<PAGE>
Sentinel Family of Funds
Semi-Annual Report
May 31, 1999
[GRAPHIC OF COVERED BRIDGE APPEARS HERE]
<PAGE>
[GRAPHIC APPEARS HERE] Sentinel Group Funds, Inc. (SGF)
Sentinel Pennsylvania
Tax-Free Trust (PA)
National Life Drive,
Montpelier, Vermont 05604
(800) 282-FUND (3863)
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Table of Contents
2 Message to Shareholders
4 Understanding your Sentinel Funds Financial Statements
5 Fund Performance
6 Sentinel Common Stock Fund
12 Sentinel Balanced Fund
19 Sentinel Mid Cap Growth Fund
23 Sentinel Small Company Fund
28 Sentinel World Fund
34 Sentinel High Yield Bond Fund
41 Sentinel Bond Fund
46 Sentinel Government Securities Fund
50 Sentinel Short Maturity Government Fund
55 Sentinel U.S. Treasury Money Market Fund
60 Sentinel Tax-Free Income Fund
65 Sentinel New York Tax-Free Income Fund
69 Notes to Financial Statements (SGF)
75 Sentinel Pennsylvania Tax-Free Trust
79 Notes to Financial Statements (PA)
81 Privileges, Plans and Services for Shareholders
83 Directors/Trustees and Officers
84 A Brief History
The financial statements included herein have been taken from the records of the
Funds/Trust without audit by the independent accountants and accordingly they do
not express an opinion thereon.
Cover: Original illustration by Douglas Fryer
1
<PAGE>
Message to Shareholders
[PHOTO OF PATRICK E. WELCH APPEARS HERE]
Patrick E. Welch
Chairman
[PHOTO OF JOSEPH M. ROB APPEARS HERE]
Joseph M. Rob
Director and President
Dear Shareholder:
During the past six months, the U.S. economy was exceedingly robust. Economic
growth generally exceeded expectations, led by consumer spending for autos,
housing and retail sales. Growing consumer income and high consumer confidence
contributed to the high level of spending during the quarter. The unemployment
rate declined to its lowest point in more than 25 years. As a result, the
consensus forecasts for economic growth for this year have risen. Despite
relatively low unemployment, productivity gains have helped to keep labor costs
down and, until April, the inflation outlook continued to be very favorable.
As a result of higher energy prices during the last few months, inflation in
April increased significantly. During April, inflation - represented by the
Producer Price Index - increased .5%, the largest increase in many months, while
the Consumer Price Index increased .7%. There is a debate in financial markets
about whether this increase is a one-time event, reflecting higher energy
prices, or whether the economy has picked up speed to the point where it will
generate higher inflation. So far, core inflation - excluding food and energy
prices, which can often be quite volatile - has not increased significantly.
Foreign economies, meanwhile, continued to be relatively weak in Europe, Japan,
the remainder of Asia and South America. Emerging market economies, on the other
hand, which were such a worry last fall, appeared to have bottomed out and have
begun to improve.
One of the pleasant surprises this year was an increase in corporate profits by
7.5% during the first quarter. This represented a significant increase over last
year, when overall corporate profitability actually declined. An even more
encouraging sign this year was a "broadening" of corporate profitability, with a
higher percentage of companies reporting higher profits. In fact, during the
first quarter of 1999, two-thirds of reporting companies met analysts'
estimates, accounting for much of the positive market environment, though the
market remained focused on large-cap growth stocks.
One event that triggered some concern in recent weeks was the resignation of
Treasury Secretary Robert Rubin. His departure, coming off a record of strong
economic performance, added a degree of uncertainty about the future direction
of government economic policy, though there's little likelihood of significant
change.
There was also some concern in financial markets about the deepening war in
Kosovo, with some fearing that escalation to the point of greater American
involvement and increased defense spending could potentially lead to higher
inflation.
Equities
The rise in interest rates and fears of inflation affected the stock market
during the second quarter of 1999, resulting in a correction among high-priced
growth stocks. Value-oriented stocks, including manufacturing, basic industries
and other economically sensitive stocks began to outperform growth stocks. As an
illustration, the Dow Jones Industrial Average was up 16% for the year, while
the Standard & Poor's 500 Index - dominated by large-cap growth issues-
increased
2
<PAGE>
5.8%. Selected technology and Internet growth stocks experienced a serious
correction, with many declining by more than 50% from their highs. Investors
developed more interest in small- and mid-cap stocks during the second quarter
of 1999, as the companies in those sectors appeared to offer more value and good
earnings potential.
Higher interest rates are never good for stock prices, but they're particularly
problematic for stocks selling at very high price/earnings multiples. Valuations
in the stock market have been at or near record levels, especially for large-cap
growth stocks, which have become quite highly priced. The correction in growth
stock prices, particularly in big technology and Internet issues, has begun to
weigh on the equity markets during the past few months.
Fixed Income
1999 has been a difficult period for the bond market. Interest rates moved up
very sharply during the year, with short-term interest rates increasing anywhere
from 20 to 50 basis points; the 5-year U.S. Treasury yield increasing 120 basis
points; and the 10-year Treasury yield up 115 basis points. What's driven this
increase are investors' fears that perhaps the combination of higher energy
prices and very strong domestic economic growth could result in the potential
for higher inflation in coming months. The combination of their concern about
the possibility of higher inflation, and a large supply of new bonds issued
during 1999 - particularly in the corporate bond market - put significant
pressure on bond prices. At this point, the longer end of the bond market -
those bonds with maturities of 10 years and longer - appears to have
anticipated, or built in, at least one tightening by the Federal Reserve Board.
Outlook
We expect that the economy will slow somewhat in the coming months. We also
expect that inflation will not turn out to be as bad as bond investors currently
fear. Accordingly, we may see a modest rally in the bond market, and, although
the economy will probably slow, it should grow at a moderate pace through the
rest of the year. The Federal Reserve Board may increase rates in the near term,
but we do not foresee significantly higher interest rates.
Corporate profits should continue to grow - at least modestly - and the stock
market should continue to broaden out, while corrections continue in some areas
of the market that are currently overvalued. Economically sensitive stocks
should perform well, as should many small- and mid-cap stocks.
The trends that have developed during 1999 should benefit Sentinel's funds,
whose focus is on value, consistency and superior individual security selection.
Sincerely,
/s/ Patrick E. Welch /s/ Joseph M. Rob
Patrick E. Welch Joseph M. Rob
Chairman Director & President
May 31, 1999
3
<PAGE>
Understanding your Sentinel Funds Financial Statements
(1) Schedule of Investment in Securities
This schedule shows you which investments your fund owned on the last day of the
reporting period. The schedule includes:
. a list of each investment
. the number of shares/par amount of each stock, bond or short-term note
. the market value of each investment
. the percentage of investments in each industry
. the percent and dollar breakdown of each category
(2) Statement of Assets and Liabilities
This statement details what the fund owns (assets), what it owes (liabilities),
and its net assets as of the last day of the period. If you subtract what the
fund owes from what it owns, you get the fund's net assets. For each class of
shares, the net assets divided by the total number of shares outstanding gives
you the price of an individual share, or the net asset value per share.
NET ASSETS are also broken down by capital (money invested by shareholders); net
investment income not yet paid to shareholders or net investment losses, if any;
net gains earned on investments but not yet paid to shareholders or net losses
on investments (known as realized gains or losses); and finally gains or losses
on securities still owned by the fund (known as unrealized appreciation or
depreciation). This breakdown tells you the value of net assets that are
performance-related, such as investment gains or losses, and the value of net
assets that are not related to performance, such as shareholder investments and
redemptions.
(3) Statement of Operations
This statement breaks down how each fund's net assets changed during the period
as a result of the fund's operations. It tells you how much money the fund made
or lost after taking into account income, fees and expenses, and investment
gains or losses. It does not include shareholder transactions and distributions.
Fund OPERATIONS include:
. income earned from investments
. management fees and other expenses
. gains or losses from selling investments (known as realized gains or
losses)
. gains or losses on current fund holdings (known as unrealized
appreciation or depreciation)
(4) Statement of Changes in Net Assets
These statements show how each fund's net assets changed over the past two
reporting periods. It details how much a fund grew or shrank as a result of:
. operations - a summary of the Statement of Operations for the most
recent period
. distributions - income and gains distributed to shareholders
. capital share transactions - shareholders' purchases, reinvestments,
and redemptions
Net assets at the beginning of the period plus the sum of operations,
distributions to shareholders and capital share transactions result in net
assets at the end of the period.
(5) Financial Highlights
These statements itemize current period activity and statistics and provide
comparison data for the last five fiscal years (or less if the fund or class is
not five years old). On a per-share basis, it includes:
. share price at the beginning of the period
. investment income and capital gains or losses
. income and capital gains distributions paid to shareholders
. share price at the end of the period
It also includes some key statistics for the period:
. total return - the overall percentage return of the fund, assuming
reinvestment of all distributions
. expense ratio - operating expenses as a percentage of average net
assets
. net income ratio - net investment income as a percentage of average
net assets
. portfolio turnover - the percentage of the portfolio that was replaced
during the period.
<PAGE>
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Fund Performance
Performance data for each Sentinel Fund is
provided in this table. Financial data is contained
in the following pages.
<TABLE>
<CAPTION>
11/30/98 - 05/31/99
---------------------------------------------------------------
5/31/99
Net Asset Capital
Sentinel Value Per Income Gain Total Lipper
Fund Share Dividends Distributions Return* Average**
<S> <C> <C> <C> <C> <C> <C>
Common Stock "A" Shares $43.63 $0.19 $3.81 7.2% 11.1%
- ---------------------------------------------------------------------------------------------------------
"B" Shares 43.53 0.03 3.81 6.8 -
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"C" Shares 43.61 - 3.81 6.8 -
- ---------------------------------------------------------------------------------------------------------
Balanced "A" Shares 19.87 0.26 1.48 3.6 6.3
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"B" Shares 19.89 0.19 1.48 3.2 -
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"C" Shares 19.87 0.16 1.48 3.0 -
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"D" Shares *** 19.84 0.11 - 1.4
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Mid Cap Growth "A" Shares 16.37 - 1.08 20.0 16.0
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"B" Shares 16.12 - 1.08 19.3 -
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Small Company "A" Shares 5.41 - 0.61 6.8 9.2
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"B" Shares 5.21 - 0.61 6.2 -
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World "A" Shares 18.81 0.17 - 4.4 5.0
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"B" Shares 18.60 0.02 - 3.9 -
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"C" Shares 18.73 - - 3.8 -
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High Yield Bond "A" Shares 9.49 0.42 - 1.7 3.2
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"B" Shares 9.48 0.40 - 1.5 -
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"C" Shares 9.49 0.36 - 1.1 -
- ---------------------------------------------------------------------------------------------------------
Bond "A" Shares 6.12 0.19 - -2.2 -1.5
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"B" Shares 6.13 0.16 - -2.6 -
- ---------------------------------------------------------------------------------------------------------
Government Securities 9.90 0.30 - -2.5 -1.8
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Short Maturity Government 9.72 0.28 - 1.3 1.3
- ---------------------------------------------------------------------------------------------------------
U.S. Treas. Money Market "A" Shares 1.00 0.02 - 1.9 2.0
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"B" Shares 1.00 0.02 - 1.8 -
- ---------------------------------------------------------------------------------------------------------
Tax-Free Income 13.31 0.32 0.17 0.2 0.1
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New York Tax-Free Income 11.95 0.29 - 0.4 0.1
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Pennsylvania Tax-Free Trust 12.88 0.31 0.29 0.0 0.3
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Standard & Poor's 500 + - - - 12.6 -
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Lehman Aggregate Bond Index ++ - - - -0.8 -
- ---------------------------------------------------------------------------------------------------------
Lehman Municipal Bond Index +++ - - - 0.8 -
- ---------------------------------------------------------------------------------------------------------
</TABLE>
* Total return is computed assuming the reinvestment of dividends and capital
gain distributions using net asset values. Past performance is no guarantee
of future results.
** Average performance of category of funds with similar investment objectives
as tracked by Lipper Analytical Services.
*** 1/4/99 Inception.
+ An unmanaged index of stocks reflecting average prices in the stock market.
++ An unmanaged index of bonds reflecting average prices in the bond market.
+++ An unmanaged index of bonds reflecting average prices in the municipal bond
market.
5
<PAGE>
Sentinel Common Stock Fund
Investment in Securities
at May 31, 1999 (Unaudited)
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Shares Value
(Note 1)
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Common Stocks 95.8%
Aerospace 3.8%
Goodrich (B.F.) 850,000 $34,425,000
Raytheon Co. Class A 500,000 33,218,750
-------------
67,643,750
-------------
Automobiles & Auto Parts 2.2%
Ford Motor 688,300 39,276,119
-------------
Banks 5.5%
Bank of America Corp. 367,770 23,790,122
Bank of New York 869,200 31,073,900
Chase Manhattan Corp. 325,000 23,562,500
First Union Corp. 425,000 19,576,563
-------------
98,003,085
-------------
Beverages 1.5%
Pepsico Inc. 751,100 26,898,769
-------------
Building Materials 2.4%
Sherwin - Williams 875,000 26,960,937
Weyerhaeuser Co. 275,000 17,067,187
-------------
44,028,124
-------------
Chemicals 1.7%
Dupont (EI) de Nemours 350,000 22,903,125
Praxair Inc. 150,000 7,321,875
-------------
30,225,000
-------------
Computer Products & Services 4.3%
Compaq Computer 746,700 17,687,456
International Business
Machines 520,000 60,482,500
-------------
78,169,956
-------------
Consumer & Business Services 5.0%
Automatic Data Processing 620,000 25,536,250
Electronic Data Systems 400,000 22,500,000
Omnicom Group 615,000 43,050,000
-------------
91,086,250
-------------
Consumer Products 4.2%
Fortune Brands 875,000 35,765,625
Kimberly - Clark 675,000 39,614,062
-------------
75,379,687
-------------
Containers & Packaging 0.8%
Bemis Co. 394,200 14,881,050
Drugs 4.5% -------------
American Home Products 815,000 46,964,375
Pfizer, Inc. 210,000 22,470,000
Schering Plough Corp. 250,000 11,265,625
-------------
80,700,000
-------------
Electrical Equipment 3.0%
Emerson Electric 500,000 31,937,500
General Electric 215,000 21,862,812
-------------
53,800,312
-------------
Energy 5.2%
Chevron 240,000 22,245,000
Exxon 200,000 15,975,000
Mobil 370,000 37,462,500
Royal Dutch Petroleum 325,000 18,382,812
-------------
94,065,312
-------------
Financial Services 5.5%
American Express 305,000 36,962,187
Associated First Capital 360,786 14,792,226
Citigroup 400,000 26,500,000
Fannie Mae 306,900 20,869,200
-------------
99,123,613
-------------
Foods 4.4%
Bestfoods 400,000 20,000,000
Hershey Foods Corp. 348,900 18,927,825
McCormick & Co. 620,800 18,856,800
Sara Lee 900,000 21,600,000
-------------
79,384,625
-------------
Healthcare Providers 0.7%
* HCR Manor Care 500,000 13,375,000
-------------
Industrial-Diversified 2.0%
Parker-Hannifin 825,000 36,042,187
-------------
Insurance 6.4%
Allstate Corp. 642,600 23,414,738
American General 495,000 35,763,750
American Int'l. Group 262,550 30,012,747
Jefferson-Pilot 400,000 27,075,000
-------------
116,266,235
-------------
Lodging 2.3%
Marriott Int'l. - Class A 1,100,000 41,868,750
-------------
Medical - Equipment & Supplies 5.0%
Abbott Laboratories 690,000 31,179,375
Becton, Dickinson & Co. 500,000 19,375,000
Johnson & Johnson 430,000 39,828,750
-------------
90,383,125
-------------
Oil Field Equipment & Services 2.1%
Halliburton Co. 570,000 23,583,750
Schlumberger Ltd. 240,000 14,445,000
-------------
38,028,750
-------------
Publishing 3.8%
Gannett 500,000 36,125,000
McGraw-Hill 600,000 31,125,000
Time Warner Inc. 25,000 1,701,563
-------------
68,951,563
-------------
Railroads 1.7%
Union Pacific Corp. 530,000 30,243,125
-------------
Retail 5.3%
* Costco Cos. 509,400 36,931,500
Dayton Hudson Corp. 239,600 15,094,800
Gap Inc. 325,000 20,332,813
May Department Stores 550,470 23,842,232
-------------
96,201,345
-------------
Semiconductors 0.8%
Intel Corp. 250,000 13,515,625
-------------
Telecommunications 0.6%
* Comcast Corp. - Class A 75,000 2,704,687
* Comcast Corp. - Special Class A 225,000 8,662,500
-------------
11,367,187
-------------
Tobacco 0.8%
Philip Morris 390,000 15,039,375
-------------
Utilities - Electric 3.4%
Duke Energy 310,000 18,696,875
Florida Progress 450,000 18,871,875
FPL Group Inc. 275,000 16,001,563
Pacificorp 400,000 7,275,000
-------------
60,845,313
-------------
Utilities - Gas 2.3%
Enron Corp. 575,000 41,040,625
-------------
Utilities - Telephone 4.6%
AT&T Corp. 675,000 37,462,500
GTE Corp. 625,000 39,414,063
MCI Worldcom Inc. 72,000 6,219,000
-------------
83,095,563
-------------
Total Common Stocks
(Cost $921,101,186) 1,728,929,420
-------------
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Principal Amount Value
(M = $1,000) (Note 1)
- --------------------------------------------------------------------------------
Corporate Short-Term Notes 4.0%
Assoc. Corp. of NA
4.77%, 06/01/99 9,000M 9,000,000
Assoc. Corp. of NA
4.79%, 06/04/99 7,000M 6,997,206
Avnet Inc.
4.9%, 07/27/99 5,500M 5,458,826
Chevron Oil Finance
4.76%, 06/17/99 6,000M 5,987,307
Commercial Credit
4.79%, 06/14/99 10,000M 9,982,703
Commerical Credit
4.85%, 06/17/99 3,500M 3,492,456
General Motors Acc.
4.76%, 06/25/99 12,000M 11,961,920
Household Finance
4.80%, 06/09/99 10,000M 9,989,333
Norwest Financial
4.80%, 06/04/99 2,500M 2,499,000
Norwest Financial
4.75%, 06/22/99 7,000M 6,980,604
-------------
Total Corporate Short-Term Notes
(Cost $72,349,355) 72,349,355
-------------
Total Investments
(Cost $993,450,541)** 1,801,278,775
Excess of Other Assets
Over Liabilities 0.2% 3,262,826
-------------
Net Assets $1,804,541,601
=============
- --------------------------------------------------------------------------------
* Non-income producing.
** Also cost for federal income tax purposes.
At May 31, 1999, unrealized appreciation for federal income tax purposes
aggregated $807,828,234 of which $830,904,566 related to appreciated
securities and $23,076,332 related to depreciated securities.
See notes to Financial Statements.
6
<PAGE>
Sentinel Common Stock Fund
Statement of Assets and Liabilities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Assets
Investments at value $1,801,278,775
Cash and cash equivalents 463,473
Receivable for securities sold 9,936,229
Receivable for fund shares sold 1,637,828
Receivable for dividends and interest 4,037,103
--------------
Total Assets 1,817,353,408
--------------
Liabilities
Payable for securities purchased 9,170,804
Payable for fund shares repurchased 780,892
Accrued expenses 442,386
Management fee payable 869,726
Distribution fee payable (Class A Shares) 1,256,507
Distribution fee payable (Class B Shares) 136,477
Distribution fee payable (Class C Shares) 6,639
Fund service fee payable 148,376
--------------
Total Liabilities 12,811,807
--------------
Net Assets Applicable to Outstanding shares $1,804,541,601
==============
Net Asset Value and Offering Price per Share
Class A Shares
$1,646,875,699 / 37,743,115 shares outstanding $ 43.63
Sales Charge -- 5.00% of offering price 2.30
--------------
Maximum Offering Price $ 45.93
==============
Class B Shares
$150,360,938 / 3,454,573 shares outstanding $ 43.53
==============
Class C Shares
$7,304,964 / 167,510 shares outstanding $ 43.61
==============
Net Assets Represent
Capital stock at par value $ 413,652
Paid-in capital 910,735,932
Accumulated undistributed net investment income 2,129,484
Accumulated undistributed net realized gain
on investments 83,434,299
Unrealized appreciation of investments 807,828,234
--------------
Net Assets $1,804,541,601
==============
Investments at Cost $ 993,450,541
==============
Sentinel Common Stock Fund
Statement of Operations
For the Six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Investment Income
Income:
Dividends $ 14,449,845
Interest 1,800,635
-------------
Total Income 16,250,480
--------------
Expenses:
Management advisory fee 4,922,029
Transfer agent and custodian 970,198
Distribution expense (Class A Shares) 2,460,000
Distribution expense (Class B Shares) 710,730
Distribution expense (Class C Shares) 32,745
Accounting services 255,350
Auditing fees 62,800
Legal fees 27,650
Reports and notices to shareholders 50,625
Registration and filing fees 37,950
Directors' fees and expenses 82,586
Other 54,442
--------------
Total Expenses 9,667,105
Expense Offset (47,463)
--------------
Net Expenses 9,619,642
--------------
Net Investment Income 6,630,838
--------------
Realized and Unrealized Gain on Investments
Net realized gain on sales of investments 83,434,755
Net change in unrealized appreciation 34,562,693
--------------
Net Realized and Unrealized Gain on Investments 117,997,448
--------------
Net Increase in Net Assets from Operations $ 124,628,286
=============
See Notes to Financial Statements.
7
<PAGE>
Sentinel Common Stock Fund
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
--------------- ---------------
Increase in Net Assets from Operations
Net investment income $ 6,630,838 $ 15,663,251
Net realized gain on sales of investments 83,434,755 149,403,464
Net change in unrealized appreciation 34,562,693 55,634,791
--------------- ---------------
Net increase in net assets from operations 124,628,286 220,701,506
--------------- ---------------
Distributions to Shareholders
From net investment income
Class A Shares (7,003,865) (16,362,871)
Class B Shares (80,293) (275,957)
Class C Shares (342) (1,857)
From net realized gain on investments
Class A Shares (137,654,972) (160,459,928)
Class B Shares (11,316,488) (8,547,448)
Class C Shares (434,275) --
--------------- ---------------
Total distributions to shareholders (156,490,235) (185,648,061)
--------------- ---------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 57,817,983 99,401,414
Class B Shares 21,146,487 53,313,684
Class C Shares 11,846,035 5,462,096
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 120,675,701 146,514,487
Class B Shares 11,180,431 8,661,766
Class C Shares 431,931 1,668
--------------- ---------------
223,098,568 313,355,115
Less: Payments for shares reacquired
Class A Shares (112,760,182) (176,666,662)
Class B Shares (9,666,447) (12,751,018)
Class C Shares (10,223,213) (334,825)
--------------- ---------------
Increase in net assets from
capital share transactions 90,448,726 123,602,610
--------------- ---------------
Total Increase in Net Assets for period 58,586,777 158,656,055
Net Assets: Beginning of period 1,745,954,824 1,587,298,769
--------------- ---------------
Net Assets: End of period $ 1,804,541,601 $ 1,745,954,824
=============== ===============
Undistributed Net Investment Income
at End of Period $ 2,129,484 $ 2,583,147
=============== ===============
See Notes to Financial Statements.
8
<PAGE>
Sentinel Common Stock Fund
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 5/31/99 Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/98 11/30/97 11/30/96 11/30/95 11/30/94
------------- ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 44.56 $ 44.09 $ 40.60 $ 35.21 $ 28.25 $ 29.63
------------- ------------ ------------ ------------ ------------ -----------
Income (loss) from Investment Operations
Net investment income 0.18 0.42 0.57 0.59 0.72 0.83
Net realized and unrealized gain
loss) on investments 2.89 5.19 7.03 8.18 8.09 (1.35)
------------- ------------ ------------ ------------ ------------ -----------
Total from investment operations 3.07 5.61 7.60 8.77 8.81 (0.52)
------------- ------------ ------------ ------------ ------------ -----------
Less Distributions
Dividends from net investment income 0.19 0.45 0.57 0.61 0.74 0.80
Distributions from realized gains
on investments 3.81 4.69 3.54 2.77 1.11 0.06
------------- ------------ ------------ ------------ ------------ -----------
Total Distributions 4.00 5.14 4.11 3.38 1.85 0.86
------------- ------------ ------------ ------------ ------------ -----------
Net asset value at end of period $ 43.63 $ 44.56 $ 44.09 $ 40.60 $ 35.21 $ 28.25
============= ============ ============ ============ ============ ===========
Total Return (%) * 7.2++ 14.3 20.9 27.2 32.8 (1.8)
Ratios/Supplemental Data
Ratio of net expenses to average
net assets (%) 1.01+ 1.01 1.04 1.06 1.09 1.02
Ratio of expenses to average net
assets before expense reductions (%)** 1.01+ 1.02 1.05 1.07 1.10 1.02
Ratio of net investment income to average
net assets (%) 0.81+ 0.98 1.41 1.64 2.29 2.82
Portfolio turnover rate (%) 8 28 24 22 22 15
Net assets at end of period (000 omitted) $ 1,646,876 $ 1,610,630 $ 1,509,999 $ 1,306,592 $ 1,057,944 $ 839,335
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
Sentinel Common Stock Fund
Financial Highlights (cont'd.)
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Six Months Eight Months
Ended 5/31/99 Year Ended Year Ended Ended
Class B Shares (Unaudited) 11/30/98 11/30/97 11/30/96 (A)
----------------- ------------- ------------ -------------
Net asset value at beginning of period $ 44.47 $ 44.03 $ 40.57 $ 35.43
----------------- ------------- ------------ -------------
Income from Investment Operations
Net investment income -- 0.07 0.27 0.22
Net realized and unrealized gain
on investments 2.90 5.19 6.99 5.05
----------------- ------------- ------------ -------------
Total from investment operations 2.90 5.26 7.26 5.27
----------------- ------------- ------------ -------------
Less Distributions
Dividends from net investment income 0.03 0.13 0.26 0.13
Distributions from realized gains
on investments 3.81 4.69 3.54 --
----------------- ------------- ------------ -------------
Total Distributions 3.84 4.82 3.80 0.13
----------------- ------------- ------------ -------------
Net asset value at end of period $ 43.53 $ 44.47 $ 44.03 $ 40.57
================= ============= ============ =============
Total Return (%) * 6.8 ++ 13.4 19.9 14.9 ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.85 + 1.81 1.79 1.91 +
Ratio of expenses to average net assets before
expense reductions (%)** 1.85 + 1.81 1.80 1.92 +
Ratio of net investment income (loss)
to average net assets (%) (0.03)+ 0.19 0.66 0.80 +
Portfolio turnover rate (%) 8 28 24 22
Net assets at end of period (000 omitted) $ 150,361 $ 129,966 $ 77,299 $ 27,257
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
Sentinel Common Stock Fund
Financial Highlights (cont'd.)
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
- --------------------------------------------------------------------------------
Six Months
Ended 5/31/99 Period 5/4/98
Class C Shares (Unaudited) 11/30/98 (B)
-------------- --------------
Net asset value at beginning of period $44.55 $45.23
-------------- --------------
Income from Investment Operations
Net investment income (loss) (0.03) 0.06
Net realized and unrealized gain (loss)
on investments 2.90 (0.71)
-------------- --------------
Total from investment operations 2.87 (0.65)
-------------- --------------
Less Distributions
Dividends from net investment income -- 0.03
Distributions from realized gains
on investments 3.81 --
-------------- --------------
Total Distributions 3.81 0.03
-------------- --------------
Net asset value at end of period $43.61 $44.55
============== ==============
Total Return (%) * 6.8 ++ (1.4)++
Ratios/Supplemental Data
Ratio of net expenses to average
net assets (%) 1.96 + 1.92 +
Ratio of expenses to average net
assets before expense
reductions (%)** 1.97 + 1.92 +
Ratio of net investment income (loss)
to average net assets (%) (0.15) + 0.08 +
Portfolio turnover rate (%) 8 28
Net assets at end of period (000 omitted) $7,305 $5,358
(A) Commenced operations April 1, 1996.
(B) Commenced operations May 4, 1998.
+ Annualized
++ Not annualized
* Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at the net asset value during the period, and a redemption on
the last day of the period. Initial sales charge is not reflected in the
calculation of total return.
