[FRONT COVER]
[COVER GRAPHICS OF ACORN, COLUMN, GRADUATION CAP, AND INTERLOCKED HANDS]
Semi-Annual Report
April 30, 2000
Galaxy Tax Exempt Bond Funds
Galaxy Funds
Galaxy Tax-Exempt Bond Fund
Galaxy New Jersey Municipal
Bond Fund
Galaxy New York Municipal
Bond Fund
Galaxy Connecticut Municipal
Bond Fund
Galaxy Massachusetts Municipal
Bond Fund
Galaxy Rhode Island Municipal
Bond Fund
[GALAXY FUNDS LOGO]
<PAGE>
CHAIRMAN'S MESSAGE
Dear Shareholder:
Enclosed is the semi-annual report for the Galaxy Tax-Exempt Bond Funds
that covers the six months ended April 30, 2000. The report includes a Market
Overview that explains the different economic and market factors influencing
municipal bond investments during this time. Following the Market Overview are
individual reviews that describe how Fleet Investment Advisors Inc. managed each
of the Funds' portfolios in this climate. Financial statements and a list of
portfolio holdings for each of the Funds as of April 30, 2000 appear at the end
of the report.
U.S. growth remained strong over the past six months, surprising most
observers, but inflation remained relatively moderate. Concerned that the robust
pace of growth would eventually cause higher inflation, the Federal Reserve (the
"Fed") imposed three hikes in short-term interest rates of 25 basis points
(0.25%) each. Although the yields on shorter-maturity bonds rose in response,
yields for longer maturities fell. With investors uncertain about how far
interest rates would rise, and when the Fed would act, the prices for bonds of
all maturities became more volatile.
Of course, market volatility, while unsettling, is part of the normal ups
and downs that occur with most investments. This is important to remember with
all the talk about the effect of securities from "new economy" industries, like
technology, on the market behavior of both bonds and stocks. In recent months
the stock market has been caught up in "momentum investing," in which the prices
for technology shares have outstripped their fundamentals. Most analysts
believe, however, that there will always be demand for investments in the "old
economy" sectors represented by industrial and retail firms, as well as other
asset classes. Such demand was clearly evident in the final weeks of the
reporting period, when investors shifted out of technology stocks into both
other equities and bonds.
During this time, many investors decided to stick with the portfolio
strategies that they had set to meet long-term investment goals. One strategy
that has served investors well over time is diversification. By using the broad
array of portfolios offered by the Galaxy Funds, you can reduce the impact of
market volatility on your returns. You may also be able to stabilize returns by
diversifying across a range of asset classes and market sectors. Because
individual classes and sectors often move in different directions, such
diversification improves the chance that some part of your portfolio will
perform well within a given period.
With many stock, bond and money market funds from which to choose, the
Galaxy Funds can provide much of the diversification you need. Following the
completion of the reorganization of the Boston 1784 Funds into the Galaxy Funds
in June, you will have even more funds from which to choose. Your financial
professional can help you select a mix of funds that suits your particular
investment goals and make sure that your asset allocations remain in place
through any major market changes.
If you have any questions about the information in this report, please
contact the Galaxy Information Center toll-free at 1-877-BUY-GALAXY
(1-877-289-4252). You can also visit one of our investment professionals located
at Fleet Bank branches.
Sincerely,
/S/ SIGNATURE OMITTED
Dwight E. Vicks, Jr.
Chairman of the Board of Trustees
[BEGIN SIDEBAR]
MUTUAL FUNDS:
(BULLET) ARE NOT BANK DEPOSITS
(BULLET) ARE NOT FDIC INSURED
(BULLET) ARE NOT OBLIGATIONS OF FLEET BANK
(BULLET) ARE NOT GUARANTEED BY FLEET BANK
(BULLET) ARE SUBJECT TO INVESTMENT RISK INCLUDING POSSIBLE LOSS OF PRINCIPAL
AMOUNT INVESTED
[END SIDEBAR]
<PAGE>
MARKET OVERVIEW
TAX-EXEMPT BOND MARKET OVERVIEW
BY FLEET INVESTMENT ADVISORS INC.
In the face of accelerating economic growth that threatened higher
inflation, the Federal Reserve ("the Fed") boosted short-term interest rates by
75 basis points (0.75%) in the past six months. The shape of the yield curve
changed dramatically over this time, with the difference in yields between bonds
maturing in one year and those maturing in 30 years decreasing from 209 basis
points to 150 basis points. This occurred as the yields for bonds maturing in
less than seven years rose between 26 to 53 basis points and the yields for
intermediate and longer maturities fell.
Because investors were uncertain exactly when the Fed might raise rates,
and how large the increases would be, the volatility in bond prices increased
significantly. By adjusting the mix of investments and maturities in the Galaxy
Tax-Exempt Bond Funds to take advantage of these and other market changes, we
helped the Funds make the most of this environment.
STRONG ECONOMY PROMPTS THREE RATE HIKES
When the reporting period began on November 1, 1999, 30-year Treasury bonds
were yielding 6.16%, the Lehman Brothers Municipal Bond Index was yielding
5.32%, and the annual rate of inflation was about 2.6%. Following a growth rate
of 5.5% in the third quarter of 1999, the Gross Domestic Product ("GDP"), which
measures the output of U.S. goods and services, improved by 7.3% in the fourth
quarter.
Although inflation was still relatively moderate, the Fed worried that the
very strong pace of GDP growth would spark higher inflation down the road.
Recognizing that the short-term rate hikes of 25 basis points each imposed in
June and August of 1999 had not yet caused growth to slow, the Fed boosted rates
another 25 basis points on November 16. In response to this rate hike, and in
anticipation of future hikes to come, the yield for long-term Treasuries rose to
6.48% by December 31, 1999, and the yield for the Lehman Brothers Municipal Bond
Index rose to 5.46%.
Economic growth remained robust in the first quarter of 2000, with an
estimated 5.4% annualized gain in GDP. Concerned that tight employment and
rising energy costs would put further upward pressure on inflation, the Fed
imposed two more rate hikes of 25 basis points each on February 2 and March 21.
This brought the total increase in short-term rates since June 1999 to 125 basis
points and represented the highest level of short-term rates since April 1991.
Despite the Fed's actions, economic growth showed little sign of slowing.
While the higher rates were increasing costs for many companies, continued price
gains for stocks had created a "wealth effect" that offset the economic impact
of the higher costs. By March, the high level of growth had boosted the annual
rate of inflation to 3.7%. With investors expecting further rate hikes from the
Fed, short-term yields continued to rise.
After increasing through the middle of January, however, long-term yields
began to fall. This was due in large part to a federal budget surplus that was
larger than many investors had expected. Because of the surplus, the Treasury
Department had less need to issue new debt and began to buy back many
longer-maturity bonds.
Meanwhile, the demand for Treasury bonds remained strong, as investors
looked for rising interest rates to weaken corporate profits. With less supply
and heavy demand, the prices for long-term Treasuries rallied and their yields
fell through most of April. Yields for other long-term bonds drifted lower in
response. When the reporting period ended on April 30, 2000, long-term Treasury
bonds were yielding 5.96%, down from a high of 6.75% in January, and the Lehman
Brothers Municipal Bond Index had a yield of 5.50%.
[BEGIN SIDEBAR]
"ECONOMIC GROWTH REMAINED ROBUST IN THE FIRST QUARTER OF 2000, WITH AN ESTIMATED
5.4% ANNUALIZED GAIN IN GDP."
[END SIDEBAR]
2
<PAGE>
MAKING THE MOST OF HIGHER YIELDS
Because of the significant reduction in supply, Treasury bonds generally
outperformed other fixed-income issues, including municipal bonds. Municipal
bonds performed well relative to other non-Treasury sectors, however, due to a
favorable balance of demand and supply. Although demand from institutional
investors decreased, particularly for longer-maturity issues, individual
investors added municipals to their portfolios at a strong pace. At the same
time, municipal supplies were shrinking, with new-issue volume down more than
30% from 1999 for the first four months of 2000 alone. This was due primarily to
a lack of refundings, which was caused by higher interest rates.
In such a market and economic environment, the Galaxy Tax-Exempt Bond Funds
benefited from our emphasis on investments with good liquidity, strong credit
quality and premium coupons. Of further help was extra attention to shorter
maturities at the start of the period, which improved our ability to add
higher-yielding bonds once concerns about potential Y2K computer problems had
passed.
HIGHER RATES LIKELY
Unless economic growth slows substantially, we expect the Fed to continue
raising interest rates through the summer of 2000. While this would keep
downward pressure on bond prices, prices could benefit if the stock market
remains volatile and investors seek stability in fixed-income issues. Additional
upward pressure on long-term bond prices could come from further reductions in
the supplies of longer-term Treasuries, as well as the prospect of slower growth
with lower inflation.
We believe municipal bonds should perform relatively well as a result of
both reduced supplies and good demand from investors due to generally attractive
yields. At current yield levels, intermediate- to longer-maturity municipal
bonds offer taxable equivalent yields between 9% and 10% for investors in the
top federal income tax brackets. Given the current makeup of municipal demand,
we would expect the municipal yield curve to remain positively sloped, unlike
the yield curve for Treasury bonds.
[BEGIN SIDEBAR]
"WE BELIEVE MUNICIPAL BONDS SHOULD PERFORM RELATIVELY WELL AS A RESULT OF BOTH
REDUCED SUPPLIES AND GOOD DEMAND FROM INVESTORS DUE TO GENERALLY ATTRACTIVE
YIELDS."
[END SIDEBAR]
3
<PAGE>
PERFORMANCE AT-A-GLANCE
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS - TRUST SHARES
AS OF APRIL 30, 2000 6 MONTHS(DAGGER) 1 YEAR 5 YEARS LIFE OF FUND
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------
Tax-Exempt Bond Fund
(INCEPTION DATE 12/30/91) 2.75% -1.98% 5.14% 5.70%
..................................................................................................................
New Jersey Municipal Bond Fund
(INCEPTION DATE 4/3/98) 1.96 -2.10 N/A 1.56
..................................................................................................................
New York Municipal Bond Fund
(INCEPTION DATE 12/31/91) 3.21 -1.64 5.26 5.53
..................................................................................................................
Connecticut Municipal Bond Fund
(INCEPTION DATE 12/14/90) 2.37 -1.51 5.37 4.68
..................................................................................................................
Massachusetts Municipal Bond Fund
(INCEPTION DATE 12/31/91) 2.89 -2.02 5.20 4.45
------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS - RETAIL A SHARES**
AS OF APRIL 30, 2000 6 MONTHS(DAGGER) 1 YEAR 5 YEARS LIFE OF FUND
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------
Tax-Exempt Bond Fund
(INCEPTION DATE 12/30/91) -1.16% -5.82% 4.10% 5.16%
..................................................................................................................
New Jersey Municipal Bond Fund
(INCEPTION DATE 4/3/98) -1.92 -5.96 N/A -0.48
..................................................................................................................
New York Municipal Bond Fund
(INCEPTION DATE 12/31/91) -0.73 -5.49 4.26 4.91
..................................................................................................................
Connecticut Municipal Bond Fund
(INCEPTION DATE 12/14/90) -1.52 -5.40 4.35 3.95
..................................................................................................................
Massachusetts Municipal Bond Fund
(INCEPTION DATE 12/31/91) -1.04 -5.86 4.21 3.75
..................................................................................................................
Rhode Island Municipal Bond Fund
(INCEPTION DATE 12/20/94) -0.91 -5.07 4.49 5.09
------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
AVERAGE ANNUAL TOTAL RETURNS -- RETAIL B SHARES***
6-MONTH 6-MONTH 1 YEAR 1 YEAR LIFE OF FUND
RETURN BEFORE RETURN AFTER RETURN BEFORE RETURN AFTER RETURN BEFORE
CONTINGENT CONTINGENT CONTINGENT CONTINGENT CONTINGENT
DEFERRED SALES DEFERRED SALES DEFERRED SALES DEFERRED SALES DEFERRED SALES
AS OF APRIL 30, 2000 CHARGE DEDUCTED(DAGGER) CHARGE DEDUCTED*(DAGGER) CHARGE DEDUCTED CHARGE DEDUCTED* CHARGE DEDUCTED
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------------
Tax-Exempt Bond Fund
(INCEPTION DATE 3/4/96) 2.32% -2.68% -2.82% -7.50% 3.06%
----------------------------------------------------------------------------------------------------------------------------------
LIFE OF FUND
RETURN AFTER
CONTINGENT
DEFERRED SALES
AS OF APRIL 30, 2000 CHARGE DEDUCTED*
<S> <C>
------------------------------------------------
Tax-Exempt Bond Fund
(INCEPTION DATE 3/4/96) 2.85%
------------------------------------------------
<FN>
(DAGGER) Unannualized total returns
* As if shares were redeemed at end of period.
** 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 B Shares are subject to a 5.00% contingent deferred sales charge
if shares are redeemed within the first year. The charge decreases to
4.00%, 3.00%, 3,00%, 2.00% and 1.00% for redemptions made during the
second through sixth years, respectively. Retail B Shares automatically
convert to Retail A Shares after six years. Total returns are from the
date of inception.
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.
</FN>
</TABLE>
4
<PAGE>
PORTFOLIO REVIEWS
GALAXY TAX-EXEMPT BOND FUND
BY GLENN MIGLIOZZI, CFA
MANAGING DIRECTOR,
FIXED INCOME INVESTMENTS
[PHOTO OMITTED]
[BEGIN SIDEBAR]
GLENN MIGLIOZZI IS THE MANAGING DIRECTOR OF FIXED INCOME INVESTMENTS FOR FLEET
INVESTMENT ADVISORS INC. HE IS ALSO A MEMBER OF FLEET'S MUNICIPAL BOND PORTFOLIO
MANAGEMENT TEAM WHICH HAS MANAGED THE GALAXY TAX-EXEMPT BOND, NEW YORK MUNICIPAL
BOND, CONNECTICUT MUNICIPAL BOND, MASSACHUSETTS MUNICIPAL BOND AND RHODE ISLAND
MUNICIPAL BOND FUNDS SINCE 1996 AND THE GALAXY NEW JERSEY MUNICIPAL BOND FUND
SINCE IT COMMENCED OPERATIONS IN APRIL OF 1998.
[END SIDEBAR]
As bond yields edged higher in the past six months, fixed-income debt with
intermediate-term maturities held up better than their long-term counterparts.
This was a positive development for the Galaxy Tax-Exempt Bond Fund, which
emphasized intermediate-term bonds throughout much of the reporting period.
The Fund's Trust Shares earned a total return of 2.75% for the six months
ended April 30, 2000. Over the same time, Retail A Shares had a total return of
2.67% before deducting the maximum 3.75% front-end sales charge, and Retail B
Shares had a total return of 2.32% before deducting the maximum 5.00% contingent
deferred sales charge. (Please see the charts on page 4 for total returns after
deducting the front-end sales charge and the contingent deferred sales charge.)
Over the same time, the average general municipal bond fund followed by
Lipper Analytical Services ("Lipper"), a mutual fund performance tracking
service, had a total return of 2.05%, and the Lehman Brothers Municipal Bond
Index had a total return of 2.63%.
On April 30, 2000, the Fund's Trust Shares had a 30-day Securities and
Exchange Commission ("SEC") annualized yield of 4.75%. On the same date, Retail
A Shares of the Fund had a 30-day SEC annualized yield of 4.40%, and Retail B
Shares of the Fund had a 30-day SEC annualized yield of 3.91%. For shareholders
in the 39.6% federal income tax bracket, these equaled taxable yields of 7.86%,
7.28% and 6.47%, respectively.
STRATEGIES THAT HELPED PERFORMANCE
Early in the period, we raised cash in anticipation of an increase in
redemptions related to concerns about potential Y2K computer problems. This
strategy proved effective, as bond prices retreated in December. Once it became
apparent that Y2K would not materially impact the debt markets, we invested the
cash in bonds at attractive yields, which helped boost the level of income paid
to shareholders.
Our emphasis on premium-coupon bonds, which outperformed, further enhanced
returns. Avoiding discount bonds also helped, as these securities
underperformed. As rising interest rates drove bond prices lower at the start of
2000 and the final weeks of the reporting period, our decision to maintain a
slightly shorter duration than municipal bond funds with similar objectives
helped protect the value of Fund shares.
STAYING DEFENSIVE
Expecting higher interest rates in coming months, we intend to maintain our
current investment strategy. Once we believe growth has slowed enough for
interest rates to decline, we may lengthen the Fund's average-weighted maturity.
As always, we expect to remain focused on high-quality securities that can
enhance income for shareholders.
GALAXY TAX-EXEMPT BOND FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF APRIL 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
NORTH CENTRAL 12%
PACIFIC 8%
OTHER TERRITORIES 3%
SOUTH 28%
MOUNTAIN 7%
EAST 39%
CASH EQUIVALENTS &
NET OTHER ASSETS AND LIABILITIES 3%
GALAXY TAX-EXEMPT BOND FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
LEHMAN BROTHERS GALAXY TAX- GALAXY TAX- GALAXY TAX-
MUNICIPAL BOND EXEMPT BOND FUND EXEMPT BOND FUND EXEMPT BOND FUND
INDEX RETAIL A SHARES TRUST SHARES RETAIL B SHARES
<S> <C> <C> <C> <C>
12/30/91 10000 9625 10000
1992 10582 10062 10455
1993 12072 11635 12089
1994 11546 11082 11515
1995 13213 12657 13084 10000
1996 13967 13167 13742 9615
10/31/1997 15465 14153 14807 10398
10/31/1998 16705 15229 15970 11250
10/31/1999 16409 14817 15450 10889
4/30/2000 16841 15213 15876 11241
</TABLE>
* 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 2.00% CONTINGENT
DEFERRED SALES CHARGE (APPLICABLE TO SHARES REDEEMED DURING THE FIFTH YEAR
AFTER PURCHASE) AS IF SHARES WERE REDEEMED ON APRIL 30, 2000. THE LEHMAN
BROTHERS MUNICIPAL BOND INDEX IS AN UNMANAGED INDEX IN WHICH INVESTORS
CANNOT INVEST. RESULTS FOR THE INDEX DO NOT REFLECT INVESTMENT MANAGEMENT
FEES AND OTHER EXPENSES INCURRED BY THE FUND.
5
<PAGE>
PORTFOLIO REVIEWS
GALAXY NEW JERSEY MUNICIPAL BOND FUND
BY GLENN MIGLIOZZI, CFA
MANAGING DIRECTOR,
FIXED INCOME INVESTMENTS
In an environment of rising bond yields during the past six months, the
Galaxy New Jersey Municipal Bond Fund benefited from its emphasis on
higher-coupon issues that recorded relatively strong investment results. Of
further help was an emphasis on intermediate-term maturities, which also
outperformed.
For the six months ended April 30, 2000, the Fund's Trust Shares had a
total return of 1.96%. Over the same time, Retail A Shares of the Fund had a
total return of 1.88% before deducting the maximum 3.75% front-end sales charge.
(Please see the chart on page 4 for total returns after deducting the front-end
sales charge.) The average New Jersey municipal bond fund tracked by Lipper had
a total return of 1.78% for the same period, and the Lehman Brothers Municipal
Bond Index had a total return of 2.63%.
On April 30, 2000, the Fund's Trust Shares had a 30-day SEC annualized
yield of 4.40%. On the same date, Retail A Shares of the Fund had a 30-day SEC
annualized yield of 4.30% These equaled taxable yields of 7.78% and 7.60%,
respectively, for taxpayers in the 39.6% federal income tax bracket who live in
New Jersey.
OUR INVESTMENT APPROACH
Early in the period, when concerns about potential Y2K computer problems
raised the threat of higher redemptions, we increased the Fund's cash reserves.
When Y2K proved to be a non-event, we put the cash back to work in bonds with
attractive yields that increased income for shareholders.
When investor concerns turned to the strength of the U.S. economy, and
interest rates began to rise, our emphasis on intermediate-term maturities
proved effective as these securities outperformed long-term issues.
Our underweighting in municipals within the hospital sector, which
continued to underperform due to worries over health care earnings, also helped
the Fund's returns. In keeping with our overall strategy, we maintained our
emphasis on high-quality securities throughout the period.
STAYING THE COURSE
We intend to maintain our current investment approach over the next few
months, in anticipation of higher interest rates ahead. If the higher rates slow
growth later this year, and rates then show signs of retreating, we intend to
extend the average duration of investments in the Fund's portfolio. As before,
we expect to maintain a portfolio of high-quality investments that can provide
an attractive after-tax yield to shareholders.
GALAXY NEW JERSEY MUNICIPAL BOND FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF APRIL 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
NEW JERSEY 88%
PUERTO RICO 9%
CASH EQUIVALENTS &
NET OTHER ASSETS AND LIABILITIES 3%
GALAXY NEW JERSEY MUNICIPAL BOND FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
LEHMAN BROTHERS GALAXY NEW GALAXY NEW
MUNICIPAL BOND JERSEY MUNICIPAL BOND JERSEY MUNICIPAL BOND
INDEX FUND-RETAIL A SHARES FUND-TRUST SHARES
04/03/1998 10000 9628 10000
10/31/1998 10464 10043 10448
10/31/1999 10279 9718 10128
04/30/2000 10549 9901 10327
* SINCE INCEPTION ON 4/3/98. PERFORMANCE FIGURES FOR RETAIL A SHARES INCLUDE
THE EFFECT OF THE MAXIMUM 3.75% FRONT-END SALES CHARGE. THE LEHMAN BROTHERS
MUNICIPAL BOND INDEX IS AN UNMANAGED INDEX IN WHICH INVESTORS CANNOT
INVEST. RESULTS FOR THE INDEX DO NOT REFLECT INVESTMENT MANAGEMENT FEES AND
OTHER EXPENSES INCURRED BY THE FUND. RESULTS FOR THE INDEX ARE CALCULATED
SINCE 4/30/98 BECAUSE THE INDEX RETURNS ARE CALCULATED AT MONTH-END ONLY.
6
<PAGE>
PORTFOLIO REVIEWS
GALAXY NEW YORK MUNICIPAL BOND FUND
BY GLENN MIGLIOZZI, CFA
MANAGING DIRECTOR,
FIXED INCOME INVESTMENTS
In an environment of rising yields and falling bond prices during the
six-month reporting period, increasing demand and relatively light supply
enabled New York tax-exempt securities to hold up reasonably well. The Galaxy
New York Municipal Bond Fund further benefited from our decision to emphasize
intermediate-term municipals, which outperformed longer-term issues in this
environment. The Fund's investments in higher-coupon municipals also contributed
positively to returns.
For the six months ended April 30, 2000, the Fund's Trust Shares had a
total return of 3.21%. During the same time, Retail A Shares of the Fund
returned 3.12% before deducting the maximum 3.75% front-end sales charge.
(Please see the chart on page 4 for total returns after deducting the front-end
sales charge.) Over this period, the average New York tax-exempt bond fund
tracked by Lipper returned 2.36%, and the Lehman Brothers Municipal Bond Index
returned 2.63%.
On April 30, 2000, the Fund's Trust Shares had a 30-day SEC annualized
yield of 4.66%. On the same date, Retail A Shares of the Fund had a 30-day SEC
annualized yield of 4.31%. These are the same as taxable yields of 8.28% and
7.66%, respectively, for shareholders in the 39.6% federal income tax bracket
who live in New York.
EFFECTIVE STRATEGIES
In addition to a focus on intermediate-maturity and higher-coupon issues,
several other strategies proved quite effective. Early in the period, we
increased the Fund's cash position due to concerns that potential Y2K computer
problems would lead to a stronger demand for liquidity. When this did not
materialize, we invested the cash in high-quality securities with attractive
yields, which helped boost income for shareholders.
Another strategy that helped performance was our decision to maintain an
underweighting in bonds from the hospital sector. Throughout the period,
investor concerns over the earnings growth potential of health maintenance
organizations weighed heavily on this group. Our emphasis on municipals that
could not be called by their issuers also proved beneficial to shareholders.
ANTICIPATING FURTHER RATE HIKES
Anticipating further rate hikes to come, we expect to maintain these
strategies in the months ahead. An emphasis on bonds with high credit quality
should also help returns once the higher rates slow growth, and yields begin to
head back down.
