investment income per share were less than
$0.005.
(4) The Fund began issuing A Prime and B Prime Shares on November 1, 1998.
(A) Calculation does not include the effect of any sales charge for Retail A
Shares, Retail B Shares, A Prime Shares and B Prime Shares.
(B) Net investment income (loss) per share before reimbursement/waiver of fees
by the Investment Advisor and/or Administrator for Retail A Shares for the
years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $(0.06),
$0.01, $0.07, $0.10 and $0.13, respectively. Net investment (loss) per
share before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Retail B Shares for the years ended October 31, 1999,
1998 and 1997 and the period ended October 31, 1996 were $(0.21),
$(0.16)(2), $(0.14)(2) and $(0.03), respectively. Net investment income
per share before reimbursement/waiver of fees by the Investment Advisor
and/or Administrator for Trust Shares for the years ended October 31,
1999, 1998, 1997, 1996 and 1995 were $0.03, $0.09, $0.16, $0.17 and $0.20,
respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for A Prime Shares
for the year ended October 31, 1999 was $(0.04). Net investment (loss) per
share before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for B Prime Shares for the year ended October 31, 1999 was
$(0.14).
See Notes to Financial Statements.
74
<PAGE>
<TABLE>
<CAPTION>
Ratios to Average Net Assets/Supplemental Data
-----------------------------------------------
Ratio of Net Ratio of Ratio of
Investment Operating Operating
Income (Loss) Expenses Expenses
Net Increase Net Assets, Including Including Excluding
(Decrease) in Net Net Asset Value, End of Period Reimbursement/ Reimbursement/ Reimbursement/ Portfolio
Asset Value End of Period Total Return(A) (in 000's) Waiver Waiver Waiver Turnover Rate
- ----------------- ---------------- --------------- ------------- --------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 4.52 $28.99 27.55% $ 443,639 (0.25)% 1.34% 1.34% 53%
(0.67) 24.47 14.73% 312,951 0.02% 1.34% 1.34% 60%
4.77 25.14 31.61% 226,330 0.30% 1.37% 1.37% 66%
3.08 20.37 20.51% 160,800 0.50% 1.40% 1.40% 36%
3.11 17.29 24.54% 98,911 0.85% 1.45% 1.47% 14%
4.20 28.27 26.63% 71,525 (0.96)% 2.05% 2.08% 53%
(0.84) 24.07 13.98% 34,693 (0.68)% 2.04% 2.04% 60%
4.65 24.91 30.78% 20,363 (0.40)% 2.07% 2.30% 66%
1.49 20.26 7.95%** 3,995 (0.16)%* 1.92%* 2.29%* 36%
4.63 29.15 28.07% 1,041,378 0.15% 0.94% 0.94% 53%
(0.65) 24.52 15.17% 815,756 0.40% 0.96% 0.96% 60%
4.78 25.17 32.16% 745,537 0.72% 0.95% 0.95% 66%
3.09 20.39 21.03% 562,419 0.92% 0.98% 0.98% 36%
3.11 17.30 25.08% 420,016 1.31% 1.00% 1.00% 14%
4.46 28.95 27.30% 107 (0.05)% 1.14% 1.28% 53%
4.35 28.84 26.79% 246 (0.78)% 1.87% 2.19% 53%
</TABLE>
75
<PAGE>
- --------------------------------------------------------------------------------
International Equity Fund
Financial Highlights
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
------------------------------------------- --------------------------------------
Net
Net Net Realized and Dividends Dividends Net
Asset Value, Investment Unrealized Total from from Net from Increase(Decrease)
Beginning Income Gain (Loss) on Investment Investment Net Realized Total in Net
of Period (Loss)(B) Investments Operations Income Capital Gains Dividends Asset Value
------------ ---------- -------------- ---------- ---------- ------------- --------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail A
10/31/99 $16.75 $ 0.01(2) $ 4.72 $ 4.73 $(0.05) $(0.57) $(0.62) $ 4.11
10/31/98 15.18 0.07 1.93 2.00 (0.07) (0.36) (0.43) 1.57
10/31/97 13.94 0.01 2.09 2.10 (0.18) (0.68) (0.86) 1.24
10/31/96 12.92 0.11 1.27 1.38 (0.12) (0.24) (0.36) 1.02
10/31/95 13.20 0.11 (0.21) (0.10) (0.02) (0.16) (0.18) (0.28)
Retail B
10/31/99(1) 16.85 (0.09)(2) 4.74 4.65 (0.13) (0.57) (0.70) 3.95
Trust
10/31/99 17.00 0.10(2) 4.80 4.90 (0.15) (0.57) (0.72) 4.18
10/31/98 15.33 0.14 1.98 2.12 (0.09) (0.36) (0.45) 1.67
10/31/97 14.01 0.08 2.12 2.20 (0.20) (0.68) (0.88) 1.32
10/31/96 12.98 0.17 1.30 1.47 (0.20) (0.24) (0.44) 1.03
10/31/95 13.20 0.16 (0.18) (0.02) (0.04) (0.16) (0.20) (0.22)
A Prime
10/31/99(1) 16.85 0.06(2) 4.79 4.85 (0.15) (0.57) (0.72) 4.13
B Prime
10/31/99(1) 16.85 (0.08)(2) 4.78 4.70 (0.13) (0.57) (0.70) 4.00
</TABLE>
- ----------
(1) The Fund began issuing Retail B, A Prime and B Prime Shares on November 1,
1998.