** Expense reductions are comprised of the voluntary expense reimbursements
and include, effective 1995, the earning credits as described in Notes (2)
and (1) H.
See Notes to Financial Statements.
11
<PAGE>
Sentinel Balanced Fund
Investment in Securities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- --------------------------------------------------------------------------------
U.S. Government Obligations 26.5%
U.S. Treasury Obligations 8.1%
10-Year:
Note 4.75%, '08 17,500M $16,285,150
------------
30-Year:
Note 5.25%, '29 16,000M 14,695,360
------------
Total U.S. Treasury Obligations 30,980,510
------------
U.S. Government Agency Obligations 18.4%
Federal Home Loan Mortgage Corporation 3.3%
15-Year:
9%, '05 1,228M 1,274,022
9.5%, '06 1,085M 1,149,266
7%, '10 689M 702,661
7.5%, '10 943M 972,000
7.5%, '10 850M 876,627
8%, '10 6,289M 6,518,411
------------
11,492,987
------------
30-Year:
8%, '08 1,131M 1,197,207
------------
Total Federal Home
Loan Mortgage Corporation 12,690,194
------------
Federal National Mortgage Association 13.5%
Agency Discount Note:
4.74%, 08/11/99 19,000M 18,822,382
------------
10-Year:
9%, '06 1,426M 1,490,149
------------
15-Year:
7.5%, '07 815M 839,473
8%, '09 1,444M 1,497,265
7.5%, '12 3,080M 3,171,950
10.5%, '12 298M 316,750
------------
5,825,438
------------
30-Year:
10.25%, '17 1,056M 1,151,109
8.5%, '24 1,364M 1,432,921
8.5%, '26 4,526M 4,755,279
8.5%, '26 2,398M 2,519,700
8%, '27 2,000M 2,076,860
6%, '28 1,181M 1,123,534
7.5%, '28 2,328M 2,379,274
7.5%, '28 1,905M 1,945,663
8%, '28 943M 979,065
8.5%, '28 1,919M 2,016,322
6%, '29 500M 475,780
7%, '29 4,957M 4,964,268
------------
25,819,775
------------
Total Federal National
Mortgage Association 51,957,744
------------
Government National Mortgage Association 1.6%
15-Year:
7%, '09 2,111M 2,162,924
7%, '13 2,203M 2,250,233
------------
4,413,157
------------
30-Year:
9%, '09 27M 28,495
6.5%, '26 1,548M 1,520,418
------------
1,548,913
------------
Total Government
National Mortgage Assocation 5,962,070
------------
Total U.S. Government
Agency Obligations 70,610,008
------------
Total U.S. Government Obligations
(Cost $103,951,158) 101,590,518
------------
Bonds 15.8%
Automobile & Auto Parts 0.6%
General Motors 7.1%, '06 1,000M 1,015,000
TRW Inc. 7.125%, '09 1,500M 1,481,250
------------
2,496,250
------------
Building Materials/Construction 0.8%
Owens Corning 7.5%, '05 3,000M 3,000,000
------------
Chemicals 1.0%
IMC Global Inc. 7.4%, '02 2,000M 2,027,500
Lubrizol Corp. 5.875%, '08 1,750M 1,625,312
------------
3,652,812
------------
Financial Institutions 2.2%
First Union Corp.
6.824%, '26 2,325M 2,394,750
Household Finance Corp.
5.875%, '04 1,000M 972,500
Lehman Brothers Holdings
8.5%, '15 2,800M 2,982,000
Salomon Brothers
6.25%, '05 2,000M 1,935,000
------------
8,284,250
------------
Foods 0.5%
Archer-Daniels-Midland
6.625%, '29 2,000M 1,892,500
------------
Foreign Financial Institutions 1.1%
Banque National de Paris
7.738%, '49 2,500M 2,428,125
Societe Generale 7.64%, '49 1,750M 1,684,375
------------
4,112,500
------------
Foreign Industrial 0.9%
Akzo Nobel Inc. 6%, '03 1,000M 975,000
Laidlaw Inc. 7.65%, '06 2,625M 2,582,344
------------
3,557,344
------------
Foreign Utilities-Electric 1.4%
Israel Electric Corp.
7.75%, '09 2,400M 2,436,000
Korea Electric Power
7.75%, '13 1,000M 923,750
Korea Electric Power
6.75%, '27 1,000M 942,500
Korea Electric Power
7%, '27 1,000M 940,000
------------
5,242,250
------------
Lodging 0.4%
Marriott Int'l. Inc.
6.625%, '03 1,750M 1,715,000
------------
Oil Field Equipment & Services 0.4%
Nabors Industries Inc.
6.8%, '04 1,500M 1,488,750
------------
Oil & Gas 0.4%
Union Pacific Resources
7.3%, '09 1,500M 1,466,250
------------
Technology 0.7%
Lucent Technologies
6.45%, '29 3,000M 2,820,000
------------
Telecommunications 3.0%
AT & T Corp. 6.5%, '29 4,000M 3,725,000
Comsat 8.05%, '06 2,000M 2,177,540
MCI Worldcom Inc.
6.4%, '05 2,000M 1,962,500
Sprint Capital Corp.
6.875%, '28 2,000M 1,882,500
US West Capital Funding
6.25%, '05 2,000M 1,935,000
------------
11,682,540
------------
Tobacco 0.4%
Dimon Inc. 8.875%, '06 1,800M 1,660,500
------------
Transportation 0.4%
ERAC USA Finance
6.625%, '06 1,500M 1,456,875
------------
Utilities-Electric 1.6%
Cleveland Electric
7.67%, '04 2,000M 2,057,500
CMS Energy Corp.
6.75%, '04 1,000M 960,000
Waterford 3 Funding
8.09%, '17 3,213M 3,256,998
------------
6,274,498
------------
Total Bonds
(Cost $61,858,328) 60,802,319
------------
(continued)
12
<PAGE>
Sentinel Balanced Fund
Investment in Securities (cont'd.)
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Shares Value
(Note 1)
- --------------------------------------------------------------------------------
Common Stocks 62.1%
Aerospace 2.4%
Goodrich (B. F.) 117,500 $ 4,758,750
Raytheon Co. Class A 66,000 4,384,875
-------------
9,143,625
-------------
Automobiles & Auto Parts 1.3%
Ford Motor 90,000 5,135,625
-------------
Banks 3.4%
Bank of America Corp. 50,922 3,294,017
Bank of New York 122,000 4,361,500
Chase Manhattan Corp. 40,000 2,900,000
First Union Corp. 58,500 2,694,656
-------------
13,250,173
-------------
Beverages 0.9%
Pepsico Inc. 94,100 3,369,956
-------------
Building Materials 1.6%
Sherwin-Williams 120,000 3,697,500
Weyerhaeuser Co. 40,000 2,482,500
-------------
6,180,000
-------------
Chemicals 1.2%
Dupont (EI) de Nemours 55,000 3,599,063
Praxair Inc. 25,000 1,220,313
-------------
4,819,376
-------------
Computer Products & Services 2.7%
Compaq Computer 98,400 2,330,850
International Business
Machines 69,400 8,072,087
-------------
10,402,937
-------------
Consumer & Business Services 3.0%
Automatic Data Processing 84,000 3,459,750
Electronic Data Systems 45,000 2,531,250
Omnicom Group 80,000 5,600,000
-------------
11,591,000
-------------
Consumer Products 2.6%
Fortune Brands 115,000 4,700,625
Kimberly-Clark 90,000 5,281,875
-------------
9,982,500
-------------
Containers & Packaging 0.6%
Bemis Co. 61,900 2,336,725
-------------
Drugs 2.9%
American Home Products 105,000 6,050,625
Pfizer, Inc. 25,000 2,675,000
Schering Plough Corp. 50,000 2,253,125
-------------
10,978,750
-------------
Electrical Equipment 2.0%
Emerson Electric 75,000 4,790,625
General Electric 28,000 2,847,250
-------------
7,637,875
-------------
Energy 3.3%
Chevron 32,500 3,012,344
Exxon 26,000 2,076,750
Mobil 53,100 5,376,375
Royal Dutch Petroleum 40,000 2,262,500
-------------
12,727,969
-------------
Financial Services 3.5%
American Express 37,500 4,544,531
Associated First Capital 47,174 1,934,134
Citigroup 60,000 3,975,000
Fannie Mae 46,100 3,134,800
-------------
13,588,465
-------------
Foods 2.9%
Bestfoods 60,000 3,000,000
Hershey Foods Corp. 44,800 2,430,400
McCormick & Co. 97,900 2,973,713
Sara Lee 110,000 2,640,000
-------------
11,044,113
-------------
Healthcare Providers 0.5%
* HCR Manor Care 75,000 2,006,250
-------------
Industrial-Diversified 1.2%
Parker-Hannifin 105,000 4,587,188
-------------
Insurance 4.1%
Allstate Corp. 95,000 3,461,562
American General 63,000 4,551,750
American Int'l. Group 33,750 3,858,047
Jefferson-Pilot 57,750 3,908,953
-------------
15,780,312
-------------
Lodging 1.6%
Marriott International -
Class A 157,500 5,994,844
-------------
Medical-Equipment & Supplies 3.2%
Abbott Laboratories 100,000 4,518,750
Becton, Dickinson & Co. 67,600 2,619,500
Johnson & Johnson 56,000 5,187,000
-------------
12,325,250
-------------
Oil Field Equipment & Services 1.5%
Halliburton Co. 91,000 3,765,125
Schlumberger Ltd. 31,500 1,895,906
-------------
5,661,031
-------------
Publishing 3.3%
Gannett 76,000 5,491,000
McGraw-Hill 127,000 6,588,125
Time Warner Inc. 6,000 408,375
-------------
12,487,500
-------------
Railroads 1.2%
Union Pacific Corp. 80,000 4,565,000
Retail 3.2%
* Costco Cos. 73,900 5,357,750
Dayton Hudson Corp. 29,600 1,864,800
Gap Inc. 25,000 1,564,062
May Department Stores 82,500 3,573,281
-------------
12,359,893
-------------
Semiconductors 0.5%
Intel Corp. 33,000 1,784,062
-------------
Telecommunications 0.7%
* Comcast Corp. - Class A 18,000 649,125
* Comcast Corp. -
Special Class A 54,000 2,079,000
-------------
2,728,125
-------------
Tobacco 0.5%
Philip Morris 54,000 2,082,375
-------------
Utilities-Electric 1.8%
Duke Energy 41,000 2,472,813
Florida Progress 55,000 2,306,563
FPL Group 36,000 2,094,750
-------------
6,874,126
-------------
Utilities-Gas 1.6%
Enron Corp. 86,000 6,138,250
-------------
Utilities-Telephone 2.9%
AT & T Corp. 90,000 4,995,000
GTE Corp. 86,000 5,423,375
MCI Worldcom 9,500 820,562
-------------
11,238,937
-------------
Total Common Stocks
(Cost $134,550,007) 238,802,232
-------------
- --------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- --------------------------------------------------------------------------------
Corporate Short-Term Notes 3.7%
Assoc. Corp. of NA
4.85%, 08/17/99 2,400M 2,375,103
Commercial Credit
4.85%, 06/07/99 3,000M 2,997,576
John Deere Capital
4.8%, 06/02/99 9,000M 8,998,800
-------------
Total Corporate Short-Term Notes
(Cost $14,371,479) 14,371,479
-------------
Total Investments
(Cost $314,730,972)** 415,566,548
Excess of Liabilities
Over Other Assets (8.1%) (31,154,783)
-------------
Net Assets $384,411,765
=============
- --------------------------------------------------------------------------------
* Non-income producing.
** Cost for federal income tax purposes is substantially similar. At May 31,
1999 net unrealized appreciation for federal income tax purposes aggregated
$100,835,576 of which $108,357,145 related to appreciated securities and
$7,521,569 related to depreciated securities.
See Notes to Financial Statements.
13
<PAGE>
Sentinel Balanced Fund
Statement of Assets and Liabilities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Assets
Investments at value $415,566,548
Cash and cash equivalents 752,644
Receivable for securities sold 13,902,264
Receivable for fund shares sold 266,359
Receivable for dividends and interest 2,239,599
--------------
Total Assets 432,727,414
--------------
Liabilities
Payable for securities purchased 47,656,410
Payable for fund shares repurchased 78,001
Accrued expenses 106,696
Management fee payable 203,346
Distribution fee payable (Class A Shares) 167,654
Distribution fee payable (Class B Shares) 47,974
Distribution fee payable (Class C Shares) 2,546
Distribution fee payable (Class D Shares) 426
Fund service fee payable 52,596
--------------
Total Liabilities 48,315,649
--------------
Net Assets Applicable to Outstanding Shares $384,411,765
==============
Net Asset Value and Offering Price per Share
Class A Shares
$326,616,144 / 16,440,323 shares outstanding $ 19.87
Sales Charge-- 5.00% of offering price 1.05
--------------
Maximum Offering Price $ 20.92
==============
Class B Shares
$54,074,688 / 2,718,972 shares outstanding $ 19.89
==============
Class C Shares
$3,113,943 / 156,680 shares outstanding $ 19.87
==============
Class D Shares
$606,990 / 30,597 shares outstanding $ 19.84
==============
Net Assets Represent
Capital stock at par value $ 193,466
Paid-in capital 274,341,284
Accumulated undistributed net investment income 1,314,586
Accumulated undistributed net realized gain
on investments 7,726,853
Unrealized appreciation of investments 100,835,576
--------------
Net Assets $384,411,765
==============
Investments at Cost $314,730,972
==============
Sentinel Balanced Fund
Statement of Operations
For the Six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Investment Income
Income:
Dividends $ 1,944,421
Interest 5,117,324
--------------
Total Income 7,061,745
--------------
Expenses:
Management advisory fee 1,178,536
Transfer agent and custodian 285,399
Distribution expense (Class A Shares) 497,800
Distribution expense (Class B Shares) 256,325
Distribution expense (Class C Shares) 12,733
Distribution expense (Class D Shares) 1,259
Accounting services 55,040
Auditing fees 16,785
Legal fees 8,058
Reports and notices to shareholders 17,580
Registration and filing fees 38,562
Directors' fees and expenses 17,784
Other 18,234
--------------
Total Expenses 2,404,095
Expense Offset (22,979)
--------------
Net Expenses 2,381,116
--------------
Net Investment Income 4,680,629
--------------
Realized and Unrealized Gain on Investments
Net realized gain on sales of investments 7,868,939
Net change in unrealized appreciation 1,050,875
--------------
Net Realized and Unrealized Gain on Investments 8,919,814
--------------
Net Increase in Net Assets from Operations $ 13,600,443
==============
See Notes to Financial Statements.
14
<PAGE>
Sentinel Balanced Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
-------------- --------------
<S> <C> <C>
Increase in Net Assets from Operations
Net investment income $ 4,680,629 $ 9,400,265
Net realized gain on sales of investments 7,868,939 26,819,535
Net change in unrealized appreciation 1,050,875 4,726,009
-------------- --------------
Net increase in net assets from operations 13,600,443 40,945,809
-------------- --------------
Distributions to Shareholders
From net investment income
Class A Shares (4,173,483) (8,757,240)
Class B Shares (465,921) (681,123)
Class C Shares (18,245) (6,238)
Class D Shares (2,773) -
From net realized gain on investments
Class A Shares (23,432,737) (18,036,497)
Class B Shares (3,424,615) (1,576,559)
Class C Shares (137,453) -
Class D Shares - -
-------------- --------------
Total distributions to shareholders (31,655,227) (29,057,657)
-------------- --------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 16,259,092 35,425,569
Class B Shares 9,633,056 20,459,943
Class C Shares 1,597,323 1,476,109
Class D Shares 640,859
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 25,991,533 24,763,831
Class B Shares 3,773,154 2,110,105
Class C Shares 154,036 6,238
Class D Shares 2,773
-------------- --------------
58,051,826 84,241,795
-------------- --------------
Less: Payments for shares reacquired
Class A Shares (30,027,647) (55,473,366)
Class B Shares (3,986,562) (3,659,707)
Class C Shares (66,182) (2,229)
Class D Shares (40,012) -
-------------- --------------
Increase in net assets fromcapital share transactions 23,931,423 25,106,493
-------------- --------------
Total Increase in Net Assets for period 5,876,639 36,994,645
Net Assets: Beginning of period 378,535,126 341,540,481
-------------- --------------
Net Assets: End of period $ 384,411,765 $ 378,535,126
============== ==============
Undistributed Net Investment Income
at End of Period $ 1,314,586 $ 1,300,366
============== ==============
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
Sentinel Balanced Fund
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 5/31/99 Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/98 11/30/97 11/30/96 11/30/95 11/30/94
-------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 20.88 $ 20.29 $ 18.55 $ 16.84 $ 14.08 $ 15.27
-------------- ----------- ----------- ----------- ----------- -----------
Income (loss) from Investment Operations
Net investment income 0.26 0.54 0.56 0.54 0.58 0.58
Net realized and unrealized gain (loss) on investments 0.47 1.76 2.18 2.13 2.78 (1.12)
-------------- ----------- ----------- ----------- ----------- -----------
Total from investment operations 0.73 2.30 2.74 2.67 3.36 (0.54)
-------------- ----------- ----------- ----------- ----------- -----------
Less Distributions
Dividends from net investment income 0.26 0.55 0.55 0.54 0.59 0.56
Distributions from realized gains on investments 1.48 1.16 0.45 0.42 0.01 0.09
-------------- ----------- ----------- ----------- ----------- -----------
Total Distributions 1.74 1.71 1.00 0.96 0.60 0.65
-------------- ----------- ----------- ----------- ----------- -----------
Net asset value at end of period $ 19.87 $ 20.88 $ 20.29 $ 18.55 $ 16.84 $ 14.08
============== =========== =========== =========== =========== ===========
Total Return (%) * 3.6 ++ 12.2 15.4 16.6 24.4 (3.6)
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.13 + 1.12 1.16 1.20 1.27 1.21
Ratio of expenses to average net assets before
expense reductions (%) ** 1.14 + 1.13 1.17 1.22 1.29 1.21
Ratio of net investment income to average net assets (%) 2.52 + 2.69 2.93 3.13 3.77 3.97
Portfolio turnover rate (%) 58 81 63 83 110 66
Net assets at end of period (000 omitted) $326,616 $330,067 $314,948 $297,288 $267,103 $226,328
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
Sentinel Balanced Fund
Financial Highlights (cont'd.)
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each
fiscal period.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Six Months Eight Months
Ended 5/31/99 Year Ended Year Ended Ended
Class B Shares (Unaudited) 11/30/98 11/30/97 11/30/96 (A)
-------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period $ 20.91 $ 20.32 $ 18.58 $ 17.09
-------------- ----------- ----------- -------------
Income from Investment Operations
Net investment income 0.17 0.38 0.42 0.26
Net realized and unrealized gain on investments 0.48 1.77 2.18 1.37
-------------- ----------- ----------- -------------
Total from investment operations 0.65 2.15 2.60 1.63
-------------- ----------- ----------- -------------
Less Distributions
Dividends from net investment income 0.19 0.40 0.41 0.14
Distributions from realized gains on investments 1.48 1.16 0.45 -
-------------- ----------- ----------- -------------
Total Distributions 1.67 1.56 0.86 0.14
-------------- ----------- ----------- -------------
Net asset value at end of period $ 19.89 $ 20.91 $ 20.32 $ 18.58
============== =========== =========== =============
Total Return (%) * 3.2 ++ 11.3 14.6 9.6 ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.88 + 1.89 1.88 2.12 +
Ratio of expenses to average net assets before
expense reductions (%) ** 1.89 + 1.90 1.89 2.13 +
Ratio of net investment income to average net assets (%) 1.77 + 1.91 2.21 2.21 +
Portfolio turnover rate (%) 58 81 63 83
Net assets at end of period (000 omitted) $54,075 $46,946 $26,593 $10,948
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
Sentinel Balanced Fund
Financial Highlights (cont'd.)
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Period 1/4/99
Ended 5/31/99 Period 5/4/98 to 5/31/99 (C)
Class C Shares (Unaudited) to 11/30/98 (B) Class D Shares (Unaudited)
-------------- --------------- --------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period $20.90 $20.87 $19.68
-------------- --------------- --------------
Income from Investment Operations
Net investment income 0.17 0.20 0.16
Net realized and unrealized gain (loss) on investments 0.44 (0.01) 0.11
-------------- --------------- --------------
Total from investment operations 0.61 0.19 0.27
-------------- --------------- --------------
Less Distributions
Dividends from net investment income 0.16 0.16 0.11
Distributions from realized gains on investments 1.48 - -
-------------- --------------- --------------
Total Distributions 1.64 0.16 0.11
-------------- --------------- --------------
Net asset value at end of period $19.87 $20.90 $19.84
============== =============== ==============
Total Return (%) * 3.0 ++ 0.9 ++ 1.4 ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 2.22 + 2.17 + 1.67 +
Ratio of expenses to average net assets before
expense reductions (%) ** 2.23 + 2.18 + 1.68 +
Ratio of net investment income to average net assets (%) 1.43 + 1.63 + 1.98 +
Portfolio turnover rate (%) 58 81 58
Net assets at end of period (000 omitted) $3,114 $1,523 $ 607
</TABLE>
(A) Commenced operations April 1, 1996.
(B) Commenced operations May 4, 1998.
(C) Commenced operations January 4, 1999
+ Annualized
++ Not annualized
* Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at the net asset value during the period, and a redemption on
the last day of the period. Initial sales charge is not reflected in the
calculation of total return.
** Expense reductions are comprised of the voluntary expense reimbursements
and include, effective 1995, the earning credits as described in Notes (2)
and (1) H.
See Notes to Financial Statements.
18
<PAGE>
Sentinel Mid Cap Growth Fund
Investment in Securities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Shares Value
(Note 1)
- --------------------------------------------------------------------------------
Common Stocks 98.2%
Advertising 1.0%
True North Communications 55,000 $ 1,285,625
------------
Aerospace 5.0%
Goodrich (B. F.) 120,000 4,860,000
Raytheon Co. Class A 20,000 1,328,750
------------
6,188,750
------------
Banks 3.5%
Cullen Frost Bankers, Inc 30,000 1,687,500
Mercantile Bankshares 75,000 2,695,312
------------
4,382,812
------------
Building Materials 0.6%
Sherwin Williams 25,000 770,313
------------
Chemicals 2.1%
Cambrex Corp 60,000 1,350,000
Dupont (EI) de Nemours 20,000 1,308,750
------------
2,658,750
------------
Computer Products & Services 2.2%
* Lexmark Int'l Group 20,000 2,722,500
------------
Consumer & Business Services 7.0%
* Affiliated Computer Services 74,300 3,222,762
Electronic Data Systems 22,900 1,288,125
* FileNet Corp 100,000 987,500
* Sterling Commerce 85,000 3,304,375
------------
8,802,762
------------
Consumer Products 1.1%
Fortune Brands 33,000 1,348,875
------------
Electronics 4.3%
CTS Corp 15,000 840,000
* Sawtech Inc 115,000 4,556,875
------------
5,396,875
------------
Environmental Control 0.8%
Donaldson Co 40,000 967,500
------------
Foods 7.9%
McCormick & Co 120,000 3,645,000
* Sodexho Marriott Services 165,000 3,753,750
* Whole Foods Market Inc 60,000 2,490,000
------------
9,888,750
------------
Healthcare Providers 1.1%
* HCR Manor Care 50,000 1,337,500
------------
Industrial - Diversified 0.5%
* Bush Boake Allen 20,000 576,250
------------
Insurance 2.0%
AFLAC Inc 25,000 1,275,000
Enhance Financial Services 65,000 1,271,563
------------
2,546,563
------------
Lodging 2.4%
Marriott Int'l - Class A 80,000 3,045,000
------------
Manufacturing - Diversified 3.3%
Bemis Co 110,000 4,152,500
------------
Marketing Services 4.7%
* Acxiom Corp 120,000 3,240,000
* Catalina Marketing Corp 30,000 2,656,875
------------
5,896,875
------------
Medical - Equipment & Supplies 5.9%
Biomet Inc 90,000 3,594,375
Hillenbrand Industries 90,000 3,774,375
------------
7,368,750
------------
Medical - Lab & Testing Services 2.8%
* Covance Inc 165,000 3,495,937
------------
Oil Field Equipment & Services 5.6%
* Cal Dive Int'l 55,000 1,347,500
* Smith Int'l 130,000 5,622,500
------------
6,970,000
------------
Restaurants 9.1%
Applebees Int'l 132,000 3,894,000
* Outback Steakhouse 120,000 4,305,000
Ruby Tuesday Inc 170,000 3,155,625
------------
11,354,625
------------
Retail 3.3%
Ethan Allen Interiors 127,500 4,064,063
------------
Retail - Apparel 5.9%
* Lands' End Inc 108,200 4,625,550
* Wet Seal Inc. - Class A 100,000 2,775,000
------------
7,400,550
------------
Semiconductors &
Semiconductor Equipment 3.7%
* C-Cube Microsystems 35,000 877,188
Dallas Semiconductor Corp 64,000 2,784,000
* Novellus Systems 10,000 488,125
* Photronics Inc 20,700 408,825
------------
4,558,138
------------
Software 1.9%
* Novell Inc 100,000 2,350,000
------------
Telecommunications 2.5%
AT & T 19,800 1,098,900
Motorola 24,000 1,987,500
------------
3,086,400
------------
Tobacco 1.1%
UST Inc 44,000 1,342,000
------------
Transportation 3.9%
CH Robinson Worldwide 99,600 3,218,325
* Eagle USA Airfreight 35,000 1,649,375
------------
4,867,700
------------
Utilities 3.0%
* MidAmerican Energy 110,000 3,712,500
------------
Total Common Stocks
(Cost $107,956,855) 122,538,863
------------
- --------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- --------------------------------------------------------------------------------
Corporate Short-Term Notes 0.8%
American Express 4.87%, 06/02/99
(Cost $999,864) 1,000M $ 999,864
------------
Total Investments
(Cost $108,956,719)** 123,538,727
Excess of Other Assets
Over Liabilities 1.0% 1,246,253
------------
Net Assets $124,784,980
============
- --------------------------------------------------------------------------------
* Non-income producing.
** Also cost for federal income tax purposes.
At May 31, 1999 net unrealized appreciation for federal income tax purposes
aggregrated $14,582,008 of which $19,203,894 related to appreciated
securities and $4,621,886 related to depreciated securities.
See Notes to Financial Statements.
19
<PAGE>
Sentinel Mid Cap Growth Fund
Statement of Assets and Liabilities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Assets
Investments at value $ 123,538,727
Cash and cash equivalents 651,157
Receivable for fund shares sold 837,277
Receivable for dividends 61,570
-------------
Total Assets 125,088,731
-------------
Liabilities
Payable for fund shares repurchased 68,751
Accrued expenses 67,819
Management fee payable 65,195
Distribution fee payable (Class A Shares) 77,259
Distribution fee payable (Class B Shares) 5,683
Fund service fee payable 19,044
-------------
Total Liabilities 303,751
-------------
Net Assets Applicable to Outstanding Shares $ 124,784,980
=============
Class A Shares
$117,302,223/7,163,915 shares outstanding $ 16.37
Sales Charge -- 5.00% of offering price 0.86
-------------
Maximum Offering Price $ 17.23
=============
Class B Shares
$7,482,757/464,195 shares outstanding $ 16.12
=============
Net Assets Represent
Capital stock at par value $ 76,281
Paid-in capital 96,684,899
Accumulated distributions in excess of
net investment income (309,625)
Accumulated undistributed net realized gain
on investments 13,751,417
Unrealized appreciation of investments 14,582,008
-------------
Net Assets $ 124,784,980
=============
Investments at Cost $ 108,956,719
=============
Sentinel Mid Cap Growth Fund
Statement of Operations
For the Six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Investment Income
Income:
Dividends $ 352,469
Interest 115,188
-------------
Total Income 467,657
-------------
Expenses:
Management advisory fee 353,702
Transfer agent and custodian 144,917
Distribution expense (Class A Shares) 165,940
Distribution expense (Class B Shares) 26,147
Accounting services 16,475
Auditing fees 5,125
Legal fees 2,575
Reports and notices to shareholders 7,725
Registration and filing fees 21,886
Directors' fees and expenses 5,420
Other 14,238
-------------
Total Expenses 764,150
Expense Offset (11,657)
-------------
Net Expenses 752,493
-------------
Net Investment Loss (284,836)
-------------
Realized and Unrealized Gain on Investments
Net realized gain on sales of investments 13,751,421
Net change in unrealized appreciation 6,972,752
-------------
Net Realized and Unrealized Gain on Investments 20,724,173
-------------
Net Increase in Net Assets from Operations $ 20,439,337
=============
See Notes to Financial Statements.