GALAXY NEW YORK MUNICIPAL BOND FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF APRIL 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
NEW YORK 94%
OTHER 3%
CASH EQUIVALENTS &
NET OTHER ASSETS AND LIABILITIES 3%
GALAXY NEW YORK MUNICIPAL BOND FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
LEHMAN BROTHERS GALAXY NEW GALAXY NEW
MUNICIPAL BOND YORK MUNICIPAL BOND YORK MUNICIPAL BOND
INDEX FUND-RETAIL A SHARES FUND-TRUST SHARES
12/30/1991 10000 9625 10000
1992 10582 9993 10383
1993 12072 11558 12009
1994 11546 10870 11294
1995 13213 12395 12901
1996 13967 12928 13488
10/31/1997 15465 13954 14590
10/31/1998 16705 15021 15731
10/31/1999 16409 14462 15175
04/30/2000 16841 14913 15661
* SINCE INCEPTION ON 12/30/91. PERFORMANCE FIGURES FOR RETAIL A SHARES
INCLUDE THE EFFECT OF THE MAXIMUM 3.75% FRONT-END SALES CHARGE. THE LEHMAN
BROTHERS MUNICIPAL BOND INDEX IS AN UNMANAGED INDEX IN WHICH INVESTORS
CANNOT INVEST. RESULTS FOR THE INDEX DO NOT REFLECT INVESTMENT MANAGEMENT
FEES AND OTHER EXPENSES INCURRED BY THE FUND.
7
<PAGE>
PORTFOLIO REVIEWS
GALAXY CONNECTICUT MUNICIPAL BOND FUND
BY GLENN MIGLIOZZI, CFA
MANAGING DIRECTOR,
FIXED INCOME INVESTMENTS
During the six months ended April 30, 2000, low supply and high demand
helped to offset the impact of rising interest rates on the value of Connecticut
municipal securities. In this environment, the Galaxy Connecticut Municipal Bond
Fund also benefited from an emphasis on higher coupons and a shorter than
average duration for its investments. When interest rates rise, the prices of
longer-term issues generally fall more than the prices for shorter maturities.
For the six months ended April 30, 2000, the Fund's Trust Shares earned a
total return of 2.37%. Before deducting the maximum 3.75% front-end sales
charge, Retail A Shares of the Fund earned a total return of 2.28%. (Please see
the chart on page 4 for total returns after deducting the front-end sales
charge.) During the same period, the average Connecticut municipal bond fund
tracked by Lipper returned 2.00%, and the Lehman Brothers Municipal Bond Index
returned 2.63%.
On April 30, 2000, the Fund's Trust Shares had a 30-day SEC annualized
yield of 4.58%. On the same date, Retail A Shares of the Fund had a 30-day SEC
annualized yield of 4.22%. These equaled taxable yields of 7.94% and 7.32%,
respectively, for shareholders in the 39.6% federal income tax bracket who live
in Connecticut.
HIGH COUPONS ENHANCE RESULTS
Early in the period, we focused our efforts on protecting the Fund from the
market impact of concerns about potential Y2K computer problems. In this
environment we raised our cash exposure but maintained our emphasis on
high-coupon securities. This strategy proved successful, given the relatively
strong performance of those issues.
When investor concerns turned to the strength of the U.S. economy, and
interest rates began to rise, the Fund benefited from an emphasis on
intermediate-term maturities, which outperformed longer-term issues.
Our decision to invest in high-quality securities, many of which could not
be called in by their issuers, further enhanced returns, as these securities
also recorded superior results. The Fund further benefited from an
underweighting in municipals from the hospital sector, which performed poorly on
worries over weak health care earnings.
PREPARING FOR SLOWER GROWTH
If higher interest rates slow growth later this year, as we expect, bonds
with longer maturities should outperform as yields fall and prices rally. Given
this backdrop, we intend to maintain a slightly longer average duration than the
Fund's benchmark and to use periodic upticks in interest rates as opportunities
to increase investments in longer-term securities. As before, we plan to
maintain a portfolio of high-quality securities with attractive yields.
GALAXY CONNECTICUT MUNICIPAL BOND FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF APRIL 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
OTHER TERRITORIES 8%
CONNECTICUT 89%
CASH EQUIVALENTS &
NET OTHER ASSETS AND LIABILITIES 3%
GALAXY CONNECTICUT MUNICIPAL BOND FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
LEHMAN BROTHERS GALAXY CONNECTICUT GALAXY CONNECTICUT
MUNICIPAL BOND MUNICIPAL BOND MUNICIPAL BOND
INDEX FUND-RETAIL A SHARES FUND-TRUST SHARES
03/16/1993 10000 9625 10000
1993 10697 10183 10580
1994 10231 9532 9902
1995 12594 10956 11413
1996 12952 11429 11930
1997 14776 12327 12891
10/31/1998 15961 13261 13898
10/31/1999 15678 12880 13526
04/30/2000 16090 13174 13847
* SINCE INCEPTION ON 3/16/93. PERFORMANCE FIGURES FOR RETAIL A SHARES INCLUDE
THE EFFECT OF THE MAXIMUM 3.75% FRONT-END SALES CHARGE. THE LEHMAN BROTHERS
MUNICIPAL BOND INDEX IS AN UNMANAGED INDEX IN WHICH INVESTORS CANNOT
INVEST. RESULTS FOR THE INDEX DO NOT REFLECT INVESTMENT MANAGEMENT FEES AND
OTHER EXPENSES INCURRED BY THE FUND. RESULTS FOR THE INDEX ARE CALCULATED
SINCE 3/31/93 BECAUSE THE INDEX RETURNS ARE CALCULATED AT MONTH-END ONLY.
8
<PAGE>
PORTFOLIO REVIEWS
GALAXY MASSACHUSETTS MUNICIPAL BOND FUND
BY GLENN MIGLIOZZI, CFA
MANAGING DIRECTOR,
FIXED INCOME INVESTMENTS
As bond yields rose on a wave of strong economic data during the six months
ended April 30, 2000, the Galaxy Massachusetts Municipal Bond Fund fared
generally well, thanks to several strategies that helped boost returns and limit
downside risk. In addition to a focus on intermediate-term securities and
high-quality credits with relatively attractive income characteristics, the Fund
benefited from its decision to remain underweighted in the hospital sector.
Financial problems experienced by Harvard-Pilgrim, a Massachusetts-based health
maintenance organization, had a negative spillover effect on bonds throughout
the hospital sector.
For the period ended April 30, 2000, the Fund's Trust Shares earned a total
return of 2.89%. Over the same time, Retail A Shares of the Fund had a total
return of 2.81% before deducting the maximum 3.75% front-end sales charge.
(Please see the chart on page 4 for total returns after deducting the front-end
sales charge.) These returns compared to 2.09% for the average Massachusetts
municipal bond fund tracked by Lipper and 2.63% for the benchmark Lehman
Brothers Municipal Bond Index.
On April 30, 2000, the Fund's Trust Shares had a 30-day SEC annualized
yield of 4.86% and Retail A Shares of the Fund had a 30-day SEC annualized yield
of 4.52%. These equaled taxable yields of 8.55% and 7.95% for shareholders in
the 39.6% federal income tax bracket who live in Massachusetts.
FOCUSING ON INTERMEDIATE-TERM ISSUES
In November 1999, when the reporting period began, we prepared for a
possible increase in redemptions due to concerns about potential Y2K computer
problems by raising the Fund's cash position. Once those concerns abated, we put
the cash back into municipals with relatively attractive yields, which helped
enhance the income paid to shareholders.
When concerns over a potentially overheating economy became the more
important issue, Fund returns benefited from our decision to emphasize
intermediate-term bonds, which outperformed their long-term counterparts. Our
overweighting in higher-coupon bonds and issues with strong credit quality also
helped returns, thanks to their relatively good results.
LOOKING AHEAD
Given our expectation that the Fed is likely to continue raising interest
rates in the months ahead, we intend to maintain our current duration strategy
and our emphasis on high-quality securities. In the current environment, this
strategy should generate attractive yields and help protect the value of Fund
shares.
GALAXY MASSACHUSETTS MUNICIPAL BOND FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF APRIL 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
MASSACHUSETTS 93%
PUERTO RICO 5%
CASH EQUIVALENTS &
NET OTHER ASSETS AND LIABILITIES 2%
GALAXY MASSACHUSETTS MUNICIPAL BOND FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
LEHMAN BROTHERS GALAXY MASSACHUSETTS GALAXY MASSACHUSETTS
MUNICIPAL BOND MUNICIPAL BOND MUNICIPAL BOND
INDEX FUND-RETAIL A SHARES FUND-TRUST SHARES
03/12/1993 10000 9625 10000
1993 10584 10146 10542
1994 10231 9491 9861
1995 12594 10868 11312
1996 12952 11309 11795
10/31/1997 14776 12204 12746
10/31/1998 15961 13086 13692
10/31/1999 15678 12647 13257
04/30/2000 16090 13003 13641
* SINCE INCEPTION ON 3/12/93. PERFORMANCE FIGURES FOR RETAIL A SHARES INCLUDE
THE EFFECT OF THE MAXIMUM 3.75% FRONT-END SALES CHARGE. THE LEHMAN BROTHERS
MUNICIPAL BOND INDEX IS AN UNMANAGED INDEX IN WHICH INVESTORS CANNOT
INVEST. RESULTS FOR THE INDEX DO NOT REFLECT INVESTMENT MANAGEMENT FEES AND
OTHER EXPENSES INCURRED BY THE FUND. RESULTS FOR THE INDEX ARE CALCULATED
SINCE 3/31/93 BECAUSE THE INDEX RETURNS ARE CALCULATED AT MONTH-END ONLY.
9
<PAGE>
PORTFOLIO REVIEWS
GALAXY RHODE ISLAND MUNICIPAL BOND FUND
BY GLENN MIGLIOZZI, CFA
MANAGING DIRECTOR,
FIXED INCOME INVESTMENTS
Increasing demand and relatively light supply enabled Rhode Island
tax-exempt securities to hold up reasonably well as interest rates rose in the
six months ended April 30, 2000. The Galaxy Rhode Island Municipal Bond Fund
further benefited from its decision to invest in bonds that cannot be called by
issuers. The Fund's investment in intermediate-term securities, which
outperformed their longer-term counterparts, also contributed positively to
results.
During the reporting period the Fund's Retail A Shares earned a total
return of 2.92% before deducting the maximum 3.75% front-end sales charge.
(Please see the chart on page 4 for total returns after deducting the front-end
sales charge.) Over the same time, the average Rhode Island municipal bond fund
tracked by Lipper had a total return of 1.91%, and the Lehman Brothers Municipal
Bond Index had a total return of 2.63%.
On April 30, 2000, the Fund's Retail A Shares had a 30-day SEC annualized
yield of 4.62%. This equaled a taxable yield of 8.53% for taxpayers in the 39.6%
federal income tax bracket who live in Rhode Island.
FOCUS SHIFTS FROM Y2K TO HIGHER RATES
Early in the period, when investors were concerned that the economy might
slow due to potential Y2K computer problems, we increased the Fund's cash
reserves in anticipation of a rise in redemptions. When Y2K proved to be a
non-event, we put this cash back to work in securities that increased the level
of income for shareholders.
At the start of the new millennium, our attention turned to the strength of
the economy and the Fed's plan for keeping inflation under control. In this
environment, our decision to focus on high-coupon securities helped performance,
as these securities recorded relatively good investment results as interest
rates rose.
The Fund further benefited from an underweighting in municipals from the
hospital sector. On worries over poor health care earnings and the prospects for
more of the same in months to come, the hospital sector underperformed the
broader market.
FURTHER FOCUS ON RISING RATES
Expecting growth to slow later in the year, we intend to maintain our
current duration strategy and emphasize high-quality securities that meet our
strict investment standards. As growth ebbs, and investors become nervous about
the ability of bond issuers to repay their debt, higher-quality issues should
outperform.
GALAXY RHODE ISLAND MUNICIPAL BOND FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF APRIL 30, 2000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
RHODE ISLAND 81%
PUERTO RICO 10%
OTHER TERRITORIES 6%
CASH EQUIVALENTS &
NET OTHER ASSETS AND LIABILITIES 3%
GALAXY RHODE ISLAND MUNICIPAL BOND FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
LEHMAN BROTHERS GALAXY RHODE ISLAND
MUNICIPAL BOND MUNICIPAL BOND
INDEX FUND-RETAIL A SHARES
12/20/1994 10000 9625
1995 11445 10711
1996 12050 11270
10/31/1997 12507 12146
10/31/1998 13510 13040
10/31/1999 13271 12683
04/30/2000 13620 13053
* SINCE INCEPTION ON 12/20/94. PERFORMANCE FIGURES FOR RETAIL A SHARES
INCLUDE THE EFFECT OF THE MAXIMUM 3.75% FRONT-END SALES CHARGE. THE LEHMAN
BROTHERS MUNICIPAL BOND INDEX IS AN UNMANAGED INDEX IN WHICH INVESTORS
CANNOT INVEST. RESULTS FOR THE INDEX DO NOT REFLECT INVESTMENT MANAGEMENT
FEES AND OTHER EXPENSES INCURRED BY THE FUND. RESULTS FOR THE INDEX ARE
CALCULATED SINCE 12/31/94 BECAUSE THE INDEX RETURNS ARE CALCULATED AT
MONTH-END ONLY.
10
<PAGE>
SHAREHOLDER SERVICES
[BEGIN SIDEBAR]
"A WELL-BALANCED ASSET ALLOCATION PLAN MAY HELP TO CONTROL YOUR RISK WHILE
PURSUING YOUR GOALS."
[END SIDEBAR]
AUTOMATIC INVESTMENT PROGRAM
The Golden Rule of investing is "pay yourself first." That is easy to do with
Galaxy's Automatic Investment Program. For as little as $50 per month deducted
directly from your checking, savings or bank money market account, you can
consistently and conveniently add to your Galaxy investment. When you establish
an Automatic Investment Program, the $2,500 initial investment requirement for
Galaxy is waived. Of course, such a program does not assure a profit and does
not protect against loss in a declining market.
DIVERSIFICATION
A fundamental investment practice is "diversification." A well-balanced asset
allocation plan may help to control your risk while pursuing your goals. Many
mutual funds offer a low-cost way to diversify your investments while you
benefit from professional management. Galaxy's comprehensive array of investment
choices can be used in combination to match the needs of nearly everyone.
EXCHANGE PRIVILEGES
As your investment needs change, you can conveniently exchange your shares in
one Fund for shares in another Fund at no cost (as long as you exchange within
the same share class).
CONSOLIDATED STATEMENTS
Timely, comprehensive mutual fund account statements offer detailed information
on your individual account. If you have a FleetOne Gold or a Fleet Private
Banking Account, your Galaxy Fund information can be added to these statements.
24-HOUR ACCESS TO REGISTERED REPRESENTATIVES
24 hours a day, seven days a week, 365 days a year, we are ready and available
to help. Our toll-free telephone lines offer round-the-clock access to Fund
information and services. Call toll-free 1-877-BUY-GALAXY (1-877-289-4252) for
information on initial purchases and current performance.
--------------------------------------------------------------------------------
CERTAIN SHAREHOLDER SERVICES MAY NOT BE AVAILABLE TO TRUST, PRIME A AND PRIME B
SHARE INVESTORS. PLEASE CONSULT YOUR FUND PROSPECTUS. SHARES OF THE FUNDS ARE
DISTRIBUTED THROUGH PROVIDENT DISTRIBUTORS, INC., MEMBER NASD AND SIPC.
11
<PAGE>
SHAREHOLDER INFORMATION
[BEGIN SIDEBAR]
TRUSTEES
AND OFFICERS
Dwight E. Vicks, Jr.
CHAIRMAN AND TRUSTEE
John T. O'Neill
PRESIDENT, TREASURER
AND TRUSTEE
Louis DeThomasis,
F.S.C., Ph.D.
TRUSTEE
Donald B. Miller
TRUSTEE
James M. Seed
TRUSTEE
Bradford S. Wellman
TRUSTEE
Jylanne Dunne
VICE PRESIDENT AND
ASSISTANT TREASURER
William Greilich
VICE PRESIDENT
W. Bruce
McConnel, Esq.
SECRETARY
INVESTMENT ADVISOR
Fleet Investment
Advisors Inc.
75 State Street
Boston, MA
02109
DISTRIBUTOR
Provident
Distributors, Inc.
3200 Horizon Drive
King of Prussia,
Pennsylvania 19406
ADMINISTRATOR
PFPC Inc.
4400 Computer Drive
Westborough,
Massachusetts 01581-5108
AUDITOR
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
LEGAL COUNSEL
Drinker Biddle & Reath LLP
One Logan Square
18th and Cherry Streets
Philadelphia, PA 19103
[END SIDEBAR]
This report is submitted for the general information of shareholders of The
Galaxy Fund. It is not authorized for distribution to prospective investors
unless accompanied or preceded by an effective prospectus for each Fund of The
Galaxy Fund, which contains more information concerning the investment policies
and expenses of the Funds as well as other pertinent information. For complete
information, and before making an investment decision on any of the Funds of The
Galaxy Fund, you should request a prospectus from Provident Distributors, Inc.
by calling toll-free 1-877-BUY-GALAXY (1-877-289-4252). Read the prospectus
carefully before you invest.
SHARES OF THE FUNDS ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, FLEETBOSTON FINANCIAL CORPORATION OR ANY OF ITS AFFILIATES, FLEET
INVESTMENT ADVISORS INC., OR ANY FLEET BANK. SHARES OF THE FUNDS ARE NOT
FEDERALLY INSURED BY, GUARANTEED BY, OBLIGATIONS OF OR OTHERWISE SUPPORTED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENTAL AGENCY. INVESTMENT RETURN AND PRINCIPAL
VALUE WILL VARY AS A RESULT OF MARKET CONDITIONS OR OTHER FACTORS SO THAT SHARES
OF THE FUNDS, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
AN INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL AMOUNT INVESTED.
[GRAPHIC OMITTED]
This report was printed on recycled paper.
<PAGE>
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
MUNICIPAL SECURITIES - 96.58%
ALASKA - 0.71%
$ 1,275,000 Anchorage Hospital Revenue
Sisters of Providence Project
6.75%, 10/01/00 ............................ $ 1,284,091
------------
CALIFORNIA - 6.65%
2,500,000 California Educational
Facilities Authority
Stanford University, Series O
5.13%, 01/01/31 ............................ 2,234,375
1,915,000 California Rural Home Mortgage
Finance Authority, Single Family
Mortgage, Mortgage-Backed
Securities Program, Series A, AMT
6.35%, 12/01/29
Insured: GNMA/FNMA/FHLMC...................... 2,001,175
2,000,000 California State, GO
5.00%, 10/01/19
Insured: FSA ............................ 1,797,500
3,000,000 California State, GO
5.00%, 08/01/24
Insured: MBIA ............................ 2,625,000
1,500,000 California State, GO
Veterans Bonds
Series BH, AMT
5.40%, 12/01/15
Insured: FSA ............................ 1,462,500
1,000,000 East Bay California
Municipal Utilities District
Water Systems Revenue
5.25%, 06/01/17 ............................ 957,500
1,000,000 San Diego
Water Utilities Funding
5.38%, 08/01/12
Insured: FGIC ............................ 1,012,500
------------
12,090,550
------------
COLORADO - 0.57%
990,000 Colorado Housing Finance Authority
Single Family Program, Series B-3
6.55%, 05/01/25 ............................ 1,032,075
------------
CONNECTICUT - 2.82%
1,520,000 Connecticut State, SP OB
Transportation Infrastructure, Series A
5.63%, 12/01/19 ............................ 1,501,000
500,000 Connecticut State, SP OB
Transportation Infrastructure, Series B
6.10%, 09/01/07 ............................ 523,125
1,000,000 Connecticut State
Clean Water Fund
5.13%, 09/01/15 ............................ 967,500
PAR VALUE VALUE
----------- ---------
CONNECTICUT (CONTINUED)
$ 1,000,000 Connecticut State HEFA Trinity College,
Series F
5.50%, 07/01/21
Insured: MBIA ............................ $ 957,500
530,000 Connecticut State HFA
Housing Mortgage Finance
Program, Series A
6.10%, 05/15/13 ............................ 539,275
615,000 Connecticut State HFA
Housing Mortgage Finance
Program, SubSeries B-1
6.25%, 05/15/11 ............................ 631,144
------------
5,119,544
------------
FLORIDA - 3.51%
2,500,000 Florida State Board of Education
Lottery Revenue, Series C
4.50%, 07/01/17
Insured: FGIC ............................ 2,134,375
2,000,000 Hillsborough County
School Board, Series A
5.50%, 07/01/14
Insured: MBIA ............................ 2,012,500
2,835,000 Miami, Dade County, SP OB
Series A
5.22%, 10/01/14 (A)
Insured: MBIA ............................ 1,226,137
1,000,000 Tampa, Florida, Revenue
Health System
Catholic Health East
Series A-1
5.50%, 11/15/14 ............................ 998,750
------------
6,371,762
------------
GEORGIA - 3.81%
2,000,000 Atlanta Water & Wastewater
Revenue, Series A
5.00%, 11/01/38
Insured: FGIC ............................ 1,675,000
2,000,000 De Kalb County
Water and Sewer Revenue
6.25%, 10/01/06 ............................ 2,125,000
1,000,000 Fulton County School District, GO
5.60%, 01/01/11 ............................ 1,033,750
2,000,000 Georgia State, GO
Series B
5.75%, 08/01/10 ............................ 2,087,500
------------
6,921,250
------------
IDAHO - 0.90%
500,000 Boise-Kuna Irrigation District
Lucky Peak Hydroelectric Project
6.60%, 07/01/05 ............................ 518,750
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
IDAHO (CONTINUED)
$ 1,160,000 Idaho Housing & Finance Association
Single Family Mortgage
Series G-2, AMT
5.70%, 07/01/16 ............................ $ 1,122,300
------------
1,641,050
------------
ILLINOIS - 3.31%
1,000,000 Cook County, GO
7.25%, 11/01/07
Insured: MBIA ............................ 1,125,000
3,000,000 Illinois Educational Facilities
Authority, Wesleyan University
5.65%, 09/01/26
Insured: MBIA ............................ 2,823,750
1,000,000 Illinois State, GO
5.80%, 09/01/18
Insured: FGIC ............................ 1,001,250
1,000,000 Regional Transportation Authority
Series A
6.25%, 06/01/15 ............................ 1,062,500
------------
6,012,500
------------
INDIANA - 1.11%
2,000,000 Indianapolis Local Public
Improvement Bond Bank
Series A
6.00%, 01/10/18 ............................ 2,025,000
------------
IOWA - 0.91%
1,700,000 Iowa Finance Authority
Single Family Mortgage, Series F
5.55%, 01/01/16
Insured: GNMA/FNMA............................ 1,655,375
------------
KANSAS - 0.86%
1,575,000 Kansas State
Department of Highway Transportation
5.50%, 09/01/14 ............................ 1,563,187
------------
KENTUCKY - 1.11%
1,000,000 Kentucky Housing Corp.