(2) The selected per share data was calculated using the weighted average
shares outstanding method for the year.
(A) Calculation does not include the effect of any sales charge for Retail A
Shares, Retail B Shares, A Prime Shares and B Prime Shares.
(B) Net investment income (loss) per share before reimbursement/waiver of fees
by the Investment Advisor and/or Administrator for Retail A Shares for the
years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $(0.04),
$0.03, $(0.01), $0.07 and $0.08, respectively. Net investment (loss) per
share before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Retail B Shares for the period ended October 31, 1999
was $(0.25). Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for Trust Shares
for the years ended October 31, 1999, 1998, 1997, 1996 and 1995 were
$0.06, $0.10, $0.04, $0.13 and $0.13, respectively. Net investment (loss)
per share before reimbursement/waiver of fees by the Investment Advisor
and/or Administrator for A Prime Shares for the year ended October 31,
1999 was $(0.09). Net investment (loss) per share before
reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for B Prime Shares for the year ended October 31, 1999 was
$(0.16).
See Notes to Financial Statements.
76
<PAGE>
<TABLE>
<CAPTION>
Ratios to Average Net Assets/Supplemental Data
-----------------------------------------------------
Ratio of Net Ratio of Ratio of
Investment Operating Operating
Income (Loss) Expenses Expenses
Net Assets, Including Including Excluding
Net Asset Value, End of Period Reimbursement/ Reimbursement/ Reimbursement/ Portfolio
End of Period Total Return(A) (in 000's) Waiver Waiver Waiver Turnover Rate
- ---------------- --------------- -------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$20.86 29.04% $ 89,327 0.03% 1.48% 1.73% 45%
16.75 13.64% 66,541 0.39% 1.48% 1.73% 49%
15.18 15.88% 56,592 0.03% 1.60% 1.85% 45%
13.94 10.86% 35,144 0.78% 1.70% 1.98% 146%
12.92 (0.64)% 30,104 0.84% 1.76% 2.03% 48%
20.80 28.41% 2,189 (0.45)% 1.96% 2.70% 45%
21.18 29.71% 501,776 0.54% 0.97% 1.22% 45%
17.00 14.32% 345,692 0.91% 0.96% 1.21% 49%
15.33 16.60% 265,124 0.57% 1.06% 1.32% 45%
14.01 11.51% 172,561 1.40% 1.08% 1.36% 146%
12.98 (0.02)% 89,614 1.36% 1.22% 1.48% 48%
20.98 29.73% 12 0.34% 1.17% 2.03% 45%
20.85 28.74% 458 (0.38)% 1.89% 2.27% 45%
</TABLE>
77
<PAGE>
- --------------------------------------------------------------------------------
Small Cap Value Fund
Financial Highlights
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
---------------------------------------------- -----------------------------------------
Net Dividends
Net Net Realized and Dividends in Excess Dividends
Asset Value, Investment Unrealized Total from from Net of Net from Net
Beginning Income Gain (Loss) on Investment Investment Investment Realized Total
of Period (Loss)(B) Investments Operations Income Income Capital Gains Dividends
------------ ---------- -------------- ---------- ---------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail A
10/31/99 $13.53 $ 0.02 $ 0.73 $ 0.75 $(0.03) $ -- $(1.27) $(1.30)
10/31/98 18.29 0.08 (2.08) (2.00) (0.08) -- (2.68) (2.76)
10/31/97 14.75 (0.04)(2) 5.72 5.68 -- -- (2.14) (2.14)
10/31/96(1) 12.68 0.01 2.95 2.96 (0.02) -- (0.87) (0.89)
10/31/95 11.06 (0.02) 2.21 2.19 -- -- (0.57) (0.57)
Retail B
10/31/99(3) 13.59 (0.04) 0.68 0.64 -- -- (1.27) (1.27)
Trust
10/31/99 13.61 0.05 0.74 0.79 (0.06) -- (1.27) (1.33)
10/31/98 18.37 0.11 (2.06) (1.95) (0.13) -- (2.68) (2.81)
10/31/97 14.76 0.01(2) 5.74 5.75 -- -- (2.14) (2.14)
10/31/96(1) 12.71 0.05 2.97 3.02 (0.05) (0.01) (0.91) (0.97)
10/31/95 11.07 0.01 2.21 2.22 (0.01) -- (0.57) (0.58)
A Prime
10/31/99(3) 13.59 0.03 0.73 0.76 (0.04) -- (1.27) (1.31)
B Prime
10/31/99(3) 13.59 (0.05) 0.71 0.66 -- -- (1.27) (1.27)
</TABLE>
- ----------
(1) The Fund commenced operations on December 14, 1992 as a separate
investment portfolio (the "Predecessor Fund") of the Shawmut Funds. On
December 4, 1995, the Predecessor Fund was reorganized as a new portfolio
of the Trust. Prior to the reorganization, the Predecessor Fund offered
and sold two series of shares, Investment Shares and Trust Shares, that
were similar to the Fund's Retail A and Trust Shares, respectively. In
connection with the reorganization, shareholders of the Predecessor Fund
exchanged Investment Shares and Trust Shares for Retail A Shares and Trust
Shares, respectively, in the Galaxy Small Cap Value Fund.