20
<PAGE>
Sentinel Mid Cap Growth Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
--------------- ---------------
<S> <C> <C>
Increase in Net Assets from Operations
Net investment loss $ (284,836) $ (237,254)
Net realized gain on sales of investments 13,751,421 7,709,262
Net change in unrealized appreciation (depreciation) 6,972,752 (175,673)
--------------- ---------------
Net increase in net assets from operations 20,439,337 7,296,335
--------------- ---------------
Distributions to Shareholders
From net investment income
Class A Shares - -
Class B Shares - -
From net realized gain on investments
Class A Shares (7,360,527) (24,253,869)
Class B Shares (288,532) -
--------------- ---------------
Total distributions to shareholders (7,649,059) (24,253,869)
--------------- ---------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 14,248,819 16,027,433
Class B Shares 3,113,962 4,100,488
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 6,662,042 22,564,015
Class B Shares 288,437 -
--------------- ---------------
24,313,260 42,691,936
Less: Payments for shares reacquired
Class A Shares (13,765,246) (11,900,854)
Class B Shares (289,366) (281,977)
--------------- ---------------
Increase in net assets from capital share transactions 10,258,648 30,509,105
--------------- ---------------
Total Increase in Net Assets for period 23,048,926 13,551,571
Net Assets: Beginning of period 101,736,054 88,184,483
--------------- ---------------
Net Assets: End of period $ 124,784,980 $ 101,736,054
=============== ===============
Distributions in Excess of Net Investment Income
at End of Period $ (309,625) $ (24,789)
=============== ===============
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
Sentinel Mid Cap Growth Fund
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 5/31/99 Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/98 11/30/97 11/30/96 11/30/95 11/30/94
-------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 14.65 $ 18.73 $ 17.57 $ 16.93 $ 16.15 $ 17.51
-------------- ----------- ----------- ----------- ----------- -----------
Income (loss) from Investment Operations
Net investment income (loss) (0.03) (0.03) (0.02) 0.03 0.07 0.05
Net realized and unrealized gain (loss) on investments 2.83 1.08 4.00 3.23 3.33 (0.92)
-------------- ----------- ----------- ----------- ----------- -----------
Total from investment operations 2.80 1.05 3.98 3.26 3.40 (0.87)
-------------- ----------- ----------- ----------- ----------- -----------
Less Distributions
Dividends from net investment income - - 0.02 0.07 0.05 0.03
Distributions from realized gains on investments 1.08 5.13 2.80 2.55 2.57 0.46
-------------- ----------- ----------- ----------- ----------- -----------
Total Distributions 1.08 5.13 2.82 2.62 2.62 0.49
-------------- ----------- ----------- ----------- ----------- -----------
Net asset value at end of period $ 16.37 $ 14.65 $ 18.73 $ 17.57 $ 16.93 $ 16.15
============== =========== =========== =========== =========== ===========
Total Return (%) * 20.0 ++ 8.3 27.3 22.6 24.9 (5.1)
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.24 + 1.26 1.29 1.40 1.50 1.43
Ratio of expenses to average net assets before
expense reductions (%) ** 1.26 + 1.29 1.32 1.43 1.54 1.43
Ratio of net investment income (loss)
to average net assets (%) (0.44)+ (0.23) (0.15) 0.16 0.42 0.30
Portfolio turnover rate (%) 64 97 161 98 84 58
Net assets at end of period (000 omitted) $117,302 $97,895 $88,184 $69,816 $60,446 $50,447
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Six Months Period 1/12/98
Ended 5/31/99 to 11/30/98 (A)
Class B Shares (Unaudited)
-------------- ---------------
<S> <C> <C>
Net asset value at beginning of period $14.52 $13.08
-------------- ---------------
Income from Investment Operations
Net investment income (loss) (0.14) (0.17)
Net realized and unrealized gain on investments 2.82 1.61
-------------- ---------------
Total from investment operations 2.68 1.44
-------------- ---------------
Less Distributions
Dividends from net investment income - -
Distributions from realized gains on investments 1.08 -
-------------- ---------------
Total Distributions 1.08 -
-------------- ---------------
Net asset value at end of period $16.12 $14.52
============== ===============
Total Return (%) * 19.3 ++ 11.0 ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 2.54 + 2.27 +
Ratio of expenses to average net assets before
expense reductions (%)** 2.56 + 2.29 +
Ratio of net investment income (loss)
to average net assets (%) (1.73)+ (1.24)+
Portfolio turnover rate (%) 64 97
Net assets at end of period (000 omitted) $7,483 $3,841
</TABLE>
(A) Commenced operations January 12, 1998.
+ Annualized
++ Not Annualized
* Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at the net asset value during the period, and a redemption on
the last day of the period. Initial sales charge is not reflected in the
calculation of total return.
** Expense reductions are comprised of the voluntary expense reimbursements
and include, effective 1995, the earning credits as described in Notes (2)
and (1) H.
See Notes to Financial Statements.
22
<PAGE>
Sentinel Small Company Fund
Investment in Securities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Shares Value
(Note 1)
- --------------------------------------------------------------------------------
Common Stocks 91.6%
Advertising 1.9%
True North
Communications 100,000 $ 2,337,500
-------------
Aerospace 0.5%
Goodrich (B.F.) 15,000 607,500
-------------
Banks 1.6%
Cullen Frost Bankers Inc 10,000 562,500
Mercantile Bankshares 15,000 539,063
Wilmington Trust Corp 14,900 876,306
-------------
1,977,869
-------------
Beverages 0.8%
* Mondavi (Robert) `A' 30,000 1,012,500
-------------
Chemicals 3.5%
Cambrex Corp 135,000 3,037,500
* TETRA Technologies 150,000 1,275,000
-------------
4,312,500
-------------
Communications 0.1%
* Dynatech Corp 17,500 59,609
-------------
Consumer & Business Services 13.4%
* Administaff Inc 30,000 480,000
* Affiliated Computer Services 100,000 4,337,500
Analysts Int'l 130,000 2,071,875
* CACI Int'l 100,000 1,837,500
* FileNet Corp 150,000 1,481,250
* Healthcare Services Group 94,800 900,600
* Sterling Commerce 90,000 3,498,750
Unifirst Corporation 100,000 1,800,000
-------------
16,407,475
-------------
Cosmetics and Toiletries 1.9%
Alberto-Culver Co Class A 100,000 2,281,250
-------------
Electronics 7.0%
* C-COR Electronics 20,000 472,500
CTS Corp 10,000 560,000
Harman Int'l
Industries 50,000 2,218,750
Methode Electronics `A' 200,000 3,687,500
* Sawtech Inc 40,000 1,585,000
-------------
8,523,750
-------------
Environmental Control 2.0%
Donaldson Co 100,000 2,418,750
-------------
Financial Services 2.5%
Duff & Phelps Credit Rating 50,000 3,078,125
-------------
Food & Food Distributors 3.1%
Smart & Final Inc 55,000 525,937
* Smart & Final Inc - Rights 55,000 1,719
* Whole Foods Market Inc 60,000 2,490,000
Worthington Foods 50,000 728,125
-------------
3,745,781
-------------
Healthcare Providers 0.8%
Healthplan Services 84,000 745,500
* Monarch Dental Corp 60,000 213,750
-------------
959,250
-------------
Industrial - Diversified 5.4%
Aptargroup 100,000 2,750,000
* Bush Boake Allen 96,000 2,766,000
Lawter Int'l 90,000 1,096,875
-------------
6,612,875
-------------
Insurance 4.9%
Enhance Financial
Service Group 70,000 $ 1,369,375
HCC Insurance Holdings 150,000 3,337,500
Horace Mann Educators 50,000 1,293,750
-------------
6,000,625
-------------
Investment/Advisory Services 2.6%
Waddell & Reed Financial -
Class A 100,000 2,450,000
Waddell & Reed Financial -
Class B 30,000 723,750
-------------
3,173,750
-------------
Manufacturing - Diversified 3.9%
Bemis Co 50,000 1,887,500
* Plexus 20,000 611,250
Robbins and Myers Inc 20,000 477,500
Tyco Int'l Ltd 20,000 1,747,500
-------------
4,723,750
-------------
Marketing Services 3.9%
* Acxiom Corp 100,000 2,700,000
* Catalina Marketing Corp 24,000 2,125,500
-------------
4,825,500
-------------
Medical - Equipment & Supplies 5.5%
Ballard Medical Products 72,000 1,710,000
Diagnostic Products 11,600 263,900
Hillenbrand Industries 25,000 1,048,437
Mentor Corp 150,000 2,390,625
Minntech Corp 90,000 1,243,125
-------------
6,656,087
-------------
Medical - Lab & Testing Services 2.6%
* Covance Inc 150,000 3,178,125
-------------
Oil Field Equipment & Services 2.3%
* Cal Dive Int'l 15,000 367,500
Carbo Ceramics Inc 20,000 445,000
* Oceaneering Int'l Inc 20,000 308,750
* Smith Int'l 40,000 1,730,000
-------------
2,851,250
-------------
Pharmaceuticals 0.7%
* Barr Laboratories 10,000 329,375
JONES PHARMA INC 15,000 533,438
-------------
862,813
-------------
Real Estate 2.5%
Chateau Communitites Inc 100,000 3,018,750
-------------
Restaurants 5.3%
Applebee's Int'l 50,000 1,475,000
Ruby Tuesday Inc 124,000 2,301,750
Sbarro Inc 100,000 2,725,000
-------------
6,501,750
-------------
Retail 2.5%
Casey's General Stores 50,000 671,875
Ethan Allen Interiors 75,000 2,390,625
-------------
3,062,500
-------------
Retail - Apparel 0.7%
* Wet Seal Inc - Class A 30,000 832,500
-------------
Semiconductors &
Semiconductor Equipment 4.7%
* C-Cube Microsystems 25,000 $ 626,563
Dallas Semicondutor Corp 65,000 2,827,500
* Novellus Systems 15,000 732,187
* Photronics Inc 60,000 1,185,000
* Unitrode Corp 20,000 416,250
-------------
5,787,500
-------------
Transportation 2.9%
CH Robinson Worldwide 75,000 2,423,438
* Eagle USA Airfreight 12,000 565,500
* Railtex Inc 40,000 540,000
-------------
3,528,938
-------------
Utilities 2.1%
* Midamerican Energy 75,000 2,531,250
-------------
Total Common Stocks
(Cost $95,626,094) 111,869,822
-------------
- --------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- --------------------------------------------------------------------------------
Corporate Convertible Bonds 0.3%
Phoenix Investment Partners 6%, '15
(Cost $403,571) 250M 312,500
-------------
Corporate Short-Term Notes 7.3%
Chevron Oil Finance 4.71%,
06/03/99 2,700M 2,699,293
Commercial Credit 4.85%,
06/11/99 4,500M 4,493,938
Ford Motor Corp 4.8%,
06/08/99 1,800M 1,798,320
-------------
Total Corporate Short-Term Notes
(Cost $8,991,551) 8,991,551
-------------
Total Investments
(Cost $105,021,216)** 121,173,873
Excess of Other Assets
Over Liabilities 0.8% 1,026,146
-------------
Net Assets $122,200,019
=============
- -------------------------------------------------------------------------------
* Non-income producing.
** Cost for federal income tax purposes is substantially similar. At May 31,
1999 net unrealized appreciation for federal income tax purposes aggregated
$16,152,657 of which $24,691,216 related to appreciated securities and
$8,538,559 related to depreciated securities.
See Notes to Financial Statements.
23
<PAGE>
Sentinel Small Company Fund
Statement of Assets and Liabilities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Assets
Investments at value $ 121,173,873
Cash and cash equivalents 395,653
Receivable for securities sold 348,334
Receivable for fund shares sold 558,971
Receivable for dividends and interest 27,750
----------------
Total Assets 122,504,581
----------------
Liabilities
Payable for fund shares repurchased 103,566
Accrued expenses 35,223
Management fee payable 63,538
Distribution fee payable (Class A Shares) 62,480
Distribution fee payable (Class B Shares) 13,627
Fund service fee payable 26,128
----------------
Total Liabilities 304,562
----------------
Net Assets Applicable to Outstanding Shares $ 122,200,019
================
Net Asset Value and Offering Price per Share
Class A Shares
$108,947,168 / 20,140,614 shares outstanding $ 5.41
Sales Charge -- 5.00% of offering price 0.28
----------------
Maximum Offering Price $ 5.69
================
Class B Shares
$13,252,851 / 2,541,818 shares outstanding $ 5.21
================
Net Assets Represent
Capital stock at par value $ 226,824
Paid-in capital 96,777,594
Accumulated distributions in excess of
net investment income (72,682)
Accumulated undistributed net realized gain
on investments 9,115,626
Unrealized appreciation of investments 16,152,657
----------------
Net Assets $ 122,200,019
================
Investments at Cost $ 105,021,216
Sentinel Small Company Fund
Statement of Operations
For the Six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Investment Income
Income:
Dividends $ 474,062
Interest 227,264
----------------
Total Income 701,326
----------------
Expenses:
Management advisory fee 361,637
Transfer agent and custodian 200,741
Distribution expense (Class A Shares) 159,195
Distribution expense (Class B Shares) 61,415
Accounting services 16,875
Auditing fees 5,350
Legal fees 2,375
Reports and notices to shareholders 6,500
Registration and filing fees 18,138
Directors' fees and expenses 5,600
Other 2,299
----------------
Total Expenses 840,125
Expense Offset (8,501)
----------------
Net Expenses 831,624
----------------
Net Investment Loss (130,298)
----------------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain on sales of investments 9,115,435
Net change in unrealized appreciation (depreciation) (1,323,047)
----------------
Net Realized and Unrealized Gain on Investments 7,792,388
----------------
Net Increase in Net Assets from Operations $ 7,662,090
================
See Notes to Financial Statements. See Notes to Financial Statements.
24
<PAGE>
Sentinel Small Company Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
---------------- ----------------
Increase in Net Assets from Operations
Net investment income (loss) $ (130,298) $ (186,150)
Net realized gain on sales of investments 9,115,435 13,141,667
Net change in unrealized appreciation (depreciation) (1,323,047) (9,868,808)
---------------- ----------------
Net increase in net assets from operations 7,662,090 3,086,709
---------------- ----------------
Distributions to Shareholders
From net investment income
Class A Shares - (348,277)
Class B Shares - -
From realized gain on investments
Class A Shares (11,668,708) (13,692,058)
Class B Shares (1,353,508) (952,430)
---------------- ----------------
Total distributions to shareholders (13,022,216) (14,992,765)
---------------- ----------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 8,696,917 10,479,815
Class B Shares 1,812,407 5,429,602
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 10,889,296 12,740,406
Class B Shares 1,352,352 950,322
---------------- ----------------
22,750,972 29,600,145
Less: Payments for shares reacquired
Class A Shares (15,466,069) (18,180,818)
Class B Shares (1,425,692) (999,866)
---------------- ----------------
Increase in net assets from capital share transactions 5,859,211 10,419,461
---------------- ----------------
Total Increase (Decrease) in Net Assets for period 499,085 (1,486,595)
Net Assets: Beginning of period 121,700,934 123,187,529
---------------- ----------------
Net Assets: End of period $ 122,200,019 $ 121,700,934
================ ================
Accumulated undistributed (distributions in excess of)
Net Investment Income at End of Period $ (72,682) $ 57,617
================ ================
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
Sentinel Small Company Fund
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 5/31/99 Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/98 11/30/97 11/30/96 11/30/95 11/30/94
-------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 5.67 $ 6.30 $ 5.17 $ 5.20 $ 5.53 $ 6.87
-------------- ------------ ------------ ------------ ------------ ------------
Income from Investment Operations
Net investment income (loss) - - 0.02 0.01 0.02 (0.04)
Net realized and unrealized gain on investments 0.35 0.14 1.16 0.95 0.56 0.18
-------------- ------------ ------------ ------------ ------------ ------------
Total from investment operations 0.35 0.14 1.18 0.96 0.58 0.14
-------------- ------------ ------------ ------------ ------------ ------------
Less Distributions
Dividends from net investment income - 0.02 0.01 0.03 - -
Distributions from realized gains on investments 0.61 0.75 0.04 0.96 0.91 1.48
-------------- ------------ ------------ ------------ ------------ ------------
Total Distributions 0.61 0.77 0.05 0.99 0.91 1.48
-------------- ------------ ------------ ------------ ------------ ------------
Net asset value at end of period $ 5.41 $ 5.67 $ 6.30 $ 5.17 $ 5.20 $ 5.53
============== ============ ============ ============ ============ ============
Total Return (%) * 6.8 ++ 2.7 23.0 22.0 12.2 2.0
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.30 + 1.31 1.34 1.47 1.56 1.58
Ratio of expenses to average net assets before
expense reductions (%) ** 1.32 + 1.33 1.36 1.51 1.60 1.58
Ratio of net investment income (loss)
to average net assets (%) (0.12)+ (0.07) 0.38 0.23 0.26 (0.74)
Portfolio turnover rate (%) 17 45 45 60 79 46
Net assets at end of period (000 omitted) $108,947 $109,598 $115,532 $99,393 $89,321 $88,420
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
Sentinel Small Company Fund
Financial Highlights (cont'd.)
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Six Months Eight
Ended 5/31/99 Year Ended Year Ended Months Ended
Class B Shares (Unaudited) 11/30/98 11/30/97 11/30/96 (A)
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period $ 5.51 $ 6.18 $ 5.12 $ 4.82
-------------- -------------- -------------- --------------
Income from Investment Operations
Net investment income (loss) (0.03) (0.03) (0.03) (0.03)
Net realized and unrealized gain on investments 0.34 0.11 1.13 0.33
-------------- -------------- -------------- --------------
Total from investment operations 0.31 0.08 1.10 0.30
-------------- -------------- -------------- --------------
Less Distributions
Dividends from net investment income - - - -
Distributions from realized gains on investments 0.61 0.75 0.04 -
-------------- -------------- -------------- --------------
Total Distributions 0.61 0.75 0.04 -
-------------- -------------- -------------- --------------
Net asset value at end of period $ 5.21 $ 5.51 $ 6.18 $ 5.12
============== ============== ============== ==============
Total Return (%) * 6.2 ++ 1.7 21.6 6.2 ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 2.30 + 2.24 2.35 2.62 +
Ratio of expenses to average net assets before
expense reductions (%) ** 2.31 + 2.25 2.36 2.64 +
Ratio of net investment income (loss)
to average net assets (%) (1.12)+ (1.00) (0.62) (0.91)+
Portfolio turnover rate (%) 17 45 45 60
Net assets at end of period (000 omitted) $13,253 $12,103 $7,656 $1,943
</TABLE>
(A) Commenced operations April 1, 1996.
+ Annualized
++ Not Annualized
* Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at the net asset value during the period, and a redemption on
the last day of the period. Initial sales charge is not reflected in the
calculation of total return.
** Expense reductions are comprised of the voluntary expense reimbursements
and include, effective 1995, the earnings credits as described in Notes (2)
and (1) H.
See Notes to Financial Statements.
27
<PAGE>
Sentinel World Fund
Investment in Securities
at May 31, 1999 (Unaudited)
- ------------------------------------------------------------------------
Shares Value
(Note 1)
- ------------------------------------------------------------------------
Common Stocks 97.0%
Argentina 2.1%
YPF S. A. ( ADR ) 60,000 $ 2,527,500
-------------
Australia 6.0%
National Australia 190,000 3,074,889
News Corporation 250,000 2,064,371
Rio Tinto Limited 149,625 2,098,247
-------------
7,237,507
-------------
Denmark 3.4%
Den Danske Bank 25,000 2,675,070
Novo Nordisk (ADR) 27,000 1,404,000
-------------
4,079,070
-------------
France 9.4%
Alcatel Alsthom ( ADR ) 40,005 947,619
Credit Commercial 25,000 2,748,143
Elf Aquitaine ( ADR ) 28,785 2,043,735
Group Danone 8,000 2,200,598
Guyenne et Gascogne 2,940 1,497,357
Societe Generale 10,850 1,969,358
-------------
11,406,810
-------------
Germany 7.7%
BASF AG 45,000 1,713,747
Bayer A.G. Ord 60,000 2,288,122
DaimlerChrysler (ADR) 13,000 1,136,688
Deutsche Bank 37,000 1,922,596
SAP A.G. (ADR) 40,000 1,345,000
Siemens A.G 13,000 872,320
-------------
9,278,473
-------------
Hong Kong 1.6%
HSBC Holdings 60,890 1,994,295
-------------
Italy 3.5%
San Paolo IMI SpA (ADR) 62,700 1,712,494
Telecom Italia (ADR) 25,000 2,573,438
-------------
4,285,932
-------------
Japan 16.2%
Canon 80,000 2,008,479
Daiichi Pharmaceuticals 110,000 1,756,595
Dai Nippon Printing Co 70,000 1,044,080
Fuji Photo Film 50,000 1,777,997
Honda Motors 40,000 1,633,124
Kyocera Corp 45,000 2,348,438
Mitsubishi Heavy Industry 400,000 1,554,101
Murata Manufacturing 40,000 2,196,156
Nintendo Co 20,000 2,337,737
Sankyo Co LTD 65,000 1,522,205
Sony Corp 15,000 1,402,642
-------------
19,581,554
-------------
Mexico 1.3%
Telefonos de Mexico (ADR) 20,000 1,598,750
-------------
Netherlands 8.3%
ABN Amro Bank 115,000 $ 2,546,265
Akzo Nobel N.V 30,000 1,244,088
ING Groep N.V 40,000 2,135,998
Koninklijke Philips
Electronics N.V. (ADR) 15,640 1,462,000
Unilever N.V. ( ADR ) 40,178 2,624,163
-------------
10,012,514
-------------
Portugal 1.7%
Portugal Telecom (ADR) 45,000 2,036,250
-------------
South Korea 0.4%
Pohang Iron & Steel Co 6,740 525,741
-------------
Spain 6.5%
Banco Popular 30,000 2,191,221
Endesa (ADR) 105,000 2,264,063
E.N.I. SpA (ADR) 20,000 1,258,750
Repsol ( ADR ) 120,000 2,160,000
-------------
7,874,034
-------------
Sweden 3.0%
Astrazeneca 93,332 3,667,013
-------------
Switzerland 5.3%
Nestle A.G. Registered 1,575 2,830,082
Novartis A.G. Registered 1,600 2,320,951
Zurich Allied 2,200 1,293,228
-------------
6,444,261
-------------
United Kingdom 20.6%
Assoc. Brit. Food 220,000 1,602,351
British Airways plc (ADR) 25,000 1,812,500
British Steel (ADR) 75,000 1,626,563
British Telecom plc ( ADR ) 18,000 3,024,000
Carlton Communications 150,000 1,195,760
Diageo plc 138,240 1,457,179
Glaxo Hldg plc ( ADR ) 25,000 1,406,250
Johnson Matthey plc 100,000 872,409
National Westminster
Bank plc 111,342 2,559,393
Powergen plc 175,000 1,886,684
Scottish Power 150,000 1,293,006
Shell Transport &
Trading (ADR) 62,000 2,735,750
Smithkline Beecham
plc (ADR) 20,000 1,312,500
Tesco plc 751,509 2,198,442
-------------
24,982,787
-------------
Total Common Stocks
(Cost $90,548,427) 117,532,491
-------------
Preferred Stocks 1.3%
Germany
RWE A.G.
(Cost $1,869,620) 35,000 $ 1,557,194
-------------
Total Investments
(Cost $92,418,047)* 119,089,685
Excess of Other Assets
Over Liabilities 1.7% 2,096,360
-------------
Net Assets $ 121,186,045
=============
- ------------------------------------------------------------------------
Summary of Foreign Securities
by Industry Classification
Percent of Market
Industry Net Assets Value
Airlines 1.5% $ 1,812,500
Automobiles, Auto Parts 2.3% 2,769,812
Banks 15.4% 18,651,286
Broadcasting 1.7% 2,064,371
Chemicals 2.9% 3,532,210
Computers 1.1% 1,345,000
Distributors, Food & Health 3.1% 3,802,949
Electrical Components 1.9% 2,348,438
Engineering & Construction 1.2% 1,462,000
Entertainment 2.9% 3,533,497
Financial Services 5.7% 6,878,436
Foods, Beverage 1.2% 1,457,179
Foods, Grocery 2.2% 2,624,163
Gold, Precious Metals 2.4% 2,970,656
Healthcare - Diversified 1.2% 1,522,205
Healthcare - Drug/Pharmacy 9.8% 11,867,309
Household Furniture
& Appliance 1.1% 1,402,642
Insurance 1.1% 1,293,228
Machinery 1.3% 1,554,101
Manufacturing & Process 3.9% 4,782,223
Office Equipment & Supply 1.7% 2,008,479
Oil 8.9% 10,725,735
Photography 1.5% 1,777,997
Printing, Publishing 0.9% 1,044,080
Retail - Drug & Food 5.4% 6,525,881
Steel 1.8% 2,152,304
Telecommunications 8.4% 10,180,057
Utilities - Electric 5.8% 7,000,947
----- -------------
98.3% $ 119,089,685
===== =============
- ------------------------------------------------------------------------
** Also cost for federal income tax purposes.
At May 31, 1999 net unrealized appreciation for federal income tax purposes
aggregated $26,671,638 of which $31,616,174 related to appreciated
securities and $4,944,536 related to depreciated securities.
(ADR) - American Depository Receipt
See Notes to Financial Statements.
28
<PAGE>
Sentinel World Fund
Statement of Assets and Liabilities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Assets
Investments at value $ 119,089,685
Cash and cash equivalents 182,674
Foreign currency (cost $597,889) 590,242
Receivable for securities sold 620,529
Receivable for fund shares sold 123,298
Receivable for dividends and interest 815,476
--------------
Total Assets 121,421,904
--------------
Liabilities
Payable for fund shares repurchased 20,041
Accrued expenses 57,347
Management fee payable 64,574
Distribution fee payable (Class A Shares) 54,205
Distribution fee payable (Class B Shares) 18,629
Distribution fee payable (Class C Shares) 1,819
Fund service fee payable 19,244
--------------
Total Liabilities 235,859
--------------
Net Assets Applicable to Outstanding Shares $ 121,186,045
==============
Net Asset Value and Offering Price per Share
Class A Shares
$100,174,700 / 5,324,309 shares outstanding $ 18.81
Sales Charge -- 5.00% of offering price 0.99
--------------
Maximum Offering Price $ 19.80
==============
Class B Shares
$19,644,109 / 1,056,145 shares outstanding $ 18.60
==============
Class C Shares
$1,367,236 / 72,980 shares outstanding $ 18.73
==============
Net Assets Represent
Capital stock at par value $ 64,534
Paid-in capital 90,610,119
Accumulated undistributed net investment income 1,026,312
Accumulated undistributed net realized gain
on investments and foreign exchange 2,828,003
Unrealized appreciation of investments
and foreign exchange 26,657,077
--------------
Net Assets $ 121,186,045
==============
Investments at Cost $ 92,418,047
==============
Sentinel World Fund
Statement of Operations
For the Six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Investment Income
Income:
Dividends $ 1,857,051 *
Interest 35,300
--------------
Total Income 1,892,351
--------------
Expenses:
Management advisory fee 370,569
Transfer agent and custodian 177,702
Distribution expense (Class A Shares) 150,280
Distribution expense (Class B Shares) 94,980
Distribution expense (Class C Shares) 10,886
Accounting services 14,470
Auditing fees 5,870
Legal fees 2,810
Reports and notices to shareholders 6,325
Registration and filing fees 23,125
Directors' fees and expenses 5,640
Other 11,761
--------------
Total Expenses 874,418
Expense Offset (8,347)
--------------
Net Expenses 866,071
--------------
Net Investment Income 1,026,280
--------------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) from:
Investments 4,111,935
Foreign currency transactions (26,781)
--------------
Net realized gain 4,085,154
--------------
Net change in unrealized appreciation
(depreciation) during the period:
Investments (12,987)
Foreign currency transactions 137,787
--------------
Net change in unrealized appreciation 124,800
--------------
Net Realized and Unrealized Gain on Investments 4,209,954
--------------
Net Increase in Net Assets from Operations $ 5,236,234
==============
* Net of Foreign Tax Withholding of $194,004
See Notes to Financial Statements.