Series C-3
5.70%, 01/01/11 ............................ 1,008,750
1,000,000 Kentucky State Turnpike Authority
Economic Development & Refunding
Revenue, Revitalization Projects
Pre-refunded 05/15/00
7.13%, 05/15/01 ............................ 1,015,890
------------
2,024,640
------------
PAR VALUE VALUE
----------- ---------
MAINE - 1.02%
$ 1,000,000 Maine Governmental Facilities
Authority, Lease Rent Revenue
5.63%, 10/01/19
Insured: FSA ............................ $ 963,750
250,000 Maine Municipal Bond Bank
Series B
6.75%, 11/01/12 ............................ 265,312
500,000 Maine Municipal Bond Bank
Sewer & Water
SRF Program, Series A
6.50%, 11/01/08 ............................ 526,250
100,000 Maine State Housing
Authority, Series C-1
6.50%, 11/15/11 ............................ 103,250
------------
1,858,562
------------
MARYLAND - 4.11%
2,875,000 Maryland State Community
Development Administration
Department of Housing & Community
Development, Series A, AMT
5.70%, 07/01/17 ............................ 2,777,969
2,000,000 Maryland State Community
Development Administration
Department of Housing & Community
Development, Series B, AMT
5.55%, 09/01/25 ............................ 1,992,500
1,500,000 Maryland State Health & Higher
Education Facilities Authority
Johns Hopkins University
6.00%, 07/01/10 ............................ 1,597,500
1,090,000 Montgomery County Housing
Opportunity Commission
Single Family Mortgage, Series A
5.75%, 07/01/13 ............................ 1,094,087
------------
7,462,056
------------
MASSACHUSETTS - 10.42%
4,000,000 Massachusetts Bay
Transportation Authority, General
Transportation Systems, Series A
7.00%, 03/01/21 ............................ 4,485,000
3,000,000 Massachusetts State, GO
Consolidated Loan, Series B
5.00%, 05/01/19 ............................ 2,662,500
2,000,000 Massachusetts State HEFA Partners
Healthcare System, Series A
5.38%, 07/01/17
Insured: MBIA ............................ 1,892,500
130,000 Massachusetts State HEFA
South Shore Hospital, Series D
Pre-refunded 07/01/02
6.50%, 07/01/10
Insured: MBIA ............................ 136,987
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
MASSACHUSETTS (CONTINUED)
$ 70,000 Massachusetts State HEFA
South Shore Hospital, Series D
Unrefunded Balance
6.50%, 07/01/10
Insured: MBIA ............................ $ 73,500
1,000,000 Massachusetts State IFA Nantucket Electric
Company, Series A, AMT
5.88%, 07/01/17
Insured: AMBAC ............................ 1,003,750
2,000,000 Massachusetts State IFA
Tufts University, Series H
5.50%, 02/15/12
Insured: MBIA ............................ 2,025,000
2,000,000 Massachusetts State Port
Authority, Series A
5.38%, 07/01/18 ............................ 1,892,500
4,500,000 Massachusetts State Turnpike Authority,
Metropolitan Highway System, Subordinated
Series A
5.00%, 01/01/39
Insured: AMBAC ............................ 3,763,125
1,000,000 Massachusetts State Water
Resource Authority, Series B
5.50%, 08/01/15
Insured: FSA ............................ 1,000,000
------------
18,934,862
------------
MICHIGAN - 0.56%
1,000,000 Central Michigan University
6.00%, 10/01/13
Insured: MBIA ............................ 1,021,250
------------
MINNESOTA - 0.52%
1,000,000 Rochester Health Care Facilities
Mayo Foundation, Series A
5.50%, 11/15/27
Insured: GO of Mayo Foundation................ 941,250
------------
MISSOURI - 0.97%
1,000,000 Missouri State HEFA
St. Louis University
5.50%, 10/01/16 ............................ 988,750
750,000 Missouri State Housing
Development Commission
Single Family, Series B-2, AMT
6.40%, 03/01/29 ............................ 769,687
------------
1,758,437
------------
NEBRASKA - 1.10%
2,000,000 Nebraska Investment Finance
Authority, Single Family Housing
Series A, AMT
5.75%, 09/01/25 ............................ 2,000,000
------------
PAR VALUE VALUE
----------- ---------
NEVADA - 2.76%
$ 1,000,000 Clark County, GO & Revenue
Series A
Pre-refunded 06/01/02
6.00%, 06/01/16
Insured: AMBAC ............................ $ 1,023,750
1,500,000 Nevada State, GO
Capital Improvement &
Cultural Affairs, Series A
5.50%, 02/01/18 ............................ 1,445,625
3,000,000 Nevada State, GO, Projects 66 & 67,
Series A
5.00%, 05/15/28
Insured: FGIC ............................ 2,553,750
------------
5,023,125
------------
NEW JERSEY - 4.77%
1,500,000 New Jersey Health Care
Facilities Financing Authority
AHS Hospital Corp., Series A
6.00%, 07/01/12
Insured: AMBAC ............................ 1,580,625
1,700,000 New Jersey Health Care Facilities Financing
Authority, Medical Center at Princeton
5.13%, 07/01/18
Insured: AMBAC ............................ 1,540,625
500,000 New Jersey State Transportation Trust Fund
Authority, Transportation System, Series A
5.50%, 06/15/09 ............................ 510,625
2,000,000 New Jersey State Transportation Trust Fund
Authority, Transportation System, Series A
5.63%, 06/15/14 ............................ 2,032,500
3,000,000 New Jersey State Turnpike Authority,
Series A
5.75%, 01/01/19
Insured: MBIA ............................ 3,000,000
------------
8,664,375
------------
NEW MEXICO - 1.06%
750,000 Dona Ana County
Gross Receipt Tax Revenue
5.50%, 06/01/16
Insured: AMBAC ............................ 742,500
1,285,000 New Mexico Mortgage Finance
Authority, Single Family
Mortgage, Series B-3
5.50%, 07/01/28
Insured: GNMA/FNMA/FHLMC...................... 1,187,019
------------
1,929,519
------------
NEW YORK - 9.32%
1,000,000 Battery Park City
Authority, Series A
5.50%, 11/01/10 ............................ 1,002,500
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
NEW YORK (CONTINUED)
$ 2,165,000 Metropolitan Transportation Authority,
Dedicated Tax Fund, Series C-1
5.25%, 07/01/17
Insured: FGIC ............................ $ 2,045,925
1,000,000 Municipal Assistance Corp. for
New York City, Series O
5.25%, 07/01/07 ............................ 1,007,500
1,000,000 New York City, GO
Series I
6.00%, 04/15/09 ............................ 1,041,250
1,000,000 New York City
Municipal Water Finance
Authority, Water and Sewer
System, Series A
5.50%, 06/15/11 ............................ 1,005,000
1,500,000 New York City Transitional Finance
Authority, Revenue, Series C
5.00%, 05/01/26 ............................ 1,293,750
250,000 New York State, GO
6.10%, 11/15/09 ............................ 259,688
1,000,000 New York State, GO
5.50%, 06/15/10 ............................ 1,008,750
2,000,000 New York State, GO
Series F
5.25%, 09/15/12 ............................ 1,960,000
4,000,000 New York State Dormitory Authority
Capital Appreciation, State
University of New York, Class B
5.18%, 05/15/10 (A)
Insured: MBIA ............................ 2,320,000
2,110,000 New York State Dormitory Authority
Columbia University
5.00%, 07/01/18 ............................ 1,941,200
1,000,000 New York State Dormitory Authority
Municipal Health Facilities
Improvement Program, Series 1
5.00%, 01/15/09
Insured: FSA ............................ 971,250
30,000 New York State Dormitory Authority,
University of Rochester, Unrefunded Balance
6.50%, 07/01/09 ............................ 30,382
1,000,000 Port Authority of New York and New Jersey,
SP OB, JFK International Air Terminal,
Series 6, AMT
6.00%, 12/01/07
Insured: MBIA ............................ 1,048,750
------------
16,935,945
------------
NORTH CAROLINA - 1.35%
1,500,000 Charlotte Certificates of Participation
Convention Facility Project
6.35%, 12/01/00
Insured: AMBAC ............................ 1,516,875
PAR VALUE VALUE
----------- ---------
NORTH CAROLINA (CONTINUED)
$ 915,000 North Carolina Housing Finance
Agency, Single Family Revenue
Series Y
6.30%, 09/01/15 ............................ $ 937,875
------------
2,454,750
------------
OHIO - 3.48%
955,000 Cleveland Waterworks
Pre-refunded 01/01/02
6.25%, 01/01/15
Insured: AMBAC ............................ 994,394
45,000 Cleveland Waterworks
Unrefunded Balance
6.25%, 01/01/15
Insured: AMBAC ............................ 46,238
1,000,000 Cleveland Waterworks
Refunding & Improvement
First Mortgage
5.50%, 01/01/10
Insured: MBIA ............................ 1,012,500
1,460,000 Forest Hills School District, GO
6.00%, 12/01/10
Insured: MBIA ............................ 1,547,600
1,000,000 Ohio State Building Authority
Adult Correctional Facilities
Series A
6.00%, 04/01/06
Insured: AMBAC ............................ 1,047,500
1,785,000 Ohio State Water
Development Authority, PCR
Water Control Loan Fund
Water Quality Series
5.00%, 12/01/15
Insured: MBIA ............................ 1,680,131
------------
6,328,363
------------
PENNSYLVANIA - 4.18%
2,000,000 Delaware Valley Regional
Finance Authority, Local
Government Revenue, Series B
5.60%, 07/01/17
Insured: AMBAC ............................ 1,970,000
2,210,000 Elizabeth Forward School District, GO
Capital Appreciation, Series B
5.52%, 09/01/21 (A)
Insured: MBIA ............................ 618,800
2,210,000 Elizabeth Forward School District, GO
Capital Appreciation, Series B
5.52%, 09/01/22 (A)
Insured: MBIA ............................ 580,125
1,000,000 Luzerne County, GO, Series B
6.00%, 09/15/11
Insured: FGIC ............................ 1,004,080
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
PENNSYLVANIA (CONTINUED)
$ 1,500,000 Pennsylvania Housing Finance
Agency, Single Family Mortgage
Series 59-A, AMT
5.75%, 10/01/23 ............................ $ 1,428,750
1,000,000 Pennsylvania State, GO
Second Series A
Pre-refunded 11/01/01
6.50%, 11/01/04
Insured: MBIA ............................ 1,041,250
1,000,000 Pennsylvania State Higher
Education Facilities Authority
Temple University, First Series
5.25%, 04/01/14
Insured: MBIA ............................ 958,750
------------
7,601,755
------------
PUERTO RICO - 1.77%
3,000,000 Puerto Rico Electric Power Authority,
Series BB
6.00%, 07/01/12
Insured: MBIA ............................ 3,210,000
------------
RHODE ISLAND - 2.51%
190,000 Rhode Island Clean Water
Protection Finance Agency, PCR
Series A
Pre-refunded 10/01/02
6.75%, 10/01/13
Insured: MBIA ............................ 201,400
10,000 Rhode Island Clean Water
Protection Finance Agency, PCR
Series A
Unrefunded Balance
6.75%, 10/01/13
Insured: MBIA ............................ 10,550
700,000 Rhode Island Housing & Mortgage
Finance Corp., Homeownership
Opportunity, Series 13
6.70%, 10/01/15 ............................ 725,375
1,500,000 Rhode Island State HEBC
Higher Education Facilities
Johnson & Wales University
6.38%, 04/01/12
Insured: Connie Lee........................... 1,573,125
1,500,000 Rhode Island State HEBC
Higher Education Facilities
Johnson & Wales University
Series A
5.75%, 04/01/12
Insured: Connie Lee........................... 1,528,125
500,000 Rhode Island State HEBC
Miriam Hospital Foundation, Series B
Pre-refunded 04/01/03
6.50%, 04/01/13 ............................ 528,125
------------
4,566,700
------------
PAR VALUE VALUE
----------- ---------
SOUTH CAROLINA - 2.66%
$ 1,500,000 Greenville Waterworks
Revenue Bonds
5.50%, 02/01/22 ............................ $ 1,447,500
2,100,000 Oconee County, PCR
Duke Power Co. Project
5.80%, 04/01/14 ............................ 2,086,875
500,000 Piedmont Municipal
Power Agency
6.10%, 01/01/06
Insured: MBIA ............................ 526,250
750,000 Richland County
Certificates of Participation
6.90%, 02/01/01
Insured: FGIC ............................ 764,070
------------
4,824,695
------------
SOUTH DAKOTA - 0.57%
1,000,000 Rapid City Sales Tax
Series B
6.20%, 06/01/12
Insured: FGIC ............................ 1,036,250
------------
TENNESSEE - 1.95%
500,000 Memphis Water Revenue
Series A
6.00%, 01/01/07 ............................ 515,000
2,000,000 Metropolitan Government of
Nashville & Davidson County, GO
5.88%, 05/15/26 ............................ 1,980,000
1,000,000 Metropolitan Government of
Nashville & Davidson County
Health & Education Facilities Board
Vanderbilt University, Series B
6.30%, 10/01/14 ............................ 1,040,000
------------
3,535,000
------------
TEXAS - 10.48%
1,000,000 Amarillo Health Facilities Corp.
Baptist St. Anthony Hospital Corp.
5.50%, 01/01/14
Insured: FSA ............................ 995,000
5,000,000 Harris County, GO & Revenue
Capital Appreciation, Series A
5.18%, 08/15/07 (A)
Insured: FGIC ............................ 3,393,750
2,170,000 Harris County Health Facilities
Development Corp., Memorial Hospital
System Project, Series A
6.00%, 06/01/13
Insured: MBIA ............................ 2,267,650
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
TAX-EXEMPT BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
TEXAS (CONTINUED)
$ 4,000,000 Houston Water & Sewer System
Junior Lien, Series C
5.35%, 12/01/11 (A)
Insured: AMBAC ............................ $ 2,120,000
1,775,000 Katy Independent School District
Capital Appreciation
3.56%, 08/15/11 (A)........................... 956,281
1,750,000 Lower Colorado River Authority
Junior Lien, 4th Supplement
Capital Appreciation
5.45%, 01/01/13 (A)
Insured: FGIC ............................ 855,313
2,000,000 Lower Colorado River Authority
Junior Lien, 5th Supplement
5.38%, 01/01/16 ............................ 1,952,500
2,000,000 Lower Neches Valley Authority IDC
Mobil Oil Refining Project
5.80%, 05/01/22 ............................ 1,902,500
2,000,000 New Braunfels Independent School
District, GO, Capital Appreciation
5.23%, 02/01/07 (A)........................... 1,395,000
1,000,000 North Central Health
Facilities Development Corp.
Presbyterian Healthcare
Pre-refunded 06/01/05
5.90%, 06/01/21 ............................ 1,037,500
2,000,000 San Antonio Airport System
7.13%, 07/01/05
Insured: AMBAC ............................ 2,162,500
------------
19,037,994
------------
UTAH - 1.18%
2,500,000 Central Utah Water Conservancy, GO
Series D
5.00%, 04/01/27
Insured: AMBAC ............................ 2,146,875
------------
VIRGINIA - 1.15%
1,000,000 Norfolk Industrial Development
Authority, Childrens Hospital
Kings Group
6.50%, 06/01/21
Insured: AMBAC ............................ 1,040,690
1,025,000 Virginia State, GO
5.38%, 06/01/04 ............................ 1,042,938
------------
2,083,628
------------
WASHINGTON - 1.32%
1,370,000 Seattle, GO
Series A
5.50%, 03/01/11 ............................ 1,387,125
PAR VALUE VALUE
----------- ---------
WASHINGTON (CONTINUED)
$ 1,000,000 Washington State Public Power
Supply System, Nuclear Project
No. 2, Series C
7.30%, 07/01/00 ............................ $ 1,004,220
------------
2,391,345
------------
WEST VIRGINIA - 1.10%
2,000,000 West Virginia School Building
Authority, Capital Improvement
5.50%, 07/01/11
Insured: AMBAC ............................ 2,002,500
------------
TOTAL MUNICIPAL SECURITIES ................... 175,490,260
------------
(Cost $179,312,224)
SHARES
--------
INVESTMENT COMPANIES - 2.06%
40,417 Dreyfus Tax-Exempt Cash Management Fund 40,417
3,701,086 Federated Tax-Free Obligations Fund .......... 3,701,086
------------
TOTAL INVESTMENT COMPANIES ................... 3,741,503
------------
(Cost $3,741,503)
TOTAL INVESTMENTS - 98.64%...................................... 179,231,763
------------
(Cost $183,053,727)
NET OTHER ASSETS AND LIABILITIES - 1.36%........................ 2,463,347
------------
NET ASSETS - 100.00%............................................ $181,695,110
============
----------------------------------------------------
(A) Zero Coupon Bond. Rate shown reflects effective yield to maturity at
time of purchase.
AMBAC American Municipal Bond Assurance Corp.
AMT Alternative Minimum Tax. Private activity obligations the interest on
which is subject to the federal AMT for individuals.
Connie Lee College Construction Loan Association
FGIC Federal Guaranty Insurance Corp.
FHLMC Federal Home Loan Mortgage Corp.
FSA Financial Security Assurance Company
GNMA Government National Mortgage Association
GO General Obligation
HEBC Health and Educational Building Corp.
HEFA Health and Educational Facilities Authority
HFA Housing Finance Authority
IDC Industrial Development Corp.
IFA Industrial Finance Agency
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
SP OB Special Obligation
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
NEW JERSEY MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
MUNICIPAL SECURITIES - 96.42%
NEW JERSEY - 87.75%
$ 235,000 Freehold Township
Board of Education, GO
5.38%, 07/15/10
Insured: FSA ............................ $ 236,762
250,000 Lacey Municipal Utilities Authority
5.10%, 12/01/16
Insured: MBIA ............................ 232,500
50,000 Lenape Regional High School
District, GO
5.00%, 04/01/12
Insured: FGIC ............................ 48,062
500,000 Lindenwold Borough
School District, GO
5.20%, 06/01/25
Insured: FSA ............................ 453,125
250,000 Mercer County Improvement Authority
Youth Center, Series B
5.00%, 02/15/14
Insured: FGIC ............................ 235,000
50,000 Monmouth County Improvement Authority
Governmental Loan
5.50%, 12/01/07
Insured: AMBAC ............................ 51,250
100,000 Morristown, GO
5.15%, 02/01/09
Insured: FSA ............................ 100,000
250,000 New Brunswick, GO
4.80%, 09/15/13
Insured: MBIA ............................ 231,562
250,000 New Jersey Building Authority
State Building Revenue
6.00%, 06/15/07 ............................ 263,125
250,000 New Jersey Economic Development
Authority, Educational Testing
Service, Series A
4.00%, 05/15/06
Insured: MBIA ............................ 230,937
250,000 New Jersey Economic Development
Authority, State Office Buildings
5.25%, 06/15/08
Insured: AMBAC ............................ 252,188
75,000 New Jersey
Environmental Infrastructure Trust
Wastewater Treatment, Series F
5.00%, 04/01/14
Insured: MBIA ............................ 70,406
500,000 New Jersey
Environmental Infrastructure Trust
Wastewater Treatment, Series G
5.00%, 04/01/12
Insured: FGIC ............................ 480,000
300,000 New Jersey Health Care Facilities Financing
Authority, Medical Center at Princeton
5.13%, 07/01/18
Insured: AMBAC ............................ 271,875
PAR VALUE VALUE
----------- ---------
NEW JERSEY (CONTINUED)
$ 190,000 New Jersey Sports & Exposition Authority
Convention Center Luxury Tax Revenue
Series A
6.00%, 07/01/13
Insured: MBIA ............................ $ 198,075
75,000 New Jersey State, GO, Series D
5.40%, 02/15/03 ............................ 76,031
250,000 New Jersey State Educational Facilities
Authority, Richard Stockton College
Series C
5.10%, 07/01/23
Insured: AMBAC ............................ 222,500
250,000 New Jersey State Higher
Education Assistance Authority
Student Loan Revenue, Series A, AMT
5.30%, 06/01/17
Insured: AMBAC ............................ 229,688
300,000 New Jersey State Highway Authority
Garden State Parkway
5.60%, 01/01/17
Insured: FGIC ............................ 298,125
290,000 New Jersey State HMFA
Home Buyer, Series G
4.63%, 04/01/15
Insured: MBIA ............................ 279,488
250,000 New Jersey State HMFA
Home Buyer, Series O, AMT
5.80%, 10/01/20
Insured: MBIA ............................ 250,415
250,000 New Jersey State HMFA
Series B
6.05%, 11/01/17
Insured: FSA ............................ 252,500
400,000 New Jersey State Transportation Trust Fund
Authority, Transportation System, Series A
5.00%, 06/15/06 ............................ 399,000
250,000 New Jersey State Transportation Trust Fund
Authority, Transportation System, Series A
5.50%, 06/15/09 ............................ 255,313
400,000 New Jersey State Transportation Trust Fund
Authority, Transportation System, Series A
5.63%, 06/15/12 ............................ 411,000
295,000 New Jersey State Turnpike Authority, Series A
5.75%, 01/01/19
Insured: MBIA ............................ 295,000
400,000 Ocean County, GO
General Improvement
5.30%, 12/01/06 ............................ 406,500
50,000 Old Tappan Board of Education, GO
5.10%, 04/01/15
Insured: FGIC ............................ 47,063
50,000 Plumsted Township Board
of Education, GO
5.00%, 03/01/14
Insured: FGIC ............................ 47,000
250,000 Trenton, GO
5.70%, 03/01/19
Insured: FGIC ............................ 248,125
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
NEW JERSEY MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
NEW JERSEY (CONTINUED)
$ 250,000 Union County, GO
General Improvement
5.13%, 02/01/16 ............................ $ 235,000
300,000 Vernon Township Board
of Education, GO
5.38%, 12/01/19
Insured: FGIC ............................ 286,500
250,000 West Orange Board of Education
Certificate of Participation
5.63%, 10/01/29
Insured: MBIA ............................ 243,125
------------
7,837,240
------------
PUERTO RICO - 8.67%
250,000 Puerto Rico Commonwealth, GO
6.00%, 07/01/16
Insured: MBIA ............................ 265,000
250,000 Puerto Rico Commonwealth, GO
5.00%, 07/01/27
Insured: FSA ............................ 219,063
50,000 Puerto Rico Electric Power Authority
Series AA
5.25%, 07/01/17
Insured: MBIA ............................ 47,750
250,000 Puerto Rico Electric Power Authority
Series DD
5.25%, 07/01/15
Insured: FSA ............................ 242,500
------------
774,313
------------
TOTAL MUNICIPAL SECURITIES ...... 8,611,553
------------
(Cost $8,912,724)
SHARES VALUE
----------- ---------
INVESTMENT COMPANIES - 2.30%
37,996 Dreyfus Tax-Exempt Cash Management
Fund.......................................... $ 37,996
167,464 Federated Tax-Free Obligations Fund........... 167,464
------------
TOTAL INVESTMENT COMPANIES ................... 205,460
------------
(Cost $205,460)
TOTAL INVESTMENTS - 98.72%...................................... 8,817,013
------------
(Cost $9,118,184)
NET OTHER ASSETS AND LIABILITIEs - 1.28%........................ 114,642
------------
NET ASSETS - 100.00%............................................ $ 8,931,655
============
-----------------------------------------
AMBAC American Municipal Bond Assurance Corp.
AMT Alternative Minimum Tax. Private activity obligations the interest on
which is subject to the federal AMT for individuals.
FGIC Federal Guaranty Insurance Corp.