(2) The selected per share data was calculated using the weighted average
shares outstanding method for the periods indicated.
(3) The Fund began issuing Retail B, A Prime and B Prime Shares on November 1,
1998.
(A) Calculation does not include the effect of any sales charge for Retail A
Shares, Retail B Shares, A Prime Shares and B Prime Shares.
(B) Net investment income (loss) per share before reimbursement/waiver of fees
by the Investment Advisor and/or Administrator for Retail A Shares for the
years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $(0.02),
$0.05, $(0.02)(2), $0.01 and $(0.08), respectively. Net investment (loss)
per share before reimbursement/waiver of fees by the Investment Advisor
and/or Administrator for Retail B Shares for the year ended October 31,
1999 was $(0.09). Net investment income (loss) per share before
reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Trust Shares for the years ended October 31, 1999, 1998,
1997, 1996 and 1995 were $0.05, $0.11, $0.05(2), $0.05 and $(0.03),
respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for A Prime Shares
for the year ended October 31, 1999 was $0.00. Net investment (loss) per
share before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for B Prime Shares for the year ended October 31, 1999 was
$(0.10).
See Notes to Financial Statements.
78
<PAGE>
<TABLE>
<CAPTION>
Ratios to Average Net Assets/Supplemental Data
----------------------------------------------
Ratio of Net Ratio of Ratio of
Investment Operating Operating
Income (Loss) Expenses Expenses
Net Increase Net Assets, Including Including Excluding
(Decrease) in Net Net Asset Value, End of Period Reimbursement/ Reimbursement/ Reimbursement/ Portfolio
Asset Value End of Period Total Return(A) (in 000's) Waiver Waiver Waiver Turnover Rate
- ----------------- ---------------- --------------- ------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.55) $12.98 5.68% $ 80,870 0.13% 1.31% 1.59% 42%
(4.76) 13.53 (12.52)% 87,781 0.38% 1.31% 1.45% 33%
3.54 18.29 43.58% 63,658 (0.25)% 1.30% 1.52% 52%
2.07 14.75 24.77% 34,402 0.08% 1.40% 1.55% 39%
1.62 12.68 21.27% 27,546 (0.19)% 1.35% 1.85% 32%
(0.63) 12.96 4.80% 1,637 (0.66)% 2.10% 2.88% 42%
(0.54) 13.07 6.02% 255,268 0.47% 0.97% 0.97% 42%
(4.76) 13.61 (12.07)% 202,385 0.73% 0.96% 0.96% 33%
3.61 18.37 44.08% 189,257 0.09% 0.96% 0.96% 52%
2.05 14.76 25.22% 137,341 0.45% 1.05% 1.06% 39%
1.64 12.71 21.52% 121,364 0.07% 1.10% 1.35% 32%
(0.55) 13.04 5.80% 175 0.26% 1.18% 1.40% 42%
(0.61) 12.98 4.96% 190 (0.49)% 1.93% 2.49% 42%
</TABLE>
79
<PAGE>
- --------------------------------------------------------------------------------
Small Company Equity Fund
Financial Highlights
For a Share outstanding throughout each period.
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
----------------------------------------- --------------------------
Net
Net Realized and Dividends Net
Asset Value, Net Unrealized Total from from Increase(Decrease)
Beginning Investment Gain (Loss) on Investment Net Realized Total in Net
of Period (Loss)(B) Investments Operations Capital Gains Dividends Asset Value
------------ ---------- -------------- ---------- ------------- --------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Retail A
10/31/99 $13.63 $(0.23) $ 2.26 $ 2.03 $ -- $ -- $ 2.03
10/31/98 20.94 (0.19) (4.86) (5.05) (2.26) (2.26) (7.31)
10/31/97 19.96 (0.18) 3.54 3.36 (2.38) (2.38) 0.98
10/31/96 16.28 (0.14) 3.99 3.85 (0.17) (0.17) 3.68
10/31/95 12.35 (0.09) 4.21 4.12 (0.19) (0.19) 3.93
Retail B
10/31/99 13.39 (0.34) 2.26 1.92 -- -- 1.92
10/31/98 20.73 (0.30) (4.78) (5.08) (2.26) (2.26) (7.34)
10/31/97 19.91 (0.21) 3.41 3.20 (2.38) (2.38) 0.82
10/31/96(1) 17.27 (0.19)(2) 2.83 2.64 -- -- 2.64
Trust
10/31/99 13.96 (0.16) 2.33 2.17 -- -- 2.17
10/31/98 21.32 (0.14) (4.96) (5.10) (2.26) (2.26) (7.36)
10/31/97 20.20 (0.11) 3.61 3.50 (2.38) (2.38) 1.12
10/31/96 16.38 (0.09) 4.08 3.99 (0.17) (0.17) 3.82
10/31/95 12.36 (0.04) 4.25 4.21 (0.19) (0.19) 4.02
</TABLE>
- ----------
* Annualized
** Not Annualized
(1) The Fund began issuing Retail B Shares on March 4, 1996.