29
<PAGE>
Sentinel World Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
------------- --------------
<S> <C> <C>
Increase in Net Assets from Operations
Net investment income $ 1,026,280 $ 1,224,860
Net realized gain (loss) on sales of investments 4,085,154 (1,484,464)
Net change in unrealized appreciation 124,800 9,925,548
------------- --------------
Net increase in net assets from operations 5,236,234 9,665,944
------------- --------------
Distributions to Shareholders
From net investment income
Class A Shares (949,988) (615,675)
Class B Shares (22,623) -
Class C Shares - -
From realized gain on investments
Class A Shares - (3,354,309)
Class B Shares - (392,508)
Class C Shares - -
------------- --------------
Total distributions to shareholders (972,611) (4,362,492)
------------- --------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 24,634,391 23,218,940
Class B Shares 2,244,101 8,692,576
Class C Shares 12,706,704 2,785,802
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 777,351 3,762,833
Class B Shares 19,186 388,693
Class C Shares - -
------------- --------------
40,381,733 38,848,844
Less: Payments for shares reacquired
Class A Shares (29,359,781) (20,790,851)
Class B Shares (1,476,522) (1,504,451)
Class C Shares (12,588,029) (1,753,067)
------------- --------------
Increase (decrease) in net assets from capital
share transactions (3,042,599) 14,800,475
------------- --------------
Total Increase in Net Assets for period 1,221,024 20,103,927
Net Assets: Beginning of period 119,965,021 99,861,094
------------- --------------
Net Assets: End of period $ 121,186,045 $ 119,965,021
============= ==============
Undistributed Net Investment Income
at End of Period $ 1,026,312 $ 999,423
============= ==============
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
Sentinel World Fund (A)
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Six Months
Ended 5/31/99 Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/98 11/30/97 11/30/96 11/30/95 11/30/94
------------- ---------- ---------- ---------- ---------- ----------
Net asset value at beginning of period $ 18.19 $ 17.25 $ 15.69 $ 13.78 $ 12.74 $ 11.86
------------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.17 0.18 0.11 0.12 0.14 0.08
Net realized and unrealized gain on investments 0.62 1.52 1.80 1.99 1.14 0.89
------------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 0.79 1.70 1.91 2.11 1.28 0.97
------------- ---------- ---------- ---------- ---------- ----------
Less Distributions
Dividends from net investment income 0.17 0.12 0.11 0.13 0.09 0.03
Distributions from realized gains on investments - 0.64 0.24 0.07 0.15 0.06
------------- ---------- ---------- ---------- ---------- ----------
Total Distributions 0.17 0.76 0.35 0.20 0.24 0.09
------------- ---------- ---------- ---------- ---------- ----------
Net asset value at end of period $ 18.81 $ 18.19 $ 17.25 $ 15.69 $ 13.78 $ 12.74
============= ========== ========== ========== ========== ==========
Total Return (%) * 4.4 ++ 10.3 12.5 15.5 10.2 8.2
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.26 + 1.24 1.29 1.43 1.56 1.58
Ratio of expenses to average net assets before
expense reductions (%) ** 1.28 + 1.26 1.32 1.48 1.63 1.58
Ratio of net investment income to average net assets (%) 1.85 + 1.18 1.14 0.94 0.79 0.62
Portfolio turnover rate (%) 15 12 21 14 32 30
Net assets at end of period (000 omitted) $100,175 $100,790 $89,740 $71,458 $47,702 $41,970
</TABLE>
See Notes to Financial Statements.
31
<PAGE>
Sentinel World Fund (A)
Financial Highlights (cont'd.)
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Six Months Eight Months
Ended 5/31/99 Year Ended Year Ended Ended
Class B Shares (Unaudited) 11/30/98 11/30/97 11/30/96 (B)
------------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period $ 17.92 $ 17.05 $ 15.58 $14.49
------------- ---------- ---------- ------------
Income (loss) from Investment Operations
Net investment income (loss) 0.09 0.04 0.01 (0.08)
Net realized and unrealized gain on investments 0.61 1.47 1.74 1.17
------------- ---------- ---------- ------------
Total from investment operations 0.70 1.51 1.75 1.09
------------- ---------- ---------- ------------
Less Distributions
Dividends from net investment income 0.02 - 0.04 -
Distributions from realized gains on investments - 0.64 0.24 -
------------- ---------- ---------- ------------
Total Distributions 0.02 0.64 0.28 -
------------- ---------- ---------- ------------
Net asset value at end of period $ 18.60 $ 17.92 $ 17.05 $15.58
============= ========== ========== ============
Total Return (%) * 3.9++ 9.2 11.5 7.5++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 2.19+ 2.23 2.16 2.56+
Ratio of expenses to average net assets before
expense reductions (%) ** 2.21+ 2.25 2.18 2.59+
Ratio of net investment income (loss)
to average net assets (%) 0.92+ 0.19 0.23 (0.19)+
Portfolio turnover rate (%) 15 12 21 14
Net assets at end of period (000 omitted) $19,644 $18,163 $10,121 $3,188
</TABLE>
See Notes to Financial Statements.
32
<PAGE>
Sentinel World Fund (A)
Financial Highlights (cont'd.)
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Six Months
Ended 5/31/99 Period 5/4/98
Class C Shares (Unaudited) 11/30/98 (C)
-------------- --------------
<S> <C> <C>
Net asset value at beginning of period $18.05 $19.57
-------------- --------------
Income (loss) from Investment Operations
Net investment income (loss) 0.08 (0.02)
Net realized and unrealized gain (loss) on investments 0.60 (1.50)
-------------- --------------
Total from investment operations 0.68 (1.52)
-------------- --------------
Less Distributions
Dividends from net investment income - -
Distributions from realized gains on investments - -
-------------- --------------
Total Distributions - -
-------------- --------------
Net asset value at end of period $18.73 $18.05
============== ==============
Total Return (%) * 3.8++ (7.8)++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 2.36+ 2.20+
Ratio of expenses to average net assets before
expense reductions (%) ** 2.37+ 2.21+
Ratio of net investment income
to average net assets (%) 0.75+ 0.23+
Portfolio turnover rate (%) 15 12
Net assets at end of period (000 omitted) $1,367 $1,013
</TABLE>
(A) As of April 1, 1996 INVESCO Capital Management, Inc. became the sub-advisor
to the Fund.
(B) Commenced operations April 1, 1996.
(C) Commenced operations May 4, 1998.
+ Annualized
++ Not Annualized
* Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at the net asset value during the period, and a redemption on
the last day of the period. Initial sales charge is not reflected in the
calculation of total return.
** Expense reductions are comprised of the voluntary expense reimbursements
and include, effective 1995, the earning credits as described in Notes (2)
and (1) H.
See Notes to Financial Statements.
33
<PAGE>
Sentinel High Yield Bond Fund
Investment in Securities
at May 31, 1999 (Unaudited)
- ------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- ------------------------------------------------------------------------
Bonds 93.1%
Aerospace 1.1%
BE Aerospace 9.5%, '08 1,000M $1,043,750
------------
Automotive 5.0%
Budget Group Inc.
9.125%, '06 1,000M 971,250
Dura Operating Corp.
9%, '09 450M 444,937
Eagle-Picher 9.375%, '08 750M 732,188
Exide Corp. 10%, '05 500M 501,250
United Rentals Inc.
9.25%, '09 1,000M 998,750
Walbro Corp. 10.125%, '07 1,000M 1,148,750
------------
4,797,125
------------
Broadcasting 0.7%
ACME Television
0%/10.875%, '05 800M 691,000
------------
Building Materials/ Construction 0.3%
Nortek Inc. 9.125%, '07 250M 254,062
------------
Building Residential & Commercial 1.0%
Del Webb Corporation
9.375%, '09 1,000M 996,250
------------
Cable/Other Video Distribution 4.7%
Avalon Cable of Michigan
9.375%, '08 1,000M 1,043,750
Echostar Communications
9.375%, '09 1,000M 1,005,000
Frontiervision 11%, '06 1,000M 1,113,750
Star Choice 13.0%, '05 1,250M 1,278,125
------------
4,440,625
------------
Chemicals 2.6%
Lyondell Chemical Co.
9.625%, '07 300M 304,875
Lyondell Chemical Co.
10.875%, '09 500M 511,250
Polymer Group 9%, '07 500M 490,000
Polymer Group 8.75%, '08 1,250M 1,212,500
------------
2,518,625
------------
Consumer Products 2.4%
Advance Stores 10.25%, '08 1,000M 1,005,000
MTS Inc. 9.375%, '05 500M 448,750
Simmons Co. 10.25%, '09 800M 823,000
------------
2,276,750
------------
Diversified Media 2.1%
Ackerley Group Inc. 9%, '09 1,000M 1,023,750
Big Flower Press 8.625%, '08 1,000M 958,750
------------
1,982,500
------------
Energy 1.7%
Giant Industries 9%, '07 940M 861,275
Petsec Energy 9.5%, '07 1,500M 778,125
------------
1,639,400
------------
Entertainment/Gaming 11.3%
Boyd Gaming 9.5%, '07 1,000M $1,008,750
Circus Circus Enterprise
9.25%, '05 1,000M 1,020,000
Coast Hotels & Casino
9.5%, '09 1,000M 993,750
Hollywood Park Inc.
9.25%, '07 850M 858,500
Horseshoe Gaming
9.375%, '07 1,000M 1,026,250
Isle of Capri Casinos
8.75%, '09 625M 587,500
Loews Cineplex 8.875%, '08 1,000M 963,750
Mohegan Tribal Gaming
8.75%, '09 1,000M 1,008,750
* Premier Cruise, Ltd.,
11%, '08 1,000M 300,000
Premier Parks 9.25%, '06 1,000M 1,031,250
Regal Cinemas 9.5%, '08 1,000M 957,500
Station Casinos 9.75%, '07 1,000M 1,043,750
------------
10,799,750
------------
Financial Services 4.7%
Americredit Corp. 9.875%, '06 500M 509,375
APP International Finance
8.522%, '99 500M 495,000
CB Richard Ellis 8.875%, '06 1,000M 997,500
Contifinancial 8.375%, '03 1,000M 925,000
Crown Castle Int'l. Corp.
9%, '11 550M 541,063
Ono Finance PLC 13%, '09 1,000M 1,016,250
------------
4,484,188
------------
Food/Restaurants 1.8%
Aurora Foods 9.875%, '07 1,000M 1,051,250
FRD Acquisitions 12.5%, '04 150M 148,313
Sun World Int'l. 11.25%, '04 500M 526,250
1,725,813
Hospitals and Healthcare/
Medical Technology 3.2%
Biovail Corp. 10.875%, '05 1,000M 1,026,250
Prime Medical 8.75%, '08 1,000M 978,750
Triad Hospitals Hldgs
11%, '09 1,000M 1,023,750
------------
3,028,750
------------
Industrial 1.0%
Tokheim Corp. 11.375%, '08 1,000M 998,750
------------
Information Technology 0.6%
Unisys Corp. 11.75%, '04 500M 561,250
------------
Manufacturing 2.8%
Delta Mills 9.625%, '07 350M $ 347,812
International Knife & Saw
11.375%, '06 750M 768,750
Packaging Corp. 9.625%, '09 500M 515,000
Transdigm Inc. 10.375%, '08 1,000M 997,500
------------
2,629,062
------------
Metals/Minerals 8.3%
* Acme Metals 10.875%, '07 1,000M 115,000
AK Steel Corp. 7.875%, '09 1,000M 982,500
Bulong Operations Pty
12.5%, '08 1,000M 1,010,000
Golden Northwest Aluminum
12%, '06 1,000M 1,030,000
Great Central 8.875%, '08 1,250M 1,196,875
Kaiser Aluminum
12.75%, '03 1,250M 1,271,875
National Steel Corp.
9.875%, '09 1,000M 1,023,750
NSM Steel Ltd. 12%, '06 1,000M 200,000
Oxford Automotive
10.125%, '07 1,000M 1,038,750
------------
7,868,750
------------
Oil & Gas 2.6%
Benton Oil & Gas
9.375%, '07 1,000M 738,750
Chiles Offshore 10%, '08 1,000M 790,000
Energy Corp. 9.5%, '07 500M 469,375
Houston Exploration
8.625%, '08 500M 488,125
------------
2,486,250
------------
Paper 3.8%
Domtar Inc. 9.5%, '16 1,000M 1,081,250
Riverwood Int'l. 10.25%, '06 500M 509,375
Riverwood Int'l
10.875%, '08 1,000M 981,250
Stone Containers
10.75%, '02 1,000M 1,040,000
------------
3,611,875
------------
Retail 3.2%
Ames Department Stores
10%, '06 1,000M 987,500
Jitney Jungle 12%, '06 1,000M 1,022,500
Pathmark Stores
9.625%, '03 1,000M 1,025,000
------------
3,035,000
------------
Service 1.6%
AFC Enterprises 10.25%, '07 500M 515,000
American Lawyer 9.75%, '07 1,000M 1,033,750
------------
1,548,750
------------
(continued)
34
<PAGE>
Sentinel High Yield Bond Fund
Investment in Securities (cont'd.)
at May 31, 1999 (Unaudited)
- -------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- -------------------------------------------------------------------------------
Shipping/Transportation 1.8%
Greyhound Lines 11.5%, '07 1,000M $ 1,133,750
Pegasus Shipping
11.875%, '04 750M 540,000
-------------
1,673,750
-------------
Telecommunications 18.9%
Alestra SA 12.125%, '06 1,000M 960,000
American Communications
10.25%, '08 1,000M 1,026,250
Galaxy Telecom 12.375%, '05 750M 833,438
Global Crossings 9.625%, '08 1,000M 1,112,500
Hayes Lemmerz 9.125%, '07 1,000M 1,028,750
Hermes Europe Railtel
10.375%, '09 1,000M 1,025,000
Intermedia Communications
0%/11.25%, '07 1,575M 1,130,062
Jordan Telecom Products
9.875%, '07 1,000M 981,250
McLeodUSA Inc.
0%/10.5%, '07 450M 343,125
McLeodUSA Inc.
8.125%, '09 1,000M 932,500
Metronet Communications
0%/9.95%, '08 1,500M 1,111,875
Microcell Telecommunications
0%/12%, '09 2,000M 1,100,000
Nextel Communications
0%/9.95%, '08 1,500M 1,035,000
Pegasus Communications
9.625%, '05 1,500M 1,537,500
RCN Corp. 0%/11.125%, '07 1,525M 1,017,938
Rural Cellular Corp.
9.625%, '08 1,000M 1,035,000
Tritel Pcs Inc. 0%/12.75%, '09 450M 224,437
Triton Pcs Inc. 0%/11%, '08 900M 543,375
Verio Inc. 10.375%, '05 1,000M 1,031,250
-------------
18,009,250
-------------
Wireless Communications 5.9%
Comcast Cellular 9.5%, '07 1,000M 1,121,250
Price Communications
9.125%, '06 1,000M 1,043,750
Price Comm. Cellular
11.25%, '08 1,061M 1,090,113
SFX Entertainment
9.125%, '08 1,000M 1,000,000
Telewest Communications
0%/11.0%, '07 1,500M 1,331,250
-------------
5,586,363
-------------
Total Bonds
(Cost $91,669,013) 88,687,638
-------------
Corporate Convertible Bonds 0.6%
Industrial 0.6%
Exide Corp. 2.9%, '05
(Cost $665,432) 1,000M 602,500
-------------
- -------------------------------------------------------------------------------
Shares Value
(Note 1)
- -------------------------------------------------------------------------------
Preferred Stocks 3.0%
Cable/Other Video Distribution 1.9%
Adelphia Communications
13% 6,500 $ 742,625
CSC Holdings
11.125% 9,003 1,044,348
-------------
1,786,973
-------------
Telecommunications 1.1%
Rural Cellular Corp.
11.375% 1,118 1,091,364
-------------
Total Preferred Stocks
(Cost $2,732,590) 2,878,337
-------------
Repurchase Agreements 1.3%
Repurchase agreement with State Street
Bank dated 5/28/99 at 3.25% to be
repurchased at $1,177,425 on 06/01/99,
collateralized by a $1,265,000 U.S.
Treasury Note due 5/25/00 valued at
$1,204,913
(Cost $1,177,000) 1,177,000
-------------
Total Investments
(Cost $96,244,035)** 93,345,475
Excess of Other Assets
Over Liabilities 2.0% 1,944,570
-------------
Net Assets $95,290,045
=============
- -------------------------------------------------------------------------------
* Bond in default.
** Also cost for federal income tax purposes. At May 31, 1999 unrealized
depreciation for federal income tax purposes aggregated $2,898,560 of which
$1,944,451 related to appreciated securities and $4,843,011 related to
depreciated securities.
See Notes to Financial Statements.
35
<PAGE>
Sentinel High Yield Bond Fund
Statement of Assets and Liabilities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Assets
Investments at value $ 93,345,475
Cash and cash equivalents 844
Receivable for fund shares sold 621,894
Receivable for interest and dividends 2,118,343
--------------
Total Assets 96,086,556
--------------
Liabilities
Payable for securities purchased 30,914
Payable for fund shares repurchased 638,023
Accrued expenses 14,298
Management fee payable 60,863
Distribution fee payable (Class A Shares) 10,489
Distribution fee payable (Class B Shares) 32,427
Distribution fee payable (Class C Shares) 2,063
Fund service fee payable 7,434
--------------
Total Liabilities 796,511
--------------
Net Assets Applicable to Outstanding Shares $ 95,290,045
==============
Net Asset Value and Offering Price per Share
Class A Shares
$32,459,861 / 3,420,400 shares outstanding $ 9.49
Sales Charge -- 4.00% of offering price 0.40
--------------
Maximum Offering Price $ 9.89
==============
Class B Shares
$60,372,282 / 6,366,783 shares outstanding $ 9.48
==============
Class C Shares
$2,457,902 / 258,981 shares outstanding $ 9.49
==============
Net Assets Represent
Capital stock at par value $ 100,462
Paid-in capital 102,716,136
Accumulated undistributed net investment income 3,582
Accumulated undistributed net realized loss
on investments (4,631,575)
Unrealized depreciation of investments (2,898,560)
--------------
Net Assets $ 95,290,045
==============
Investments at Cost $ 96,244,035
==============
Sentinel High Yield Bond Fund
Statement of Operations
For the Six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Investment Income
Income:
Dividends $ 176,660
Interest 4,476,981
--------------
Total Income 4,653,641
--------------
Expenses:
Management advisory fee 349,559
Transfer agent and custodian 62,507
Distribution expense (Class A Shares) 32,139
Distribution expense (Class B Shares) 197,254
Distribution expense (Class C Shares) 12,253
Accounting services 13,290
Auditing fees 3,025
Legal fees 1,475
Reports and notices to shareholders 1,825
Registration and filing fees 17,100
Directors' fees and expenses 4,276
Other 15,522
--------------
Total Expenses 710,225
Expense Offset (2,757)
--------------
Net Expenses 707,468
--------------
Net Investment Income 3,946,173
--------------
Realized and Unrealized Gain (Loss) on Investments
Net realized loss on sales of investments (3,141,183)
Net change in unrealized depreciation 581,651
--------------
Net Realized and Unrealized Gain (Loss) on Investments (2,559,532)
--------------
Net Increase in Net Assets from Operations $ 1,386,641
==============
See Notes to Financial Statements.
36
<PAGE>
Sentinel High Yield Bond Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
------------ ------------
<S> <C> <C>
Increase in Net Assets from Operations
Net investment income $ 3,946,173 $ 5,889,537
Net realized loss on sales of investments (3,141,183) (1,490,419)
Net change in unrealized appreciation (depreciation) 581,651 (4,106,785)
------------- -------------
Net increase in net assets from operations 1,386,641 292,333
------------- -------------
Distributions to Shareholders
From net investment income
Class A Shares (1,401,820) (2,030,629)
Class B Shares (2,452,690) (3,810,264)
Class C Shares (93,077) (47,427)
From net realized gain on investments
Class A Shares - (106,907)
Class B Shares - (291,716)
Class C Shares - -
------------- -------------
Total distributions to shareholders (3,947,587) (6,286,943)
------------- -------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 5,367,099 25,055,794
Class B Shares 8,559,526 28,434,192
Class C Shares 988,803 1,996,985
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 907,693 1,504,347
Class B Shares 1,005,391 1,375,149
Class C Shares 86,965 43,607
------------- -------------
16,915,477 58,410,074
Less: Payments for shares reacquired
Class A Shares (4,044,373) (4,351,448)
Class B Shares (3,497,768) (3,955,134)
Class C Shares (508,524) (14,589)
------------- -------------
Increase in net assets from capital share transactions 8,864,812 50,088,903
------------- -------------
Total Increase in Net Assets for period 6,303,866 44,094,293
Net Assets: Beginning of period 88,986,179 44,891,886
------------- -------------
Net Assets: End of period $ 95,290,045 $ 88,986,179
============= =============
Accumulated undistributed Net Investment
Income at End of Period $ 3,582 $ 4,996
============= =============
</TABLE>
See Notes to Financial Statements.
37
<PAGE>
Sentinel High Yield Bond Fund
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 5/31/99 Year Ended Period Ended
Class A Shares (Unaudited) 11/30/98 11/30/97 (A)
---------------- ---------------- ----------------
<S> <C> <C> <C>
Net asset value at beginning of period $ 9.75 $ 10.41 $ 10.00
---------------- ---------------- ----------------
Income from Investment Operations
Net investment income 0.42 0.87 0.32
Net realized and unrealized gain (loss) on investments (0.26) (0.58) 0.41
---------------- ---------------- ----------------
Total from investment operations 0.16 0.29 0.73
---------------- ---------------- ----------------
Less Distributions
Dividends from net investment income 0.42 0.86 0.32
Distributions from realized gains on investments - 0.09 -
---------------- ---------------- ----------------
Total Distributions 0.42 0.95 0.32
---------------- ---------------- ----------------
Net asset value at end of period $ 9.49 $ 9.75 $ 10.41
================ ================ ================
Total Return (%) * 1.7++ 2.7 7.3++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.27+ 1.26 1.20+
Ratio of expenses to average net assets before
expense reductions (%) ** 1.28+ 1.28 1.26+
Ratio of net investment income to average net assets (%) 8.69+ 8.42 7.80+
Portfolio turnover rate (%) 67 139 133
Net assets at end of period (000 omitted) $32,460 $31,120 $11,084
</TABLE>
See Notes to Financial Statements.
38
<PAGE>
Sentinel High Yield Bond Fund
Financial Highlights (cont'd.)
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 5/31/99 Year Ended Period Ended
Class B Shares (Unaudited) 11/30/98 11/30/97 (A)
---------------- ---------------- ----------------
<S> <C> <C> <C>
Net asset value at beginning of period $ 9.74 $ 10.40 $ 10.00
---------------- ---------------- ----------------
Income (loss) from Investment Operations
Net investment income 0.40 0.84 0.32
Net realized and unrealized gain (loss) on investments (0.26) (0.57) 0.39
---------------- ---------------- ----------------
Total from investment operations 0.14 0.27 0.71
---------------- ---------------- ----------------
Less Distributions
Dividends from net investment income 0.40 0.84 0.31
Distributions from realized gains on investments - 0.09 -
---------------- ---------------- ----------------
Total Distributions 0.40 0.93 0.31
---------------- ---------------- ----------------
Net asset value at end of period $ 9.48 $ 9.74 $ 10.40
================ ================ ================
Total Return (%) * 1.5++ 2.4 7.2++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.61+ 1.49 1.30+
Ratio of expenses to average net assets before
expense reductions (%) ** 1.62+ 1.52 1.34+
Ratio of net investment income to average net assets (%) 8.34+ 8.19 7.70+
Portfolio turnover rate (%) 67 139 133
Net assets at end of period (000 omitted) $60,372 $55,911 $33,808
</TABLE>
See Notes to Financial Statements.
39
<PAGE>
Sentinel High Yield Bond Fund
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Six Months
Ended 5/31/99 Period 5/4/98
Class C Shares (Unaudited) 11/30/98 (B)
---------------- ----------------
<S> <C> <C>
Net asset value at beginning of period $ 9.75 $10.70
---------------- ----------------
Income (loss) from Investment Operations
Net investment income 0.34 0.41
Net realized and unrealized gain (loss) on investments (0.24) (0.91)
---------------- ----------------
Total from investment operations 0.10 (0.50)
---------------- ----------------
Less Distributions
Dividends from net investment income 0.36 0.45
Distributions from realized gains on investments - -
---------------- ----------------
Total Distributions 0.36 0.45
---------------- ----------------
Net asset value at end of period $ 9.49 $ 9.75
================ ================
Total Return (%) * 1.1++ (4.7)++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 2.46+ 2.05+
Ratio of expenses to average net assets before
expense reductions (%) ** 2.47+ 2.06+
Ratio of net investment income to average net assets (%) 7.49+ 7.63+
Portfolio turnover rate (%) 67 139
Net assets at end of period (000 omitted) $2,458 $1,956
</TABLE>
(A) Commenced operations June 23, 1997.
(B) Commenced operations May 4, 1998.
+ Annualized
++ Not Annualized
* Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at the net asset value during the period, and a redemption on
the last day of the period. Initial sales charge is not reflected in the
calculation of total return.
** Expense reductions are comprised of the voluntary expense reimbursements
and include, effective 1995, the earnings credits as described in Notes (2)
and (1) H.
See Notes to Financial Statements.
40
<PAGE>
Sentinel Bond Fund
Investment in Securities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- --------------------------------------------------------------------------------
U.S.Government Obligations 47.0%
U.S. Treasury Obligations 20.4%
5-Year
Note 5.25%, '04 1,500M $ 1,478,775
--------------
10-Year:
Note 7%, '06 1,250M 1,335,625
Note 4.750%, '08 7,000M 6,514,060
--------------
7,849,685
--------------
30-Year:
Note 7.2%, '16 2,000M 2,236,280
Note 6%, '26 1,500M 1,489,950
Note 5.25%, '29 9,000M 8,266,140
--------------
11,992,370
--------------
Total U.S. Treasury Obligations 21,320,830
--------------
U.S. Government Agency Obligations 26.6%
Federal Home Loan Mortgage Corporation 1.2%
30-Year
8.0%, '08 1,131M 1,197,207
--------------
Federal National Mortgage Association 24.6%
Agency Discount Note:
4.77%, 08/17/99 9,000M 8,908,178
--------------
15-Year:
7.5%, '04 398M 406,608
--------------
30-Year:
7%, '28 1,272M 1,274,095
7%, '28 2,315M 2,317,406
7%, '29 2,926M 2,930,185
7%, '29 1,997M 1,999,707
8.5%, '28 1,968M 2,067,530
8.5%, '26 1,923M 2,020,551
10%, '17 600M 648,723
10%, '17 746M 807,054
6%, '28 1,086M 1,035,112
9.5%, '24 1,010M 1,078,873
--------------
16,179,236
--------------
Total Federal National
Mortgage Association 25,494,022
--------------
Government National
Mortgage Association 0.8%
15-year:
7%, '09 834M 854,191
--------------
30-year:
13%, '11 7M 8,515
13%, '13 1M 600
--------------
9,115
--------------
Total Government National
Mortgage Association 863,306
--------------
Total U.S. Government
Agency Obligations 27,554,535
--------------
Total U.S. Government Obligations
(Cost $50,191,667) 48,875,365
--------------
Bonds 59.4%
Automobile & Auto Parts 2.9%
General Motors 7.1%, '06 1,000M $ 1,015,000
TRW Inc. 7.125%, '09 2,000M 1,975,000
--------------
2,990,000
--------------
Building Materials/Construction 2.1%
Owens Corning 7.5%, '05 2,200M 2,200,000
--------------
Chemicals 3.5%
IMC Global Inc. 7.4%, '02 2,000M 2,027,500
Lubrizol Corp. 5.875%, '08 1,750M 1,625,313
--------------
3,652,813
--------------
Financial Institutions 8.2%
First Union Corp.
6.824%, '26 2,325M 2,394,750
Household Finance Corp.
5.875%, '04 1,000M 972,500
Lehman Brothers Holdings
8.5%, '15 3,000M 3,195,000
Salomon Brothers 6.25%, '05 2,000M 1,935,000
--------------
8,497,250
--------------
Foreign Financial Institutions 2.8%
Banque National de Paris
7.738%, '49 1,500M 1,456,875
Societe Generale 7.64%, '49 1,500M 1,443,750
--------------
2,900,625
--------------
Foreign Industrial 6.0%
Ahold Finance 6.25%, '09 2,750M 2,633,125
Akzo Nobel Inc. 6%, '03 1,000M 975,000
Laidlaw Inc. 7.65%, '06 2,625M 2,582,344
--------------
6,190,469
--------------
Foreign Utilities - Electric 5.5%
Israel Electric Corp.