FSA Financial Security Assurance Company
GO General Obligation
HMFA Housing and Mortgage Finance Agency
MBIA Municipal Bond Insurance Association
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
NEW YORK MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
MUNICIPAL SECURITIES - 97.40%
CALIFORNIA - 0.59%
$ 500,000 Los Angeles Regional Airports
Improvement Corp., Lease Revenue
L.A. International Two
6.00%, 12/01/25 (A)
LOC: Societe Generale......................... $ 500,000
------------
New York - 94.04%
1,000,000 Albany County, GO
5.50%, 06/01/08
Insured: FGIC ............................ 1,017,500
1,000,000 Albany County Airport Authority, AMT
5.38%, 12/15/17
Insured: FSA ............................ 947,500
100,000 Canandaigua City School District, GO
6.50%, 06/01/10
Insured: AMBAC ............................ 109,750
550,000 Long Island Power Authority
Electric Systems Revenue, Series 6
5.95%, 05/01/33 (A)
LOC: ABN AMRO Bank, N.V....................... 550,000
2,000,000 Long Island Power Authority
Electric Systems Revenue, Series A
5.50%, 12/01/13
Insured: FSA ............................ 2,015,000
1,000,000 Metropolitan Transportation Authority
Dedicated Tax Fund, Series A
5.50%, 04/01/16
Insured: MBIA ............................ 978,750
2,000,000 Metropolitan Transportation Authority
Dedicated Tax Fund, Series A
5.00%, 04/01/23
Insured: FGIC ............................ 1,740,000
1,000,000 Metropolitan Transportation Authority,
Dedicated Tax Fund, Series C-1
5.25%, 07/01/17
Insured: FGIC ............................ 945,000
2,000,000 Metropolitan Transportation Authority
Transportation Facilities Revenue
Series A
6.00%, 07/01/19 ............................ 2,002,500
600,000 Monroe County, GO
Public Improvement
Pre-refunded 03/01/01
6.10%, 03/01/09
Insured: MBIA ............................ 620,232
25,000 Monroe County, GO
Public Improvement
Unrefunded Balance
6.10%, 03/01/09
Insured: MBIA ............................ 25,696
900,000 Monroe County, GO
Public Improvement
Pre-refunded 06/01/04
6.10%, 06/01/14
Insured: AMBAC ............................ 952,875
PAR VALUE VALUE
----------- ---------
NEW YORK (CONTINUED)
$ 1,000,000 Monroe County Water
Authority, Series A
6.25%, 08/01/11 ............................ $ 1,030,000
1,000,000 Monroe Woodbury
Central School District, GO
5.63%, 05/15/18
Insured: MBIA ............................ 985,000
1,500,000 Municipal Assistance Corporation
for New York City, Series L
6.00%, 07/01/08 ............................ 1,582,500
500,000 New Castle, GO
Public Improvement
5.88%, 09/15/09 ............................ 515,000
2,060,000 New York City, GO
Capital Appreciation, Series F
4.59%, 08/01/08 (B)
Insured: MBIA ............................ 1,326,125
3,500,000 New York City, GO
Capital Appreciation, Series G
4.65%, 08/01/08 (B)
Insured: MBIA ............................ 2,253,125
1,000,000 New York City, GO
Series I
6.00%, 04/15/09 ............................ 1,041,250
1,000,000 New York City Industrial
Development Agency, Civic Facility
Trinity Episcopal School Corp. Project
5.25%, 06/15/17
Insured: MBIA ............................ 945,000
500,000 New York City MWFA
Water & Sewer System, Series A
6.10%, 06/15/06 ............................ 516,875
2,000,000 New York City MWFA
Water & Sewer System, Series A
5.13%, 06/15/15 ............................ 1,880,000
1,000,000 New York City MWFA
Water & Sewer System, Series A
6.00%, 06/15/17 ............................ 1,011,250
1,000,000 New York City MWFA
Water & Sewer System, Series A
5.75%, 06/15/18
Insured: AMBAC ............................ 996,250
750,000 New York City MWFA
Water & Sewer System, Series B
5.75%, 06/15/13
Insured: MBIA ............................ 751,582
1,000,000 New York City MWFA
Water & Sewer System, Series B
5.75%, 06/15/26
Insured: MBIA ............................ 976,250
1,000,000 New York City MWFA
Water & Sewer System, Series B
5.25%, 06/15/29
Insured: FSA ............................ 897,500
1,725,000 New York City MWFA
Water & Sewer System, Series C
5.00%, 06/15/21
Insured: FGIC ............................ 1,515,844
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
NEW YORK MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
NEW YORK (CONTINUED)
$ 2,750,000 New York City Transitional Finance
Authority, Revenue, Series C
5.00%, 05/01/26 ............................ $ 2,371,875
2,000,000 New York City Trust For
Cultural Resources, Revenue
American Museum of
Natural History, Class A
5.60%, 04/01/18
Insured: MBIA ............................ 1,960,000
1,000,000 New York State, GO
6.13%, 11/15/10 ............................ 1,038,750
3,000,000 New York State, GO
5.25%, 03/01/15 ............................ 2,861,250
2,500,000 New York State, GO, Series F
5.25%, 09/15/13 ............................ 2,431,250
2,000,000 New York State Dormitory Authority
City University System
Consolidated 2nd Generation, Series A
6.13%, 07/01/13
Insured: AMBAC ............................ 2,112,500
2,000,000 New York State Dormitory Authority
Columbia University
5.00%, 07/01/18 ............................ 1,840,000
1,675,000 New York State Dormitory Authority
Fordham University
5.00%, 07/01/28
Insured: MBIA ............................ 1,436,313
1,000,000 New York State Dormitory Authority
Ithaca College
5.00%, 07/01/21 ............................ 878,750
1,000,000 New York State Dormitory Authority
Lease Revenue Municipal Health
Facilities Improvement, Series 1
5.13%, 01/15/14
Insured: FSA ............................ 936,250
1,175,000 New York State Dormitory Authority
Mount Sinai School of Medicine
Series B
5.70%, 07/01/11
Insured: MBIA ............................ 1,208,781
500,000 New York State Dormitory Authority
New York University
6.25%, 07/01/09
Insured: FGIC ............................ 519,375
1,000,000 New York State Dormitory Authority
New York University, Series A
6.00%, 07/01/17
Insured: MBIA ............................ 1,038,750
2,000,000 New York State Dormitory Authority
New York University, Series A
5.75%, 07/01/20
Insured: MBIA ............................ 2,005,000
2,225,000 New York State Dormitory Authority
Rochester Institute of Technology
5.30%, 07/01/17
Insured: MBIA ............................ 2,113,750
PAR VALUE VALUE
----------- ---------
NEW YORK (CONTINUED)
$ 1,500,000 New York State Dormitory Authority
Rockefeller University
5.00%, 07/01/28 ............................ $ 1,312,500
1,000,000 New York State Dormitory Authority
State University Dormitory Facilities
Series A
6.00%, 07/01/30 ............................ 981,250
15,000 New York State Dormitory Authority,
University of Rochester, Unrefunded Balance
6.50%, 07/01/09 ............................ 15,191
1,125,000 New York State Dormitory Authority
University of Rochester, Series A
5.00%, 07/01/27
Insured: MBIA ............................ 966,094
100,000 New York State EFC, PCR
State Water, Series A
6.40%, 09/15/06 ............................ 104,625
500,000 New York State EFC, PCR
State Water, Series B
6.50%, 09/15/08 ............................ 523,750
1,000,000 New York State EFC, PCR
State Water, Series E
5.00%, 06/15/13
Insured: MBIA ............................ 958,750
100,000 New York State EFC, PCR
State Water, Series E
Pre-refunded 06/15/01
6.88%, 06/15/10 ............................ 104,375
500,000 New York State Housing Finance
Agency, Multifamily Mortgage
Housing, Series A
6.95%, 08/15/12 ............................ 522,500
300,000 New York State Local
Government Assistance Corp.
Series A
Pre-refunded 04/01/02
6.88%, 04/01/06 ............................ 316,875
1,500,000 New York State Local
Government Assistance Corp.
Series E
6.00%, 04/01/14
Insured: GO of New York State................. 1,575,000
800,000 New York State Medical Care
Facilities Finance Agency
Second Mortgage Program
Health Care Projects, Series B
6.35%, 11/01/14 ............................ 823,000
500,000 New York State Mortgage Agency
Homeowner Mortgage, Series 27
6.90%, 04/01/15 ............................ 520,625
3,000,000 New York State Mortgage Agency
Homeowner Mortgage, Series 67, AMT
5.70%, 10/01/17 ............................ 2,898,750
125,000 New York State Mortgage Agency
Revenue, 8th Series
6.88%, 04/01/17 ............................ 125,222
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
NEW YORK MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
NEW YORK (CONTINUED)
$ 1,000,000 New York State Power Authority
Revenue, General Purpose, Series AA
6.38%, 01/01/12 ............................ $ 1,043,750
500,000 New York State Power Authority
Revenue, General Purpose, Series Z
6.63%, 01/01/12 ............................ 524,375
500,000 Onondaga County, GO
5.88%, 02/15/10 ............................ 523,750
100,000 Orleans County, GO
6.50%, 09/15/08 ............................ 108,125
200,000 Port Authority of New York
and New Jersey, Consolidated
Loan, Series 71
6.90%, 07/15/09 ............................ 204,382
500,000 Port Authority of New York
and New Jersey, Consolidated
Loan, Series 78
6.50%, 04/15/11 ............................ 516,875
1,000,000 Port Authority of New York and New Jersey,
SP OB, JFK International Air Terminal,
Series 6, AMT
6.00%, 12/01/07
Insured: MBIA ............................ 1,048,750
545,000 Rensselaer County, GO
5.25%, 06/01/11
Insured: AMBAC ............................ 542,275
2,000,000 Triborough Bridge and
Tunnel Authority, Revenue
General Purpose, Series B
5.50%, 01/01/30 ............................ 1,872,500
1,315,000 Triborough Bridge and
Tunnel Authority, Revenue
General Purpose, Series A
5.13%, 01/02/22 ............................ 1,170,350
500,000 Triborough Bridge and
Tunnel Authority, Revenue
General Purpose, Series X
6.00%, 01/01/06 ............................ 507,500
500,000 Triborough Bridge and
Tunnel Authority, Revenue
General Purpose, Series X
6.00%, 01/01/07 ............................ 507,500
750,000 Triborough Bridge and
Tunnel Authority, Revenue
General Purpose, Series X
6.00%, 01/01/08 ............................ 761,250
300,000 Triborough Bridge and
Tunnel Authority, Revenue
General Purpose, Series X
6.63%, 01/01/12 ............................ 333,375
750,000 Triborough Bridge and
Tunnel Authority, Revenue
General Purpose, Series Y
6.00%, 01/01/12 ............................ 793,125
PAR VALUE VALUE
----------- ---------
NEW YORK (CONTINUED)
$ 80,000 Triborough Bridge and
Tunnel Authority, Revenue, SP OB
Pre-refunded 01/01/02
6.10%, 01/01/05
Insured: FGIC ............................ $ 82,800
20,000 Triborough Bridge and
Tunnel Authority, Revenue, SP OB
Unrefunded Balance
6.10%, 01/01/05
Insured: FGIC ............................ 20,600
50,000 Triborough Bridge and
Tunnel Authority, Revenue, SP OB
Unrefunded Balance
6.15%, 01/01/06
Insured: FGIC ............................ 51,500
500,000 United Nations Development Corp.
Senior Lien, Series A
Pre-refunded 07/01/03
6.00%, 07/01/06 ............................ 525,000
1,000,000 United Nations Development Corp.
Senior Lien, Series A
Pre-refunded 07/01/03
6.00%, 07/01/12 ............................ 1,050,000
500,000 United Nations Development Corp.
Subordinated Lien, Series B
Pre-refunded 07/01/03
6.20%, 07/01/11 ............................ 527,500
------------
79,344,737
------------
PENNSYLVANIA - 0.79%
2,210,000 Elizabeth Forward School District, GO
Capital Appreciation, Series B
5.68%, 09/01/20 (A)........................... 663,000
------------
PUERTO RICO - 1.27%
1,000,000 Puerto Rico Electric Power Authority
Series BB
6.00%, 07/01/12
Insured: MBIA ............................ 1,070,000
------------
TEXAS - 0.71%
600,000 Lone Star Airport Improvement
Authority, Series A-3
6.00%, 12/01/14 (A)
LOC: Royal Bank of Canada..................... 600,000
------------
TOTAL MUNICIPAL SECURITIES ................... 82,177,737
------------
(Cost $83,859,378)
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
NEW YORK MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
SHARES VALUE
----------- ---------
INVESTMENT COMPANIES - 1.47%
290,096 Dreyfus Tax-Exempt Cash Management
Fund.......................................... $ 290,096
947,024 Federated New York Municipal Cash Trust 947,024
------------
TOTAL INVESTMENT COMPANIES ................... 1,237,120
------------
(Cost $1,237,120)
TOTAL INVESTMENTS - 98.87%...................................... 83,414,857
------------
(Cost $85,096,498)
NET OTHER ASSETS AND LIABILITIES - 1.13%........................ 954,897
------------
NET ASSETS - 100.00%............................................ $ 84,369,754
============
----------------------------------------------------
(A) Variable Rate Bond. Rate shown reflects the rate in effect at April
30, 2000.
(B) Zero Coupon Bond. Rate shown reflects the effective yield to maturity
at time of purchase.
AMBAC American Municipal Bond Assurance Corp.
AMT Alternative Minimum Tax. Private activity obligations the interest on
which is subject to the federal AMT for individuals.
EFC Environmental Facilities Corp.
FGIC Federal Guaranty Insurance Corp.
FSA Financial Security Assurance Company
GO General Obligation
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
MWFA Municipal Water Finance Authority
PCR Pollution Control Revenue
SP OB Special Obligation
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
CONNECTICUT MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
MUNICIPAL SECURITIES - 97.37%
CALIFORNIA - 4.14%
$ 2,000,000 California State, GO
5.00%, 08/01/18 ............................ $ 1,812,500
------------
Connecticut - 88.55%
250,000 Cheshire, GO
5.10%, 08/15/07 ............................ 250,625
885,000 Colchester, GO, Lot A
5.40%, 08/15/10 ............................ 901,594
250,000 Connecticut State, GO, Series A
5.10%, 11/15/04 ............................ 251,875
1,000,000 Connecticut State, GO, Series A
5.13%, 03/01/10 ............................ 997,500
400,000 Connecticut State, GO, Series B
5.40%, 03/15/08 ............................ 408,000
1,000,000 Connecticut State, GO, Series B
5.38%, 10/01/11 ............................ 1,008,750
500,000 Connecticut State, GO, Series C
5.50%, 08/15/05 ............................ 513,125
1,000,000 Connecticut State, GO, Series E
6.00%, 03/15/12 ............................ 1,065,000
400,000 Connecticut State Airport Revenue
Bradley International Airport
7.40%, 10/01/04
Insured: FGIC ............................ 432,000
500,000 Connecticut State Airport Revenue
Bradley International Airport
7.65%, 10/01/12
Insured: FGIC ............................ 553,125
500,000 Connecticut State Clean Water Fund
7.00%, 01/01/11 ............................ 518,155
200,000 Connecticut State Clean Water Fund
6.00%, 10/01/12 ............................ 213,500
500,000 Connecticut State HEFA Backus (William W.)
Hospital Issue, Series D
5.63%, 07/01/17
Insured: AMBAC ............................ 493,750
900,000 Connecticut State HEFA
Connecticut College, Series C1
5.50%, 07/01/27
Insured: MBIA ............................ 851,625
2,000,000 Connecticut State HEFA
Fairfield University, Series I
5.25%, 07/01/25
Insured: MBIA ............................ 1,830,000
750,000 Connecticut State HEFA
Greenwich Hospital Issue, Series A
5.30%, 07/01/08
Insured: MBIA ............................ 754,687
1,060,000 Connecticut State HEFA
Middlesex Hospital, Series H
5.00%, 07/01/12
Insured: MBIA ............................ 1,018,925
PAR VALUE VALUE
----------- ---------
CONNECTICUT (CONTINUED)
$ 375,000 Connecticut State HEFA Newington
Childrens Hospital, Series A
5.65%, 07/01/05
Insured: MBIA ............................ $ 384,844
500,000 Connecticut State HEFA
Trinity College, Series F
5.50%, 07/01/21
Insured: MBIA ............................ 478,750
200,000 Connecticut State HFA Housing Mortgage
Finance Program, Series A
5.40%, 05/15/04 ............................ 202,500
105,000 Connecticut State HFA Housing Mortgage
Finance Program, Series A
5.60%, 05/15/05 ............................ 107,231
125,000 Connecticut State HFA Housing Mortgage
Finance Program, Series A-1
5.85%, 11/15/16 ............................ 125,469
400,000 Connecticut State HFA Housing Mortgage
Finance Program, Series B
6.25%, 11/15/05 ............................ 417,000
100,000 Connecticut State HFA Housing Mortgage
Finance Program, Series B
6.20%, 05/15/12 ............................ 102,500
1,500,000 Connecticut State HFA Housing Mortgage
Finance Program, Series D-2
5.45%, 11/15/24 ............................ 1,366,875
415,000 Connecticut State HFA Housing Mortgage
Finance Program, Series F-1
5.60%, 05/15/14 ............................ 413,444
350,000 Connecticut State HFA Housing Mortgage
Finance Program, Series F-2
4.50%, 05/15/00 ............................ 349,982
760,000 Connecticut State Higher Education
Supplemental Loan Authority Family
Education Loan Program, Series A
5.63%, 11/15/07 ............................ 758,100
1,000,000 Connecticut State Resource Recovery
Authority, Series A
5.75%, 11/15/07 ............................ 1,037,500
150,000 Connecticut State, SP OB Transportation
Infrastructure, Series A
5.10%, 09/01/04 ............................ 150,937
950,000 Connecticut State, SP OB Transportation
Infrastructure, Series A
5.13%, 09/01/05 ............................ 957,125
700,000 Connecticut State, SP OB Transportation
Infrastructure, Series A
5.40%, 04/01/07 ............................ 710,500
1,250,000 Connecticut State, SP OB Transportation
Infrastructure, Series A
5.25%, 09/01/07 ............................ 1,260,937
1,500,000 Connecticut State, SP OB Transportation
Infrastructure, Series A
5.38%, 09/01/08 ............................ 1,524,375
1,750,000 Connecticut State, SP OB Transportation
Infrastructure, Series A
5.50%, 10/01/12 ............................ 1,782,812
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
CONNECTICUT MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
CONNECTICUT (CONTINUED)
$ 400,000 Connecticut State, SP OB Transportation
Infrastructure, Series B
6.13%, 09/01/12 ............................ $ 426,500
200,000 Danbury, GO
5.63%, 02/01/13 ............................ 207,000
250,000 East Hampton, GO
5.10%, 06/15/05
Insured: MBIA ............................ 251,875
1,100,000 Fairfield, GO
5.00%, 01/01/18 ............................ 1,017,500
500,000 Hamden, GO
5.50%, 08/15/14
Insured: MBIA ............................ 501,875
250,000 Hartford County Metropolitan District, GO
6.70%, 10/01/09 ............................ 280,313
300,000 Meriden, GO
5.75%, 10/15/04
Insured: AMBAC ............................ 310,875
580,000 Monroe, GO
5.63%, 04/15/14
Insured: FGIC ............................ 585,075
370,000 Montville, GO
5.30%, 12/01/09 ........................... 374,625
500,000 New Canaan, GO
4.75%, 02/01/18 ............................ 443,125
1,500,000 New Haven, GO
5.38%, 02/15/11
Insured: FGIC ............................ 1,513,125
100,000 New Milford, GO
5.80%, 10/01/01 ............................ 101,625
250,000 New Milford, GO
5.50%, 08/01/08 ............................ 256,875
1,000,000 New Milford, GO
5.00%, 05/15/15 ............................ 947,500
350,000 Norwalk, GO
5.00%, 01/15/05 ............................ 351,313
200,000 Norwalk, GO
5.00%, 01/15/06 ............................ 200,500
500,000 Norwich, GO
5.63%, 09/15/07 ............................ 515,000
330,000 Regional School District No. 5, GO
5.05%, 05/15/04 ............................ 330,825
135,000 Regional School District No. 5, GO
5.15%, 05/15/05 ............................ 135,506
225,000 South Central Regional Water Authority
Water System, Series 11
5.75%, 08/01/12
Insured: FGIC ............................ 230,906
175,000 South Central Regional Water Authority
Water System, Series 12
5.13%, 08/01/07
Insured: FGIC ............................ 175,438
1,300,000 Torrington, GO
5.13%, 09/15/12
Insured: FGIC ............................ 1,280,500
100,000 Trumbull, GO
6.00%, 05/15/04 ............................ 104,000
PAR VALUE VALUE
----------- ---------
Connecticut (continued)
$ 2,000,000 University of Connecticut, GO, Series A
5.38%, 03/01/19
Insured: MBIA ............................ $ 1,922,500
100,000 West Hartford, GO
6.00%, 05/01/07 ............................ 106,000
250,000 West Haven, GO, Series B
5.40%, 06/01/09 ............................ 253,125
1,890,000 Westport, GO
5.00%, 07/15/18 ............................ 1,764,788
------------
38,781,406
------------
PUERTO RICO - 4.68%
1,000,000 Puerto Rico Commonwealth, GO
6.00%, 07/01/16
Insured: MBIA ............................ 1,060,000
1,000,000 Puerto Rico Municipal Finance Agency, GO,
Series A
5.50%, 07/01/17
Insured: FSA ............................ 987,500
------------
2,047,500
------------
TOTAL MUNICIPAL SECURITIES ................... 42,641,406
------------
(Cost $43,194,320)
SHARES
--------
INVESTMENT COMPANIES - 1.58%
675,600 Dreyfus Tax-Exempt Cash
Management Fund............................... 675,600
17,789 Federated Connecticut
Municipal Cash Trust.......................... 17,789
------------
TOTAL INVESTMENT COMPANIES ................... 693,389
------------
(Cost $693,389)
TOTAL INVESTMENTS - 98.95%...................................... 43,334,795
------------
(Cost $43,887,709)
NET OTHER ASSETS AND LIABILITIES - 1.05%........................ 460,904
------------
NET ASSETS - 100.00%............................................ $ 43,795,699
============
---------------------------------------------
AMBAC American Municipal Bond Assurance Corp.
FGIC Federal Guaranty Insurance Corp.