(2) The selected per share data was calculated using the weighted average
shares outstanding method for the period.
(A) Calculation does not include the effect of any sales charge for Retail A
Shares and Retail B shares.
(B) Net investment (loss) per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for Retail A Shares for the years
ended October 31, 1999, 1998, 1997, 1996 and 1995 were $(0.23), $(0.19),
$(0.18), $(0.14) and $(0.09), respectively. Net investment (loss) per
share before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Retail B Shares for the years ended October 31, 1999,
1998 and 1997 and the period ended October 31, 1996 were $(0.37), $(0.30),
$(0.24) and $(0.24)(2), respectively. Net investment (loss) per share
before reimbursement/waiver of fees by the Investment Advisor and/or
Administrator for Trust Shares for the years ended October 31, 1999, 1998,
1997, 1996 and 1995 were $(0.16), $(0.14), $(0.11), $(0.09) and $(0.04),
respectively.
See Notes to Financial Statements.
80
<PAGE>
<TABLE>
<CAPTION>
Ratios to Average Net Assets/Supplemental Data
--------------------------------------------------
Ratio of Net Ratio of Ratio of
Investment Operating Operating
Income (Loss) Expenses Expenses
Net Assets, Including Including Excluding
Net Asset Value, End of Period Reimbursement/ Reimbursement/ Reimbursement/ Portfolio
End of Period Total Return(A) (in 000's) Waiver Waiver Waiver Turnover Rate
- ---------------- --------------- ------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$15.66 14.89% $ 87,921 (1.41)% 1.53% 1.54% 105%
13.63 (26.26)% 95,831 (1.13)% 1.46% 1.47% 78%
20.94 19.08% 135,593 (1.02)% 1.46% 1.48% 69%
19.96 23.97% 111,101 (1.03)% 1.57% 1.57% 82%
16.28 34.01% 45,668 (0.85)% 1.60% 1.64% 54%
15.31 14.34% 12,212 (2.04)% 2.16% 2.32% 105%
13.39 (26.72)% 12,565 (1.78)% 2.11% 2.16% 78%
20.73 18.23% 14,731 (1.76)% 2.20% 2.44% 69%
19.91 15.34%** 3,659 (1.50)%* 2.04%* 2.44%* 82%
16.13 15.54% 233,326 (1.00)% 1.12% 1.12% 105%
13.96 (26.00)% 222,675 (0.76)% 1.09% 1.09% 78%
21.32 19.59% 310,751 (0.65)% 1.09% 1.12% 69%
20.20 24.69% 174,990 (0.60)% 1.14% 1.14% 82%
16.38 34.73% 94,831 (0.37)% 1.12% 1.12% 54%
</TABLE>
81
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Notes to Financial Statements
1. Organization
The Galaxy Fund, a Massachusetts business trust (the "Trust"), is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. As of the date of this report, the Trust offered
twenty-nine managed investment portfolios. The accompanying financial statements
and financial highlights are those of the Asset Allocation, Equity Income,
Growth and Income, Strategic Equity, Equity Value, Equity Growth, International
Equity, Small Cap Value and Small Company Equity Funds (individually, a "Fund,"
collectively, the "Funds") only.
Each Fund is authorized to issue five series of shares (Trust Shares,
Retail A Shares, Retail B Shares, A Prime Shares and B Prime Shares). Currently,
the Asset Allocation, Growth and Income, Equity Growth, International Equity and
Small Cap Value Funds offer all five series of shares and the Equity Income,
Strategic Equity, Equity Value and Small Company Equity Funds offer Trust
Shares, Retail A Shares, and Retail B Shares. Trust Shares, Retail A Shares,
Retail B Shares, A Prime Shares and B Prime Shares are substantially the same
except that (i) Retail A Shares are subject to a maximum 3.75% front-end sales
charge, (ii) A Prime Shares are subject to a maximum 5.50% front-end sales
charge, (iii) Retail B Shares and B Prime 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, B Prime Shares will convert automatically to A Prime Shares. On
November 29, 1999, A Prime Shares and B Prime Shares were redesignated Prime A
Shares and Prime B Shares, respectively.
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: Investments in securities which are traded on a
recognized stock exchange are valued at the last sale price on the securities
exchange on which such securities are primarily traded, or at the last sale
price on the national securities market. Securities traded on over-the-counter
markets are valued at the last bid price. Short-term obligations that mature in
60 days or less are valued at amortized cost, which approximates fair value. All
other securities and other assets are appraised at their fair value as
determined in good faith under consistently applied procedures established by
and under the general supervision of the Board of Trustees.