7.75%, '09 2,850M 2,892,750
Korea Electric Power
7.75%, '13 1,000M 923,750
Korea Electric Power
6.75%, '27 1,000M 942,500
Korea Electric Power
7%, '27 1,000M 940,000
--------------
5,699,000
--------------
Industrial - Transportation 1.6%
ERAC USA Finance
6.625%, '06 1,750M 1,699,687
--------------
Lodging 1.6%
Marriott Int'l. Inc.
6.625%, '03 1,750M 1,715,000
--------------
Oil Field Equipment & Services 1.4%
Nabors Industries Inc.
6.8%, '04 1,500M 1,488,750
--------------
Oil & Gas 1.4%
Union Pacific Resources
7.3%, '09 1,500M 1,466,250
--------------
Technology 2.3%
Lucent Technologies
6.45%, '29 2,500M 2,350,000
--------------
Telecommunications 10.2%
AT&T Corp. 6.5%, '29 2,600M $ 2,421,250
Comsat 8.05%, '06 2,000M 2,177,540
MCI Worldcom Inc.
6.4%, '05 2,000M 1,962,500
Sprint Capital Corp.
6.875%, '28 2,000M 1,882,500
US West Capital Funding
6.25%, '05 2,250M 2,176,875
--------------
10,620,665
--------------
Tobacco 1.7%
Dimon Inc. 8.875%, '06 1,860M 1,715,850
--------------
Utilities - Electric 8.2%
Calenergy Co. 7.52%, '08 2,250M 2,300,625
Cleveland Electric
7.67%, '04 2,000M 2,057,500
CMS Energy Corp.
6.75%, '04 1,000M 960,000
Waterford 3 Funding
8.09%, '17 3,213M 3,256,998
--------------
8,575,123
--------------
Total Bonds
(Cost $62,714,082) 61,761,482
--------------
Corporate Short-Term Notes 4.8%
American Express 4.87%,
06/02/99 2,000M 1,999,729
Ford Motor Credit 4.84%,
07/08/99 3,000M 2,985,077
--------------
Total Corporate Short-Term Notes
(Cost $4,984,806) 4,984,806
--------------
Total Investments
(Cost $117,890,555)* 115,621,653
Excess of Liabilities
Over Other Assets (11.2%) (11,707,177)
---------------
Net Assets $ 103,914,476
==============
- --------------------------------------------------------------------------------
** Cost for federal income tax purposes is substantially similar. At May 31,
1999, unrealized depreciation for federal income tax purposes aggregated
$2,268,902 of which $830,187 related to appreciated securities and
$3,099,089 related to depreciated securities.
See Notes to Financial Statements.
41
<PAGE>
Sentinel Bond Fund
Statement of Assets and Liabilities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Assets
Investments at value $ 115,621,653
Cash and cash equivalents 1,152,950
Receivable for securities sold 991,140
Receivable for fund shares sold 82,450
Receivable for interest 1,453,586
Receivable from fund administrator 118,084
----------------
Total Assets 119,419,863
----------------
Liabilities
Payable for securities purchased 15,231,518
Payable for fund shares repurchased 140,038
Accrued expenses 34,372
Management fee payable 47,027
Distribution fee payable (Class A Shares) 25,042
Distribution fee payable (Class B Shares) 16,898
Fund service fee payable 10,492
----------------
Total Liabilities 15,505,387
----------------
Net Assets Applicable to Outstanding Shares $ 103,914,476
================
Net Asset Value and Offering Price per Share
Class A Shares
$84,440,005 / 13,798,858 shares outstanding $ 6.12
Sales Charge-- 4.00% of offering price 0.26
----------------
Maximum Offering Price $ 6.38
================
Class B Shares
$19,474,471 / 3,174,951 shares outstanding $ 6.13
================
Net Assets Represent
Capital stock at par value $ 169,738
Paid-in capital 110,231,724
Accumulated distributions in excess of
net investment income (5,802)
Accumulated undistributed net realized loss
on investments (4,212,282)
Unrealized depreciation of investments (2,268,902)
----------------
Net Assets $ 103,914,476
================
Investments at Cost $ 117,890,555
================
Sentinel Bond Fund
Statement of Operations
For the Six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Investment Income
Income:
Interest $ 3,641,205
----------------
Expenses:
Management advisory fee 282,578
Transfer agent and custodian 75,743
Distribution expense (Class A Shares) 88,570
Distribution expense (Class B Shares) 92,260
Accounting services 15,225
Auditing fees 4,360
Legal fees 1,825
Reports and notices to shareholders 3,250
Registration and filing fees 21,094
Directors' fees and expenses 4,890
Other 1,158
----------------
Total Expenses 590,953
Expense Reimbursement (118,084)
Expense Offset (11,453)
----------------
Net Expenses 461,416
----------------
Net Investment Income 3,179,789
----------------
Realized and Unrealized Loss on Investments
Net realized loss on sales of investments (412,379)
Net change in unrealized depreciation (5,166,454)
----------------
Net Realized and Unrealized Loss on Investments (5,578,833)
----------------
Net Decrease in Net Assets from Operations $ (2,399,044)
================
See Notes to Financial Statements. See Notes to Financial Statements.
42
<PAGE>
Sentinel Bond Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
---------------- ----------------
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net Investment income $ 3,179,789 $ 6,202,098
Net realized gain (loss) on sales of investments (412,379) 528,645
Net change in unrealized appreciation (depreciation) (5,166,454) 759,337
---------------- ----------------
Net increase (decrease) in net assets from operations (2,399,044) 7,490,080
---------------- ----------------
Distributions to Shareholders
From net investment income
Class A Shares (2,688,437) (5,570,866)
Class B Shares (479,754) (610,309)
From net realized gain on investments
Class A Shares - -
Class B Shares - -
---------------- ----------------
Total distributions to shareholders (3,168,191) (6,181,175)
---------------- ----------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 7,311,404 15,581,402
Class B Shares 5,292,699 10,004,831
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 1,799,947 3,791,071
Class B Shares 346,702 396,798
---------------- ----------------
14,750,752 29,774,102
Less: Payments for shares reacquired
Class A Shares (10,386,835) (18,008,356)
Class B Shares (1,779,919) (2,048,004)
---------------- ----------------
Increase in net assets from capital share transactions 2,583,998 9,717,742
---------------- ----------------
Total Increase (Decrease) in Net Assets for period (2,983,237) 11,026,647
Net Assets: Beginning of period 107,897,713 96,871,066
---------------- ----------------
Net Assets: End of period $ 104,914,476 $ 107,897,713
================ ================
Distributions in Excess of Net Investment Income
at End of Period $ (5,802) $ (11,851)
================ ================
</TABLE>
See Notes to Financial Statements.
43
<PAGE>
Sentinel Bond Fund
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Six Months
Ended 5/31/99 Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/98 11/30/97 11/30/96 11/30/95 11/30/94
-------------- ---------- -------- -------- -------- --------
Net asset value at beginning of period $ 6.45 $ 6.36 $ 6.35 $ 6.49 $ 5.85 $ 6.90
-------------- ---------- -------- -------- -------- --------
Income from Investment Operations
Net investment income 0.19 0.40 0.40 0.41 0.42 0.39
Net realized and unrealized gain (loss) on investments (0.33) 0.09 0.01 (0.14) 0.64 (0.70)
Total from investment operations (0.14) 0.49 0.41 0.27 1.06 (0.31)
-------------- ---------- -------- -------- -------- ---------
Less Distributions
Dividends from net investment income 0.19 0.40 0.40 0.41 0.42 0.39
Distributions from realized gains on investments - - - - - 0.35
-------------- ---------- -------- -------- -------- --------
Total Distributions 0.19 0.40 0.40 0.41 0.42 0.74
Net asset value at end of period $ 6.12 $ 6.45 $ 6.36 $ 6.35 $ 6.49 $ 5.85
============== ========== ========= ======== ========= =========
Total Return (%) * (2.2)++ 8.0 6.7 4.5 18.8 (4.9)
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.71+ 0.77 0.97 0.98 0.99 0.98
Ratio of expenses to average net assets before
expense reductions (%) ** 0.95+ 0.95 0.99 1.00 1.03 0.98
Ratio of net investment income to average net assets (%) 6.08+ 6.26 6.37 6.46 6.81 6.34
Ratio of net investment income to average net assets before
voluntary expense reimbursements (%) 5.86+ 6.11 6.37 6.46 6.81 6.34
Portfolio turnover rate (%) 125 147 130 176 237 133
Net assets at end of period (000 omitted) $84,440 $91,297 $88,756 $99,408 $108,755 $80,487
</TABLE>
See Notes to Financial Statements.
44
<PAGE>
Sentinel Bond Fund
Financial Highlights (cont'd.)
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Six Months Eight
Ended 5/31/99 Year Ended Year Ended Months Ended
Class B Shares (Unaudited) 11/30/98 11/30/97 11/30/96 (A)
------------- ---------- ---------- ------------
Net asset value at beginning of period $ 6.46 $ 6.38 $ 6.36 $ 6.30
------------- ---------- ---------- ------------
Income from Investment Operations
Net investment income 0.16 0.34 0.34 0.21
Net realized and unrealized gain (loss) on investments (0.33) 0.08 0.02 0.06
------------- ---------- ---------- ------------
Total from investment operations (0.17) 0.42 0.36 0.27
------------- ---------- ---------- ------------
Less Distributions
Dividends from net investment income 0.16 0.34 0.34 0.21
Distributions from realized gains on investments - - - -
------------- ---------- ---------- ------------
Total Distributions 0.16 0.34 0.34 0.21
------------- ---------- ---------- ------------
Net asset value at end of period $ 6.13 $ 6.46 $ 6.38 $ 6.36
============= ========== ========== ============
Total Return (%) * (2.6)++ 6.8 5.9 4.5++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.61+ 1.64 1.87 2.16+
Ratio of expenses to average net assets before
expense reductions (%) ** 1.85+ 1.84 1.90 2.18+
Ratio of net investment income to average net assets (%) 5.18+ 5.40 5.46 5.28+
Ratio of net investment income to average net assets before
voluntary expense reimbursements (%) 4.96+ 5.22 5.46 5.28+
Portfolio turnover rate (%) 125 147 130 176
Net assets at end of period (000 omitted) $19,474 $16,601 $8,115 $4,714
</TABLE>
(A) Commenced operations April 1, 1996.
+ Annualized
++ Not Annualized
* Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at the net asset value during the period, and a redemption on
the last day of the period. Initial sales charge is not reflected in the
calculation of total return.
** Expense reductions are comprised of the voluntary expense reimbursements
and include, effective 1995, the earnings credits as described in Notes (2)
and (1) H.
See Notes to Financial Statements.
#
<PAGE>
Sentinel Government Securities Fund
Investment in Securities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- --------------------------------------------------------------------------------
U.S. Government Obligations 127.6%
U.S. Treasury Obligations 37.6%
10-Year:
Note 4.75%, '08 9,000M $ 8,375,220
---------------
30-Year:
Note 5.25%, '29 20,000M 18,369,200
---------------
Total U.S. Treasury Obligations 26,744,420
---------------
U.S. Government Agency Obligations 90.0%
Federal Home Loan Mortgage Corporation 30.5%
Agency Discount Note:
4.72%, 07/14/99 20,000M 19,887,245
---------------
15-Year:
9.5%, '05 400M 420,481
9%, '06 111M 114,341
6.5%, '07 1,012M 1,028,517
---------------
1,563,339
---------------
30-Year:
8.25%, '05 60M 63,821
11%, '09 10M 10,925
11%, '15 30M 33,796
11%, '15 22M 23,889
11%, '15 31M 33,960
11%, '16 5M 5,302
11%, '17 7M 8,342
11%, '17 75M 82,993
---------------
263,028
---------------
Total Federal Home Loan
Mortgage Corporation 21,713,612
---------------
Federal National Mortgage Association 45.9%
15-Year:
8.25%, '02 54M 55,608
9.75%, '04 188M 198,929
7.75%, '05 1,279M 1,335,744
8%, '09 1,444M 1,497,265
---------------
3,087,546
---------------
30-Year:
9.25%, '09 220M 235,287
8%, '16 419M 439,572
10.5%, '17 1,228M 1,347,188
10%, '18 825M 892,564
10%, '19 464M 497,546
10.5%, '19 1,408M 1,545,164
7.5%, '20 1,307M 1,335,495
7.75%, '20 2,257M 2,324,264
7%, '21 1,727M 1,731,042
10%, '24 1,508M 1,631,939
6%, '25 1,003M 961,675
9%, '25 1,088M 1,154,663
9%, '25 2,578M 2,734,658
9.5%, '25 1,507M 1,608,980
8%, '27 1,037M 1,076,608
6%, '28 2,953M 2,813,518
7.5%, '28 1,813M 1,853,045
8%, '28 1,936M 2,010,810
8%, '28 987M 1,025,162
6%, '29 2,523M 2,400,613
---------------
29,619,793
---------------
Total Federal National
Mortgage Association 32,707,339
---------------
Government National
Mortgage Association 13.6%
10-Year:
7%, '03 505M $ 517,338
7%, '03 711M 728,871
---------------
1,246,209
---------------
15-Year:
10%, '01 9M 9,947
---------------
30-Year:
7.8%, '19 890M 929,585
7.8%, '19 117M 122,133
7.8%, '19 450M 469,706
7.8%, '20 458M 478,668
7.8%, '20 392M 409,426
7.8%, '20 293M 305,320
6.5%, '26 3,871M 3,801,044
5.5%, '29 2,100M 1,920,919
---------------
8,436,801
---------------
Total Government National
Mortgage Association 9,692,957
---------------
Total U.S. Government
Agency Obligations 64,113,908
---------------
Total U.S. Government Obligations
(Cost $92,587,703) 90,858,328
---------------
Corporate Short-Term Notes 10.4%
American Express
4.82%, 08/16/99 3,500M $ 3,464,386
G.E. Capital Corp.
4.81%, 07/12/99 2,500M 2,486,305
General Motors Accept. Corp.
4.76%, 06/02/99 1,500M 1,499,801
---------------
(Cost $7,450,492) 7,450,492
---------------
Total Investments
(Cost $100,038,195)* 98,308,820
Excess of Liabilities
Over Other Assets (38.0%) (27,088,787)
---------------
Net Assets $ 71,220,033
---------------
- --------------------------------------------------------------------------------
* Also cost for federal income tax purposes. At May 31, 1999 unrealized
depreciation for federal income tax purposes aggregated $1,729,375 of which
$235,250 related to appreciated securities and $1,964,625 related to
depreciated securities.
See Notes to Financial Statements.
46
<PAGE>
Sentinel Government Securities Fund
Statement of Assets and Liabilities
at May 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C>
Assets
Investments at value $ 98,308,820
Cash and cash equivalents 86,801
Receivable for securities sold 19,020,492
Receivable for fund shares sold 2,082
Receivable for interest 403,138
Receivable fund administrator 41,538
-----------
Total Assets 117,862,871
-----------
Liabilities
Payable for securities purchased 46,547,348
Payable for fund shares repurchased 10,419
Accrued expenses 22,896
Management fee payable 32,114
Distribution fee payable 22,337
Fund service fee payable 7,724
----------
Total Liabilities 46,642,838
----------
Net Assets Applicable to Outstanding Shares $ 71,220,033
=============
Net Asset Value and Offering Price Per Share
$71,220,033 / 7,195,923 shares outstanding $ 9.90
Sales Charge -- 4.00% of Offering Price 0.41
-------------
Maximum Offering Price Per Share $ 10.31
=============
Net Assets Represent
Capital stock at par value $ 71,959
Paid-in capital 77,116,463
Accumulated distributions in excess of
net investment income (9,279)
Accumulated undistributed net realized loss
on investments (4,229,735)
Unrealized depreciation of investments (1,729,375)
-----------
Net Assets $ 71,220,033
=============
Investments at Cost $ 100,038,195
=============
Sentinel Government Securities Fund
Statement of Operations
For the six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Investment Income
Income:
Interest $ 2,512,776
-------------
Expenses:
Management advisory fee 194,678
Transfer agent and custodian 60,767
Distribution expense 73,725
Accounting services 10,400
Auditing fees 2,500
Legal fees 1,200
Reports and notices to shareholders 2,500
Registration and filing fees 11,713
Directors' fees and expenses 3,401
Other 1,783
-----
Total Expenses 362,667
Expense Reimbursement (41,538)
Expense Offset (5,167)
-------
Net Expenses 315,962
-------
Net Investment Income 2,196,814
---------
Realized and Unrealized Loss on Investments
Net realized loss on sales of investments (1,285,042)
Net change in unrealized depreciation (2,791,050)
-----------
Net Realized and Unrealized Loss on Investments (4,076,092)
-----------
Net Decrease in Net Assets from Operations $ (1,879,278)
==============
See Notes to Financial Statements.
</TABLE>
47
<PAGE>
Sentinel Government Securities Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
------------ ------------
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income $ 2,196,814 $ 4,482,787
Net realized gain (loss) on sales of investments (1,285,042) 2,896,784
Net change in unrealized depreciation (2,791,050) (277,519)
------------ ------------
Net increase (decrease) in net assets from operations (1,879,278) 7,102,052
------------ ------------
Distributions to Shareholders
From net investment income (2,185,843) (4,425,304)
From net realized gain on investments - -
------------ ------------
Total distributions to shareholders (2,185,843) (4,425,304)
------------ ------------
From Capital Share Transactions
Net proceeds from sales of shares 8,883,569 12,434,900
Net asset value of shares in reinvestment
of dividends and distributions 1,698,766 3,445,346
------------ ------------
10,582,335 15,880,246
Less: Payments for shares reacquired (11,795,667) (17,868,058)
------------ ------------
Decrease in net assets from capital share transactions (1,213,332) (1,987,812)
------------ ------------
Total Increase (Decrease) in Net Assets for period (5,278,453) 688,936
Net Assets: Beginning of period 76,498,486 75,809,550
------------ ------------
Net Assets: End of period $ 71,220,033 $ 76,498,486
============ ============
Distributions in Excess of Net Investment Income
at End of Period $ (9,279) $ (12,441)
============ ============
</TABLE>
See Notes to Financial Statements.
48
<PAGE>
Sentinel Government Securities Fund
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 5/31/99 Year Ended Year Ended Year Ended Year Ended Year Ended
(Unaudited) 11/30/98 11/30/97 11/30/96 11/30/95 11/30/94
------------- ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 10.46 $ 10.09 $ 10.00 $ 10.30 $ 9.31 $ 10.45
------------- ---------- --------- ---------- ---------- ----------
Income (loss) from Investment Operations
Net investment income 0.30 0.61 0.59 0.61 0.63 0.59
Net realized and unrealized gain (loss) on investments (0.56) 0.37 0.09 (0.30) 0.99 (1.04)
------------- ---------- --------- ---------- ---------- ----------
Total from investment operations (0.26) 0.98 0.68 0.31 1.62 (0.45)
------------- ---------- --------- ---------- ---------- ----------
Less Distributions
Dividends from net investment income 0.30 0.61 0.59 0.61 0.63 0.58
Distributions from realized gains on investments - - - - - 0.11
------------- ---------- --------- ---------- ---------- ----------
Total Distributions 0.30 0.61 0.59 0.61 0.63 0.69
------------- ---------- --------- ---------- ---------- ----------
Net asset value at end of period $ 9.90 $ 10.46 $ 10.09 $ 10.00 $ 10.30 $ 9.31
============= ========== ========= ========== ========== ==========
Total Return (%) * (2.5)++ 10.0 7.2 3.2 17.9 (4.5)
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.86+ 0.91 0.98 1.00 1.03 1.00
Ratio of expenses to average net assets before
expense reductions (%) ** 0.98+ 0.99 0.99 1.01 1.04 1.00
Ratio of net investment income to average net assets (%) 5.94+ 6.02 6.15 6.18 6.50 5.95
Ratio of net investment income to average net assets before
voluntary expense reimbursements (%) 5.83+ 5.94 6.15 6.18 6.50 5.95
Portfolio turnover rate (%) 185 355 249 614 367 149
Net assets at end of period (000 omitted) $71,220 $76,498 $75,810 $92,299 $108,100 $104,457
</TABLE>
+ Annualized
++ Not Annualized
* Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at the net asset value during the period, and a redemption on
the last day of the period. Initial sales charge is not reflected in the
calculation of total return.
** Expense reductions are comprised of the voluntary expense reimbursements
and include, effective 1995, the earning credits as described in Notes (2)
and (1)H.
See Notes to Financial Statements.
49
<PAGE>
Sentinel Short Maturity Government Fund
Investment in Securities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- --------------------------------------------------------------------------------
U.S. Government Obligations 98.2%
U.S. Treasury Obligations 5.2%
5-Year:
4.75%, '04 4,000M $3,860,680
------------
U.S. Government Agency Obligations 93.0%
Federal Home Loan Mortgage Corporation 33.9%
Collateralized Mortgage Obligations:
FHLMC 1057(D), 8%, '00 208M 209,816
FHLMC 1455L, 7%, '20 302M 302,516
FHLMC 53(A) P11, 9.5%, '20 1M 298
FSPC T-2A, 7%, '21 292M 290,006
------------
802,636
------------
10-Year:
6.5%, '04 512 521,932
------------
15-Year:
8.5%, '01 232M 240,118
9%, '01 99M 103,106
9%, '01 111M 114,956
9.5%, '01 1M 984
9.5%, '01 2M 1,749
7.5%, '02 242M 250,204
8%, '02 288M 299,628
9%, '02 282M 292,031
9.5%, '03 3M 2,986
9.5%, '03 156M 164,979
9.5%, '04 103M 108,290
10%, '05 69M 73,349
9%, '06 332M 347,408
8.5%, '07 30M 31,182
9%, '07 3,092M 3,233,086
9%, '07 259M 270,957
8%, '08 173M 178,923
5.5%, '09 637M 625,025
6.5%, '09 2,923M 2,930,101
7.5%, '11 1,366M 1,407,616
8%, '11 2,938M 3,037,970
8%, '11 939M 971,627
8%, '11 791M 817,798
8%, '12 267M 276,603
------------
15,780,676
------------
30-Year:
8.5%, '03 377M $ 401,407
7%, '06 434M 442,273
6.5%, '07 432M 439,980
7%, '07 237M 241,086
8%, '07 450M 476,265
8.25%, '07 314M 331,141
7.5%, '08 680M 708,522
7.5%, '08 437M 456,655
8%, '08 279M 286,151
7.5%, '09 407M 424,224
7.75%, '09 382M 401,407
8%, '09 162M 171,287
8%, '09 153M 161,490
8.25%, '09 576M 612,456
8.5%, '09 961M 1,028,408
10.25%, '09 14M 15,202
9.25%, '11 1,050M 1,130,273
8%, '23 465M 488,195
------------
8,216,422
------------
Total Federal Home Loan
Mortgage Corporation 25,321,666
------------
Federal National Mortgage Association 48.8%
7-Year Balloon:
7%, '04 458M 464,887
------------
10- Year
6.5%, '08 2,399M 2,421,024
------------
15-Year:
9%, '02 3M 3,554
9%, '02 367M 383,267
7%, '03 200M 199,794
9.5%, '03 1,874M 1,976,508
6%, '04 566M 572,834
7%, '07 375M 382,162
7%, '07 533M 542,353
7%, '07 314M 319,175
7%, '07 164M 166,785
7%, '07 192M 195,000
7%, '07 271M 275,878
7.5%, '08 1,915M 1,972,502
7.25%, '09 790M 809,278
8%, '09 1,444M 1,497,265
8.5%, '10 222M 231,322
8%, '11 1,023M 1,060,787
7%, '12 1,737M 1,738,750
8.5%, '12 1,791M 1,864,210
------------
14,191,424
------------
20-Year:
10.5%, '18 976M $1,071,098
------------
30-Year:
10.5%, '03 15M 15,606
8%, '04 182M 190,292
8%, '04 112M 117,621
9%, '04 412M 430,487
7%, '05 363M 367,522
8%, '05 280M 292,058
9%, '05 508M 530,561
7.75%, '06 343M 355,587
8%, '06 447M 463,737
7%, '07 438M 447,479
7.5%, '07 318M 327,377
7.5%, '07 144M 149,925
7.5%, '07 971M 1,001,836
7.5%, '08 424M 436,622
8%, '08 417M 437,223
8.25%, '09 181M 190,718
8.75%, '09 109M 115,675
9%, '09 243M 258,862
8.5%, '11 148M 157,082
8%, '12 753M 789,038
8.5%, '12 1,566M 1,661,364
8.75%, '13 33M 35,319
7.5%, '14 714M 737,311
12.5%, '14 83M 95,098
11.5%, '15 461M 517,023
12.5%, '15 340M 390,501
10.5%, '16 733M 804,283
8.25%, '17 417M 439,259
9%, '17 362M 385,708
10.5%, '18 449M 492,302
11%, '19 421M 466,853
8.25%, '22 86M 90,699
10%, '23 720M 779,240
9%, '25 224M 238,708
10%, '25 589M 636,684
8.5%, '26 962M 1,010,276
8.5%, '26 981M 1,031,558
8%, '28 1,385M 1,438,517
------------
18,326,011
------------
Total Federal National
Mortgage Association 36,474,444
------------
(continued)
50
<PAGE>
Sentinel Short Maturity Government Fund
Investment in Securities (cont'd.)
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- --------------------------------------------------------------------------------
Government National
Mortgage Association 10.3%
Collateralized Mortgage Obligations:
CMO Trust 27(A) 7.25%, '17 150M $ 150,014
MDC Asset Inv.
Trust XII 3, 8.94%, '18 302M 308,711
------------
458,725
------------
15-Year:
10.25%, '99 1M 245
11%, '00 3M 2,714
11.25%, '00 6M 6,593
9%, '01 10M 10,766
9.75%, '01 3M 3,463
9.75%, '01 1M 961
9.5%, '04 2M 2,597
9%, '06 340M 356,528
7%, '07 439M 450,149
9%, '07 19M 19,749
7%, '08 1,632M 1,672,435
7.5%, '08 278M 287,907
8%, '08 326M 339,619
10%, '10 112M 117,992
9%, '11 338M 355,117
------------
3,626,835
------------
20-Year:
9.25%, '07 32M 33,936
9.75%, '10 69M 73,342
------------
107,278
------------
30-Year:
6.5%, '03 168M 168,535
8%, '03 189M 198,820
7.75%, '05 232M 242,051
9%, '09 104M 111,362
10%, '09 9M 10,085
10%, '16 8M 9,008
7.8%, '19 159M 165,514
7.8%, '19 218M 227,473
7.8%, '19 370M 386,469
7.8%, '19 159M 165,698
7.8%, '19 213M 222,135
7.8%, '19 91M 95,511
7.8%, '20 108M 112,381
7.8%, '20 206M 215,265
7.8%, '20 336M 351,100
7.8%, '20 278M 290,146
7.8%, '20 332M 346,693
9.25%, '26 181M 194,389
------------
3,512,635
------------
Total Government National
Mortgage Association 7,705,473
------------
Total U.S. Government
Agency Obligations 69,501,583
------------
Total U.S. Government Obligations
(Cost $72,917,923) 73,362,263
------------
- --------------------------------------------------------------------------------
Shares Value
(Note 1)
- --------------------------------------------------------------------------------
Corporate Short-Term Notes 6.5%
American Express 4.82%,
08/17/99 2,400M $ 2,375,257
Ford Motor Credit Corp. 4.76%,
06/1/99 1,000M 1,000,000
Norwest Financial 4.84%,
08/17/99 1,500M 1,484,472
------------
(Cost $4,859,729) 4,859,729
------------
Total Investments
(Cost $77,777,652)* 78,221,992
Excess of Liabilities
Over Other Assets (4.7%) (3,496,214)
------------
Net Assets $ 74,725,778
============
- --------------------------------------------------------------------------------
* Also cost for federal income tax purposes. At May 31, 1999 unrealized
appreciation for federal income tax purposes aggregated $444,340 of which
$631,531 related to appreciated securities and $187,191 related to
depreciated securities.
See Notes to Financial Statements.