FSA Financial Security Assurance Company
GO General Obligation
HEFA Health and Educational Facilities Authority
HFA Housing Finance Authority
MBIA Municipal Bond Insurance Association
SP OB Special Obligation
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
MASSACHUSETTS MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
MUNICIPAL SECURITIES - 97.76%
MASSACHUSETTS - 92.78%
$ 300,000 Attleboro, GO
5.20%, 07/01/02
Insured: AMBAC ............................ $ 303,000
250,000 Boston, GO
5.25%, 10/01/05
Insured: MBIA ............................ 253,125
360,000 Boston, GO, Series A
5.45%, 02/01/07
Insured: AMBAC ............................ 365,850
225,000 Boston, GO, Series A
5.55%, 02/01/08
Insured: AMBAC ............................ 228,656
200,000 Boston Water & Sewer Commission
General Purpose, Senior Series A
5.50%, 11/01/01
Insured: FSA ............................ 202,500
230,000 Boston Water & Sewer Commission
General Purpose, Senior Series A
Pre-refunded 11/01/01
7.00%, 11/01/18
Insured: FGIC ............................ 242,075
100,000 Brookline, GO
5.60%, 09/01/10 ............................ 102,375
250,000 Deerfield, GO
5.60%, 06/15/02 ............................ 253,750
2,015,000 Everett, GO
6.00%, 12/15/11
Insured: MBIA ............................ 2,135,900
250,000 Franklin, GO
5.50%, 11/15/02
Insured: MBIA ............................ 254,687
2,385,000 Holden, GO
Municipal Purpose Loan
5.75%, 03/01/18
Insured: FGIC ............................ 2,387,981
100,000 Kingston, GO
5.70%, 08/01/07 ............................ 102,500
250,000 Lowell, GO
6.05%, 04/01/11
Insured: FSA ............................ 260,625
100,000 Lynn Water & Sewer Commission
5.30%, 12/01/06
Insured: FGIC ............................ 101,000
2,000,000 Massachusetts Bay Transportation
Authority, General Transportation
System, Series A
5.40%, 03/01/08 ............................ 2,030,000
1,000,000 Massachusetts Bay Transportation
Authority, General Transportation
System, Series D
5.00%, 03/01/11 ............................ 1,002,500
130,000 Massachusetts Bay Transportation
Authority, Series A
6.00%, 03/01/12 ............................ 135,200
200,000 Massachusetts Bay Transportation
Authority, Series A
5.75%, 03/01/22 ............................ 203,500
PAR VALUE VALUE
----------- ---------
MASSACHUSETTS (CONTINUED)
$ 750,000 Massachusetts Educational Financing
Authority, Issue G, Series A, AMT
5.15%, 12/01/15
Insured: MBIA ............................ $ 685,312
250,000 Massachusetts State, GO
Consolidated Loan, Series A
5.75%, 02/01/15
Insured: MBIA ............................ 259,688
250,000 Massachusetts State, GO
Consolidated Loan, Series B
5.10%, 07/01/03 ............................ 251,250
1,300,000 Massachusetts State, GO
Consolidated Loan, Series C
5.63%, 08/01/14
Insured: MBIA ............................ 1,347,125
1,000,000 Massachusetts State, GO
Consolidated Loan, Series C
5.02%, 08/01/18 (A)........................... 340,000
370,000 Massachusetts State, GO
Federal Assisted Housing
6.00%, 02/01/08 ............................ 381,563
250,000 Massachusetts State, GO, Series A
6.25%, 07/01/02 ............................ 257,188
250,000 Massachusetts State, GO, Series A
6.25%, 07/01/04 ............................ 261,563
750,000 Massachusetts State, GO, Series A
5.25%, 02/01/08 ............................ 752,813
200,000 Massachusetts State, GO, Series B
5.30%, 11/01/05 ............................ 202,750
100,000 Massachusetts State, GO, Series B
5.50%, 11/01/07 ............................ 102,375
1,000,000 Massachusetts State, SP OB
and Revenue, Consolidated Loan
Series A
5.50%, 06/01/13 ............................ 1,010,000
350,000 Massachusetts State, SP OB
and Revenue, Series A
5.80%, 06/01/00
Insured: AMBAC ............................ 350,322
300,000 Massachusetts State, SP OB
and Revenue, Series A
7.00%, 06/01/02 ............................ 312,750
200,000 Massachusetts State, SP OB
and Revenue, Series A
6.00%, 06/01/13
Insured: AMBAC ............................ 204,750
250,000 Massachusetts State, SP OB
and Revenue, Series A
Pre-refunded 06/01/04
5.80%, 06/01/14 ............................ 259,375
4,000,000 Massachusetts State
Capital Appreciation, Series A
Federal Highway Note
5.15%, 06/15/15 (A)........................... 1,670,000
100,000 Massachusetts State
Convention Center Authority
Boston Common Parking Garage
Series A
5.35%, 09/01/06 ............................ 101,250
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
MASSACHUSETTS MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
MASSACHUSETTS (CONTINUED)
$ 100,000 Massachusetts State
Convention Center Authority
Boston Common Parking Garage
Series A
5.40%, 09/01/07 ............................ $ 101,250
2,000,000 Massachusetts State
Development Finance Agency
Higher Education, Smith College
5.75%, 07/01/23 ............................ 1,965,000
800,000 Massachusetts State
Development Finance Agency
Regis College
5.00%, 10/01/08 ............................ 749,000
1,000,000 Massachusetts State
Grant Anticipation Notes, Series A
5.50%, 06/15/14 ............................ 990,000
1,000,000 Massachusetts State HEFA
Amherst College, Series G
5.00%, 11/01/18 ............................ 896,250
2,000,000 Massachusetts State HEFA
Amherst College, Series G
5.38%, 11/01/20 ............................ 1,872,500
400,000 Massachusetts State HEFA
Beth Israel Hospital, Series G
5.70%, 07/01/05
Insured: AMBAC ............................ 408,500
1,000,000 Massachusetts State HEFA
Caregroup, Series A
5.50%, 07/01/08 ............................ 1,016,250
1,000,000 Massachusetts State HEFA
Harvard University, Series P
5.63%, 11/01/26 ............................ 981,250
1,000,000 Massachusetts State HEFA
Harvard University, Series P
5.38%, 11/01/32 ............................ 931,250
100,000 Massachusetts State HEFA
McLean Hospital Issue, Series C
6.63%, 07/01/15
Insured: FGIC ............................ 105,625
250,000 Massachusetts State HEFA
Medical Center of Central
Massachusetts, Series B
6.00%, 07/01/02
Insured: AMBAC ............................ 255,625
1,110,000 Massachusetts State HEFA
Northeastern University, Series G
5.50%, 10/01/12
Insured: MBIA ............................ 1,125,262
1,435,000 Massachusetts State HEFA Partners
Healthcare System, Series A
5.38%, 07/01/17
Insured: MBIA ............................ 1,357,869
100,000 Massachusetts State HEFA
South Shore Hospital, Series E
5.40%, 07/01/07
Insured: MBIA ............................ 100,625
PAR VALUE VALUE
----------- ---------
MASSACHUSETTS (CONTINUED)
$ 325,000 Massachusetts State HEFA
South Shore Hospital, Series E
5.50%, 07/01/13
Insured: MBIA ............................ $ 322,969
1,000,000 Massachusetts State HEFA
University of Massachusetts, Series A
5.88%, 10/01/29
Insured: FGIC ............................ 986,250
500,000 Massachusetts State HEFA
Williams College, Series D
5.40%, 07/01/05 ............................ 510,000
1,750,000 Massachusetts State HEFA
Williams College, Series F
5.50%, 07/01/26 ............................ 1,658,125
150,000 Massachusetts State HFA
Single Family, Series 41
5.25%, 06/01/01 ............................ 151,260
1,250,000 Massachusetts State IFA
Belmont Hill School
5.63%, 09/01/20 ............................ 1,176,562
400,000 Massachusetts State IFA
Brooks School
5.95%, 07/01/23 ............................ 418,500
1,000,000 Massachusetts State IFA
Combined Jewish Philanthropies
Series A
6.38%, 02/01/15
Insured: AMBAC ............................ 1,037,500
1,000,000 Massachusetts State IFA
Concord Academy
5.50%, 09/01/27 ............................ 881,250
1,000,000 Massachusetts State IFA
Groton School, Series A
5.00%, 03/01/28 ............................ 863,750
250,000 Massachusetts State IFA
Lesley College Project, Series A
6.00%, 07/01/10
Insured: Connie Lee........................... 261,562
300,000 Massachusetts State IFA
Milton Academy, Series B
5.30%, 09/01/08
Insured: MBIA ............................ 301,875
950,000 Massachusetts State IFA Nantucket Electric
Company, Series A, AMT
5.88%, 07/01/17
Insured: AMBAC ............................ 953,562
500,000 Massachusetts State IFA
Park School
5.90%, 09/01/26 ............................ 474,375
2,000,000 Massachusetts State IFA
Phillips Academy
5.38%, 09/01/23 ............................ 1,882,500
1,210,000 Massachusetts State IFA
Trustees Deerfield Academy
5.00%, 10/01/23 ............................ 1,073,875
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
MASSACHUSETTS MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
MASSACHUSETTS (CONTINUED)
$ 1,830,000 Massachusetts State IFA
Tufts University, Series H
5.50%, 02/15/13
Insured: MBIA ............................ $ 1,846,012
1,200,000 Massachusetts State IFA
Wentworth Institute of Technology
5.65%, 10/01/18 ............................ 1,116,000
1,300,000 Massachusetts State IFA
Worcester Polytechnic Institute, Series 2
5.25%, 09/01/14
Insured: MBIA ............................ 1,252,875
610,000 Massachusetts State Port Authority
5.63%, 07/01/12 ............................ 622,200
250,000 Massachusetts State Port Authority
Series B
5.30%, 07/01/01 ............................ 251,875
1,000,000 Massachusetts State Port Authority
Series C
5.13%, 07/01/16 ............................ 928,750
2,000,000 Massachusetts State Port Authority
Series C
5.63%, 07/01/18 ............................ 1,957,500
250,000 Massachusetts State Turnpike
Authority, Series A
5.00%, 01/01/13 ............................ 242,187
1,000,000 Massachusetts State Turnpike Authority,
Metropolitan Highway System, Subordinated
Series A
5.13%, 01/01/09
Insured: AMBAC ............................ 995,000
500,000 Massachusetts State Turnpike Authority,
Metropolitan Highway System, Subordinated
Series A
5.00%, 01/01/39
Insured: AMBAC ............................ 418,125
250,000 Massachusetts State WPAT
Pooled Loan Program, Series 1
5.00%, 02/01/02 ............................ 251,563
2,000,000 Massachusetts State WPAT
Pooled Loan Program, Series 5
5.75%, 08/01/16 ............................ 2,025,000
225,000 Massachusetts State WPAT
Series A
Prerefunded
5.40%, 08/01/11 ............................ 227,531
25,000 Massachusetts State WPAT
Series A
Unrefunded balance
5.40%, 08/01/11 ............................ 25,281
300,000 Massachusetts State WRA
Series A
6.30%, 12/01/01 ............................ 307,500
190,000 Massachusetts State WRA
Series A
Pre-refunded 07/15/02
6.50%, 07/15/21 ............................ 200,213
PAR VALUE VALUE
----------- ---------
MASSACHUSETTS (CONTINUED)
$ 300,000 Massachusetts State WRA
Series B
5.88%, 11/01/04 ............................ $ 310,500
1,165,000 Massachusetts State WRA
Series B
5.50%, 08/01/15
Insured: FSA ............................ 1,165,000
1,000,000 Methuen, GO
5.63%, 11/15/14
Insured: FSA ............................ 1,008,750
220,000 Nantucket Island Land Bank
GO and Revenue, Series E
7.25%, 07/01/19 ............................ 230,725
450,000 New England Education Loan
Marketing Corp., Issue A
5.80%, 03/01/02 ............................ 456,188
200,000 Northampton, GO
5.30%, 09/01/10
Insured: AMBAC ............................ 200,500
150,000 Salem, GO
5.80%, 07/15/06
Insured: AMBAC ............................ 154,500
100,000 Salem, GO
5.90%, 07/15/07
Insured: AMBAC ............................ 103,125
200,000 Sandwich, GO
5.40%, 11/01/07
Insured: AMBAC ............................ 203,250
1,000,000 Southeastern Massachusetts University
Building Authority, Series A
5.75%, 05/01/16
Insured: AMBAC ............................ 1,005,000
1,500,000 Springfield, GO
Municipal Purpose Loan
5.00%, 09/01/15 ............................ 1,411,875
1,000,000 Springfield, GO
Municipal Purpose Loan
6.00%, 10/01/16 ............................ 1,030,000
1,000,000 Springfield, GO
Municipal Purpose Loan
5.00%, 11/15/18 ............................ 905,000
400,000 Taunton, GO
8.00%, 02/01/01 ............................ 410,240
250,000 University of Lowell
Building Authority
Fifth Series A
6.75%, 11/01/03
Insured: AMBAC ............................ 264,375
200,000 University of Massachusetts
Building Authority, Series A
5.50%, 05/01/03
Insured: MBIA ............................ 203,250
100,000 Woods Hole, Martha's Vineyard
& Nantucket Steamship Bonds, Series B
6.00%, 03/01/02 ............................ 102,125
------------
66,957,484
------------
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
MASSACHUSETTS MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
PUERTO RICO - 4.98%
$ 1,000,000 Puerto Rico Commonwealth, GO
Public Improvement
5.50%, 07/01/13 ............................ $ 1,008,750
500,000 Puerto Rico Commonwealth
Aqueduct & Sewer Authority
6.00%, 07/01/09
Insured: Commonwealth Guaranteed.............. 526,875
1,000,000 Puerto Rico Electric Power Authority,
Series BB
6.00%, 07/01/12
Insured: MBIA ............................ 1,070,000
1,000,000 Puerto Rico Municipal Finance Agency, GO,
Series A
5.50%, 07/01/17
Insured: FSA ............................ 987,500
------------
3,593,125
------------
TOTAL MUNICIPAL SECURITIES ................... 70,550,609
------------
(Cost $72,357,539)
SHARES VALUE
-------- ---------
INVESTMENT COMPANIES - 0.93%
527,897 Dreyfus Tax-Exempt Cash
Management Fund............................... $ 527,897
145,876 Federated Massachusetts
Municipal Cash Trust.......................... 145,876
------------
TOTAL INVESTMENT COMPANIES ................... 673,773
------------
(Cost $673,773)
TOTAL INVESTMENTS - 98.69%...................................... 71,224,382
------------
(Cost $73,031,312)
NET OTHER ASSETS AND LIABILITIES - 1.31%........................ 945,461
------------
NET ASSETS - 100.00%............................................ $ 72,169,843
============
--------------------------------------------------------
(A) Zero Coupon Bond. Rate shown reflects effective yield to maturity at
time of purchase.
AMBAC American Municipal Bond Assurance Corp.
AMT Alternative Minimum Tax. Private activity obligations the interest on
which is subject to the federal AMT for individuals.
Connie Lee College Construction Loan Association
FGIC Federal Guaranty Insurance Corp.
FSA Financial Security Assurance Company
GO General Obligation
HEFA Health and Educational Facilities Authority
HFA Housing Finance Agency
IFA Industrial Finance Agency
MBIA Municipal Bond Insurance Association
SP OB Special Obligation
WPAT Water Pollution Abatement Test
WRA Water Resource Authority
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
RHODE ISLAND MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
MUNICIPAL SECURITIES - 96.54%
NEVADA - 1.08%
$ 300,000 Nevada State, GO, Projects 66 & 67,
Series A
5.00%, 05/15/28
Insured: FGIC ............................ $ 255,375
------------
PUERTO RICO - 10.36%
250,000 Puerto Rico Commonwealth, GO
6.00%, 07/01/16
Insured: MBIA ............................ 265,000
500,000 Puerto Rico Commonwealth, GO, Public
Improvement
5.50%, 07/01/12 ............................ 506,250
500,000 Puerto Rico Commonwealth Special Tax
Revenue, Series A, Infrastructure Finance
Authority
5.00%, 07/01/16
Insured: AMBAC ............................ 463,750
500,000 Puerto Rico Electric Power Authority Revenue,
Series EE
5.25%, 07/01/15
Insured: MBIA ............................ 485,000
400,000 Puerto Rico Municipal Finance Agency,
Series A
6.00%, 07/01/14
Insured: FSA ............................ 422,000
315,000 Puerto Rico Municipal Finance Agency, GO,
Series A
5.50%, 07/01/17
Insured: FSA ............................ 311,062
------------
2,453,062
------------
RHODE ISLAND - 80.86%
500,000 Bristol County Water Authority Revenue,
General, Series A
5.00%, 07/01/16
Insured: MBIA ............................ 458,125
200,000 Burrillville, GO
5.85%, 05/01/14
Insured: FGIC ............................ 204,250
500,000 Convention Center Authority, Series A
6.38%, 05/15/23
Insured: MBIA ............................ 518,905
500,000 Lincoln, GO
5.50%, 08/15/10
Insured: MBIA ............................ 506,250
500,000 North Kingstown, GO
5.75%, 10/01/19
Insured: FGIC ............................ 496,875
500,000 Pawtucket, GO
5.70%, 01/15/06
Insured: MBIA ............................ 514,375
PAR VALUE VALUE
----------- ---------
RHODE ISLAND (CONTINUED)
$ 300,000 Pawtucket, GO
5.63%, 04/15/07
Insured: MBIA ............................ $ 309,750
500,000 Providence, GO
5.45%, 01/15/10
Insured: FSA ............................ 506,875
400,000 Providence, GO
5.75%, 04/15/11
Insured: FGIC ............................ 410,000
500,000 Rhode Island Clean Water Protection
Finance Agency PCR, Series A
5.25%, 10/01/16
Insured: AMBAC ............................ 470,625
150,000 Rhode Island Clean Water Protection
Finance Agency Safe Drinking Water
Providence, Series A
6.20%, 01/01/06
Insured: AMBAC ............................ 156,750
100,000 Rhode Island Clean Water Protection
Finance Agency Safe Drinking Water
Providence, Series A
6.70%, 01/01/15
Insured: AMBAC ............................ 107,125
500,000 Rhode Island Clean Water Protection
Finance Agency Wastewater Treatment
System, Cranston
5.80%, 09/01/22
Insured: MBIA ............................ 480,625
500,000 Rhode Island Depositors Economic
Protection Corp. SP OB, Series A
5.75%, 08/01/21 ............................ 503,125
250,000 Rhode Island Depositors Economic
Protection Corp. SP OB, Series B
5.25%, 08/01/21 ............................ 247,813
500,000 Rhode Island Port Authority & Economic
Development Corp., Shepard Building
Project, Series B
6.75%, 06/01/15
Insured: AMBAC ............................ 539,375
200,000 Rhode Island State, GO, Series A
6.10%, 06/15/03 ............................ 206,750
150,000 Rhode Island State, GO, Series A
6.25%, 06/15/07 ............................ 156,563
500,000 Rhode Island State EDC Airport, Series B
5.00%, 07/01/18
Insured: FSA ............................ 445,625
500,000 Rhode Island State EDC Airport, Series B
5.00%, 07/01/23
Insured: FSA ............................ 435,000
225,000 Rhode Island State EDC Airport, Series B
5.00%, 07/01/28
Insured: FSA ............................ 191,531
750,000 Rhode Island State EDC, University of
Rhode Island Steam Generation Facility
Project
5.00%, 11/01/19
Insured: FSA ............................ 668,437
SEE NOTES TO FINANCIAL STATEMENTS.
31
<PAGE>
RHODE ISLAND MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ---------
RHODE ISLAND (CONTINUED)
$ 500,000 Rhode Island State HEBC Higher Education
Facility, Brown University
6.00%, 09/01/20 ............................ $ 511,250
1,000,000 Rhode Island State HEBC Higher Education
Facility, Brown University
5.00%, 09/01/23 ............................ 871,250
275,000 Rhode Island State HEBC Higher Education
Facility, Bryant College SP OB
6.50%, 06/01/05
Insured: MBIA ............................ 287,375
1,420,000 Rhode Island State HEBC Higher Education
Facility, Johnson & Wales
5.50%, 04/01/18 ............................ 1,377,400
475,000 Rhode Island State HEBC Higher Education
Facility, New England Institute
6.00%, 03/01/15
Insured: Connie Lee........................... 484,500
300,000 Rhode Island State HEBC Higher Education
Facility, Providence College
5.60%, 11/01/09
Insured: MBIA ............................ 303,000
500,000 Rhode Island State HEBC Higher Education
Facility, Rhode Island School of Design
5.63%, 06/01/16
Insured: MBIA ............................ 492,500
325,000 Rhode Island State HEBC Higher Education
Facility, Roger Williams
6.50%, 11/15/24
Insured: Connie Lee........................... 342,875
300,000 Rhode Island State HEBC Higher Education
Facility, Saint Antoine
6.75%, 11/15/18
LOC: Allied Island State HMFC................. 322,125
260,000 Rhode Island State HEBC Higher Education
Facility, Salve Regina
6.25%, 03/15/13
Insured: Connie Lee........................... 268,125
175,000 Rhode Island State HEBC Higher Education
Facility, Unrefunded
6.50%, 11/15/24
Insured: Connie Lee........................... 183,531
500,000 Rhode Island State HEBC, Miriam Hospital
6.60%, 04/01/19 ............................ 529,375
300,000 Rhode Island State HMFC Homeownership
Opportunity, Series 17-A
6.25%, 04/01/17 ............................ 305,625
500,000 Rhode Island State HMFC Homeownership
Opportunity, Series 19-A
5.70%, 04/01/15 ............................ 493,750
500,000 Rhode Island State HMFC Homeownership
Opportunity, Series 22-A
5.55%, 04/01/17 ............................ 484,375
PAR VALUE VALUE
----------- ---------
RHODE ISLAND (CONTINUED)
$ 500,000 Rhode Island State HMFC Homeownership
Opportunity, Series 29-A
5.05%, 10/01/15
Insured: FHA ............................ $ 450,625
500,000 Rhode Island State HMFC Homeownership
Opportunity, Series 33-B
5.75%, 04/01/22 ............................ 498,750
500,000 Rhode Island State HMFC Multifamily
Housing, Series A
5.60%, 07/01/10
Insured: AMBAC ............................ 502,500
500,000 Rhode Island State HMFC Multifamily
Housing, Series A
6.15%, 07/01/17
Insured: AMBAC ............................ 506,250
250,000 Rhode Island State HMFC Rental Housing
Program, Series A
5.65%, 10/01/07 ............................ 250,625
500,000 Rhode Island State Industrial Facilities Corp.,
Revenue Marine Terminal, Mobil Oil Refining
6.00%, 11/01/14 ............................ 523,750
400,000 Rhode Island State Turnpike & Bridge
Authority
5.35%, 12/01/17 ............................ 372,500
100,000 South Kingstown, GO, Series B
5.50%, 06/15/10
Insured: FSA ............................ 101,625
140,000 Westerly, GO
6.00%, 09/15/14
Insured: AMBAC ............................ 143,850
------------
19,142,280
------------
WASHINGTON - 2.10%
1,000,000 Seattle, GO, Series E
4.85%, 12/15/12 (A)........................... 497,500
------------
WISCONSIN - 2.14%
500,000 Milwaukee County, GO, Series A
5.70%, 09/01/15 ............................ 505,625
------------
TOTAL MUNICIPAL SECURITIES ................... 22,853,842
------------
(Cost $23,136,274)
SEE NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
RHODE ISLAND MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
SHARES VALUE
----------- ---------
INVESTMENT COMPANIES - 2.27%
14,276 Dreyfus Tax-Exempt Cash Management
Fund.......................................... $ 14,276
522,943 Federated Tax-Free Obligations Fund........... 522,943
------------
TOTAL INVESTMENT COMPANIES ................... 537,219
------------
(Cost $537,219)
TOTAL INVESTMENTS - 98.81%...................................... 23,391,061
------------
(Cost $23,673,493)
NET OTHER ASSETS AND LIABILITIES - 1.19%........................ 280,957
------------
NET ASSETS - 100.00%............................................ $ 23,672,018
============
------------------------------------------------------
(A) Zero Coupon Bond. Rate shown reflects effective yield to maturity at
time of purchase.
AMBAC American Municipal Bond Assurance Corp.
Connie Lee College Construction Loan Association
EDC Economic Development Corp.
FGIC Federal Guaranty Insurance Corp.
FHA Federal Housing Authority
FSA Financial Security Assurance Company
GO General Obligation
HEBC Health and Education Building Corp.
HMFC Housing and Mortgage Finance Corp.
LOC Line of Credit
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
SP OB Special Obligation
SEE NOTES TO FINANCIAL STATEMENTS.
33
<PAGE>
GALAXY TAX-EXEMPT BOND FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
<TABLE>
NEW JERSEY NEW YORK
TAX-EXEMPT MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
------------------ ------------------ ------------------
<S> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost .......................................... $ 183,053,727 $ 9,118,184 $ 85,096,498
Net unrealized (depreciation) ................................ (3,821,964) (301,171) (1,681,641)
------------------ ------------------ ------------------
Total investments at value ................................... 179,231,763 8,817,013 83,414,857
Cash ........................................................... 7 -- 23
Receivable for shares sold ..................................... 430,224 -- 25,482
Interest and dividend receivables .............................. 2,811,636 141,237 1,320,595
Deferred organizational expense (Note 2) ....................... -- 9,934 --
------------------ ------------------ ------------------
Total Assets ................................................. 182,473,630 8,968,184 84,760,957
------------------ ------------------ ------------------
LIABILITIES:
Dividends payable .............................................. 406,496 30,134 190,366
Payable to Custodian ........................................... -- -- --
Payable for shares repurchased ................................. 254,900 -- 139,590
Advisory fee payable (Note 3) .................................. 83,529 1,879 36,813
Payable to Fleet affiliates (Note 3) ........................... 4,641 -- 3,569
Payable to Administrator (Note 3) .............................. 18,475 -- 9,991
Trustees' fees and expenses payable (Note 3) ................... 5,720 256 3,344
Accrued expenses and other payables ............................ 4,759 4,260 7,530
------------------ ------------------ ------------------
Total Liabilities ............................................ 778,520 36,529 391,203
------------------ ------------------ ------------------
NET ASSETS ........................................................ $ 181,695,110 $ 8,931,655 $ 84,369,754
================== ================== ==================
NET ASSETS consist of:
Par value (Note 5) ............................................. $ 17,524 $ 935 $ 7,932
Paid-in capital in excess of par value ......................... 186,058,214 9,382,501 86,556,586
Undistributed (overdistributed) net investment income (loss) ... (26,014) 5,370 5
Accumulated net realized (loss) on investments sold ............ (532,650) (155,980) (513,128)
Unrealized (depreciation) of investments ....................... (3,821,964) (301,171) (1,681,641)
------------------ ------------------ ------------------
TOTAL NET ASSETS .................................................. $ 181,695,110 $ 8,931,655 $ 84,369,754
================== ================== ==================
Retail A Shares:
Net Assets ..................................................... $ 18,582,484 $ 326,276 $ 40,031,731
Shares of beneficial interest outstanding ...................... 1,792,200 34,152 3,763,757
NET ASSET VALUE and redemption price per share ................ $ 10.37 $ 9.55 $ 10.64
Sales charge - 3.75% of offering price ......................... 0.40 0.37 0.41
------------------ ------------------ ------------------
Maximum offering price per share ............................... $ 10.77 $ 9.92 $ 11.05
================== ================== ==================
Retail B Shares:
Net Assets ..................................................... $ 3,229,847 N/A N/A
Shares of beneficial interest outstanding ...................... 311,506 N/A N/A
------------------ ------------------ ------------------
NET ASSET VALUE and offering price per share* .................. $ 10.37 N/A N/A
================== ================== ==================
Trust Shares:
Net Assets ..................................................... $ 159,882,779 $ 8,605,379 $ 44,338,023
Shares of beneficial interest outstanding ...................... 15,420,267 900,631 4,168,467
------------------ ------------------ ------------------
NET ASSET VALUE, offering and
redemption price per share ................................... $ 10.37 $ 9.55 $ 10.64
================== ================== ==================
--------------------------------------------------------------------------
<FN>
* Redemption price per share is equal to the Net Asset Value per share less any applicable contingent deferred sales charge.