Securities Transactions and Investment Income: Securities transactions are
accounted for on a trade date basis. Net realized gains or losses on sales of
securities are determined by the identified cost method. Interest income is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date. Investment income and realized and unrealized gains and losses are
allocated to the separate series of a Fund based upon the relative net assets of
each series.
Forward Foreign Currency Exchange Contracts: The International Equity Fund
may enter into forward foreign currency exchange contracts whereby the Fund
agrees to buy or sell a specific currency at a specified price at a future date
in an attempt to hedge against fluctuations in the value of the underlying
currency of certain portfolio instruments. Forward foreign currency exchange
contracts are valued at the daily exchange rate of the underlying currency.
Purchases and sales of forward foreign currency exchange contracts having the
same settlement date and broker are offset and presented on a net basis in the
Statement of Assets and Liabilities. Gains or losses on the purchase or sale of
forward foreign currency exchange contracts having the same settlement date and
broker are recognized on the date of offset, otherwise gains or losses are
recognized on the settlement date.
Foreign Currency Translation: The books and records of the International
Equity Fund are maintained in U.S. dollars. Investment valuations and other
assets and liabilities initially expressed in foreign currencies are converted
each business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investments and income and expenses are converted into U.S.
dollars based upon exchange rates prevailing on the respective dates of such
transactions. That portion of unrealized gains or losses on investments due to
fluctuations in foreign currency exchange rates is not separately disclosed.
Dividends to Shareholders: Dividends from net investment income are
determined separately for each series of a Fund and are declared and paid
quarterly, with the exception of the International Equity Fund which declares
and pays dividends annually. Net realized capital gains, if any, are distributed
at least annually.
Income dividends and capital gain dividends are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles.
82
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Notes to Financial Statements
Federal Income Taxes: The Trust treats each Fund as a separate entity for
federal income tax purposes. Each Fund intends to continue 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. With holding taxes on foreign dividends have been paid or provided for
in accordance with the applicable country's tax rules and rates.
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 under lying securities, and a possible decline
in the value of the underlying securities during the period while the Fund seeks
to assert its rights.
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 amortized using the straight-line method over a period of five
years beginning with the commencement of each Fund's operations.
3. Investment Advisory, Administration, Shareholder Services, Distribution
and Other Fees
The Trust and Fleet Investment Advisors Inc. (the "Investment Advisor" or
"Fleet"), an indirect wholly-owned subsidiary of FleetBoston Corporation, are
parties to an investment advisory agreement under which the Investment Advisor
provides services for a fee, computed daily and paid monthly, at the annual rate
of 0.75% of the average daily net assets of the Asset Allocation, Equity Income,
Growth and Income, Strategic Equity, Equity Value, Equity Growth, Small Cap
Value and Small Company Equity Funds (See Note 4).
The Trust pays the Investment Advisor a fee, computed daily and paid
monthly, with respect to the International Equity Fund at the annual rate of
1.15% of the first $50 million of the Fund's average daily net assets, plus
0.95% of the next $50 million of such net assets, plus 0.85% of net assets in
excess of $100 million.
The Investment Advisor has entered into a sub-advisory agreement with
Oechsle International Advisors, LLC ("Oechsle") with respect to the
International Equity Fund pursuant to which the Investment Advisor pays fees to
Oechsle, computed daily and paid quarterly, at the annual rate of 0.40% of the
first $50 million of the Fund's average daily net assets, plus 0.35% of net
assets in excess of $50 million. FleetBoston Corporation owns an interest in
Oechsle.
The Trust and First Data Investor Services Group, Inc. ("Investor Services
Group"), a wholly-owned subsidiary of First Data Corporation, are parties to an
administration agreement under which Investor Services Group (the
"Administrator") provides services for a fee, computed daily and paid monthly,
at the annual rate, effective September 10, 1998, of 0.09% of the first $2.5
billion of the combined average daily net assets of the Funds and the other
funds offered by the Trust (whose financial statements are provided in separate
reports), 0.085% of the next $2.5 billion of combined average daily net assets,
0.075% of the next $7 billion of combined average daily net assets, 0.065% of
the next $3 billion of combined average daily net assets, 0.06% of the next $3
billion of combined average daily net assets and 0.0575% of combined average
daily net assets in excess of $18 billion. Prior to September 10, 1998, Investor
Services Group received administration fees at the annual rate of 0.09% of the
first $2.5 billion of the combined average daily net assets of the Funds and the
other funds offered by the Trust, 0.085% of the next $2.5 billion of combined
average daily net assets and 0.075% of combined average daily net assets over $5
billion.
83
<PAGE>
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Notes to Financial Statements
In addition, Investor Services Group also provides certain fund
accounting, custody administration and transfer agency services pursuant to
certain fee arrangements. Pursuant to such fee arrangements, Investor Services
Group compensates the Trust's custodian bank, The Chase Manhattan Bank for its
services.
First Data Distributors, Inc. (the "Distributor"), a wholly-owned
subsidiary of Investor Services Group and an indirect wholly-owned subsidiary of
First Data Corporation, serves as the distributor of the Trust's Shares.