51
<PAGE>
Sentinel Short Maturity Government Fund
Statement of Assets and Liabilities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets
Investments at value $ 78,221,992
Receivable for securities sold 10,180,904
Receivable for fund shares sold 619,346
Receivable for interest 508,744
Receivable from fund administrator 130,365
--------------
Total Assets 89,661,351
--------------
Liabilities
Payable for securities purchased 13,739,121
Payable for fund shares repurchased 395,255
Payable to custodian bank 699,092
Accrued expenses 12,618
Management fee payable 33,632
Distribution fee payable 49,958
Fund service fee payable 5,897
--------------
Total Liabilities 14,935,573
--------------
Net Assets Applicable to Outstanding Shares $ 74,725,778
==============
Net Asset Value and Offering Price Per Share
$74,725,778 / 7,686,452 shares outstanding $ 9.72
Sales Charge -- 1.00% of Offering Price 0.10
--------------
Maximum Offering Price Per Share $ 9.82
==============
Net Assets Represent
Capital stock at par value $ 76,865
Paid-in capital 76,383,894
Accumulated distributions in excess of net investment income (2,232)
Accumulated undistributed net realized loss
on investments (2,177,089)
Unrealized appreciation of investments 444,340
--------------
Net Assets $ 74,725,778
==============
Investments at Cost $ 77,777,652
==============
<CAPTION>
Sentinel Short Maturity Government Fund
Statement of Operations
For the Six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<S> <C>
Investment Income
Income:
Interest $ 2,412,593
--------------
Expenses:
Management advisory fee 189,902
Transfer agent and custodian 43,627
Distribution expense 125,865
Accounting services 10,160
Auditing fees 3,000
Legal fees 1,750
Reports and notices to shareholders 2,350
Registration and filing fees 15,967
Directors' fees and expenses 3,309
Other 11,747
--------------
Total Expenses 407,677
Expense Reimbursement (130,365)
Expense Offset (5,177)
--------------
Net Expenses 272,135
--------------
Net Investment Income 2,140,458
--------------
Realized and Unrealized Loss on Investments
Net realized loss on sales of investments (930,232)
Net change in unrealized appreciation (depreciation) (269,612)
--------------
Net Realized and Unrealized Loss on Investments (1,199,844)
--------------
Net Increase in Net Assets from Operations $ 940,614
==============
</TABLE>
See Notes to Financial Statements.
52
<PAGE>
Sentinel Short Maturity Government Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
---------------- ----------------
<S> <C> <C>
Increase in Net Assets from Operations
Net investment income $ 2,140,458 $ 3,466,726
Net realized loss on sales of investments (930,232) (71,256)
Net change in unrealized appreciation (depreciation) (269,612) 223,112
---------------- ----------------
Net increase in net assets from operations 940,614 3,618,582
---------------- ----------------
Distributions to Shareholders
From net investment income (2,108,456) (3,343,865)
From realized gain on sale of investments - -
---------------- ----------------
Total distributions to shareholders (2,108,456) (3,343,865)
---------------- ----------------
From Capital Share Transactions
Net proceeds from sales of shares 24,270,266 59,684,286
Net asset value of shares in reinvestment
of dividends and distributions 1,800,237 2,666,871
---------------- ----------------
26,070,503 62,351,157
Less: Payments for shares reacquired (18,522,820) (39,324,195)
---------------- ----------------
Increase in net assets from capital share transactions 7,547,683 23,026,962
---------------- ----------------
Total Increase in Net Assets for period 6,379,841 23,301,679
Net Assets: Beginning of period 68,345,937 45,044,258
---------------- ----------------
Net Assets: End of period $ 74,725,778 $ 68,345,937
================ ================
Accumulated undistributed (distributions in excess of)
Net Investment Income at End of Period $ (2,232) $ 8,518
================ ================
</TABLE>
See Notes to Financial Statements.
<PAGE>
Sentinel Short Maturity Government Fund
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Six Months Year Year Year Eight Months
Ended 5/31/99 Ended Ended Ended Ended
(Unaudited) 11/30/98 11/30/97 11/30/96 11/30/95(A)
--------------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 9.88 $ 9.82 $ 9.81 $ 9.84 $ 9.64
--------------- ---------- --------- --------- ------------
Income from Investment Operations
Net investment income 0.28 0.57 0.56 0.57 0.40
Net realized and unrealized gain (loss) on investments (0.16) 0.06 0.01 (0.03) 0.20
--------------- ---------- --------- --------- ------------
Total from investment operations 0.12 0.63 0.57 0.54 0.60
--------------- ---------- --------- --------- ------------
Less Distributions
Dividends from net investment income 0.28 0.57 0.56 0.57 0.40
Distributions from realized gains on investments - - - - -
--------------- ---------- --------- --------- ------------
Total Distributions 0.28 0.57 0.56 0.57 0.40
--------------- ---------- --------- --------- ------------
Net asset value at end of period $ 9.72 $ 9.88 $ 9.82 $ 9.81 $ 9.84
=============== ========== ========= ========= ============
Total Return (%) * 1.3++ 6.6 6.0 5.6 6.3++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.76+ 0.82 1.00 1.00 1.00+
Ratio of expenses to average net assets before
expense reductions (%) ** 1.13+ 1.12 1.18 1.20 1.38+
Ratio of net investment income to average net assets (%) 5.93+ 6.04 6.20 6.09 6.07+
Ratio of net investment income to average net assets before
voluntary expense reimbursements (%) 5.57+ 5.76 6.14 5.93 5.76
Portfolio turnover rate (%) 135 229 61 120 58
Net assets at end of period (000 omitted) $74,726 $68,346 $45,044 $36,474 $28,417
</TABLE>
(A) Commenced operations March 27, 1995.
+ Annualized
++ Not annualized
* Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at the net asset value during the period, and a redemption on
the last day of the period. Initial sales charge is not reflected in the
calculation of total return.
** Expense reductions are comprised of the voluntary expense reimbursements
and include, effective 1995, the earning credits as described in Notes (2)
and (1) H.
See Notes to Financial Statements.
54
<PAGE>
Sentinel U.S.Treasury Money Market Fund
Investment in Securities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- --------------------------------------------------------------------------------
U.S. Treasury Obligations 99.5%
U S Treasury Bill
4.465%, 06/03/99 1,175M $ 1,174,709
U S Treasury Bill
4.51%, 06/03/99 2,000M 1,999,499
U S Treasury Bill
4.405%, 06/10/99 2,500M 2,497,247
U S Treasury Bill
4.395%, 06/17/99 2,600M 2,594,921
U S Treasury Bill
4.4%, 06/17/99 1,200M 1,197,653
U S Treasury Bill
4.42%, 06/24/99 2,300M 2,293,505
U S Treasury Note
6%, 06/30/99 5,000M 5,005,216
U S Treasury Bill
4.19%, 07/08/99 2,000M 1,991,387
U S Treasury Note
6.375%, 07/15/99 8,000M 8,016,993
U S Treasury Bill
4.335%, 07/22/99 3,500M 3,478,506
U S Treasury Bill
4.39%, 07/22/99 5,000M 4,968,904
U S Treasury Bill
4.41%, 07/22/99 2,000M 1,987,505
U S Treasury Bill
4.38%, 07/29/99 5,000M 4,964,717
U S Treasury Bill
4.405%, 08/05/99 5,000M 4,960,233
U S Treasury Bill
4.475%, 08/12/99 2,000M 1,982,100
U S Treasury Bill
4.53%, 08/12/99 4,050M 4,013,307
U S Treasury Bill
4.435%, 08/19/99 5,500M 5,446,472
U S Treasury Bill
4.495%, 08/26/99 5,300M 5,243,088
U S Treasury Note
5.875%, 08/31/99 6,000M 6,017,973
U S Treasury Note
6.875%, 08/31/99 4,450M 4,474,002
U S Treasury Bill
4.5%, 09/09/99 2,500M $ 2,468,750
U S Treasury Bill
4.54%, 09/16/99 2,750M 2,712,892
U S Treasury Bill
4.57%, 09/16/99 3,000M 2,959,251
U S Treasury Bill
4.535%, 09/23/99 2,000M 1,971,278
U S Treasury Note
5.75%, 09/30/99 9,500M 9,529,198
U S Treasury Note
7.125%, 09/30/99 4,250M 4,283,781
U S Treasury Note
6%, 10/15/99 4,000M 4,016,696
U S Treasury Bill
4.54%, 10/21/99 1,500M 1,473,138
----------------
Total U.S. Treasury Obligations
(Amortized Cost $103,722,921) 103,722,921
----------------
Repurchase Agreements 1.2%
Repurchase agreement with State Street
Bank dated 05/28/99 at 3.50% to be
repurchased at $1,300,506 on 06/01/99,
collateralized by a $1,395,000 U.S.
Treasury Note due 05/25/00 valued at
$1,328,737
(Amortized
Cost $1,300,000) 1,300M 1,300,000
----------------
Total Investments
(Amortized Cost $105,022,921)* 105,022,921
Excess of Liabilities
Over Other Assets (0.7%) (721,835)
----------------
Net Assets $ 104,301,086
================
- ---------------------------------------------
* Also cost for federal income tax purposes.
See Notes to Financial Statements.
55
<PAGE>
Sentinel U.S. Treasury Money Market Fund
Statement of Assets and Liabilities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Assets
Investments at value $ 105,022,921
Cash and cash equivalents 111,318
Receivable for fund shares sold 2,524,269
Receivable for interest 660,532
---------------
Total Assets 108,319,040
---------------
Liabilities
Payable for fund shares repurchased 3,623,939
Dividends Payable 318,938
Accrued expenses 29,249
Management fee payable 33,795
Fund service fee payable 12,033
---------------
Total Liabilities 4,017,954
---------------
Net Assets Applicable to Outstanding Shares $ 104,301,086
===============
Net Asset Value
Class A Shares
$99,884,352 / 99,884,352 shares outstanding $ 1.00
===============
Class B Shares
$4,416,734 / 4,416,734 shares outstanding $ 1.00
===============
Net Assets Represent
Capital stock at par value $ 1,043,011
Paid-in capital 103,258,075
---------------
Net Assets $ 104,301,086
===============
Investments at Cost $ 105,022,921
===============
Sentinel U.S. Treasury Money Market Fund
Statement of Operations
For the Six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Investment Income
Income:
Interest $ 2,328,103
---------------
Expenses
Management advisory fee 204,760
Transfer agent and custodian 111,172
Accounting services 14,635
Auditing fees 2,950
Legal fees 1,115
Reports and notices to shareholders 3,525
Registration and filing fees 20,561
Directors' fees and expenses 4,667
Other 8,075
---------------
Total Expenses 371,460
Expense Offset (2,472)
---------------
Net Expenses 368,988
---------------
Net Investment Income and Net Increase in
Net Assets from Operations $ 1,959,115
===============
See Notes to Financial Statements. See Notes to Financial Statements.
56
<PAGE>
Sentinel U.S. Treasury Money Market Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
---------------- ----------------
<S> <C> <C>
Increase in Net Assets from Operations
Net investment income $ 1,959,115 $ 4,026,507
---------------- ----------------
Distributions to Shareholders
From net investment income
Class A Shares (1,877,010) (3,847,499)
Class B Shares (82,105) (179,008)
---------------- ----------------
Total Distributions to Shareholders (1,959,115) (4,026,507)
---------------- ----------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 143,737,134 195,386,431
Class B Shares 4,217,303 8,254,397
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 1,389,738 3,219,677
Class B Shares 75,425 161,984
---------------- ----------------
149,419,600 207,022,489
Less: Payments for shares reacquired
Class A Shares (143,357,562) (186,402,562)
Class B Shares (4,298,318) (7,427,663)
---------------- ----------------
Increase in net assets from capital share transactions 1,763,720 13,192,264
---------------- ----------------
Total Increase in Net Assets for period 1,763,720 13,192,264
Net Assets: Beginning of period 102,537,366 89,345,102
---------------- ----------------
Net Assets: End of period $ 104,301,086 $ 102,537,366
================ ================
</TABLE>
See Notes to Financial Statements.
57
<PAGE>
Sentinel U.S. Treasury Money Market Fund
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 5/31/99 Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/98 11/30/97 11/30/96 11/30/95 11/30/94
------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.02 0.04 0.04 0.04 0.05 0.03
Net realized and unrealized gain (loss) on investments - - - - - -
------------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 0.02 0.04 0.04 0.04 0.05 0.03
------------- ---------- ---------- ---------- ---------- ----------
Less Distributions
Dividends from net investment income 0.02 0.04 0.04 0.04 0.05 0.03
Distributions from realized gains on investments - - - - - -
------------- ---------- ---------- ---------- ---------- ----------
Total Distributions 0.02 0.04 0.04 0.04 0.05 0.03
------------- ---------- ---------- ---------- ---------- ----------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ========== ========== ========== ========== ==========
Total Return (%) * 1.9++ 4.6 4.6 4.6 5.0 3.1
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.72+ 0.72 0.76 0.78 0.81 0.81
Ratio of expenses to average net assets before
expense reductions (%) ** 0.72+ 0.73 0.77 0.78 0.82 0.81
Ratio of net investment income to average net assets (%) 3.82+ 4.47 4.46 4.38 4.83 3.01
Net assets at end of period (000 omitted) $99,884 $98,115 $85,911 $80,804 $80,664 $75,301
</TABLE>
See Notes to Financial Statements.
58
<PAGE>
Sentinel U.S. Treasury Money Market Fund
Financial Highlights (cont'd.)
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Six Months Eight
Ended 5/31/99 Year Ended Year Ended Months Ended
Class B Shares (Unaudited) 11/30/98 11/30/97 11/30/96 (A)
------------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- ---------- ---------- ------------
Income from Investment Operations
Net investment income 0.02 0.04 0.05 0.03
Net realized and unrealized gain (loss) on investments - - - -
------------- ---------- ---------- ------------
Total from investment operations 0.02 0.04 0.05 0.03
------------- ---------- ---------- ------------
Less Distributions
Dividends from net investment income 0.02 0.04 0.05 0.03
Distributions from realized gains on investments - - - -
------------- ---------- ---------- ------------
Total Distributions 0.02 0.04 0.05 0.03
------------- ---------- ---------- ------------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ========== ========== ============
Total Return (%) * 1.8++ 4.5 4.7 3.0++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.85+ 0.77 0.73 .76+
Ratio of expenses to average net assets before
expense reductions (%) ** 0.89+ 0.78 0.73 .77+
Ratio of net investment income to average net assets (%) 3.68+ 4.42 4.50 4.40+
Net assets at end of period (000 omitted) $4,417 $4,422 $3,434 $3,160
</TABLE>
(A) Commenced operations April 1, 1996.
+ Annualized
++ Not annualized
* Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at the net asset value during the period, and a redemption
on the last day of the period.
** Expense reductions are comprised of the voluntary expense reimbursements
and include, effective 1995, the earning credits as described in Notes (2)
and (1) H.
See Notes to Financial Statements.
59
<PAGE>
Sentinel Tax-Free Income Fund
Investment in Securities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- --------------------------------------------------------------------------------
Bonds 97.7%
California 7.9%
Foothill/Eastern CA Toll
6.500%, 01/01/32 3,500M $3,881,710
San Mateo Cnty CA
Power Rev (AMBAC)
6.500%, 07/01/15 3,000M 3,518,580
-----------
7,400,290
-----------
Colorado 1.9%
Arapahoe County Capital
Improvements
6.950%, 08/31/20 1,500M 1,756,365
-----------
Connecticut 2.5%
Bridgeport Ref A
6.125%, 03/01/05 2,250M 2,407,208
-----------
Delaware 0.6%
Delaware Health Facility
Auth (MBIA)
7.625%, 11/01/10 500M 552,895
-----------
Florida 3.0%
Orange County Healthcare A
(MBIA)
6.250%, 10/01/13 1,500M 1,718,295
University Community
Hospital Income (FSA)
7.500%, 09/01/11 1,000M 1,068,010
-----------
2,786,305
-----------
Georgia 3.4%
GA Municipal Electric
Authority (AMBAC)
0.000%, 01/01/02 1,800M 1,625,310
State Housing &
Finance Authority
6.550%, 12/01/27 1,485M 1,564,878
-----------
3,190,188
-----------
Hawaii 1.2%
Dept of Budget Financial
of HI (FSA)
7.650%, 07/01/19 1,000M 1,095,940
Hawaii State Housing Finance
7.800%, 07/01/29 5M 5,106
-----------
1,101,046
-----------
Idaho 0.3%
Idaho Housing Agency
Series D-1
8.000%, 01/01/20 305M 331,648
-----------
Illinois 6.8%
Illinois Educational
Facs Authority
6.100%, 12/15/16 560M 595,157
Illinois Housing
Development Authority
7.000%, 07/01/10 990M 1,065,587
Illinois State Sales Tax Revenue
6.500%, 06/15/13 1,000M 1,152,850
Illinois State Sales Tax
6.000%, 06/15/12 2,180M 2,412,344
IL MC Henry County
School (FSA)
5.850%, 01/01/16 1,000M 1,095,150
-----------
6,321,088
-----------
Indiana 0.1%
Indianapolis IN Economic
Dev Revenue
7.800%, 12/01/17 55M 56,986
-----------
Kansas 0.1%
Kansas City Leavenworth Cty &
City of Lenexa Series A -
Mtg Rev
8.400%, 05/01/15 105M 107,734
-----------
Louisiana 1.1%
Government Development
Authority Revenue (AMBAC)
5.250%, 12/01/18 1,000M 1,002,420
-----------
Massachusetts 6.3%
Boston Series A G/O (FGIC)
4.500%, 01/01/18 2,820M 2,599,194
Massachusetts State G/O
6.875%, 07/01/10 1,000M 1,079,540
Massachusetts State G/O (FGIC)
6.000%, 08/01/09 1,000M 1,120,310
Mass State Health
& Educational Facs
New England Baptist
Hospital Revenue
7.300%, 07/01/11 1,000M 1,087,960
5,887,004
-----------
Michigan 1.0%
Redford MI Union School
(AMBAC)
5.000%, 05/01/22 750M 735,923
Michigan State Building
Authority
6.250%, 10/01/20 170M 180,725
-----------
916,648
-----------
Missouri 1.2%
Central Missouri
St University (MBIA)
7.000%, 07/01/14 1,000M 1,083,070
Missouri Housing
Development Comm
9.375%, 04/01/16 20M 20,906
-----------
1,103,976
-----------
Nebraska 2.3%
Omaha Public Power District
7.625%, 02/01/12 1,000M 1,005,130
Omaha Public Power District
6.150%, 02/01/12 1,000M 1,118,820
-----------
2,123,950
-----------
New Mexico 3.0%
Sante Fe County
NM Revenue (FSA)
6.000%, 02/01/27 2,500M 2,779,600
-----------
New York 20.9%
Monroe County NY G/O
6.000%, 03/01/14 1,000M 1,117,800
Monroe Ida
5.375%, 04/01/29 700M 677,229
New York Financial Future Sale
5.000%, 08/15/12 2,200M 2,215,576
New York City NY
(Prerefunded)
7.100%, 02/01/09 1,055M 1,153,759
New York City NY
7.100%, 02/01/09 145M 157,113
NYC Municipal Water
Fin Authority
7.000%, 06/15/09 250M 268,332
NYC University Certificates
of Par
5.750%, 08/15/05 2,000M 2,146,100
New York NY Series G
5.750%, 02/01/20 1,600M 1,689,088
NY State Dorm Authority
6.375%, 07/01/08 1,275M 1,373,596
NY State Dorm
Mental Authority
6.000%, 08/15/16 2,800M 3,079,272
NY State Environ Facs
Corp (Prerefunded)
7.250%, 06/15/10 40M 43,499
NY State Environmental
Facs Corp
7.250%, 06/15/10 10M 10,792
NY State Medical Care
Facs (Prerefunded)
7.875%, 08/15/08 175M 187,372
NY State Medical Care Facs
7.875%, 08/15/08 75M 79,631
Triborough Bridge &
Tunnel Authority
6.000%, 01/01/12 3,250M 3,623,685
Urban Development Corp
5.750%, 01/01/13 1,000M 1,045,960
Urban Development Corp.
Revenue (AMBAC)
4.750%, 01/01/28 750M 689,595
-----------
19,558,399
-----------
Ohio 0.5%
OH Housing Finance
Authority
7.050%, 09/01/16 490M 511,065
-----------
(continued)
60
<PAGE>
Sentinel Tax-Free Income Fund
Investment in Securities (cont'd.)
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- --------------------------------------------------------------------------------
Pennsylvania 5.3%
Bensalem Twp School
District (FGIC)
5.875%, 07/15/16 1,500M $ 1,612,050
Montgomery Cty Higher Ed
& Health
8.300%, 06/01/10 500M 534,040
Pennsylvania State G/O
6.250%, 07/01/11 2,000M 2,253,580
Southeast Delco School
District (MBIA)
0.000%, 02/01/10 1,005M 602,327
-----------
5,001,997
-----------
Puerto Rico 3.1%
Puerto Rico Hwy &
Transportation
5.500%, 07/01/36 2,750M 2,864,702
-----------
South Carolina 3.8%
Piedmont Power (MBIA)
5.500%, 01/01/11 2,250M 2,396,790
SC Spartanburg Waterwork
(FGIC)
5.250%, 06/01/28 1,200M 1,204,944
-----------
3,601,734
-----------
Tennessee 2.4%
Lawrenceburg TN Electrical
Revenue (MBIA)
6.625%, 07/01/18 1,910M 2,254,736
-----------
Texas 1.2%
North Central TX Health
6.250%, 05/15/10 1,000M 1,128,720
-----------
Utah 0.1%
Utah State Housing
Finance Authority
7.250%, 07/01/22 10M 10,449
-----------
Vermont 4.7%
Vermont Education &
Health Norwich
6.000%, 09/01/13 1,070M 1,105,834
Vermont Education &
Health Norwich
5.500%, 07/01/18 2,295M 2,260,277
Vermont Education &
Health St. Michaels
7.050%, 10/01/16 900M 1,003,437
-----------
4,369,548
-----------
Virginia 4.2%
Fairfax County Water
Authority
7.250%, 01/01/27 1,000M 1,041,830
VA Pocahontas Parkway
5.500%, 08/15/28 3,000M 2,931,540
-----------
3,973,370
-----------
Washington 6.6%
Snohomish County
Washington School Dist
7.100%, 12/01/07 500M $ 531,900
Washington State G/O
6.200%, 03/01/11 1,220M 1,371,866
Washington State
Public Power
7.625%, 07/01/10 250M 269,412
Washington State Public
Power (MBIA)
7.125%, 07/01/16 3,295M 4,049,522
-----------
6,222,700
-----------
Wisconsin 2.2%
Wisconsin Center District
Tax Revenue (FSA)
5.250%, 12/15/27 2,000M 2,029,700
-----------
Total Investments
(Cost $86,187,827)* 91,352,471
Excess of Other Assets
Over Liabilities 2.3% 2,154,022
-----------
Net Assets $93,506,493
===========
- --------------------------------------------------------------------------------
* Also cost for federal income tax purposes.
At May 31, 1999, net unrealized appreciation for federal income tax
purposes aggregated $5,164,644 of which $5,476,437 related to appreciated
securities and $311,793 related to depreciated securities.
The following abbreviations are used in the portfolio descriptions:
(AMBAC) - Guaranteed by AMBAC Indemnity Corp.
(FGIC) - Guaranteed by Financial Guaranty Insurance Co.
(FSA) - Guaranteed by Financial Security Assurance Inc.
(MBIA) - Guaranteed by Municipal Bond Investors Assurance Corp.
G/O - General Obligation Bond
See Notes to Financial Statements.
61
<PAGE>
Sentinel Tax-Free Income Fund
Statement of Assets and Liabilities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Assets
Investments at value $ 91,352,471
Cash and cash equivalents 1,341,123
Receivable for fund shares sold 9,515
Receivable for interest 1,836,852
Receivable from fund administrator 83,101
---------------
Total Assets 94,623,062
---------------
Liabilities
Payable for fund shares repurchased 1,031,804
Accrued expenses 13,129
Management fee payable 42,501
Distribution fee payable 22,846
Fund service fee payable 6,289
---------------
Total Liabilities 1,116,569
---------------
Net Assets Applicable to Outstanding Shares $ 93,506,493
===============
Net Asset Value and Offering Price per Share
$93,506,493/7,027,499 shares outstanding $ 13.31
Sales Charge -- 4.00% of offering price 0.55
---------------
Maximum Offering Price $ 13.86
===============
Net Assets Represent
Capital stock at par value $ 7,027,499
Paid-in capital 81,189,750
Accumulated undistributed net investment income 1,670
Accumulated undistributed net realized gain
on investments 122,930
Unrealized appreciation of investments 5,164,644
---------------
Net Assets $ 93,506,493
===============
Investments at Cost $ 86,187,827
===============
Sentinel Tax-Free Income Fund
Statement of Operations
For the Six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Investment Income
Income:
Interest $ 2,384,007
---------------
Expenses:
Management advisory fee 231,374
Transfer agent and custodian 44,315
Distribution expense 87,585
Accounting services 12,100
Auditing fees 3,000
Legal fees 1,250
Reports and notices to shareholders 1,500
Registration and filing fees 11,721
Directors' fees and expenses 4,115
Other 4,405
---------------
Total Expenses 401,365
Expense Reimbursement (83,101)
Expense Offset (1,365)
---------------
Net Expenses 316,899
---------------
Net Investment Income 2,067,108
---------------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain on sales of investments 122,852
Net change in unrealized appreciation (depreciation) (2,120,332)
---------------
Net Realized and Unrealized Loss on Investments (1,997,480)
---------------
Net Increase in Net Assets from Operations $ 69,628
===============
See Notes to Financial Statements.
62
<PAGE>
Sentinel Tax-Free Income Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
---------------- ----------------
<S> <C> <C>
Increase in Net Assets from Operations
Net investment income $ 2,067,108 $ 4,236,658
Net realized gain on sales of investments 122,852 1,104,977
Net change in unrealized appreciation (depreciation) (2,120,332) 1,013,730
---------------- ----------------
Net increase in net assets from operations 69,628 6,355,365
---------------- ----------------
Distributions to Shareholders
From net investment income (2,068,083) (4,234,079)
From net realized gain on investments (1,104,934) (1,229,059)
---------------- ----------------
Total distributions to shareholders (3,173,017) (5,463,138)
---------------- ----------------
From Capital Share Transactions
Net proceeds from sales of shares 20,906,609 10,999,021
Net asset value of shares in reinvestment
of dividends and distributions 2,354,178 3,837,597
---------------- ----------------
23,260,787 14,836,618
Less: Payments for shares reacquired (15,334,331) (14,980,884)
---------------- ----------------
Increase (decrease) in net assets from capital
share transactions 7,926,456 (144,266)
---------------- ----------------
Total Increase in Net Assets for period 4,823,067 747,961
Net Assets: Beginning of period 88,683,426 87,935,465
---------------- ----------------
Net Assets: End of period $ 93,506,493 $ 88,683,426
================ ================
Undistributed Net Investment Income
at End of Period $ 1,670 $ 2,645
================ ================
</TABLE>
See Notes to Financial Statements.
63
<PAGE>
Sentinel Tax-Free Income Fund
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 5/31/99 Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/98 11/30/97 11/30/96 11/30/95 11/30/94
------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 13.78 $ 13.64 $ 13.53 $ 13.62 $ 12.35 $ 13.81
------------ ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.32 0.65 0.65 0.65 0.67 0.68
Net realized and unrealized gain (loss) on investments (0.30) 0.33 0.24 (0.09) 1.27 (1.34)
------------ ---------- ---------- ---------- ---------- ----------
Total from investment operations 0.02 0.98 0.89 0.56 1.94 (0.66)
------------ ---------- ---------- ---------- ---------- ----------
Less Distributions
Dividends from net investment income 0.32 0.65 0.65 0.65 0.67 0.68
Distributions from realized gains on investments 0.17 0.19 0.13 - - 0.12
------------ ---------- ---------- ---------- ---------- ----------
Total Distributions 0.49 0.84 0.78 0.65 0.67 0.80
------------ ---------- ---------- ---------- ---------- ----------
Net asset value at end of period $ 13.31 $ 13.78 $ 13.64 $ 13.53 $ 13.62 $ 12.35
============ ========== ========== ========== ========== ==========
Total Return (%) * 0.2++ 7.4 6.9 4.3 16.0 (5.1)
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.72+ 0.74 0.91 0.94 0.90 0.75
Ratio of expenses to average net assets before
expense reductions (%) ** 0.92+ 0.92 0.95 0.97 0.99 0.94
Ratio of net investment income to average net assets (%) 4.71+ 4.77 4.84 4.86 5.06 5.11
Ratio of net investment income to average net assets before
voluntary expense reimbursement (%) 4.52+ 4.59 4.84 4.86 5.00 4.92
Portfolio turnover rate (%) 12 37 47 112 112 92
Net assets at end of period (000 omitted) $93,506 $88,683 $87,935 $99,967 $110,506 $99,935
</TABLE>
+ Annualized
++ Not annualized
* Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at the net asset value during the period, and a redemption on
the last day of the period.