(1) As of April 30, 2000, the Rhode Island Municipal Bond Fund had not issued Trust shares.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
<TABLE>
CONNECTICUT MASSACHUSETTS RHODE ISLAND
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND(1)
------------------ ------------------ ------------------
<S> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost .......................................... $ 43,887,709 $ 73,031,312 $ 23,673,493
Net unrealized (depreciation) ................................ (552,914) (1,806,930) (282,432)
------------------ ------------------ ------------------
Total investments at value ................................... 43,334,795 71,224,382 23,391,061
Cash ........................................................... -- -- --
Receivable for shares sold ..................................... 196 60,240 74
Interest and dividend receivables .............................. 592,865 1,118,637 345,577
Deferred organizational expense (Note 2) ....................... -- -- --
------------------ ------------------ ------------------
Total Assets ................................................. 43,927,856 72,403,259 23,736,712
------------------ ------------------ ------------------
LIABILITIES:
Dividends payable .............................................. 94,398 181,564 60,517
Payable to Custodian ........................................... 2,760 15 34
Payable for shares repurchased ................................. -- 217 --
Advisory fee payable (Note 3) .................................. 13,012 21,005 3,803
Payable to Fleet affiliates (Note 3) ........................... 3,024 3,640 --
Payable to Administrator (Note 3) .............................. 7,738 16,104 215
Trustees' fees and expenses payable (Note 3) ................... 1,779 2,928 115
Accrued expenses and other liabilities ........................ 9,446 7,943 10
------------------ ------------------ ------------------
Total Liabilities ............................................ 132,157 233,416 64,694
------------------ ------------------ ------------------
NET ASSETS ........................................................ $ 43,795,699 $ 72,169,843 $ 23,672,018
================== ================== ==================
NET ASSETS consist of:
Par value (Note 5) ............................................. $ 4,336 $ 7,359 $ 2,272
Paid-in capital in excess of par value ......................... 45,359,930 75,360,557 24,088,420
Undistributed (overdistributed) net investment income (loss) ... (14,614) (24,194) (11,177)
Accumulated net realized (loss) on investments sold ............ (1,001,039) (1,366,949) (125,065)
Unrealized (depreciation) of investments ....................... (552,914) (1,806,930) (282,432)
------------------ ------------------ ------------------
TOTAL NET ASSETS .................................................. $ 43,795,699 $ 72,169,843 $ 23,672,018
================== ================== ==================
Retail A Shares:
Net Assets ..................................................... $ 24,284,845 $ 33,900,997 $ 23,672,018
Shares of beneficial interest outstanding ...................... 2,404,323 3,456,918 2,271,884
NET ASSET VALUE and redemption price per share ................ $ 10.10 $ 9.81 $ 10.42
Sales charge - 3.75% of offering price ......................... 0.39 0.38 0.41
------------------ ------------------ ------------------
Maximum offering price per share ............................... $ 10.49 $ 10.19 $ 10.83
================== ================== ==================
Retail B Shares:
Net Assets ..................................................... N/A N/A N/A
Shares of beneficial interest outstanding ...................... N/A N/A N/A
------------------ ------------------ ------------------
NET ASSET VALUE and offering price per share* .................. N/A N/A N/A
================== ================== ==================
Trust Shares:
Net Assets ..................................................... $ 19,510,854 $ 38,268,846 $ --
Shares of beneficial interest outstanding ...................... 1,931,680 3,902,312 --
------------------ ------------------ ------------------
NET ASSET VALUE, offering and
redemption price per share ................................... $ 10.10 $ 9.81 $ --
================== ================== ==================
<FN>
* Redemption price per share is equal to the Net Asset Value per share less any applicable contingent deferred sales charge.
(1) As of April 30, 2000, the Rhode Island Municipal Bond Fund had not issued Trust shares.
</FN>
</TABLE>
35
<PAGE>
<TABLE>
GALAXY TAX-EXEMPT BOND FUNDS
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED APRIL 30, 2000 (UNAUDITED)
NEW JERSEY NEW YORK
TAX-EXEMPT MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
------------------ ------------------ ------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) ............................................ $ 4,751,119 $ 229,018 $ 2,229,866
Dividends (Note 2) ........................................... 109,598 6,427 50,343
------------------ ------------------ ------------------
Total investment income .................................... 4,860,717 235,445 2,280,209
------------------ ------------------ ------------------
EXPENSES:
Investment advisory fee (Note 3) ............................. 675,729 35,748 316,301
Administration fee (Note 3) .................................. 66,428 3,515 31,097
Custodian fee ................................................ 7,388 3,905 5,359
Fund accounting fee (Note 3) ................................. 30,181 20,060 28,345
Professional fees (Note 3) ................................... 10,420 7,905 12,723
Transfer agent fee (Note 3) .................................. 5,417 2,223 9,873
Shareholder servicing and 12b-1 fees (Note 3) ................ 29,282 643 29,845
Trustees' fees and expenses (Note 3) ......................... 2,001 204 1,496
Amortization of organization costs (Note 2) .................. - 1,694 --
Reports to shareholders ...................................... 4,728 1,632 5,256
Miscellaneous ................................................ 18,704 1,435 9,378
------------------ ------------------ ------------------
Total expenses before reimbursement/waiver ................. 850,278 78,964 449,673
------------------ ------------------ ------------------
Less: reimbursement/waiver (Note 4) ........................ (180,194) (39,145) (87,309)
------------------ ------------------ ------------------
Total expenses net of reimbursement/waiver ................. 670,084 39,819 362,364
------------------ ------------------ ------------------
NET INVESTMENT INCOME ........................................... 4,190,633 195,626 1,917,845
------------------ ------------------ ------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Notes 2 & 6):
Net realized (loss) on investments sold ...................... (453,993) (110,944) (227,054)
Net change in unrealized appreciation of investments ......... 1,091,431 105,327 828,169
------------------ ------------------ ------------------
NET REALIZED AND UNREALIZED GAIN
(LOSS)ON INVESTMENTS ......................................... 637,438 (5,617) 601,115
------------------ ------------------ ------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .................................... $ 4,828,071 $ 190,009 $ 2,518,960
================== ================== ==================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
<TABLE>
CONNECTICUT MASSACHUSETTS RHODE ISLAND
MUNICIPAL MUNICIPAL MUNICIPAL
BOND FUND BOND FUND BOND FUND
------------------ ------------------ ------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) ............................................ $ 1,125,395 $ 1,914,483 $ 594,540
Dividends (Note 2) ........................................... 26,077 22,955 13,570
------------------ ------------------ ------------------
Total investment income .................................... 1,151,472 1,937,438 608,110
------------------ ------------------ ------------------
EXPENSES:
Investment advisory fee (Note 3) ............................. 167,487 274,309 84,523
Administration fee (Note 3) .................................. 16,466 26,969 8,309
Custodian fee ................................................ 4,220 5,717 3,916
Fund accounting fee (Note 3) ................................. 21,924 31,140 15,960
Professional fees (Note 3) ................................... 9,552 10,371 9,732
Transfer agent fee (Note 3) .................................. 4,467 4,779 2,624
Shareholder servicing and 12b-1 fees (Note 3) ................ 18,883 24,512 --
Trustees' fees and expenses (Note 3) ......................... 493 796 234
Amortization of organization costs (Note 2) .................. -- -- --
Reports to shareholders ...................................... 3,494 4,422 1,127
Miscellaneous ................................................ 9,186 12,035 5,661
------------------ ------------------ ------------------
Total expenses before reimbursement/waiver ................. 256,172 395,050 132,086
------------------ ------------------ ------------------
Less: reimbursement/waiver (Note 4) ........................ (89,326) (146,298) (45,079)
------------------ ------------------ ------------------
Total expenses net of reimbursement/waiver ................. 166,846 248,752 87,007
------------------ ------------------ ------------------
NET INVESTMENT INCOME .......................................... 984,626 1,688,686 521,103
------------------ ------------------ ------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Notes 2 & 6):
Net realized (loss) on investments sold ...................... (178,949) (929,311) (48,975)
Net change in unrealized appreciation of investments ......... 257,675 1,307,796 180,819
------------------ ------------------ ------------------
NET REALIZED AND UNREALIZED GAIN
(LOSS)ON INVESTMENTS ......................................... 78,726 378,485 131,844
------------------ ------------------ ------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .................................... $ 1,063,352 $ 2,067,171 $ 652,947
================== ================== ==================
</TABLE>
37
<PAGE>
GALAXY TAX-EXEMPT BOND FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
NEW JERSEY NEW YORK
TAX-EXEMPT BOND FUND MUNICIPAL BOND FUND MUNICIPAL BOND FUND
------------------------- ------------------------ -------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED APRIL 30, ENDED ENDED APRIL 30, ENDED ENDED APRIL 30, ENDED
2000 OCTOBER 31, 2000 OCTOBER 31, 2000 OCTOBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999 (UNAUDITED) 1999
------------ ------------ ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS at beginning of period........... $171,085,496 $163,142,500 $ 8,723,906 $ 8,516,218 $78,038,771 $83,019,676
------------ ------------ ----------- ----------- ------------ -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income.................... 4,190,633 7,462,137 195,626 338,909 1,917,845 3,696,094
Net realized gain (loss) on
investments sold...................... (453,993) (78,657) (110,944) (44,349) (227,054) 227,275
Net change in unrealized appreciation
(depreciation) of investments......... 1,091,431 (13,091,406) 105,327 (589,590) 828,169 (6,932,960)
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in net assets
resulting from operations............. 4,828,071 (5,707,926) 190,009 (295,030) 2,518,960 (3,009,591)
------------ ------------ ----------- ----------- ------------ -----------
DIVIDENDS TO SHAREHOLDERS FROM:
RETAIL A SHARES:
Net investment income................. (527,797) (1,025,504) (21,478) (46,232) (1,034,989) (1,903,474)
Net realized gain on investments...... -- (306,201) -- -- -- --
------------ ------------ ----------- ----------- ------------ -----------
Total Dividends.................... (527,797) (1,331,705) (21,478) (46,232) (1,034,989) (1,903,474)
------------ ------------ ----------- ----------- ------------ -----------
RETAIL B SHARES:
Net investment income................. (62,571) (118,934) N/A N/A N/A N/A
Net realized gain on investments...... -- (32,760) N/A N/A N/A N/A
------------ ------------ ----------- ----------- ------------ -----------
Total Dividends.................... (62,571) (151,694) N/A N/A N/A N/A
------------ ------------ ----------- ----------- ------------ -----------
TRUST SHARES:
Net investment income................. (3,600,265) (6,325,088) (174,148) (292,677) (1,045,378) (1,629,254)
Net realized gain on investments...... -- (1,646,317) -- -- -- --
------------ ------------ ----------- ----------- ------------ -----------
Total Dividends.................... (3,600,265) (7,971,405) (174,148) (292,677) (1,045,378) (1,629,254)
------------ ------------ ----------- ----------- ------------ -----------
Total Dividends to shareholders.... (4,190,633) (9,454,804) (195,626) (338,909) (2,080,367) (3,532,728)
------------ ------------ ----------- ----------- ------------ -----------
NET INCREASE (DECREASE) FROM
SHARE TRANSACTIONS(1).................... 9,972,176 23,105,726 213,366 841,627 5,892,390 1,561,414
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in net assets.... 10,609,614 7,942,996 207,749 207,688 6,330,983 (4,980,905)
------------ ------------ ----------- ----------- ------------ -----------
NET ASSETS AT END OF PERIOD
(INCLUDING LINE A).................... $181,695,110 $171,085,496 $ 8,931,655 $ 8,723,906 $84,369,754 $78,038,771
============ ============ =========== =========== ============ ===========
(A) Undistributed (overdistributed) net
investment income (loss).............. $ (26,014)$ (26,014) $ 5,370 $ 5,370 $ 5 $ 162,527
============ ============ =========== =========== ============ ===========
<FN>
-----------------------------------------------------------------------------
(1) For detail on share transactions by series, see Statements of Changes in
Net Assets - Capital Stock Activity on pages 40 and 41.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
<TABLE>
CONNECTICUT MUNICIPAL MASSACHUSETTS MUNICIPAL RHODE ISLAND MUNICIPAL
BOND FUND BOND FUND BOND FUND
------------------------- ------------------------ -------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED APRIL 30, ENDED ENDED APRIL 30, ENDED ENDED APRIL 30, ENDED
2000 OCTOBER 31, 2000 OCTOBER 31, 2000 OCTOBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999 (UNAUDITED) 1999
------------ ------------ ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS at beginning of period........... $ 44,562,475 $ 38,768,085 $73,593,103 $67,559,730 $ 19,833,264 $20,209,657
------------ ------------ ----------- ----------- ------------ -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income.................... 984,626 1,768,485 1,688,686 3,090,310 521,103 957,994
Net realized gain (loss) on
investments sold...................... (178,949) (23,141) (929,311) (65,783) (48,975) (76,090)
Net change in unrealized appreciation
(depreciation) of investments......... 257,675 (2,972,756) 1,307,796 (5,600,385) 180,819 (1,483,777)
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in net assets
resulting from operations............. 1,063,352 (1,227,412) 2,067,171 (2,575,858) 652,947 (601,873)
------------ ------------ ----------- ----------- ------------ -----------
DIVIDENDS TO SHAREHOLDERS FROM:
RETAIL A SHARES:
Net investment income................. (558,811) (1,076,680) (818,255) (1,821,052) (521,103) (958,948)
Net realized gain on investments...... -- -- -- -- -- (86,518)
------------ ------------ ----------- ----------- ------------ -----------
Total Dividends.................... (558,811) (1,076,680) (818,255) (1,821,052) (521,103) (1,045,466)
------------ ------------ ----------- ----------- ------------ -----------
RETAIL B SHARES:
Net investment income................. N/A N/A N/A N/A N/A N/A
Net realized gain on investments...... N/A N/A N/A N/A N/A N/A
------------ ------------ ----------- ----------- ------------ -----------
Total Dividends.................... N/A N/A N/A N/A N/A N/A
------------ ------------ ----------- ----------- ------------ -----------
TRUST SHARES:
Net investment income................. (425,815) (691,805) (872,898) (1,269,258) -- --
Net realized gain on investments...... -- -- -- -- -- --
------------ ------------ ----------- ----------- ------------ -----------
Total Dividends.................... (425,815) (691,805) (872,898) (1,269,258) -- --
------------ ------------ ----------- ----------- ------------ -----------
Total Dividends to shareholders.... (984,626) (1,768,485) (1,691,153) (3,090,310) (521,103) (1,045,466)
------------ ------------ ----------- ----------- ------------ -----------
NET INCREASE (DECREASE) FROM
SHARE TRANSACTIONS(1)..................... (845,502) 8,790,287 (1,799,278) 11,699,541 3,706,910 1,270,946
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in net assets.... (766,776) 5,794,390 (1,423,260) 6,033,373 3,838,754 (376,393)
------------ ------------ ----------- ----------- ------------ -----------
NET ASSETS AT END OF PERIOD
(INCLUDING LINE A).................... $ 43,795,699 $ 44,562,475 $72,169,843 $73,593,103 $ 23,672,018 $19,833,264
============ ============ =========== =========== ============ ===========
(A) Undistributed (overdistributed) net
investment income (loss).............. $ (14,614)$ (14,614) $ (24,194) $ (21,727) $ (11,177) $ (11,177)
============ ============ =========== =========== ============ ===========
<FN>
-----------------------------------------------------------------------------
(1) For detail on share transactions by series, see Statements of Changes in
Net Assets - Capital Stock Activity on pages 40 and 41.
</FN>
</TABLE>
39
<PAGE>
GALAXY TAX-EXEMPT BOND FUNDS
STATEMENTS OF CHANGES IN NET ASSETS -
CAPITAL STOCK ACTIVITY
<TABLE>
NEW JERSEY NEW YORK
TAX-EXEMPT BOND FUND MUNICIPAL BOND FUND MUNICIPAL BOND FUND
------------------------- ------------------------ -------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED APRIL 30, ENDED ENDED APRIL 30, ENDED ENDED APRIL 30, ENDED
2000 OCTOBER 31, 2000 OCTOBER 31, 2000 OCTOBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999 (UNAUDITED) 1999
------------ ------------ ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
DOLLAR AMOUNTS
RETAIL A SHARES:
Sold..................................... $ 10,840,827 $ 10,924,021 $ 1,533,080 $ 1,530,335 $ 9,755,727 $ 8,808,575
Issued to shareholders in reinvestment
of dividends........................... 398,151 1,054,920 16,990 27,090 794,016 1,440,313
Repurchased................................. (18,421,459) (8,919,372) (2,537,767) (969,625) (12,124,569) (13,618,561)
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in shares outstanding $ (7,182,481)$ 3,059,569 $ (987,697) $ 587,800 $ (1,574,826) $(3,369,673)
============ ============ =========== =========== ============ ===========
RETAIL B SHARES:
Sold..................................... $ 429,478 $ 1,359,050 N/A N/A N/A N/A
Issued to shareholders in reinvestment
of dividends........................... 42,240 100,123 N/A N/A N/A N/A
Repurchased.............................. (632,972) (479,393) N/A N/A N/A N/A
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in shares outstanding $ (161,254)$ 979,780 N/A N/A N/A N/A
============ ============ =========== =========== ============ ===========
TRUST SHARES:
Sold..................................... $ 33,865,967 $ 27,090,728 $ 1,580,946 $ 757,940 $ 13,201,300 $10,126,919
Issued to shareholders in reinvestment
of dividends........................... 1,351,717 3,516,363 349 -- 85,079 172,798
Repurchased.............................. (17,901,773) (11,540,714) (380,232) (504,113) (5,819,163) (5,368,630)
------------ ------------ ----------- ----------- ------------ -----------
Net increase in shares outstanding....... $ 17,315,911 19,066,377 $ 1,201,063 $ 253,827 $ 7,467,216 $ 4,931,087
============ ============ =========== =========== ============ ===========
SHARE ACTIVITY
RETAIL A SHARES:
Sold..................................... 1,049,748 1,027,378 160,931 152,836 921,992 790,902
Issued to shareholders in reinvestment
of dividends........................... 38,535 90,411 1,771 2,738 74,969 118,514
Repurchased.............................. (1,783,722) (822,141) (264,665) (99,073) (1,143,344) (1,215,806)
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in shares outstanding (695,439) 295,648 (101,963) 56,501 (146,383) (306,390)
============ ============ =========== =========== ============ ===========
RETAIL B SHARES:
Sold..................................... 41,496 121,001 N/A N/A N/A N/A
Issued to shareholders in reinvestment
of dividends........................... 4,085 9,992 N/A N/A N/A N/A
Repurchased.............................. (61,419) (43,965) N/A N/A N/A N/A
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in shares outstanding (15,838) 87,028 N/A N/A N/A N/A
============ ============ =========== =========== ============ ===========
TRUST SHARES:
Sold..................................... 3,278,149 2,480,419 163,844 74,984 1,240,873 895,936
Issued to shareholders in reinvestment
of dividends........................... 130,740 320,864 37 -- 8,031 15,619
Repurchased.............................. (1,731,189) (1,066,969) (39,478) (51,120) (551,061) (484,126)
------------ ------------ ----------- ----------- ------------ -----------
Net increase in shares outstanding....... 1,677,700 1,734,314 124,403 23,864 697,843 427,429
============ ============ =========== =========== ============ ===========
<FN>
----------------------------------------------------------------------
(1) As of April 30, 2000, the Rhode Island Municipal Bond Fund had not issued Trust Shares.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
40
<PAGE>
<TABLE>
CONNECTICUT MUNICIPAL MASSACHUSETTS MUNICIPAL RHODE ISLAND MUNICIPAL
BOND FUND BOND FUND BOND FUND
------------------------- ------------------------ -------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED APRIL 30, ENDED ENDED APRIL 30, ENDED ENDED APRIL 30, ENDED
2000 OCTOBER 31, 2000 OCTOBER 31, 2000 OCTOBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999 (UNAUDITED) 1999
------------ ------------ ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
DOLLAR AMOUNTS
RETAIL A SHARES:
Sold..................................... $ 2,911,300 $ 13,759,257 $ 6,528,799 $12,444,513 $ 7,011,517 $ 7,391,836
Issued to shareholders in reinvestment
of dividends........................... 442,106 674,313 602,239 1,440,807 191,147 490,026
Repurchased................................. (5,842,453) (10,721,396) (13,061,351) (15,097,467) (3,495,754) (6,610,916)
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in shares outstanding $ (2,489,047)$ 3,712,174 $(5,930,313) $(1,212,147) $ 3,706,910 $ 1,270,946
============ ============ =========== =========== ============ ===========
RETAIL B SHARES:
Sold..................................... N/A N/A N/A N/A N/A N/A
Issued to shareholders in reinvestment
of dividends........................... N/A N/A N/A N/A N/A N/A
Repurchased.............................. N/A N/A N/A N/A N/A N/A
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in shares outstanding N/A N/A N/A N/A N/A N/A
============ ============ =========== =========== ============ ===========
TRUST SHARES:
Sold..................................... $ 5,130,103 $ 8,822,079 $12,099,292 $15,868,262 $ -- $ --
Issued to shareholders in reinvestment
of dividends........................... 1,694 2,396 16,474 50,657 -- --
Repurchased.............................. (3,488,252) (3,746,362) (7,984,731) (3,007,231) -- --
------------ ------------ ----------- ----------- ------------ -----------
Net increase in shares outstanding....... $ 1,643,545 $ 5,078,113 $ 4,131,035 $12,911,688 $ -- $ --
============ ============ =========== =========== ============ ===========
SHARE ACTIVITY
RETAIL A SHARES:
Sold..................................... 290,099 1,302,912 668,733 1,195,565 675,174 670,082
Issued to shareholders in reinvestment
of dividends........................... 43,841 81,055 61,637 138,671 18,400 21,822
Repurchased.............................. (577,326) (1,033,862) (1,340,272) (1,464,110) (336,184) (585,107)
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in shares outstanding (243,386) 350,105 (609,902) (129,874) 357,390 106,797
============ ============ =========== =========== ============ ===========
RETAIL B SHARES:
Sold..................................... N/A N/A N/A N/A N/A N/A
Issued to shareholders in reinvestment
of dividends........................... N/A N/A N/A N/A N/A N/A
Repurchased.............................. N/A N/A N/A N/A N/A N/A
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in shares outstanding N/A N/A N/A N/A N/A N/A
============ ============ =========== =========== ============ ===========
TRUST SHARES:
Sold..................................... 508,285 832,405 1,241,082 1,544,810 -- --
Issued to shareholders in reinvestment
of dividends........................... 168 318 1,686 4,943 -- --
Repurchased.............................. (345,555) (349,964) (813,001) (296,766) -- --
------------ ------------ ----------- ----------- ------------ -----------
Net increase in shares outstanding....... 162,898 482,759 429,767 1,252,987 -- --
============ ============ =========== =========== ============ ===========
<FN>
----------------------------------------------------------------------
(1) As of April 30, 2000, the Rhode Island Municipal Bond Fund had not issued Trust Shares.