The Trust has adopted a shareholder services plan (the "Services Plan")
with respect to Retail A 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 shareholder liaison
and/or administrative support services to their customers who beneficially own
Retail A Shares, at an aggregate annual rate not to exceed 0.50% of the average
daily net asset value of the outstanding Retail A Shares of each Fund
beneficially owned by such customers. The Trust, under the direction of the
Board of Trustees, is currently limiting fees payable under the Services Plan
with respect to each Fund to an aggregate annual rate not to exceed 0.30% of the
average daily net asset value of the outstanding Retail A Shares beneficially
owned by such customers.
The Trust has adopted a distribution and services plan (the "12b-1 Plan")
with respect to Retail B Shares of the Funds. Under the 12b-1 Plan, the Trust
may pay (i) the Distributor or another person for expenses and activities
primarily intended to result in the sale of Retail B Shares, (ii) institutions
for shareholder liaison services and (iii) institutions for administrative
support services. Currently, payments under the 12b-1 Plan for distribution
services are being made solely to broker-dealer affiliates of Fleet Bank and
payments under the 12b-1 Plan for shareholder liaison and administrative support
services are being made solely to Fleet Bank and its affilitates. Payments for
distribution expenses may not exceed an annual rate of 0.65% of the average
daily net assets attributable to each Fund's outstanding Retail B Shares. The
fees paid for shareholder liaison services and/or administrative support
services may not exceed the annual rates of 0.25% and 0.25%, respectively, of
the average daily net assets attributable to each Fund's outstanding Retail B
Shares owned of record or beneficially by customers of institutions. The Trust,
under 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 0.30% of the average daily net
asset value of Retail B Shares of the Fund owned of record or beneficially by
customers of institutions. For the year ended October 31, 1999, the Funds paid
fees under the Services Plan and 12b-1 Plan as follows:
12b-1 Plan
Services ----------
Plan Services Distribution
---- -------- ------------
Asset Allocation $1,052,992 $ 206,080 $ 499,231
Equity Income 623,725 4,260 9,488
Growth and Income 678,795 166,729 400,239
Strategic Equity 18,350 2,803 6,114
Equity Value 759,127 83,125 190,927
Equity Growth 1,093,512 147,791 346,626
International Equity 204,149 1,784 6,058
Small Cap Value 242,067 1,980 4,653
Small Company Equity 226,778 33,113 80,055
The Trust has adopted a distribution plan (the "A Prime Shares Plan") with
respect to A Prime Shares of the Funds. Under the A Prime Shares Plan, the Trust
may pay the Distributor or another person for expenses and activities primarily
intended to result in the sale of A Prime Shares. Payments by the Trust under
the A Prime Shares Plan may not exceed the annual rate of 0.30% of the average
daily net assets attributable to each Fund's outstanding A Prime Shares. The
Trust, under direction of the Board of Trustees, is currently limiting each
Fund's payments under the A Prime Shares Plan to an annual rate of not more than
0.25% (on an annualized basis) of the average daily net asset value of each
Fund's outstanding A Prime Shares.
The Trust has adopted a distribution and services plan (the "B Prime
Shares Plan") with respect to the B Prime Shares of the Funds. Under the B Prime
Shares Plan, the Trust may pay (i) the Distributor or another person for
expenses and activities primarily intended to result in the sale of B Prime
Shares, (ii) institutions for shareholder liaison services, and (iii)
institutions for administrative support services. Payments for distribution
expenses may not exceed the annual rate of 0.75% of the average daily net assets
attributable to each Fund's outstanding B Prime 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 B Prime
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 B
Prime Shares Plan to an aggregate fee of not more than 0.25% of the average
daily net asset value of B Prime Shares owned of record or beneficially by the
customers of institutions. For the
84
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
year ended October 31, 1999, the Funds paid fees under the A Prime Shares Plan
and B Prime Shares Plan as follows:
A Prime B Prime Shares Plan
----------- -------------------
Shares Plan Services Distribution
----------- -------- ------------
Asset Allocation $ 438 $ 754 $2,263
Growth andIncome 264 137 412
Equity Growth 184 268 806
International Equity N/A 537 1,640
Small Cap Value 357 349 1,046
Retail A Shares, Retail B Shares, Trust Shares, A Prime Shares and B Prime
Shares of the Funds each bear series specific transfer agent charges based upon
the number of shareholder accounts for each series. In addition, Trust Shares
also bear additional transfer agency fees in order to compensate Investor
Services Group for payments made to Fleet Bank, an affiliate of the Investment
Advisor, for performing certain sub-account and administrative functions on a
per account basis with respect to Trust Shares held by defined contribution
plans. These additional fees are based on the number of underlying participant
accounts. For the year ended October 31, 1999, transfer agent charges for each
series were as follows:
Retail A Retail B Trust
-------- -------- -----
Asset Allocation $515,481 $133,280 $535,703
Equity Income 314,763 5,728 13,783
Growth and Income 491,381 133,578 462,089
Strategic Equity 21,328 4,234 83
Equity Value 499,802 73,714 363,963
Equity Growth 732,709 151,640 598,748
International Equity 240,531 6,583 278,950
Small Cap Value 342,571 7,464 128,618