** Expense reductions are comprised of the voluntary expense reimbursements
and include, effective 1995, the earning credits as described in Notes (2)
and (1) H.
See Notes to Financial Statements.
64
<PAGE>
Sentinel New York Tax-Free Income Fund
Investment in Securities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- --------------------------------------------------------------------------------
Bonds 93.9%
New York 85.6%
City University NY
Certificate of Participation
5.75%, 08/15/05 300M $321,915
Clifton Park NY
Water Authority Revenue
5.00%, 10/01/29 (FGIC) 650M 620,692
Dutchess County NY G/O
5.00%, 06/15/17 325M 320,060
Dutchess County NY
Water & Sewer
5.05%, 06/01/11 100M 100,755
Insured University Revenue
5.625%, 07/01/13 (MBIA) 250M 262,983
Long Island NY Electric
Power Revenue
5.25%, 12/01/26 200M 195,448
5.50%, 12/01/29 500M 506,355
Metro Transportation Authority
5.75%, 07/01/13 250M 268,777
5.875%, 07/01/27 (AMBAC) 200M 216,572
Monroe County G/O
6.00%, 03/01/14 250M 279,450
Monroe County Industrial
Dev. Agency
5.375%, 04/01/29 510M 493,410
Monroe Woodbury Central
School Dist.
5.625%, 05/15/22 (MBIA) 250M 260,425
New York City Municipal
Water Fin. Auth.
6.00%, 06/15/17 100M 105,781
5.75%, 06/15/20 (MBIA) 220M 231,741
5.125%, 06/15/30 (FGIC) 300M 292,041
New York NY G/O Series G
5.75%, 02/01/20 400M 422,272
New York NY Transitional
Fin. Auth.
5.125%, 11/01/11 375M 384,574
4.50%, 11/15/27 300M 263,736
New York State Dorm.
Authority Revenue
City University System
5.625%, 07/01/16 250M 263,370
5.375%, 07/01/25 (AMBAC) 200M 201,488
Cornell Univ. - Ser A
7.375%, 07/01/30 50M 52,817
Court Facility -
Westchester County
5.25%, 08/01/15 430M 437,349
Department of Health
5.50%, 07/01/20 125M 127,785
Fordham University (FGIC)
5.75%, 07/01/15 215M 227,919
Mental Health Services
5.70%, 08/15/09 250M 269,680
4.50%, 08/15/28 (AMBAC) 500M 440,875
Municipal Health Facility Impts.
5.125%, 01/15/13 (FSA) 250M 252,935
Nursing Home-Hebrew Home
5.625%, 02/01/17 220M 230,934
NY Medical College
4.75%, 07/01/27 (MBIA) 250M 228,658
NY Methodist Hospital (AMBAC)
5.00%, 07/01/10 500M 508,495
State Univ. Educ. Fac. - Ser A
7.20%, 05/15/06 200M 221,788
5.00%, 05/15/10 250M 253,715
6.375%, 05/15/14 250M 275,960
State Univ. Educ. Fac. - Ser B
4.75%, 05/15/28 250M 227,013
St. Johns Univ.
5.25%, 07/01/18 (MBIA) 205M 206,017
Wyckoff Hights Medical Ctr.
5.3%, 08/15/21 250M 248,365
New York State Energy Resources
7.50%, 07/01/25 50M 50,632
New York State Environmental
Facilities
5.75%, 01/15/13 250M 269,035
5.75%, 03/15/13 300M 312,027
New York State Environmental
Water Revenue
7.25%, 06/15/10 60M 65,207
New York State Housing
Finance Agency
5.625%, 05/01/02 250M 261,050
New York State Local Govt
Assistance Corp.
7.00%, 04/01/08 100M 110,152
5.375%, 04/01/16 (AMBAC) 300M 306,759
New York State Medical
Care Facilities
7.875%, 08/15/20 10M 10,594
7.875%, 08/15/20
(Prerefunded) 10M 10,707
7.30%, 02/15/21 10M 10,778
7.30%, 02/15/21
(Prerefunded) 15M 16,393
Hospitals & Nursing Homes
6.45%, 02/15/09 220M 235,534
New York State Thwy. Auth.
General Revenue
5.50%, 01/01/15 500M 515,750
New York State Thwy. Auth.
Service Contract
6.25%, 04/01/14 200M 222,694
New York State Urban
Development Corp.
5.125%, 04/01/18 (AMBAC) 500M 493,135
5.70%, 04/01/20 250M 265,108
4.75%, 01/01/28 (AMBAC) 250M 229,865
Suffolk County NY
Water Authority
5.625%, 06/01/16 (AMBAC) 170M 175,098
Triborough Bridge &
Tunnel Authority
6.00%, 01/01/12 250M 278,745
6.875%, 01/01/15 65M 68,483
5.125%, 01/01/22 250M 246,860
United Nations Development
Corp.
6.00%, 07/01/12 250M 273,085
-----------
14,649,841
-----------
Puerto Rico 8.3%
Puerto Rico Commonwealth
5.375%, 07/01/21 (MBIA) 255M 260,865
5.40%, 07/01/25 300M 306,243
Puerto Rico Commonwealth
Aqueduct & Sewer
6.00%, 07/01/09 250M 277,325
Puerto Rico Electric
Power Authority
4.50%, 07/01/18 (MBIA) 300M 278,544
Puerto Rico Indl. Tourist
Edl. Med. & Envir. Ctl. Facs.
5.00%, 10/01/22 (MBIA) 300M 291,528
-----------
1,414,505
-----------
Total Investments
(Cost $15,680,424)* 16,064,346
Excess of Other Assets
Over Liabilities 6.1% 1,055,960
-----------
Net Assets $17,120,306
===========
- --------------------------------------------------------------------------------
* Also cost for federal income tax purposes.
At May 31, 1999, net unrealized appreciation for federal income
tax purposes aggregated $383,922 of which, $547,453 related to
appreciated securities and $163,531 related to depreciated
securities.
The following abbreviations are used in the
portfolio descriptions:
(AMBAC) - Guaranteed by AMBAC
Indemnity Corp.
(FGIC) - Guaranteed by Financial Guaranty
Insurance Co.
(FSA) - Guaranteed by Financial Security
Assurance Inc.
(MBIA) - Guaranteed by Municipal Bond
Investors Assurance Corp.
G/O - General Obligation Bond
See Notes to Financial Statements.
65
<PAGE>
Sentinel New York Tax-Free Income Fund
Statement of Assets and Liabilities
at May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Assets
Investments at value $ 16,064,346
Cash and cash equivalents 1,154,056
Receivable for fund share purchased 205,684
Receivable for interest 281,820
Receivable from fund administrator 71,000
------------
Total Assets 17,776,906
------------
Liabilities
Payable for securities purchased 624,655
Payable for fund shares repurchased 14,139
Accrued expenses 4,651
Management fee payable 7,463
Distribution fee payable 4,898
Fund service fee payable 794
------------
Total Liabilities 656,600
------------
Net Assets Applicable to Outstanding Shares $ 17,120,306
============
Net Asset Value and Offering Price Per Share
$17,120,306 / 1,433,081 shares outstanding $ 11.95
Sales Charge-- 4.00% of Offering Price 0.50
------------
Maximum Offering Price Per Share $ 12.45
============
Net Assets Represent
Capital stock at par value $ 14,331
Paid-in capital 16,721,061
Accumulated distributions in excess of net investment income (174)
Accumulated undistributed net realized gain
on investments 1,166
Unrealized appreciation of investments 383,922
------------
Net Assets $ 17,120,306
============
Investments at Cost $ 15,680,424
============
Sentinel New York Tax-Free Income Fund
Statement of Operations
For the Six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Investment Income
Income:
Interest $ 371,141
------------
Expenses:
Management advisory fee 40,292
Transfer agent and custodian 5,763
Distribution expense 15,270
Accounting services 2,160
Auditing fees 1,200
Legal fees 500
Reports and notices to shareholders 225
Registration and filing fees 2,514
Directors' fees and expenses 697
Other 4,192
------------
Total Expenses 72,813
Expense Reimbursement (71,000)
Expense Offset (1,813)
------------
Net Expenses -
------------
Net Investment Income 371,141
------------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain on sales of investments 1,159
Net change in unrealized appreciation (depreciation) (344,399)
------------
Net Realized and Unrealized Loss on Investments (343,240)
------------
Net Increase in Net Assets from Operations $ 27,901
============
See Notes to Financial Statements.
66
<PAGE>
Sentinel New York Tax-Free Income Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
---------------- ----------------
<S> <C> <C>
Increase in Net Assets from Operations
Net investment income $ 371,141 $ 476,358
Net realized gain on sales of investments 1,159 1,777
Net change in unrealized appreciation (depreciation) (344,399) 255,201
---------------- ----------------
Net increase in net assets from operations 27,901 733,336
---------------- ----------------
Distributions to Shareholders
From net investment income (371,857) (476,229)
From realized gain on investments (1,773) (19,064)
---------------- ----------------
Total distributions to shareholders (373,630) (495,293)
---------------- ----------------
From Capital Share Transactions
Net proceeds from sales of shares 6,843,507 4,692,578
Net asset value of shares in reinvestment
of dividends and distributions 290,253 456,688
---------------- ----------------
7,133,760 5,149,266
Less: Payments for shares reacquired (1,645,357) (1,114,125)
---------------- ----------------
Increase in net assets from capital share transactions 5,488,403 4,035,141
---------------- ----------------
Total Increase in Net Assets for period 5,142,674 4,273,184
Net Assets: Beginning of period 11,977,632 7,704,448
---------------- ----------------
Net Assets: End of period $ 17,120,306 $ 11,977,632
================ ================
Accumulated undistributed (distributions in excess of)
Net Investment Income at End of Period $ (174) $ 542
================ ================
</TABLE>
See Notes to Financial Statements.
67
<PAGE>
Sentinel New York Tax-Free Income Fund
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Eight Months
Ended 5/31/99 Year Ended Year Ended Year Ended Ended
(Unaudited) 11/30/98 11/30/97 11/30/96 1/30/95(A)
-------------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 12.19 $ 11.88 $11.72 $11.72 $11.19
-------------- ---------- ---------- ---------- ------------
Income from Investment Operations
Net investment income 0.29 0.62 0.60 0.53 0.36
Net realized and unrealized gain (loss) on investments (0.24) 0.34 0.25 - 0.53
-------------- ---------- ---------- ---------- ------------
Total from investment operations 0.05 0.96 0.85 0.53 0.89
-------------- ---------- ---------- ---------- ------------
Less Distributions
Dividends from net investment income 0.29 0.62 0.60 0.53 0.36
Distributions from realized gains on investments - 0.03 0.09 - -
-------------- ---------- ---------- ---------- ------------
Total Distributions 0.29 0.65 0.69 0.53 0.36
-------------- ---------- ---------- ---------- ------------
Net asset value at end of period $ 11.95 $ 12.19 $11.88 $11.72 $11.72
============== ========== =========== ========== ============
Total Return (%) * 0.4++ 8.3 7.7 4.8 8.1++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) - - 0.30 1.04 1.22+
Ratio of expenses to average net assets before
expense reductions (%) ** 0.95+ 1.01 1.09 1.10 1.29+
Ratio of net investment income to average net assets (%) 4.85+ 5.17 5.31 4.65 4.60+
Ratio of net investment income to average net assets before
voluntary expense reimbursements (%) 3.92+ 4.19 4.57 4.65 4.60+
Portfolio turnover rate (%) 1 6 21 48 32
Net assets at end of period (000 omitted) $17,120 $11,978 $7,704 $5,749 $5,332
</TABLE>
(A) Commenced operations March 27, 1995.
+ Annualized
++ Not annualized
* Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at the net asset value during the period, and a redemption on
the last day of the period. Initial sales charge is not reflected in the
calculation of total return.
** Expense reductions are comprised of the voluntary expense reimbursements
and include, effective 1995, the earning credits as described in Note (2)
and (1) H
See Notes to Financial Statements.
68
<PAGE>
Notes to Financial Statements
(1) Significant Accounting Policies:
Sentinel Group Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended, as a diversified open-end management investment
company. The Company consists of twelve separate series - Sentinel Small Company
Fund, Sentinel Mid Cap Growth Fund (formerly Sentinel Growth Fund), Sentinel
World Fund, Sentinel Common Stock Fund, Sentinel Balanced Fund, Sentinel High
Yield Bond Fund, Sentinel Bond Fund, Sentinel Tax-Free Income Fund, Sentinel New
York Tax-Free Income Fund (a non-diversified series), Sentinel Government
Securities Fund, Sentinel Short Maturity Government Fund and Sentinel U.S.
Treasury Money Market Fund, each individually referred to as a Fund. All Funds
offer one class of shares now referred to as Class A shares. In addition,
Sentinel Small Company, Sentinel Mid Cap Growth (commenced operations January
12,1998), Sentinel World, Sentinel Common Stock, Sentinel Balanced, Sentinel
High Yield Bond, Sentinel Bond and Sentinel U.S. Treasury Money Market Funds
have a second class of shares called Class B shares. A third class of shares
called Class C shares were effective for Sentinel Common Stock, Sentinel
Balanced, Sentinel High Yield Bond and Sentinel World on May 4, 1998. On August
21, 1998 the board of directors approved Class D shares on the Sentinel Balanced
Fund which commenced operations on January 4, 1999. The following is a summary
of significant accounting policies followed by the Company.
A. Security Valuation: Equity securities which are traded on a national or
foreign securities exchange and over-the-counter securities listed in the NASDAQ
National Market System are valued at the last reported sales price on the
principal exchange on which they are traded on the date of determination.
Securities for which no sale was reported on that date are valued at the mean
between the last reported bid and asked prices. Over-the-counter securities not
listed on the NASDAQ National Market System are valued at the mean of the
current bid and asked prices. Fixed income securities are valued on the basis of
valuations provided by independent pricing services. Short-term securities
maturing in 60 days or less are stated at cost plus accrued interest earned
which approximates market value. Portfolio securities of the Sentinel U.S.
Treasury Money Market Fund are valued at amortized cost, which approximates
market value, in accordance with the terms of a rule adopted by the Securities
and Exchange Commission. The amortized cost method values a security at cost on
the date of purchase and thereafter assumes a constant amortization to maturity
of any discount or premium.
B. Securities Transactions and Related Investment Income: Securities
transactions are accounted for on the date the securities are purchased or sold
(trade date). Interest income is recorded on the accrual basis. Cost is
determined, and realized gains and losses are computed, using the identified
cost method. Market discount and original issue discount are accreted to income.
The Sentinel Tax-Free Income Fund, the Sentinel New York Tax-Free Income Fund
and the Sentinel Short Maturity Government Fund amortize premium. Sentinel New
York Tax-Free Income Fund invests in debt instruments of municipal issuers whose
ability to meet their obligations may be affected by economic developments in
the State of New York.
C. Dividends and Distributions: Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for mortgage-backed
securities and foreign currency transactions. Reclassifications were made to
reflect these differences as of May 31, 1999 as follows:
Increase (decrease) in
accumulated undistributed
Accumulated net realized gain (loss)
undistributed net on investments and foreign
Fund investment income currency transactions
- ------------------------------ ------------------- --------------------------
World ........................ ($26,780) $ 26,780
Balanced ..................... (5,986) 5,986
Bond ......................... (5,549) 5,549
Government Sec ............... (7,809) 7,809
Short Maturity Gov't ......... (42,752) 42,752
D. Dollar Rolls: Sentinel Balanced, Sentinel Bond, Sentinel Government
Securities and Sentinel Short Maturity Government Funds enter into dollar rolls
in which the Funds sell securities for delivery in the current month, and
simultaneously contract to repurchase similar (same type, coupon and maturity)
securities on a specified future date. During the roll period the Funds forgo
principal and interest paid on the securities. The Funds are compensated by the
69
<PAGE>
interest earned on the cash proceeds of the initial sale and by the lower
repurchase price at the future date. The difference between the sale proceeds
and the lower repurchase price is taken into income. The Funds maintain
segregated accounts, the dollar value of which is equal to its obligations, in
respect of dollar rolls.
E. Federal Income Taxes: Each Fund intends to continue to meet the requirements
of the Internal Revenue Code applicable to regulated investment companies. The
Company intends to distribute all of its taxable income to its shareholders,
relieving each Fund of any federal excise tax or income tax liability.
F. Foreign Currency Translations: The books and records of the Sentinel World
Fund are maintained in U.S. dollars. Foreign currency amounts are translated
into U.S. dollars at the mean between the buying and selling rates on the
following basis:
(1) market value of investment securities, assets and liabilities at the
closing daily rate of exchange; and
(2) purchases and sales of investment securities, income and expenses at the
rate of exchange prevailing on the respective dates of such transactions.
The Sentinel World Fund does not isolate that portion of gains and losses on
investments in securities which is due to changes in the foreign exchange rates
from that which is due to changes in market prices of such securities. However,
pursuant to United States federal income tax regulations, gains and losses from
certain foreign currency transactions are treated as ordinary income for federal
income tax purposes.
G. Repurchase Agreements: Each Fund may enter into repurchase agreements as a
means of making short-term investments, of seven days or less, and in aggregate
amounts of not more than 25% of the net assets of a Fund. Each Fund, through its
custodian, takes possession of the securities collateralizing repurchase
agreements. All repurchase agreements entered into by the Funds provide that the
market value of the collateral underlying the repurchase agreement at the time
of purchase, and each subsequent business day, will always be at least equal to
102% of the repurchase agreement amount including accrued interest. If the
seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
H. Other: Direct expenses of a Fund are charged to that Fund while common
expenses of the Company are allocated proportionately based upon the Funds'
respective average net assets or number of shareholder accounts.
Allocation of expenses not allocated to a specific Class of each Fund are
allocated on the basis of daily net assets or number of shareholder accounts,
each on a pro rata basis, of each Class.
Investment income, gains and losses (realized and unrealized) are allocated pro
rata according to daily net assets of each Class of each Fund.
Earnings credits are received from the custodian and dividend paying agent on
cash balances and are reflected in the statement of operations as an expense
offset.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
(2) Management Advisory Fee and Other Transactions with Affiliates:
Pursuant to the Investment Advisory Agreement (the "Agreement"), Sentinel
Advisors, Co. ("SAC"), a Vermont general partnership whose general partners are
Sentinel Advisors, Inc., an indirect wholly-owned subsidiary of National Life
Insurance Company ("National Life"), ProvidentMutual Management Co., Inc., an
affiliate of Provident Mutual Life Insurance Company of Philadelphia ("Provident
Mutual"), HTK of Delaware, Inc. ("HTK"), an affiliate of The Penn Mutual Life
Insurance Company ("Penn Mutual") and Sentinel Management Company ("SMC"), a
Vermont general partnership whose general partners are affiliates of National
Life, Provident Mutual and Penn Mutual, provides general supervision of the
Funds' investments as well as certain administrative and related services. As
compensation in full for services rendered under its Agreement, the Funds pay
SAC a monthly fee determined as follows: (1) With respect to Sentinel Small
Company, Sentinel Mid Cap Growth, Sentinel World and Sentinel Balanced Funds:
0.70% per annum on the first $200 million of aggregate average daily net assets
of such Funds; 0.65% per annum on the next $100 million of such assets; 0.60%
per annum on the next $100 million of such assets; and 0.55% per annum on such
assets in excess of $400 million. (2) With respect to Sentinel Common Stock
Fund: 0.55% per annum
70
<PAGE>
on the average daily net assets of the Fund. (3) With respect to Sentinel High
Yield Bond Fund: 0.75% per annum on the first $100 million of average daily net
assets; 0.70% per annum on the next $100 million of such assets; 0.65% per annum
on the next $100 million of such assets; and 0.60% per annum on such assets in
excess of $300 million.(4) With respect to Sentinel Bond, Sentinel Tax-Free
Income, Sentinel New York Tax-Free Income, Sentinel Government Securities and
Sentinel Short Maturity Government Funds: 0.55% per annum on the first $200
million of aggregate average daily net assets of such Funds; 0.50% per annum on
the next $200 million of such assets; and 0.45% per annum on such assets in
excess of $400 million. (5) With respect to Sentinel U.S. Treasury Money Market
Fund: 0.40% per annum on the first $300 million of average daily net assets; and
0.35% per annum on such assets in excess of $300 million.
With respect to Sentinel World Fund, SAC has entered into a sub-advisory
agreement with INVESCO Capital Management, Inc. ("INVESCO"). Pursuant to such
agreement, INVESCO provides SAC with a continuous investment program consistent
with Sentinel World Fund's investment objectives and policies. The sub-advisory
agreement provides for a fee to be paid by SAC to INVESCO of the greater of (a)
a monthly fee equal to 0.375% per annum of the average daily net assets of
Sentinel World Fund up to $500 million and 0.30% per annum of such average net
assets in excess of $500 million, or (b) $20,000 per annum.
With respect to Sentinel High Yield Bond Fund, SAC has entered into a
sub-advisory agreement with Keystone Investment Management Company ("Keystone").
Pursuant to such agreement, Keystone provides SAC with a continuous investment
program consistent with Sentinel High Yield Bond Fundis investment objectives
and policies. The sub-advisory agreement provides for a fee from SAC to Keystone
equal to one half of the fee paid by Sentinel High Yield Bond Fund to SAC,
provided that the fee paid by SAC to Keystone will always be at least 0.35% per
annum of the average daily net assets.
All Funds (except Sentinel U.S. Treasury Money Market Fund) have adopted a
distribution plan pursuant to Rule 12b-1 under the 1940 Act. These distribution
plans are herein referred to as the "A Plans." The Sentinel New York Tax-Free
Income Fund became subject to the A Plan upon its inception on March 27, 1995
and Sentinel High Yield Bond Fund became subject to it on its inception on June
23, 1997. On March 24, 1995 the Sentinel Short Maturity Government Fund adopted
a supplemental distribution plan pursuant to Rule 12b-1 applicable only to it.
On March 29, 1996 each of the Funds with Class B shares (except Sentinel U.S.
Treasury Money Market Fund) adopted a Class B distribution plan referred to as
the "B Plans." The Sentinel High Yield Bond Fund became subject to the B Plan on
June 23, 1997. On May 4, 1998 each of the Funds with Class C shares adopted a
Class C distribution plan referred to as the "C Plans." On January 4, 1999 the
Sentinel Balanced Fund Class D adopted a distribution plan referred to as the "D
Plan." None of the fees paid by the other Funds pursuant to the Plans will be
used to reimburse Sentinel Financial Services Company ("SFSC"), a Vermont
general partnership whose general partners are National Life Investment
Management Company, Inc., a wholly-owned subsidiary of National Life,
ProvidentMutual Financial Services, Inc., an affiliate of Provident Mutual, HTK
and SMC, the principal underwriter ("Distributor") of the Company's shares, for
expenses incurred in connection with the distribution of the Sentinel U.S.
Treasury Money Market Fund shares.
Under the A Plans, each participating Fund pays to the Distributor a monthly fee
at the maximum annual rate of (a) 0.30% of average daily net assets relating to
A shares outstanding in the case of the Sentinel Small Company, Sentinel Growth,
Sentinel World, Sentinel Common Stock and Sentinel Balanced Funds, (b) 0.20% of
average daily net assets relating to A shares outstanding in the case of the
Sentinel High Yield Bond, Sentinel Bond, Sentinel Tax-Free Income, Sentinel New
York Tax-Free Income and Sentinel Government Securities Funds or (c) 0.35% of
average daily net assets relating to A shares outstanding in the case of the
Sentinel Short Maturity Government Fund. Such fees will be used to reimburse the
Distributor for expenses incurred in connection with distribution and promotion
of the shares of each participating Fund, including salaries and expenses of the
Distributor's wholesale sales force, home office management and marketing
personnel, expenses incurred by the Distributor for the occupancy of its office
space in Montpelier, Vermont, expenses incurred by the Distributor with respect
to equipment and supplies, expenses incurred for the preparation, printing and
distribution of sales literature used in connection with the offering of such
shares to the public, expenses incurred in advertising, promotion and selling
shares of such Fund to the public, expenses incurred for the preparation,
printing and distribution of the Prospectus and Statement of Additional
Information, any supplement thereto used in connection with the offering of such
Fund's shares to
71
<PAGE>
the public, or any reports and other communications for the distribution to
existing shareholders, and service fees (deferred commissions) paid to
securities dealers who have executed a selling agreement with the Distributor.
Under the Plan applicable to the Class B shares, the Class B shares of each of
the Common Stock, Balanced, Growth, Small Company, World, High Yield and Bond
Funds will pay to the Distributor a monthly fee at an annual rate of up to a
total of 1.00% of average daily net assets, of which up to 0.25% shall be for
service fees to broker-dealers, and the remaining 0.75% shall be for the
recovery of the initial sales commissions paid by the Distributor at the time of
sales of Class B shares, together with the cost of financing such payments, and
for the other types of distribution, sales and marketing expenditures detailed
in the preceding paragraph for the Plans applicable to the Class A shares. The
High Yield Fund Class B shares are not assessed a distribution fee in respect of
the seed money shares owned by National Life, which will result in an overall
Rule 12b-1 fee to the Class B shares of the High Yield Fund of less than 1.00%
for so long as National Life maintains its investment.
Under the Plan applicable to the Class C shares, the Class C shares of each of
the Common Stock, Balanced, World and High Yield Funds will pay to the
Distributor a monthly fee at an annual rate of up to a total of 1.00% of average
daily net assets. In the first year after the purchase this fee will be applied
to recover the initial sales commission of 1.00% paid by the Distributor to the
selling dealer. In subsequent years, the entire 1.00% will be paid to the
selling dealer as additional commission and/or service fees.
Under the Plan Applicable to Balanced Fund Class D shares, these shares pay to
the Distributor a monthly fee at an annual rate of up to a total of 0.75% of
average daily net assets.
These asset-based fees, excepting the service fee component, are subject to
aggregate limits imposed by the National Association of Securities Dealers, Inc.
The Distributor will not be reimbursed for any unreimbursed eligible expenses
from any other Fund, or in any future year from any of the Plans.
SFSC also receives a sales charge added to the net asset value received by the
Company on the sale of its Class A shares. This compensation is not an expense
of the Company and does not affect its operating results. SFSC has advised the
Company that it received sales charges aggregating $1,918,696 for the six months
ended May 31, 1999. The Company is advised that the total distribution charges
retained by SFSC on the sale of shares amounted to $79,742 after allowances of
$884,114 to Equity Services, Inc., an affiliate of National Life, $157,495 to
1717 Capital Management Company, an affiliate of Provident Mutual, $309,380 to
Hornor, Townsend & Kent, Inc. and $167,514 to Janney Montgomery Scott, Inc.
("JMS"), affiliates of Penn Mutual, and $320,451 to other investment dealers.
During this same period, SFSC received $8,845 in contingent deferred sales
charges from certain redemptions of Class A shares and $368,733 in contingent
deferred sales charges from redemptions of Class B shares, $8,771 in contingent
deferred sales charges from redemptions of Class C shares and $12 in contingent
deferred sales charges from redemptions of Class D shares.
During the period the Company transacted purchases and sales of portfolio
securities through, among others, JMS for which it received $35,292 in brokerage
commissions. In addition JMS acted as dealer on certain purchases of shares of
the Company for which it received dealer's concessions noted above.
Each director who is not an employee of the adviser or an affiliated company is
paid an annual fee of $16,000 plus $1,500 for each meeting of the Board of
Directors attended. Such directors are reimbursed for travel and other
out-of-pocket expenses incurred in attending such meetings.
Pursuant to the Fund Services Agreement with Sentinel Administrative Service
Company ("SASC"), a Vermont general partnership whose general partners are
Sentinel Administrative Service Corporation, an indirect wholly-owned subsidiary
of National Life, SIGMA American Corp., an affiliate of Provident Mutual, HTK
and SMC, the Company receives fund accounting and financial administrative
services, transfer agent services and investor services, all of which are
coordinated with other services which the Company has contracted for with
outside providers. Total fees for the six months ended May 31, 1999 were
$1,769,511.