</FN>
</TABLE>
41
<PAGE>
TAX-EXEMPT BOND FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
RETAIL A SHARES
<TABLE>
SIX MONTHS ENDED
APRIL 30, 2000 YEARS ENDED OCTOBER 31,
--------------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............ $ 10.33 $ 11.30 $ 11.06 $ 10.78 $ 10.78 $ 9.99
------------ ------------ ------------ ------------ ------------ ------------
Income from Investment Operations:
Net investment income (A).................... 0.24 0.46 0.48 0.50 0.50 0.52
Net realized and unrealized gain (loss)
on investments............................. 0.04 (0.83) 0.34 0.29 -- 0.79
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations:......... 0.28 (0.37) 0.82 0.79 0.50 1.31
------------ ------------ ------------ ------------ ------------ ------------
Less Dividends:
Dividends from net investment income......... (0.24) (0.46) (0.49) (0.50) (0.50) (0.52)
Dividends from net realized capital gains.... -- (0.14) (0.09) (0.01) -- --
------------ ------------ ------------ ------------ ------------ ------------
Total Dividends:........................... (0.24) (0.60) (0.58) (0.51) (0.50) (0.52)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net asset value...... 0.04 (0.97) 0.24 0.28 -- 0.79
------------ ------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period.................. $ 10.37 $ 10.33 $ 11.30 $ 11.06 $ 10.78 $ 10.78
============ ============ ============ ============ ============ ============
Total Return(2)................................. 2.67%** (3.45)% 7.60% 7.49% 4.77% 13.40%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)............... $ 18.582 $ 25,704 $ 24,764 $ 25,465 $ 28,339 $ 31,609
Ratios to average net assets:
Net investment income including
reimbursement/waiver....................... 4.52%* 4.25% 4.32% 4.60% 4.68% 4.99%
Operating expenses including
reimbursement/waiver....................... 0.88%* 0.92% 0.94% 0.95% 0.93% 0.91%
Operating expenses excluding
reimbursement/waiver....................... 1.08%* 1.12% 1.15% 1.18% 1.18% 1.24%
Portfolio Turnover Rate......................... 17%** 23% 59% 78% 15% 11%
--------------------------------------------------------------
<FN>
* Annualized
** Not Annualized
(1) The Fund began offering Retail B shares on March 4, 1996.
(2) Calculation does not include the effect of any sales charge for Retail A Shares and Retail B Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail
A Shares for the six month ended April 30, 2000 (unaudited) and the years ended October 31, 1999, 1998, 1997, 1996 and 1995
were $0.23, $0.44, $0.46, $0.47, $0.48 and 0.48, respectively. Net investment income per share before reimbursement/waiver of
fees by the Investment Advisor and/or Administrator for Trust Shares for the for the six month ended April 30, 2000, and the
years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.23, $0.47, $0.48, $0.51, $0.51 and $0.51, respectively. Net
investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail B
Shares for the six month ended April 30, 2000 (unaudited) the years ended October 31, 1999, 1998 and 1997 and the period
ended October 31, 1996 were $0.19, $0.37, $0.40, $0.40 and $0.25, respectively.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
42
<PAGE>
<TABLE>
TRUST SHARES
SIX MONTHS ENDED
APRIL 30, 2000 YEARS ENDED OCTOBER 31,
--------------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............ $ 10.33 $ 11.30 $ 11.06 $ 10.78 $ 10.78 $ 9.99
------------ ------------ ------------ ------------ ------------ ------------
Income from Investment Operations:
Net investment income (A).................... 0.24 0.49 0.50 0.53 0.53 0.54
Net realized and unrealized gain (loss)
on investments............................. 0.04 (0.83) 0.34 0.29 -- 0.79
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations:......... 0.28 (0.34) 0.84 0.82 0.53 1.33
------------ ------------ ------------ ------------ ------------ ------------
Less Dividends:
Dividends from net investment income......... (0.24) (0.49) (0.51) (0.53) (0.53) (0.54)
Dividends from net realized capital gains.... -- (0.14) (0.09) (0.01) -- --
------------ ------------ ------------ ------------ ------------ ------------
Total Dividends:........................... (0.24) (0.63) (0.60) (0.54) (0.53) (0.54)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net asset value...... 0.04 (0.97) 0.24 0.28 -- 0.79
------------ ------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period.................. $ 10.37 $ 10.33 $ 11.30 $ 11.06 $ 10.78 $ 10.78
============ ============ ============ ============ ============ ============
Total Return(2)................................. 2.75%** (3.25)% 7.85% 7.75% 5.03% 13.62%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)............... $ 159,883 $ 141,999 $ 135,664 $ 122,218 $ 103,163 $ 91,740
Ratios to average net assets:
Net investment income including
reimbursement/waiver....................... 4.69%* 4.46% 4.55% 4.85% 4.91% 5.18%
Operating expenses including
reimbursement/waiver....................... 0.71%* 0.71% 0.71% 0.70% 0.70% 0.72%
Operating expenses excluding
reimbursement/waiver....................... 0.91%* 0.91% 0.92% 0.96% 0.95% 0.97%
Portfolio Turnover Rate......................... 17%** 23% 59% 78% 15% 11%
<FN>
* Annualized
** Not Annualized
(1) The Fund began offering Retail B shares on March 4, 1996.
(2) Calculation does not include the effect of any sales charge for Retail A Shares and Retail B Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail
A Shares for the six month ended April 30, 2000 (unaudited) and the years ended October 31, 1999, 1998, 1997, 1996 and 1995
were $0.23, $0.44, $0.46, $0.47, $0.48 and 0.48, respectively. Net investment income per share before reimbursement/waiver of
fees by the Investment Advisor and/or Administrator for Trust Shares for the for the six month ended April 30, 2000, and the
years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.23, $0.47, $0.48, $0.51, $0.51 and $0.51, respectively. Net
investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail B
Shares for the six month ended April 30, 2000 (unaudited) the years ended October 31, 1999, 1998 and 1997 and the period
ended October 31, 1996 were $0.19, $0.37, $0.40, $0.40 and $0.25, respectively.
</FN>
</TABLE>
<TABLE>
RETAIL B SHARES
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 2000 YEARS ENDED OCTOBER 31, OCTOBER 31,
----------------------------------------
(UNAUDITED) 1999 1998 1997 1996(1)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............ $ 10.33 $ 11.30 $ 11.06 $ 10.78 $ 10.94
------------ ------------ ------------ ------------ ------------
Income from Investment Operations:
Net investment income (A).................... 0.20 0.39 0.42 0.43 0.27
Net realized and unrealized gain (loss)
on investments............................. 0.04 (0.83) 0.33 0.29 (0.16)
------------ ------------ ------------ ------------ ------------
Total from Investment Operations:......... 0.24 (0.44) 0.75 0.72 0.11
------------ ------------ ------------ ------------ ------------
Less Dividends:
Dividends from net investment income......... (0.20) (0.39) (0.42) (0.43) (0.27)
Dividends from net realized capital gains.... -- (0.14) (0.09) (0.01) --
------------ ------------ ------------ ------------ ------------
Total Dividends:........................... (0.20) (0.53) (0.51) (0.44) (0.27)
------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net asset value...... 0.04 (0.97) 0.24 0.28 (0.16)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period.................. $ 10.37 $ 10.33 $ 11.30 $ 11.06 $ 10.78
============ ============ ============ ============ ============
Total Return(2)................................. 2.32%** (4.07)% 6.95% 6.83% 1.08%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)............... $ 3,230 $ 3,382 $ 2,715 $ 1,690 $ 787
Ratios to average net assets:
Net investment income including
reimbursement/waiver....................... 3.85%* 3.61% 3.71% 3.95% 4.08%*
Operating expenses including
reimbursement/waiver....................... 1.55%* 1.55% 1.55% 1.60% 1.57%*
Operating expenses excluding
reimbursement/waiver....................... 1.75%* 1.75% 1.76% 1.83% 1.77%*
Portfolio Turnover Rate......................... 17%** 23% 59% 78% 15%
<FN>
* Annualized
** Not Annualized
(1) The Fund began offering Retail B shares on March 4, 1996.
(2) Calculation does not include the effect of any sales charge for Retail A Shares and Retail B Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail
A Shares for the six month ended April 30, 2000 (unaudited) and the years ended October 31, 1999, 1998, 1997, 1996 and 1995
were $0.23, $0.44, $0.46, $0.47, $0.48 and 0.48, respectively. Net investment income per share before reimbursement/waiver of
fees by the Investment Advisor and/or Administrator for Trust Shares for the for the six month ended April 30, 2000, and the
years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.23, $0.47, $0.48, $0.51, $0.51 and $0.51, respectively. Net
investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail B
Shares for the six month ended April 30, 2000 (unaudited) the years ended October 31, 1999, 1998 and 1997 and the period
ended October 31, 1996 were $0.19, $0.37, $0.40, $0.40 and $0.25, respectively.
</FN>
</TABLE>
43
<PAGE>
NEW JERSEY MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
RETAIL A SHARES
<TABLE>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
APRIL 30, 2000(3) OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1999 1998(1)
----------------- ------------------- -------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period................................. $ 9.56 $ 10.24 $ 10.00
----------------- ------------------- -------------------
Income from Investment Operations:
Net investment income (A)......................................... 0.19 0.36 0.20
Net realized and unrealized gain (loss) on investments............ (0.01) (0.68) 0.24
----------------- ------------------- -------------------
Total from Investment Operations:............................. 0.18 (0.32) 0.44
----------------- ------------------- -------------------
Less Dividends
Dividends from net investment income.............................. (0.19) (0.36) (0.20)
----------------- ------------------- -------------------
Total Dividends:................................................ (0.19) (0.36) (0.20)
----------------- ------------------- -------------------
Net increase (decrease) in net asset value........................... (0.01) (0.68) 0.24
----------------- ------------------- -------------------
Net Asset Value, End of Period....................................... $ 9.55 $ 9.56 $ 10.24
================= =================== ===================
Total Return(2)...................................................... 1.88%** (3.24)% 4.34%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's).................................... $ 326 $ 1,302 $ 815
Ratios to average net assets:
Net investment income including reimbursement/waiver.............. 3.93%* 3.56% 3.62%*
Operating expenses including reimbursement/waiver................. 1.01%* 1.11% 1.09%*
Operating expenses excluding reimbursement/waiver................. 1.99%* 2.11% 3.65%*
Portfolio Turnover Rate.............................................. 48%** 41% 53%**
------------------------------------------------------------------------
<FN>
* Annualized.
** Not Annualized.
(1) The Fund commenced operations on April 3, 1998.
(2) Calculation does not include the effect of any sales charge for Retail A Shares.
(3) The selected per share data was calculated using the weighted average shares outstanding method for the period.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail
A Shares for the six months ended April 30, 2000 (unaudited), the year ended October 31, 1999 and the period ended October
31, 1998 was $0.14, $0.26 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 six months ended April 30, 2000 (unaudited), the year ended
October 31, 1999 and the period ended October 31, 1998 was $0.16, $0.30 and $0.15, respectively.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
44
<PAGE>
TRUST SHARES
<TABLE>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
APRIL 30, 2000(3) OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1999 1998(1)
----------------- ------------------- -------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period................................. $ 9.56 $ 10.24 $ 10.00
----------------- ------------------- -------------------
Income from Investment Operations:
Net investment income (A)......................................... 0.20 0.38 0.21
Net realized and unrealized gain (loss) on investments............ (0.01) (0.68) 0.24
----------------- ------------------- -------------------
Total from Investment Operations:............................. 0.19 (0.30) 0.45
----------------- ------------------- -------------------
Less Dividends
Dividends from net investment income.............................. (0.20) (0.38) (0.21)
----------------- ------------------- -------------------
Total Dividends:................................................ (0.20) (0.38) (0.21)
----------------- ------------------- -------------------
Net increase (decrease) in net asset value........................... (0.01) (0.68) 0.24
----------------- ------------------- -------------------
Net Asset Value, End of Period....................................... $ 9.55 $ 9.56 $ 10.24
================= =================== ===================
Total Return(2)...................................................... 1.96%** (3.06)% 4.48%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's).................................... $ 8,605 $ 7,422 $ 7,701
Ratios to average net assets:
Net investment income including reimbursement/waiver.............. 4.13%* 3.76% 3.79%*
Operating expenses including reimbursement/waiver................. 0.81%* 0.92% 0.92%*
Operating expenses excluding reimbursement/waiver................. 1.61%* 1.63% 2.07%*
Portfolio Turnover Rate.............................................. 48%** 41% 53%**
<FN>
* Annualized.
** Not Annualized.
(1) The Fund commenced operations on April 3, 1998.
(2) Calculation does not include the effect of any sales charge for Retail A Shares.
(3) The selected per share data was calculated using the weighted average shares outstanding method for the period.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail
A Shares for the six months ended April 30, 2000 (unaudited), the year ended October 31, 1999 and the period ended October
31, 1998 was $0.14, $0.26 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 six months ended April 30, 2000 (unaudited), the year ended
October 31, 1999 and the period ended October 31, 1998 was $0.16, $0.30 and $0.15, respectively.
</FN>
</TABLE>
45
<PAGE>
NEW YORK MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
RETAIL A SHARES
<TABLE>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 2000 ---------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ....................... $ 10.57 $ 11.44 $ 11.09 $ 10.75 $ 10.78 $ 9.89
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) ............................... 0.24 0.48 0.48 0.49 0.48 0.49
Net realized and unrealized gain (loss)
on investments ........................................ 0.09 (0.89) 0.35 0.34 (0.03) 0.89
--------- --------- --------- --------- --------- ---------
Total from Investment Operations: ................... 0.33 (0.41) 0.83 0.83 0.45 1.38
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income .................... (0.26) (0.46) (0.48) (0.49) (0.48) (0.49)
--------- --------- --------- --------- --------- ---------
Total Dividends: ...................................... (0.26) (0.46) (0.48) (0.49) (0.48) (0.49)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ................. 0.07 (0.87) 0.35 0.34 (0.03) 0.89
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ............................. $ 10.64 $ 10.57 $ 11.44 $ 11.09 $ 10.75 $ 10.78
========= ========= ========= ========= ========= =========
Total Return(1) ............................................ 3.12%** (3.72)% 7.65% 7.93% 4.31% 14.03%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .......................... $ 40,032 $ 41,343 $ 48,218 $ 38,434 $ 40,154 $ 42,870
Ratios to average net assets:
Net investment income including
reimbursement/waiver .................................. 4.45%* 4.31% 4.27% 4.52% 4.50% 4.73%
Operating expenses including
reimbursement/waiver .................................. 0.96%* 0.96% 0.87% 0.94% 0.95% 0.92%
Operating expenses excluding
reimbursement/waiver .................................. 1.16%* 1.16% 1.20% 1.26% 1.35% 1.31%
Portfolio Turnover Rate .................................... 16%** 24% 27% 61% 12% 5%
----------------------------------------------------------------------
<FN>
* Annualized.
** Not annualized.
(1) Calculation does not include the effect of any sales charge for Retail A Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail
A Shares for the six months ended April 30, 2000 (unaudited) and the years ended October 31, 1999, 1998, 1997, 1996 and 1995
were $0.23, $0.46, $0.45, $0.45, $0.44, and $0.44, respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for Trust Shares for the six months ended April 30, 2000 (unaudited)
and the years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.23, $0.48, $0.47, $0.49, $0.47 and $0.48,
respectively.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
46
<PAGE>
<TABLE>
TRUST SHARES
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 2000 ---------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ....................... $ 10.57 $ 11.44 $ 11.09 $ 10.75 $ 10.78 $ 9.89
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) ............................... 0.24 0.50 0.50 0.52 0.51 0.51
Net realized and unrealized gain (loss)
on investments ........................................ 0.09 (0.89) 0.35 0.34 (0.03) 0.89
--------- --------- --------- --------- --------- ---------
Total from Investment Operations: ................... 0.33 (0.39) 0.85 0.86 0.48 1.40
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income .................... (0.26) (0.48) (0.50) (0.52) (0.51) (0.51)
--------- --------- --------- --------- --------- ---------
Total Dividends: ...................................... (0.26) (0.48) (0.50) (0.52) (0.51) (0.51)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ................. 0.07 (0.87) 0.35 0.34 (0.03) 0.89
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ............................. $ 10.64 $ 10.57 $ 11.44 $ 11.09 $ 10.75 $ 10.78
========= ========= ========= ========= ========= =========
Total Return(1) ............................................ 3.21%** (3.54)% 7.82% 8.17% 4.55% 14.23%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .......................... $ 44,338 $ 36,696 $ 34,801 $ 27,562 $ 23,762 $ 23,077
Ratios to average net assets:
Net investment income including
reimbursement/waiver .................................. 4.64%* 4.50% 4.42% 4.75% 4.75% 4.91%
Operating expenses including
reimbursement/waiver .................................. 0.77%* 0.77% 0.72% 0.71% 0.70% 0.74%
Operating expenses excluding
reimbursement/waiver .................................. 0.97%* 0.97% 0.99% 1.02% 1.10% 1.07%
Portfolio Turnover Rate .................................... 16%** 24% 27% 61% 12% 5%
<FN>
* Annualized.
** Not annualized.
(1) Calculation does not include the effect of any sales charge for Retail A Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail
A Shares for the six months ended April 30, 2000 (unaudited) and the years ended October 31, 1999, 1998, 1997, 1996 and 1995
were $0.23, $0.46, $0.45, $0.45, $0.44, and $0.44, respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for Trust Shares for the six months ended April 30, 2000 (unaudited)
and the years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.23, $0.48, $0.47, $0.49, $0.47 and $0.48,
respectively.
</FN>
</TABLE>
47
<PAGE>
CONNECTICUT MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
RETAIL A SHARES
<TABLE>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 2000 ---------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ....................... $ 10.09 $ 10.82 $ 10.47 $ 10.14 $ 10.13 $ 9.22
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) ............................... 0.22 0.43 0.43 0.45 0.42 0.44
Net realized and unrealized gain (loss) on investments .. 0.01 (0.73) 0.35 0.33 0.01 0.91
--------- --------- --------- --------- --------- ---------
Total from Investment Operations: ................... 0.23 (0.30) 0.78 0.78 0.43 1.35
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income .................... (0.22) (0.43) (0.43) (0.45) (0.42) (0.44)
--------- --------- --------- --------- --------- ---------
Total Dividends: ...................................... (0.22) (0.43) (0.43) (0.45) (0.42) (0.44)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ................. 0.01 (0.73) 0.35 0.33 0.01 0.91
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ............................. $ 10.10 $ 10.09 $ 10.82 $ 10.47 $ 10.14 $ 10.13
========= ========= ========= ========= ========= =========
Total Return(1) ............................................ 2.28%** (2.87)% 7.58% 7.86% 4.32% 14.94%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .......................... $ 24,285 $ 26,715 $ 24,856 $ 23,355 $ 23,244 $ 18,066
Ratios to average net assets:
Net investment income including
reimbursement/waiver .................................. 4.34%* 4.07% 4.02% 4.30% 4.13% 4.53%
Operating expenses including
reimbursement/waiver .................................. 0.82%* 0.85% 0.88% 0.70% 0.70% 0.68%
Operating expenses excluding
reimbursement/waiver .................................. 1.22%* 1.25% 1.31% 1.31% 1.38% 1.48%
Portfolio Turnover Rate .................................... 14%** 53% 46% 42% 3% 7%
----------------------------------------------------------------------
<FN>
* Annualized.
** Not annualized.
(1) Calculation does not include the effect of any sales charge for Retail A Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail
A Shares for the six months ended April 30, 2000 (unaudited) and the years ended October 31, 1999, 1998, 1997, 1996 and 1995
were $0.20, $0.39, $0.38, $0.38, $0.35 and $0.37, respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for Trust Shares for the six months ended April 30, 2000 (unaudited)
and the years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.21, $0.41, $0.40, $0.41, $0.37 and $0.38,
respectively.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
48
<PAGE>
TRUST SHARES
<TABLE>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 2000 ---------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ....................... $ 10.09 $ 10.82 $ 10.47 $ 10.14 $ 10.13 $ 9.22
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) ............................... 0.23 0.45 0.45 0.47 0.44 0.46
Net realized and unrealized gain (loss) on investments .. 0.01 (0.73) 0.35 0.33 0.01 0.91
--------- --------- --------- --------- --------- ---------
Total from Investment Operations: ................... 0.24 (0.28) 0.80 0.80 0.45 1.37
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income .................... (0.23) (0.45) (0.45) (0.47) (0.44) (0.46)
--------- --------- --------- --------- --------- ---------
Total Dividends: ...................................... (0.23) (0.45) (0.45) (0.47) (0.44) (0.46)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ................. 0.01 (0.73) 0.35 0.33 0.01 0.91
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ............................. $ 10.10 $ 10.09 $ 10.82 $ 10.47 $ 10.14 $ 10.13
========= ========= ========= ========= ========= =========
Total Return (1) ........................................... 2.37%** (2.68)% 7.81% 8.06% 4.54% 15.21%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .......................... $ 19,511 $ 17,848 $ 13,913 $ 9,866 $ 6,348 $ 4,083
Ratios to average net assets:
Net investment income including
reimbursement/waiver .................................. 4.52%* 4.26% 4.24% 4.51% 4.34% 4.76%
Operating expenses including
reimbursement/waiver .................................. 0.64%* 0.65% 0.67% 0.49% 0.49% 0.45%
Operating expenses excluding
reimbursement/waiver .................................. 1.04%* 1.05% 1.10% 1.10% 1.17% 1.24%
Portfolio Turnover Rate .................................... 14%** 53% 46% 42% 3% 7%
<FN>
* Annualized.
** Not annualized.
(1) Calculation does not include the effect of any sales charge for Retail A Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail
A Shares for the six months ended April 30, 2000 (unaudited) and the years ended October 31, 1999, 1998, 1997, 1996 and 1995
were $0.20, $0.39, $0.38, $0.38, $0.35 and $0.37, respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for Trust Shares for the six months ended April 30, 2000 (unaudited)
and the years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.21, $0.41, $0.40, $0.41, $0.37 and $0.38,
respectively.
</FN>
</TABLE>
49
<PAGE>
MASSACHUSETTS MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
RETAIL A SHARES
<TABLE>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 2000 ---------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ....................... $ 9.76 $ 10.53 $ 10.25 $ 9.94 $ 9.98 $ 9.12
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) ............................... 0.22 0.43 0.46 0.45 0.43 0.44
Net realized and unrealized gain (loss)
on investments ........................................ 0.05 (0.77) 0.27 0.32 (0.04) 0.86
--------- --------- --------- --------- --------- ---------
Total from Investment Operations: ................... 0.27 (0.34) 0.73 0.77 0.39 1.30
--------- --------- --------- --------- --------- ---------
Less Dividends:
Dividends from net investment income .................... (0.22) (0.43) (0.45) (0.46) (0.43) (0.44)
--------- --------- --------- --------- --------- ---------
Total Dividends: ...................................... (0.22) (0.43) (0.45) (0.46) (0.43) (0.44)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net asset value ................. 0.05 (0.77) 0.28 0.31 (0.04) 0.86
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ............................. $ 9.81 $ 9.76 $ 10.53 $ 10.25 $ 9.94 $ 9.98
========= ========= ========= ========= ========= =========
Total Return (1) ........................................... 2.81%** (3.35)% 7.22% 7.92% 4.05% 14.52%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .......................... $ 33,901 $ 39,696 $ 44,189 $ 33,318 $ 26,275 $ 16,113
Ratios to average net assets:
Net investment income including
reimbursement/waiver ................................ 4.54%* 4.18% 4.30% 4.38% 4.42% 4.56%
Operating expenses including
reimbursement/waiver .................................. 0.76%* 0.79% 0.78% 0.63% 0.66% 0.70%
Operating expenses excluding
reimbursement/waiver .................................. 1.16%* 1.19% 1.21% 1.20% 1.32% 1.58%
Portfolio Turnover Rate .................................... 20%** 34% 44% 48% 16% 19%
----------------------------------------------------------------------
<FN>
* Annualized.
** Not annualized.
(1) Calculation does not include the effect of any sales charge for Retail A Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail
A Shares for the six months ended April 30, 2000 (unaudited) and the years ended October 31, 1999, 1998, 1997, 1996 and 1995
were $0.20, $0.39, $0.41, $0.39, $0.37 and $0.36, respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for Trust Shares for the six months ended April 30, 2000 (unaudited)
and the years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.21, $0.41, $0.42, $0.40, $0.40 and $0.38,
respectively.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
50
<PAGE>
TRUST SHARES
<TABLE>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 2000 ---------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ....................... $ 9.76 $ 10.53 $ 10.25 $ 9.94 $ 9.98 $ 9.12
--------- --------- --------- --------- --------- ---------
Income from Investment Operations:
Net investment income (A) ............................... 0.23 0.45 0.47 0.46 0.46 0.45
Net realized and unrealized gain (loss)
on investments ........................................ 0.05 (0.77) 0.27 0.32 (0.04) 0.86
--------- --------- --------- --------- --------- ---------
Total from Investment Operations: ................... 0.28 (0.32) 0.74 0.78 0.42 1.31
--------- --------- --------- --------- --------- ---------
Less Dividends: (0.23) (0.45) (0.46) (0.47) (0.46) (0.45)
Dividends from net investment income .................... --------- --------- --------- --------- --------- ---------
(0.23) (0.45) (0.46) (0.47) (0.46) (0.45)
Total Dividends: ...................................... --------- --------- --------- --------- --------- ---------
0.05 (0.77) 0.28 0.31 (0.04) 0.86
Net increase (decrease) in net asset value ................. --------- --------- --------- --------- --------- ---------
$ 9.81 $ 9.76 $ 10.53 $ 10.25 $ 9.94 $ 9.98
Net Asset Value, End of Period ............................. ========= ========= ========= ========= ========= =========
Total Return (1) ........................................... 2.89%** (3.17)% 7.42% 8.06% 4.27% 14.72%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .......................... $ 38,269 $ 33,897 $ 23,371 $ 13,986 $ 11,047 $ 7,607
Ratios to average net assets:
Net investment income including
reimbursement/waiver ................................ 4.70%* 4.36% 4.49% 4.57% 4.60% 4.73%
Operating expenses including
reimbursement/waiver .................................. 0.60%* 0.61% 0.60% 0.44% 0.48% 0.52%
Operating expenses excluding
reimbursement/waiver .................................. 1.00%* 1.01% 1.03% 1.01% 1.14% 1.31%
Portfolio Turnover Rate .................................... 20%** 34% 44% 48% 16% 19%
<FN>
* Annualized.