Small Company Equity 334,373 60,742 465,455
A Prime B Prime
------- -------
Asset Allocation $ 244 $ 530
Growth and Income 161 156
Equity Growth 115 348
International Equity 73 291
Small Cap Value 330 804
Certain officers of the Trust are officers of the Administrator. Such
officers receive no compensation from the Trust for serving in their respective
roles. No officer, director or employee of the Investment Advisor serves as an
officer, trustee or employee of the Trust. Effective May 28, 1999, each Trustee
is entitled to receive for services as a trustee of the Trust, The Galaxy VIP
Fund ("VIP") and Galaxy Fund II ("Galaxy II") an aggregate fee of $45,000 per
annum plus certain other fees for attending or participating in meetings as well
as reimbursement for expenses incurred in attending meetings. Prior to May 28,
1999, each Trustee was entitled to receive for services as a trustee of the
Trust, VIP and Galaxy II an aggregate fee of $40,000 per annum plus certain
other fees for attending or participating in meetings as well as reimbursement
for expenses incurred in attending meetings. The Chairman of the Boards of
Trustees and the President and Treasurer of the Trust, VIP and Galaxy II are
also entitled to additional fees for their services in these capacities. These
fees are allocated among the funds of the Trust, VIP and Galaxy II, based on
their relative net assets.
Each Trustee is eligible to participate in The Galaxy Fund/The Galaxy VIP
Fund/Galaxy Fund II Deferred Compensation Plan (the "Plan"), an unfunded,
non-qualified deferred compensation plan. The Plan allows each trustee to defer
receipt of all or a percentage of fees which otherwise would be payable for
services performed.
Expenses for the year ended October 31, 1999 include legal fees paid to
Drinker Biddle & Reath LLP. A partner of that firm is Secretary to the Trust.
Pursuant to procedures adopted by the Board of Trustees and in accordance
with the Investment Company Act of 1940, as amended, certain funds placed a
portion of their portfolio transactions with Quick & Reilly Institutional
Trading, a division of Fleet Securities, Inc., an affiliate of the Funds'
Investment Advisor. The commissions paid to Quick & Reilly Institutional Trading
for the year ended October 31, 1999 were as follows:
Asset Allocation $141,443
Equity Income 232,329
Growth and Income 129,843
Equity Value 860,618
Strategic Equity 11,375
Equity Growth 157,771
Small Company Equity 7,380
Small Cap Value 14,000
4. Waiver of Fees and Reimbursement of Expenses
Fleet 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 waivers and/or expense reimbursements at any time. For
the year ended October 31, 1999, Fleet and/or its affiliates and/or the
Administrator waived fees and/or reimbursed expenses with respect to the Funds
as follows:
Fund Fees Waived Expenses Reimbursed
- -------------------- ----------- -------------------
Asset Allocation $ 764 $ --
Equity Income 500 3,274
Growth and Income 306 255,584
Strategic Equity 166,409 17,809
Equity Value -- 4,444
Equity Growth 453 17,017
International Equity 1,219,744 1,764
Small Cap Value 4,738 244,045
Small Company Equity -- 33,020
85
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Notes to Financial Statements
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 thirty-one 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 the Fund
bear the expense of payments under the Services Plan, Retail B Shares of the
Fund bear the expense of payments under the 12b-1 Plan, A Prime Shares of the
Fund bear the expense of payments under the A Prime Shares Plan, B Prime Shares
of the Fund bear the expense of payments under the B Prime Shares Plan and Trust
Shares, Retail A Shares, Retail B Shares, A Prime Shares and B Prime Shares of
the 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 year ended October 31, 1999 were as follows:
<TABLE>
<CAPTION>
Purchases Sales
-------------------------------- --------------------------------
Fund U.S. Government Other U.S. Government Other
- ---- --------------- ------------ --------------- ------------
<S> <C> <C> <C> <C>
Asset Allocation ... $567,168,752 $392,808,691 $505,089,232 $345,877,161
Equity Income ...... 2,059,623 113,689,419 3,078,547 129,416,746
Growth and Income .. -- 109,729,611 -- 109,505,584
Strategic Equity ... -- 66,634,452 -- 58,931,943
Equity Value ....... -- 432,874,193 -- 465,287,198
Equity Growth ...... -- 746,175,354 -- 703,573,594
International Equity -- 258,586,270 -- 213,722,322
Small Cap Value .... -- 170,380,640 -- 122,177,106
Small Company Equity -- 351,709,401 -- 403,408,733
</TABLE>
The aggregate gross unrealized appreciation and depreciation, net
unrealized appreciation (depreciation) and cost for all securities as computed
on a federal income tax basis, at October 31, 1999 for each Fund is as follows:
<TABLE>
<CAPTION>
Fund Appreciation (Depreciation) Net Cost
- ---- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Asset Allocation ... $ 142,634,899 $ (22,816,357) $ 119,818,542 $ 629,227,087
Equity Income ...... 67,779,746 (14,941,341) 52,838,405 283,544,720
Growth and Income .. 151,441,382 (50,738,562) 100,702,820 504,431,100
Strategic Equity ... 6,848,959 (10,811,686) (3,962,727) 84,973,877
Equity Value ....... 110,634,761 (28,104,463) 82,530,298 481,783,361
Equity Growth ...... 614,280,106 (30,600,728) 583,679,378 991,244,076
International Equity 175,895,738 (27,717,372) 148,178,366 449,135,536
Small Cap Value .... 41,497,514 (68,080,761) (26,583,247) 363,938,451
Small Company Equity 88,975,338 (41,942,154) 47,033,184 285,335,699
</TABLE>
At October 31, 1999, the Small Company Equity Fund had capital loss
carryforwards of $33,481,372 and $2,671,948, which expire in 2006 and 2007,
respectively.
86
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- --------------------------------------------------------------------------------
Notes to Financial Statements
7. Foreign Securities
Each Fund may purchase securities of foreign issuers. Investing in
securities of foreign issuers involves special risks not typically associated
with investing in securities of U.S. issuers. The risks include possible
revaluation of currencies, less complete financial information about companies
and possible future adverse political and economic developments. Moreover,
securities of many foreign issuers and their markets may be less liquid and
their prices more volatile than those of securities of comparable U.S. issuers.
8. Tax Information (unaudited)
During the fiscal year ended October 31, 1999, the following Funds made
distributions from long-term capital gains:
Long-Term Gains
Fund Paid
- --------------- ---------------
Asset Allocation Fund ................................ $15,703,104
Equity Income Fund ................................... 31,283,250
Growth and Income Fund ............................... 30,329,285
Equity Value Fund .................................... 18,809,148
Equity Growth Fund ................................... 90,080,504
Small Cap Value Fund ................................. 25,019,942
International Equity Fund ............................ 11,553,218
During the fiscal year ended October 31, 1999, the Funds earned income
from direct obligations of the U.S. Government as follows:
U.S. Government
Fund Income
- --------------- ---------------
Asset Allocation Fund .................................... 0.21%
Equity Income Fund ....................................... 0.22
Growth and Income Fund ................................... 0.16
Equity Value Fund ........................................ 0.07
Strategic Equity Fund .................................... 2.60
Equity Growth Fund ....................................... 0.13
Small Cap Value Fund ..................................... 0.39
Small Company Equity Fund ................................ 0.10
International Equity Fund ................................ 0.06
Appropriate tax information detailing U.S. Government income percentages
on a calendar year basis will accompany your year-end tax statement. As each
state's rules on the exemption of this income differ, please consult your tax
advisor regarding specific tax treatment.
9. Subsequent Event - Change in Control of Administrator and Change in
Distributor (unaudited)
On December 1, 1999, PFPC Trust Company, a wholly-owned subsidiary of PFPC
Worldwide, Inc. and an indirect wholly-owned subsidiary of PNC Bank Corp.,
acquired all of the outstanding stock of Investor Services Group ( the
"Transation"). On that same date and as part of the Transaction, PFPC Inc., an
indirect wholly-owned subsidiary of PNC Bank Corp., was merged into Investor
Services Group, which then changed its name to PFPC Inc.
In connection with the Transaction, on December 1, 1999, Provident
Distributors, Inc. became the distributor of the Trust's shares.
87
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders and Board of Trustees of
The Galaxy Fund:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of the Asset Allocation Fund, Equity Income Fund,
Growth and Income Fund, Strategic Equity Fund, Equity Value Fund, Equity Growth
Fund, International Equity Fund, Small Cap Value Fund and Small Company Equity
Fund (nine of the portfolios constituting The Galaxy Fund) as of October 31,
1999, and the related statements of operations, the statements of changes in net
assets, and the financial highlights for the year then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit. The statements of
changes in net assets for the year ended October 31, 1998 and the financial
highlights for the four years then ended were audited by other auditors whose
report dated December 23, 1998 expressed an unqualified opinion on those
statements and financial highlights.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in financial statements and
financial highlights. Our procedures included confirmation of securities owned
as of October 31, 1999 by correspondence with the custodian and brokers or other
appropriate auditing procedures where replies from brokers were not received. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the of
the Asset Allocation Fund, Equity Income Fund, Growth and Income Fund, Strategic
Equity Fund, Equity Value Fund, Equity Growth Fund, International Equity Fund,
Small Cap Value Fund and Small Company Equity Fund portfolios of The Galaxy Fund
at October 31, 1999, the results of their operations, changes in their net
assets and their financial highlights for the year then ended, in conformity
with generally accepted accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
December 13, 1999
<PAGE>
-----------------
[LOGO] Galaxy Funds BULK RATE
P.O. Box 6520 U.S. POSTAGE PAID
Providence, RI 02940-6520 PERMIT NO. 105
NORTH READING, MA
-----------------
ANEQU (January 1, 2000)