** Not annualized.
(1) Calculation does not include the effect of any sales charge for Retail A Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for Retail
A Shares for the six months ended April 30, 2000 (unaudited) and the years ended October 31, 1999, 1998, 1997, 1996 and 1995
were $0.20, $0.39, $0.41, $0.39, $0.37 and $0.36, respectively. Net investment income per share before reimbursement/waiver
of fees by the Investment Advisor and/or Administrator for Trust Shares for the six months ended April 30, 2000 (unaudited)
and the years ended October 31, 1999, 1998, 1997, 1996 and 1995 were $0.21, $0.41, $0.42, $0.40, $0.40 and $0.38,
respectively.
</FN>
</TABLE>
51
<PAGE>
RHODE ISLAND MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
RETAIL A SHARES
<TABLE>
PERIOD
SIX MONTHS ENDED YEARS ENDED OCTOBER 31, ENDED
APRIL 30, 2000 --------------------------------------------- OCTOBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995(1)
--------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............. $ 10.36 $ 11.18 $ 10.91 $ 10.65 $ 10.67 $ 10.00
--------- --------- --------- --------- --------- ----------
Income from Investment Operations:
Net investment income (A)..................... 0.24 0.48 0.50 0.48 0.51 0.44
Net realized and unrealized gain (loss)
on investments.............................. 0.06 (0.77) 0.29 0.32 0.03 0.67
--------- --------- --------- --------- --------- ----------
Total from Investment Operations:......... 0.30 (0.29) 0.79 0.80 0.54 1.11
--------- --------- --------- --------- --------- ----------
Less Dividends:
Dividends from net investment income.......... (0.24) (0.48) (0.50) (0.50) (0.51) (0.44)
Dividends from net realized capital gains..... - (0.05) (0.02) (0.04) (0.05) --
--------- --------- --------- --------- --------- ----------
Total Dividends:........................... (0.24) (0.53) (0.52) (0.54) (0.56) (0.44)
--------- --------- --------- --------- --------- ----------
Net increase (decrease) in net asset value....... 0.06 (0.82) 0.27 0.26 (0.02) 0.67
--------- --------- --------- --------- --------- ----------
Net Asset Value, End of Period................... $ 10.42 $ 10.36 $ 11.18 $ 10.91 $ 10.65 $ 10.67
========= ========= ========= ========= ========= ==========
Total Return (2)................................. 2.92%** (2.73)% 7.35% 7.78% 5.22% 11.29%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)................ $ 23,672 $ 19,833 $ 20,210 $ 17,134 $ 14,900 $ 10,850
Ratios to average net assets:
Net investment income including
reimbursement/waiver........................ 4.62%* 4.41% 4.52% 4.50% 4.78% 5.13%*
Operating expenses including
reimbursement/waiver........................ 0.77%* 0.80% 0.81% 0.83% 0.77% 0.40%*
Operating expenses excluding
reimbursement/waiver........................ 1.17%* 1.20% 1.23% 1.34% 1.34% 2.25%*
Portfolio Turnover Rate.......................... 24%** 34% 41% 19% 13% 34%**
--------------------------------------------------------------
<FN>
* Annualized
** Not Annualized
(1) The Fund commenced operations on December 20, 1994.
(2) Calculation does not include the effect of any sales charge for Retail A Shares.
(A) Net investment income per share before reimbursement/waiver of fees by the Investment Advisor and/or Administrator for the
six months ended April 30, 2000 (unaudited), the years ended October 31, 1999, 1998, 1997 and 1996 and the period ended
October 31, 1995 were $0.22, $0.44, $0.45, $0.43, $0.45 and $0.28, respectively.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
52
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION
The Galaxy Fund, a Massachusetts business trust (the "Trust"), is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company. As of the date of this report, the Trust offered twenty-nine
managed investment portfolios. The accompanying financial statements and
financial highlights are those of the Tax-Exempt Bond, New Jersey Municipal
Bond, New York Municipal Bond, Connecticut Municipal Bond, Massachusetts
Municipal Bond and Rhode Island Municipal Bond Funds (individually, a "Fund",
collectively, the "Funds") only.
Each Fund is authorized to issue two series of shares (Trust Shares and
Retail A Shares), except for the Tax-Exempt Bond Fund, which is authorized to
issue five series of shares (Trust Shares, Retail A Shares, Retail B Shares,
Prime A Shares and Prime B Shares), and the Rhode Island Municipal Bond Fund,
which is authorized to issue three series of shares (Trust Shares, Retail A
Shares and BKBShares). As of April 30, 2000, the Rhode Island Municipal Bond
Fund has offered only Retail A Shares and BKB Shares and the Tax-Exempt Bond
Fund has offered only Trust Shares, Retail A Shares and Retail B Shares. Trust
Shares, Retail A Shares, Retail B Shares, Prime A Shares, Prime B Shares and
BKBShares are substantially the same except that (i) Retail A Shares are subject
to a maximum 3.75% front-end sales charge, (ii) Prime A Shares are subject to a
maximum 4.75% front-end sales charge, (iii) Retail B Shares and Prime B Shares
are subject to a maximum 5.00% contingent deferred sales charge, and (iv) each
series of shares bears the following series specific expenses: distribution fees
and/or shareholder servicing and related fees and transfer agency charges. Six
years after purchase, Retail B Shares will convert automatically to Retail A
Shares and eight years after purchase, Prime B Shares will convert automatically
to Prime A Shares. BKB Shares of the Rhode Island Municipal Bond Fund will
convert to Retail A Shares of the Fund on the first anniversary of the closing
of the reorganization of the Boston 1784 Funds into the Trust provided that
prior thereto the Board of Trustees of the Trust has determined that such
conversion is in the best interest of the holders of such BKB Shares. No BKB
Shares of the Rhode Island Municipal Bond Fund were issued prior to the date of
this report.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of their
financial statements.
PORTFOLIO VALUATION: Investment securities are valued by an independent
pricing service approved by the Trust's Board of Trustees. When, in the judgment
of the service, quoted bid prices are readily available and are representative
of the bid side of the market, investments are valued at the mean between quoted
bid prices and asked prices. Other investments are carried at fair value as
determined by the service based on methods which include consideration of yields
or prices of bonds of comparable quality, coupon maturity and type; indications
as to values from dealers; and general market conditions. Short-term obligations
that mature in 60 days or less are valued at amortized cost, which approximates
fair value. All other securities and other assets are appraised at their fair
value as determined in good faith under consistently applied procedures
established by and under the general supervision of the Board of Trustees.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
accounted for on a trade date basis. Net realized gains or losses on sales of
securities are determined by the identified cost method. Interest and dividend
income is recorded on the accrual basis. Investment income and realized and
unrealized gains and losses are allocated to the separate series of a Fund based
upon the relative net assets of each series.
DIVIDENDS TO SHAREHOLDERS: Dividends from net investment income are
determined separately for each series and are declared daily and paid monthly.
Net realized capital gains, if any, are distributed at least annually.
Income dividends and capital gain dividends are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles.
FEDERAL INCOME TAXES: The Trust treats each Fund as a separate entity for
federal income tax purposes. Each Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code.
By so qualifying, each Fund will not be subject to federal income taxes to the
extent that it distributes substantially all of its taxable or tax-exempt
income, if any, for its tax period ending October 31. In addition, by
distributing in each calendar year substantially all of its net investment
income, capital gains and certain other amounts, if any, each Fund will not be
subject to a federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
EXPENSES: The Trust accounts separately for the assets, liabilities and
operations of each Fund. Expenses directly attributable to a Fund are charged to
the Fund, while expenses which are attributable to more than one fund of the
Trust are allocated among the respective funds.
53
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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. In the event
that any of the initial shares purchased by a Fund's sponsor are redeemed during
such period by any holder thereof, the Fund involved will be reimbursed by such
holder for any unamortized organization costs in the same proportion as the
number of initial shares being redeemed bears to the number of initial shares
outstanding at the time of redemption.
WHEN-ISSUED SECURITIES: Each Fund may purchase and sell securities, such as
municipal obligations, on a "when-issued" basis. Delivery of the security and
payment take place after the date of the commitment to purchase and such
securities are subject to market fluctuations during this period. The fair value
of these securities is determined in the same manner as other municipal
obligations. The Trust's custodian will set aside cash or liquid portfolio
securities equal to the amount of the when-issued commitment in a separate
account.
3. INVESTMENT ADVISORY, ADMINISTRATION, DISTRIBUTION
SHAREHOLDER SERVICES AND OTHER FEES
The Trust and Fleet Investment Advisors Inc. (the "Investment Advisor" or
"Fleet"), an indirect wholly-owned subsidiary of FleetBoston Financial
Corporation, are parties to an investment advisory agreement under which the
Investment Advisor provides services for a fee, computed daily and paid monthly,
at the annual rate of 0.75% of the average daily net assets of each Fund (See
Note 4).
The Trust and PFPC Inc. (formerly known as First Data Investor Services
Group, Inc.), a member of PNC Financial Services Group (formerly known as PNC
Bank Corp.), are parties to an administration agreement under which PFPCInc.
(the "Administrator") provides services for a fee, computed daily and paid
monthly, at the annual rate of 0.09% of the first $2.5 billion of the combined
average daily net assets of the Funds and the other funds offered by the Trust
(whose financial statements are provided in separate reports), 0.085% of the
next $2.5 billion of combined average daily net assets, 0.075% of the next $7
billion of combined average daily net assets, 0.065% of the next $3 billion of
combined average daily net assets, 0.06% of the next $3 billion of combined
average daily net assets and 0.0575% of combined average daily net assets in
excess of $18 billion. Prior to December 1,1999, the services described above
were provided by First Data Investor Services Group, Inc., a wholly-owned
subsidiary of First Data Corp. On that date, PFPC Trust Co., a wholly owned
subsidiary of PNCBank Corp., acquired all of the outstanding stock of First Data
Investor Services Group, Inc. As part of that transaction, PFPC Inc., also an
indirect wholly-owned subsidiary of PNC Bank Corp., was merged into First Data
Investor Services Group, Inc., which then changed its name to PFPC Inc.
In addition, PFPC Inc. also provides certain fund accounting, custody
administration and transfer agency services in accordance with certain fee
arrangements. Pursuant to such fee arrangements, PFPC Inc. compensates The Chase
Manhattan Bank, the Trust's custodian bank, for its services.
Provident Distributors, Inc. (the "Distributor"), serves as the exclusive
distributor of the Trust's shares. Prior to December 1, 1999, First Data
Distributors, Inc., a wholly-owned subsidiary of First Data Investor Services
Group, Inc., acted as the exclusive distributor of the Trust's shares.
The Trust has adopted a shareholder services plan (the "Services Plan") with
respect to Retail A Shares and Trust Shares of the Funds. Currently, the
Services Plan has not been implemented with respect to the Funds' Trust Shares.
The Services Plan provides compensation to institutions (including and currently
limited to Fleet Bank and its affiliates) which provide shareholder liaison
and/or administrative support services to their customers who beneficially own
Retail A Shares at an aggregate annual rate not to exceed 0.30% of the average
daily net asset value of the outstanding Retail A Shares of each Fund
beneficially owned by such customers. The Trust, under the direction of the
Board of Trustees, is currently limiting fees payable under the Services Plan
with respect to each Fund to an aggregate annual rate not to exceed 0.15% of the
average daily net asset value of the outstanding Retail A Shares beneficially
owned by such customers. No fees were charged under the Services Plan with
respect to the Rhode Island Municipal Bond Fund for the six months ended April
30, 2000.
The Trust has adopted a distribution and shareholder services plan (the
"12b-1 Plan") with respect to Retail B Shares of the Tax-Exempt Bond Fund. Under
the 12b-1 Plan, the Trust may pay (i) the Distributor or another person for
expenses and activities primarily intended to result in the sale of Retail B
Shares, (ii) institutions for shareholder liaison services and (iii)
institutions for administrative support services. Currently, payments under the
12b-1 Plan for distribution services are being made solely to broker-dealer
affiliates of Fleet Bank and payments under the 12b-1 Plan for shareholder
liaison and shareholder administrative sup-
54
<PAGE>
NOTES TO FINANCIAL STATEMENTS
port 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 of the Fund's outstanding Retail B Shares.
The fees for shareholder liaison services and/or administrative support services
may not exceed the annual rates of 0.15% and 0.15%, respectively, of the average
daily net assets attributable to the Fund's outstanding Retail B Shares owned of
record or beneficially by customers of institutions. The Trust, under the
direction of the Board of Trustees, is currently limiting each Fund's payments
for shareholder liaison and administrative support services under the 12b-1 Plan
to an aggregate fee of not more than 0.15% of the average daily net asset value
of Retail B Shares owned of record or beneficially by customers of institutions.
For the six months ended April 30, 2000, the Funds paid fees under the Services
Plan and 12b-1 Plan as follows:
SERVICES 12B-1 PLAN
FUND PLAN SERVICES DISTRIBUTION
---- ------- -------- ------------
Tax-Exempt Bond ................ $16,377 $ 2,283 $10,622
New Jersey Municipal Bond ..... 643 N/A N/A
New York Municipal Bond ........ 29,845 N/A N/A
Connecticut Municipal Bond ..... 18,883 N/A N/A
Massachusetts Municipal Bond ... 24,512 N/A N/A
Rhode Island Municipal Bond .... -- N/A N/A
The Trust has adopted a Distribution Plan (the "Prime A Shares Plan") with
respect to Prime A Shares of the Tax-Exempt Bond Fund. Under the Prime A Shares
Plan, the Trust may pay the Distributor or another person for expenses and
activities primarily intended to result in the sale of Prime A Shares. Payments
by the Trust under the Prime A Shares Plan may not exceed the annual rate of
0.30% of the average daily net assets attributable to each Fund's outstanding
Prime A Shares. The Trust, under the direction of the Board of Trustees, intends
to limit the Fund's payments under the Prime A Shares Plan to an annual rate of
not more than 0.25% of the average daily net assets of the Fund's outstanding
Prime A Shares.
The Trust has adopted a Distribution and Services Plan (the "Prime B Shares
Plan") with respect to Prime B Shares of the Tax-Exempt Bond Fund. Under the
Prime B Shares Plan, the Trust may pay (i) the Distributor or another person for
expenses and activities primarily intended to result in the sale of Prime B
Shares, (ii) institutions for shareholder liaison services, and (iii)
institutions for administrative support services. Payments for distribution
expenses may not exceed an annual rate of 0.75% of the average daily net assets
attributable to the Fund's outstanding Prime B Shares. The fees for shareholder
liaison services and/or administrative support services may not exceed the
annual rates of 0.25% and 0.25%, respectively, of the average daily net assets
attributable to each Fund's outstanding Prime B Shares owned of record or
beneficially by customers of institutions. The Trust, under the direction of the
Board of Trustees, intends to limit the Fund's payments for shareholder liaison
and administrative support services under the Prime B Shares Plan to an
aggregate fee of not more than 0.25% of the average daily net assets of Prime B
Shares owned of record or beneficially by customers of institutions. As of April
30, 2000, the Tax-Exempt Bond Fund had not commenced its offering of Prime A
Shares and Prime B Shares.
The Trust has adopted a shareholder services plan (the "BKB Plan") with
respect to BKB Shares of the Rhode Island Municipal Bond Fund. The BKB Plan
provides compensation to institutions (including Fleet Bank and its affiliates)
which provide shareholder liaison and/or administrative support services to
their customers who beneficially own BKBShares at an aggregate annual rate not
to exceed 0.30% of the average daily net asset value of the outstanding BKB
Shares of the Fund beneficially owned by such customers. The Trust, under the
direction of the Board of Trustees, is currently limiting fees payable under the
BKBPlan with respect to the Fund to an aggregate annual rate not to exceed 0.15%
of the average daily net asset value of the outstanding BKBShares beneficially
owned by such customers. As of the date of this report, no payments have been
made under the BKB Plan.
Retail A Shares, Retail B Shares, Trust Shares, Prime A Shares, Prime B
Shares and BKB Shares of the Funds each bear series specific transfer agent
charges based upon the number of shareholder accounts for each series. For the
six months ended April 30, 2000, transfer agent charges for each series (other
than Prime A Shares, Prime B Shares and BKB Shares, which had not been issued
prior to the date of the report) were as follows:
FUND RETAIL A RETAIL B TRUST
---- -------- -------- -----
Tax-Exempt Bond ................ $ 3,546 $ 916 $ 955
New Jersey Municipal Bond ...... 1,493 N/A 730
New York Municipal Bond ........ 9,487 N/A 386
Connecticut Municipal Bond ..... 4,461 N/A 6
Massachusetts Municipal Bond ... 4,775 N/A 4
Rhode Island Municipal Bond .... 2,624 N/A N/A
Certain officers of the Trust may be officers of the Administrator. Such
officers receive no compensation from the Trust for serving in their respective
roles. No officer, director or employee of the Investment Advisor serves as an
officer, trustee or employee of the Trust. Each Trustee is entitled to receive
for services as a trustee of the Trust, The Galaxy VIP Fund ("VIP") and Galaxy
Fund II ("Galaxy II") an aggregate fee of $45,000 per annum plus certain other
fees for attending or participating in meetings as well as reimbursement for
expenses incurred in attending meetings. The Chairman of the Boards of Trustees
and the President and Treasurer of the Trust, VIP and Galaxy II are also
entitled to additional fees for their services in these capacities. These fees
are allocated among the funds of the Trust, VIP and Galaxy II based on their
relative net assets.
Each Trustee is eligible to participate in The Galaxy
55
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Fund/The Galaxy VIP Fund/Galaxy Fund II Deferred Compensation Plan (the "Plan"),
an unfunded, non-qualified deferred compensation plan. The Plan allows each
trustee to defer receipt of all or a percentage of fees which otherwise would be
payable for services performed.
Expenses for the six months ended April 30, 2000 include legal fees paid to
Drinker Biddle & Reath LLP. A partner of that firm is Secretary to the Trust.
4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
The Investment Advisor and the Administrator voluntarily agreed to waive a
portion of their fees and/or reimburse the Funds for certain expenses so that
total expenses would not exceed certain expense limitations established for each
Fund. The respective parties, at their discretion, may revise or discontinue the
voluntary fee waivers and/or expense reimbursements at any time. For the six
months ended April 30, 2000, the Investment Advisor and Administrator waived
fees and/or reimbursed expenses with respect to the Funds as follows:
FUND FEES WAIVED
------ -----------
Tax-Exempt Bond................. $ 180,194
New Jersey Municipal Bond....... 39,145
New York Municipal Bond......... 84,347
Connecticut Municipal Bond...... 89,326
Massachusetts Municipal Bond.... 146,298
Rhode Island Municipal Bond..... 45,079
EXPENSES
FUND REIMBURSED
------ ----------
New York Municipal Bond......... $ 2,962
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an
unlimited number of shares of beneficial interest, each with a par value of
$0.001. Shares of the Trust are currently classified into forty classes of
shares, each consisting of one or more series.
Each share represents an equal proportionate interest in the respective Fund,
bears the same fees and expenses (except that Retail A Shares of a Fund bear the
expense of payments under the Services Plan, Retail B Shares of a Fund bear the
expense of payments under the 12b-1 Plan, Prime A Shares of a Fund bear the
expense of payments under the Prime A Shares Plan, Prime B Shares of a Fund bear
the expense of payments under the Prime B Shares Plan, BKB Shares of a Fund bear
the expense of payments under the BKB Plan and Trust Shares, Retail A Shares,
Retail B Shares, Prime A Shares, Prime B Shares and BKB Shares of a Fund each
bear series specific transfer agent charges) and is 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, other than
short-term investments, for the six months ended April 30, 2000 were as follows:
FUND PURCHASES SALES
---- --------- -----
Tax-Exempt Bond................ $42,655,219 $29,823,681
New Jersey Municipal Bond...... 4,742,308 4,303,702
New York Municipal Bond........ 17,789,277 13,192,660
Connecticut Municipal Bond..... 6,654,283 6,084,409
Massachusetts Municipal Bond... 14,376,369 16,166,072
Rhode Island Municipal Bond.... 8,592,196 5,200,910
The aggregate gross unrealized appreciation and depreciation, net unrealized
appreciation (depreciation), and cost for all securities as computed on a
federal income tax basis at April 30, 2000 for each Fund is as follows:
FUND APPRECIATION (DEPRECIATION)
---- ------------ --------------
Tax-Exempt Bond ............... $1,435,865 $(5,257,829)
New Jersey Municipal Bond ..... 12,977 (314,148)
New York Municipal Bond ....... 883,944 (2,565,585)
Connecticut Municipal Bond .... 362,820 (915,734)
Massachusetts Municipal Bond .. 374,073 (2,181,003)
Rhode Island Municipal Bond ... 305,280 (587,712)
FUND NET COST
---- ----- ----
Tax-Exempt Bond ............... $(3,821,964) $ 183,053,727
New Jersey Municipal Bond ..... (301,171) 9,118,184
New York Municipal Bond ....... (1,681,641) 85,096,498
Connecticut Municipal Bond .... (552,914) 43,887,709
Massachusetts Municipal Bond .. (1,806,930) 73,031,312
Rhode Island Municipal Bond ... (282,432) 23,673,493
7. CAPITAL LOSS CARRYFORWARD
At October 31, 1999, the following Funds had capital loss carryforwards:
FUND AMOUNT EXPIRATION
---- ------ ----------
Tax-Exempt Bond ............... $78,657 2007
New Jersey Municipal Bond ..... 687 2006
44,349 2007
New York Municipal Bond ....... 263,502 2003
16,589 2004
Connecticut Municipal Bond .... 31,295 2002
685,391 2003
82,263 2005
23,141 2007
Massachusetts Municipal Bond .. 286,989 2003
65,783 2007
Rhode Island Municipal Bond ... 76,090 2007
56
<PAGE>
NOTES TO FINANCIAL STATEMENTS
8. CONCENTRATION OF CREDIT
The New Jersey Municipal Bond, New York Municipal Bond, Connecticut Municipal
Bond, Massachusetts Municipal Bond and Rhode Island Municipal Bond Funds invest
primarily in debt obligations issued by the State of New Jersey, the State of
New York, the State of Connecticut, the Commonwealth of Massachusetts and the
State of Rhode Island, respectively, and their respective political
subdivisions, agencies and public authorities to obtain funds for various public
purposes. The Funds, as non-diversified investment portfolios, are more
susceptible to economic and political factors adversely affecting issuers of
each respective state's specific municipal securities than are municipal bond
funds that are not concentrated in these issuers to the same extent.
9. LINE OF CREDIT
Each Fund and other affiliated funds participate in a $150 million unsecured
line of credit pursuant to a credit agreement dated as of December 29, 1999.
Borrowings may be made under the credit agreement only for temporary or
emergency purposes, such as repurchase or redemption of shares of the Funds.
Interest is charged to each Fund based on its borrowings. In addition, a
commitment fee based on the average daily unused portion of the line of credit
is computed daily and paid quarterly at an annual rate of 0.10%, and allocated
among the Funds based on average daily net assets. For the period ended April
30, 2000, no borrowings have been made by the Funds against the line of credit.
57
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