SAC has voluntarily agreed to refund its fee to the extent necessary
to prevent the overall aggregate expense ratio of the Funds' Class A shares and
Sentinel Pennsylvania Tax-Free Trust (excluding the Sentinel World Fund) from
exceeding 1.30% of average daily net assets in any fiscal year. The aggregate
expense ratio of the Funds' Class B shares (excluding the Sentinel World Fund)
would also be reduced proportionately. The Funds and Sentinel Pennsylvania Tax-
72
<PAGE>
Free Trust make up the Sentinel Family of Funds. Although SAC has no present
intention to do so, this arrangement may be terminated at any time. Expenses for
the six months ended May 31, 1999 did not exceed 1.30% of its average daily net
assets.
For the period December 1, 1997 through March 29, 1998 SASC has agreed to
reimburse the Sentinel Short Maturity Government Fund Class A for all operating
expenses in excess of an annual rate of 1.00% of the Fund's average daily
expenses. With respect to Class A shares of Sentinel New York Tax-Free Income
Fund, SASC has agreed to reimburse the Fund for all its operating expenses
effective March 31, 1997.
For the period March 30, 1998 through March 30, 1999 Sentinel Advisors
voluntarily agreed to reimburse the following Funds for advisory fees or other
expenses necessary to limit these Fund's overall expense ratios.
Bond Fund Class A shares 0.68%
Government Securities Fund Class A shares 0.87%
Short Maturity Government Fund Class A shares 0.75%
Tax-Free Income Fund Class A shares 0.72%
Effective March 31, 1999 Sentinel Advisors has voluntarily agreed to reimburse
the following Funds for advisory fees or other expenses necessary to limit these
Fund's overall expense ratios, after expense offset, (i.e. net of certain
credits against Fund expenses) to the amounts shown below:
Bond Fund Class A shares 0.76%
Government Securities Fund Class A shares 0.83%
Short Maturity Government Fund Class A shares 0.77%
Tax-Free Income Fund Class A shares 0.73%
In case of the Bond Fund, the reimbursement of advisory fees will also benefit
the Class B shares of the Bond Fund, which will experience the same reduced
effective advisory fee rate as the Class A shares.
For the six months ended May 31, 1999 the total amount reimbursable to Sentinel
Bond Fund Class A was $97,879, Sentinel Bond Fund Class B $20,205, Sentinel
Government Securities Fund Class A $41,538, Sentinel Short Maturity Government
Fund Class A $130,365, Sentinel Tax-Free Income Fund Class A $83,101 and
Sentinel New York Tax-Free Income Fund Class A $71,000.
Although SASC has no present intention to do so, these arrangements may be
changed or terminated at any time after November 30, 1999.
(3) Investment Transactions:
Purchases and sales of investment securities (excluding short-term obligations)
for the six months ended May 31, 1999 were as follows:
<TABLE>
<CAPTION>
Purchases of Sales of
other than Purchases of other than
U.S. U.S. U.S. Sales of U.S.
government government government government
direct and direct and direct and direct and
agency agency agency agency
Fund obligations obligations obligations obligations
- ----------------------------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Common Stock ...................... $140,389,940 - $222,880,248 -
Balanced .......................... 63,389,480 $161,939,452 77,369,368 $139,259,780
Mid Cap Growth .................... 71,045,288 - 70,333,386 -
Small Company ..................... 18,364,342 - 28,382,769 -
World ............................. 17,443,592 - 17,818,792 -
High Yield Bond ................... 58,141,756 11,245,488 47,803,998 11,116,957
Bond .............................. 49,087,930 82,555,437 60,189,782 68,986,166
Government ........................ - 135,106,469 - 136,234,975
Short Maturity Gov't .............. - 101,939,810 - 95,653,045
Tax-Free .......................... 17,323,805 - 10,306,077 -
N.Y. Tax-Free ..................... 5,440,194 - 105,000 -
</TABLE>
(The Sentinel U.S. Treasury Money Market Fund invests only in short-term
obligations.)
For Federal income tax purposes, the Company has capital loss carryforwards at
November 30, 1998 as follows:
$2,140,898, $538,825 and $1,051,666 (expiring in 2001, 2002 and 2004,
respectively) for a total of $3,731,389 for the Sentinel Bond Fund, $2,952,502
(expiring in 2004) for the Sentinel Government Securities Fund,$1,490,419
(expiring in 2006) for the Sentinel High Yield Bond Fund, $1,283,934 (expiring
in 2006) for the Sentinel World Fund and $278,001, $619,379, $142,166, $83,225
and $166,838 (expiring in 2000, 2001, 2002, 2004 and 2005, respectively) for a
total of $1,289,609 for the Sentinel Short Maturity Government Fund. During the
year ended November 30, 1998 the Sentinel Bond Fund, Sentinel Short Maturity
Fund and the Sentinel Government Securities Fund utilized $626,804, $50,516 and
$2,954,401 of capital loss carryforwards, respectively. It is unlikely that a
capital gains distribution will be paid to shareholders of these Funds until net
gains have been realized in excess of such capital loss carryforwards or the
carryforwards expire.
(4) Fund Shares:
At May 31, 1999, 2 billion shares of one cent par value were authorized. There
are 1.36 billion shares allocated to the various Funds as Class A shares , 260
million shares allocated to the various Funds as Class B shares, 40 million
shares allocated to the various Funds as Class C shares and 20 million shares
allocated to Sentinel Balanced Fund Class D shares. Proceeds from sales and
payments for redemptions on Fund shares as shown in the statement of changes in
net assets are represented by the following number of shares:
73
<PAGE>
<TABLE>
<CAPTION>
Net
Shares issued in increase
reinvestment of (decrease)
dividends and Shares in shares
Fund Shares sold distributions reacquired outstanding
---- ----------- ------------- ---------- -----------
<S> <C> <C> <C> <C>
Six Months Ended 5/31/99
Common Stock - A ...................... 1,332,153 2,874,714 2,610,241 1,596,626
Common Stock - B ...................... 489,887 266,581 224,244 532,224
Common Stock - C ...................... 277,829 10,274 240,870 47,233
Balanced - A .......................... 809,748 1,326,052 1,504,049 631,751
Balanced - B .......................... 479,932 192,013 198,605 473,340
Balanced - C .......................... 79,309 7,834 3,329 83,814
Balanced - D * ........................ 32,473 141 2,017 30,597
Mid Cap Growth - A .................... 898,566 455,992 874,081 480,477
Mid Cap Growth - B .................... 198,537 19,933 18,822 199,648
Small Company - A ..................... 1,644,706 2,130,978 2,951,806 823,878
Small Company - B ..................... 359,711 273,202 285,683 347,230
World - A ............................. 1,298,518 42,682 1,557,152 (215,952)
World - B ............................. 122,996 1,060 81,395 42,661
World - C ............................. 696,232 - 679,341 16,891
High Yield Bond - A ................... 554,617 94,429 419,280 229,766
High Yield Bond - B ................... 887,146 104,657 362,899 628,904
High Yield Bond - C ................... 103,265 8,012 52,772 58,505
Bond - A .............................. 1,002,539 285,949 1,646,996 (358,508)
Bond - B .............................. 833,402 55,039 282,237 606,204
Government ............................ 867,085 167,112 1,151,532 (117,335)
Short Maturity Gov't .................. 2,471,225 184,023 1,886,056 769,192
U.S. Treasury - A ..................... 143,737,134 1,389,738 143,357,562 1,769,310
U.S. Treasury - B ..................... 4,217,303 75,425 4,298,318 (5,590)
Tax-Free .............................. 1,549,575 174,239 1,134,067 589,747
N.Y. Tax-Free ......................... 561,697 23,961 135,025 450,633
Year Ended 11/30/98
Common Stock - A ...................... 2,319,503 3,707,242 4,126,688 1,900,057
Common Stock - B ...................... 1,247,141 220,053 300,254 1,166,940
Common Stock - C *** .................. 128,386 40 8,149 120,277
Balanced - A .......................... 1,761,700 1,281,894 2,754,031 289,563
Balanced - B .......................... 1,008,603 109,017 180,545 937,075
Balanced - C *** ...................... 72,665 312 111 72,866
Growth - A ............................ 1,107,943 1,695,268 827,751 1,975,460
Growth - B** .......................... 284,897 - 20,350 264,547
Small Company - A ..................... 1,816,196 2,341,987 3,171,812 986,371
Small Company - B ..................... 959,051 178,297 181,707 955,641
World - A ............................. 1,261,819 229,155 1,153,057 337,917
World - B ............................. 481,379 23,804 85,449 419,734
World - C *** ......................... 154,395 - 98,307 56,088
High Yield Bond - A ................... 2,403,640 147,508 425,396 2,125,752
High Yield Bond - B ................... 2,737,683 135,496 385,851 2,487,328
High Yield Bond - C *** ............... 197,536 4,462 1,523 200,475
Bond - A .............................. 2,428,801 592,479 2,808,497 212,783
Bond - B .............................. 1,553,747 61,897 319,531 1,296,113
Government ............................ 1,206,526 336,396 1,743,268 (200,346)
Short Maturity Gov't .................. 6,037,319 270,309 3,978,257 2,329,371
U.S. Treasury - A ..................... 195,386,431 3,219,677 186,402,562 12,203,546
U.S. Treasury - B ..................... 8,254,397 161,984 7,427,663 988,718
Tax-Free .............................. 805,481 281,459 1,096,968 (10,028)
N.Y. Tax-Free ......................... 387,759 37,877 91,615 334,021
</TABLE>
* For the period January 4, 1999 to May 31, 1999.
** For the period January 12, 1998 to November 30, 1998.
*** For the period May 4, 1998 to November 30, 1998.
(5) Post Retirement Benefits:
The Company provides certain health care and life insurance benefits to its
retirees. At May 31, 1999 the projected obligation for such benefits had been
accrued.
74
<PAGE>
Sentinel Pennsylvania Tax-Free Trust
Investment in Securities
at May 31, 1999 (Unaudited)
- -----------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
- -----------------------------------------------------------
Bonds 98.1%
Pennsylvania 91.9%
Allegheny County G/O
5.15%, 10/01/11 (FGIC) 1,000M $1,019,480
Allegheny County Hospital
6.00%, 10/01/03 (FGIC) 1,000M 1,077,460
Allegheny County
Institution G/O
7.30%, 04/01/09 (MBIA) 1,000M 1,024,300
Armstrong County
Hospital Auth.
6.25%, 06/01/13 (AMBAC) 1,200M 1,285,512
Beaver County Industrial
Dev. Auth.
7.75%, 09/01/24 500M 513,585
Bensalem Township
School Dist.
5.875%, 07/15/16 (FGIC) 1,150M 1,235,905
Berks County G/O
7.25%, 11/15/20 (FGIC) 1,000M 1,072,300
Butler PA Area School District
4.75%, 10/01/22 (FGIC) 1,000M 930,580
Delaware Valley PA Regional
Fin. Auth.
5.5%, 08/01/28 AMBAC) 1,000M 1,047,790
Erie PA Higher Education
Building Auth.
5.75%, 03/15/20 (ACA) 1,500M 1,563,915
Grove City PA Hospital Auth.
5.25%, 07/01/12 (ACA) 1,500M 1,534,725
Hazelton PA Area
School District
0.00%, 03/01/25 (FGIC) 1,255M 314,377
Jim Thorpe PA Area
School District
5.30%, 03/15/16 (MBIA) 1,500M 1,548,870
Lehigh County Industrial
Dev. Auth.
6.15%, 08/01/29 (MBIA) 1,000M 1,078,330
Montgomery County Higher
Educ. & Health
8.30%, 06/01/10 500M 534,040
Northhampton County G/O
5.125%, 08/15/17 1,000M 1,001,100
PA State Turnpike Commn.
Oil Tax Rev.
4.75%, 12/01/27 (AMBAC) 500M 462,560
Parkland PA School District
5.375%, 09/01/15 (FGIC) 1,000M 1,046,980
Pennsylvania Higher
Educ. Facs.
5.625%, 12/01/27 (MBIA) 1,000M 1,036,740
Pennsylvania Housing
Finance Agency
5.80%, 10/01/29 1,000M 1,028,070
Pennsylvania State G/O
6.25%, 07/01/11 1,500M 1,690,185
Pennsylvania State
Turnpike Commn.
7.20%, 12/01/17 (FGIC) 1,000M 1,099,910
Pennsylvania Trafford
School Dist.
5.90%, 05/01/11 (MBIA) 1,000M 1,079,290
Philadelphia Regional
Port. Auth.
7.125%, 08/01/10 (MBIA) 250M 260,353
7.15%, 08/01/20 (MBIA) 250M 260,423
Philadelphia Water & Waste
6.25%, 08/01/11 (MBIA) 1,000M 1,134,310
6.25%, 08/01/12 (MBIA) 500M 568,520
Pittsburgh PA Water &
Sewer System Rev.
6.50%, 09/01/13 (FGIC) 1,000M 1,168,200
Scranton Lackawanna
Health & Welfare
6.20%, 07/01/17 1,000M 1,012,640
Southeast Delco School
District
0.00%, 02/01/10 (MBIA) 1,000M 599,330
Westmoreland County
Municipal Auth.
0.00%, 08/15/18 (FGIC) 500M 184,170
York County Solid Waste
5.50%, 12/01/14 (FGIC) 1,000M 1,064,610
-----------
30,478,560
-----------
Puerto Rico 6.2%
Puerto Rico Commonwealth
Hwy. & Transportation
5.50%, 07/01/36 1,000M 1,041,710
Puerto Rico G/O
5.375%, 07/01/25 1,000M 1,010,720
-----------
2,052,430
-----------
Total Investments
(Cost $31,210,663)* 32,530,990
Excess of Other Assets
Over Liabilities 1.9% 647,140
-----------
Net Assets $33,178,130
===========
- -----------------------------------------------------------
* Also cost for federal income tax purposes.
At May 31, 1999, net unrealized appreciation for federal income tax
purposes aggregated $1,320,327 of which $1,439,511 related to appreciated
securities and $119,184 related to depreciated securities.
The following abbreviations are used in the portfolio descriptions:
(ACA) - ACA Financial Guaranty Corp.
(AMBAC) - Guaranteed by American Municipal Bond Association Corp.
(FGIC) - Guaranteed by Financial Guaranty Insurance Co.
(MBIA) - Guaranteed by Municipal Bond Investors Assurance Corp.
G/O - General Obligation Bond
See Notes to Financial Statements.
75
<PAGE>
Sentinel Pennsylvania Tax-Free Trust
Statement of Assets and Liabilities
at May 31, 1999 (Unaudited)
- ---------------------------------------------------------------
Assets
Investments at value $32,530,990
Cash and cash equivalents 84,167
Receivable for securities sold 1,001,170
Receivable for fund shares sold 1,056
Receivable for interest 560,645
Receivable from fund administrator 102,236
------------
Total Assets 34,280,264
------------
Liabilities
Payable for securities purchased 1,054,877
Payable for fund shares repurchased 1,016
Accrued expenses 10,484
Management fee payable 15,561
Distribution fee payable 10,113
Fund service fee payable 10,083
------------
Total Liabilities 1,102,134
------------
Net Assets Applicable to Outstanding Shares $33,178,130
============
Net Asset Value and Offering Price Per Share
$33,178,130/2,575,170 shares outstanding $ 12.88
Sales Charge -- 4.00% of Offering Price 0.54
------------
Maximum Offering Price Per Share $ 13.42
============
Net Assets Represent
No par value shares of benefical interest;
authorized - unlimited shares
Paid-in-capital $31,808,503
Accumulated undistributed net investment income 644
Accumulated undistributed net realized gain
on investments 48,656
Unrealized appreciation of investments 1,320,327
------------
Net Assets $33,178,130
============
Investments at Cost $31,210,663
============
Sentinel Pennsylvania Tax-Free Trust
Statement of Operations
For the Six Months Ended May 31, 1999 (Unaudited)
- ---------------------------------------------------------------
Investment Income
Income:
Interest $ 911,424
----------
Expenses:
Management advisory fee 93,189
Transfer agent and custodian 27,693
Distribution expense 33,888
Accounting services 42,000
Auditing fees 2,000
Legal fees 1,250
Reports and notices to shareholders 1,200
Registration and filing fees 4,650
Directors' fees and expenses 16,104
Other 819
----------
Total Expenses 222,793
Expense Reimbursement (102,236)
Expense Offset (2,493)
----------
Net Expenses 118,064
----------
Net Investment Income 793,360
----------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain on sales of investments 48,589
Net change in unrealized appreciation (depreciation) (809,346)
----------
Net Realized and Unrealized Loss on Investments (760,757)
----------
Net Increase in Net Assets from Operations $ 32,603
==========
See Notes to Financial Statements.
76
<PAGE>
Sentinel Pennsylvania Tax-Free Trust
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
------------ ------------
Increase in Net Assets from Operations
Net investment income $ 793,360 $ 1,614,164
Net realized gain on sales of investments 48,589 757,062
Net change in unrealized appreciation (depreciation) (809,346) (88,964)
------------ ------------
Net increase in net assets from operations 32,603 2,282,262
------------ ------------
Distributions to Shareholders
From net investment income (793,363) (1,613,860)
From realized gain on sale of investments (757,025) (324,168)
------------ ------------
Total distributions to shareholders (1,550,388) (1,938,028)
------------ ------------
From Capital Share Transactions
Net proceeds from sales of shares 1,032,693 2,130,748
Net asset value of shares in reinvestment
of dividends and distributions 1,151,038 1,341,058
------------ ------------
2,183,731 3,471,806
Less: Payments for shares reacquired (2,207,928) (3,939,578)
------------ ------------
Decrease in net assets from capital share
transactions (24,197) (467,772)
------------ ------------
Total Decrease in Net Assets for period (1,541,982) (123,538)
Net Assets: Beginning of period 34,720,112 34,843,650
------------ ------------
Net Assets: End of period $33,178,130 $34,720,112
============ ============
Undistributed Net Investment Income
at End of Period $ 644 $ 648
============ ============
See Notes to Financial Statements.
77
<PAGE>
Sentinel Pennsylvania Tax-Free Trust
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended 5/31/99 Year Ended Year Ended Year Ended Year Ended
(Unaudited) 11/30/98 11/30/97 11/30/96 11/30/95
-------------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 13.48 $ 13.34 $ 13.29 $ 13.40 $ 12.29
-------------- ---------- ---------- ----------- ----------
Income from Investment Operations
Net investment income 0.31 0.63 0.64 0.66 0.66
Net realized and unrealized gain (loss) on investments (0.31) 0.26 0.13 (0.03) 1.11
-------------- ---------- ---------- ----------- ----------
Total from investment operations -- 0.89 0.77 0.63 1.77
-------------- ---------- ---------- ----------- ----------
Less Distributions
Dividends from net investment income 0.31 0.63 0.64 0.66 0.66
Distributions from realized gains on investments 0.29 0.12 0.08 0.08 --
-------------- ---------- ---------- ----------- ----------
Total Distributions 0.60 0.75 0.72 0.74 0.66
-------------- ---------- ---------- ----------- ----------
Net asset value at end of period $ 12.88 $ 13.48 $ 13.34 $ 13.29 $ 13.40
============== ========== ========== =========== ==========
Total Return (%) * 0.0 ++ 6.9 6.1 5.0 14.8
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.70 + 0.77 0.85 0.75 0.97
Ratio of expenses to average net assets before
expense reductions (%) ** 1.32 + 1.31 1.34 1.37 1.36
Ratio of net investment income to average net assets (%) 4.67 + 4.65 4.86 5.07 5.14
Ratio of net investment income to average net assets before
voluntary expense reimbursements (%) 4.06 + 4.14 4.41 4.48 4.78
Portfolio turnover rate (%) 17 50 28 56 80
Net assets at end of period (000 omitted) $ 33,178 $ 34,720 $ 34,844 $ 35,545 $ 34,975
</TABLE>
Year Ended
11/30/94
-----------
Net asset value at beginning of period $ 13.57
-----------
Income from Investment Operations
Net investment income 0.64
Net realized and unrealized gain (loss) on investments (1.28)
-----------
Total from investment operations (0.64)
-----------
Less Distributions
Dividends from net investment income 0.64
Distributions from realized gains on investments --
-----------
Total Distributions 0.64
-----------
Net asset value at end of period $ 12.29
===========
Total Return (%) * (4.9)
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.30
Ratio of expenses to average net assets before
expense reductions (%) ** 1.30
Ratio of net investment income to average net assets (%) 4.84
Ratio of net investment income to average net assets before
voluntary expense reimbursements (%) 4.84
Portfolio turnover rate (%) 56
Net assets at end of period (000 omitted) $ 31,172
+ Annualized
++ Not annualized
* Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at the net asset value during the period, and a redemption on
the last day of the period. Initial sales charge is not reflected in the
calculation of total return.
** Expense reductions are comprised of the voluntary expense reimbursements
and include, effective 1995, the earnings credits as described in Notes (5)
and (1) D.
See Notes to Financial Statements.
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Notes to Financial Statements
(1) Significant Accounting Policies:
Sentinel Pennsylvania Tax-Free Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, open-end
management investment company. The following is a summary of significant
accounting policies followed by the Trust.
A. Security Valuation: Investments in securities are valued on the basis of
valuations provided by an independent pricing organization. The independent
pricing organization values the investments, taking into consideration
characteristics of the securities, values of similar securities that trade on a
regular basis, and other relevant market data. Short-term tax-free notes are
stated at cost, which approximates market value.
B. Securities Transactions and Related Investment Income: Securities
transactions are accounted for on the date the securities are purchased or sold
(trade date). Interest income is recorded on the accrual basis and premiums are
amortized. Cost of investments sold is determined on the basis of identified
cost for both financial reporting and income tax purposes. The Trust invests in
debt instruments of municipal issuers whose ability to meet their obligations
may be affected by economic developments in the State of Pennsylvania.
C. Federal Income Taxes: It is the Trust's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies. The Trust intends to distribute all of its taxable income to its
shareholders; therefore, no federal excise tax or income tax provision is
required.
D. Other: Earnings credits are received from the custodian and dividend paying
agent on cash balances and are reflected in the statement of operations as an
expense offset.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
(2) Distributions:
Realized gains from securities transactions, if any, will be distributed to
shareholders prior to the end of each calendar year. At November 30, 1998 the
Trust did not have any capital loss carryforwards for federal income tax
purposes.
Dividends from net investment income are declared and paid monthly and recorded
on the ex-dividend date. Income distributions and capital gain distributions are
determined in accordance with federal income tax regulations.
(3) Trust Shares:
Transactions in Trust shares were as follows:
Six Months Year
Ended Ended
5/31/99 11/30/98
--------- ---------
Shares sold...................................... 78,650 158,799
Shares issued to stockholders in reinvestment
of dividends and distributions................... 87,894 100,222
--------- ---------
166,544 259,021
Shares redeemed.................................. (167,888) (293,605)
--------- ---------
Net decrease..................................... (1,344) (34,584)
========= =========
(4) Investment Transactions:
Purchases and sales of securities other than short-term securities aggregated
$5,752,660 and $6,273,460, respectively, during the six months ended May 31,
1999.
(5) Management Advisory Fee and Other Transactions with Affiliates:
Pursuant to the Investment Advisory Agreement (the "Agreement"), Sentinel
Advisors, Co. ("SAC"), a Vermont general partnership whose general partners are
Sentinel Advisors, Inc., an indirect wholly-owned subsidiary of National Life
Insurance Company ("National Life"), ProvidentMutual Management Co., Inc., an
affiliate of Provident Mutual Life Insurance Company of Philadelphia ("Provident
Mutual"), HTK of Delaware, Inc. ("HTK"), an affiliate of The Penn Mutual Life
Insurance Company ("Penn Mutual") and Sentinel Management Company ("SMC"), a
Vermont general partnership whose general partners are affiliates of National
Life, Provident Mutual and Penn Mutual, provides general supervision of the
Trust's investments as well as certain administrative and related services. As
compensation in full for services rendered under its Agreement, the Trust pays
SAC a monthly fee determined as follows: 0.55% per annum on the first $50
million of average daily net assets; 0.50% per annum on the next $50 million of
such assets; and 0.45% per annum on such assets in excess of $100 million.
Sentinel Financial Services Company ("SFSC"), a Vermont general partnership
whose general partners are National Life Investment Management Company, Inc., a
wholly-owned subsidiary of National Life, ProvidentMutual Financial
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Services, Inc., an affiliate of Provident Mutual, HTK and SMC, is the principal
underwriter ("Distributor") of the Trust's shares. SFSC receives a sales charge
added to the net asset value received by the Trust on the sale of its shares.
This compensation is not an expense of the Trust and does not affect its
operating results. SFSC has advised the Trust that it received sales charges
aggregating $34,142 for the six months ended May 31, 1999. The Trust is advised
that the total distribution charges retained by SFSC on the sale of shares
amounted to $256 after allowances of $1,165 to Equity Services, Inc., an
affiliate of National Life, $6,410 to 1717 Capital Management Company, an
affiliate of Provident Mutual, $6,872 to Hornor, Townsend & Kent, Inc. and
$4,006 to Janney Montgomery Scott, Inc., affiliates of Penn Mutual, and $15,433
to other investment dealers.
Each trustee who is not an employee of the adviser or an affiliated company is
paid an annual fee of $2,500 plus $200 for each meeting of the Board of Trustees
attended. Such trustees are reimbursed for travel and other out-of-pocket
expenses incurred in attending such meetings.
Pursuant to the Fund Services Agreement with Sentinel Administrative Service
Company ("SASC"), a Vermont general partnership whose general partners are
Sentinel Administrative Service Corporation, an indirect wholly-owned subsidiary
of National Life, SIGMA American Corp., an affiliate of Provident Mutual, HTK
and SMC, the Trust receives trust accounting and financial administrative
services, transfer agent services and investor services, all of which are
coordinated with other services which the Trust has contracted for with outside
providers. Total fees for the six months ended May 31, 1999 were $60,500.
SAC has voluntarily agreed to refund its fee to the extent necessary to prevent
the overall aggregate expense ratio of the Trust and the Class A shares of
Sentinel Group Funds, Inc. (excluding the Sentinel World Fund) from exceeding
1.30% of average daily net assets in any fiscal year. Sentinel Group Funds, Inc.
is a series fund with twelve portfolios and together with the Trust make up the
Sentinel Family of Funds. Although SAC has no present intention to do so, this
arrangement may be terminated at any time. Expenses for the six months ended May
31, 1999 did not exceed 1.30% of its average daily net assets.
Effective March 27, 1995 thru May 14, 1995, SASC agreed to reimburse the Trust
for expenses in excess of an annual rate of 1.00% of the Trust's average daily
net assets. Effective May 15, 1995 thru March 30, 1997, SASC agreed to reimburse
the Trust for expenses in excess of an annual rate of 0.75% of the Trust's
average daily net assets. Effective March 31, 1997, SASC has agreed to reimburse
the Trust for expenses in excess of an annual rate of 0.90% of the Trust's
average daily net assets. Effective March 30, 1998, SASC has agreed to reimburse
the Trust for expenses in excess of an annual rate of 0.70% of the Trust's
average daily net assets. Effective March 31, 1999, SASC has agreed to reimburse
the Trust for expenses in excess of an annual rate of 0.69% of the Trust's
average daily net assets. For the six months ended May 31, 1999 the total amount
reimbursable was $102,236. This arrangement may be terminated at any time after
November 30, 1999.
(6) Distribution Expenses:
On March 1, 1993, the Trust adopted a new distribution plan ("Plan") pursuant to
Rule 12b-1 under the 1940 Act. Under the Plan the Trust pays to the Distributor
a monthly fee at the maximum annual rate of 0.20% of average daily net assets.
Such fees will be used to reimburse the Distributor for expenses incurred in
connection with distribution and promotion of the shares of the Trust, including
salaries and expenses of the Distributor's wholesale sales force, home office
management and marketing personnel, expenses incurred by the Distributor for the
occupancy of its office space in Montpelier, Vermont, expenses incurred by the
Distributor with respect to equipment and supplies, expenses incurred for the
preparation, printing and distribution of sales literature used in connection
with the offering of such shares to the public, expenses incurred in
advertising, promotion and selling shares of such Trust to the public, expenses
incurred for the preparation, printing and distribution of the Prospectus and
Statement of Additional Information, any supplement thereto used in connection
with the offering of such Trust's shares to the public, or any reports and other
communications for the distribution to existing shareholders, and service fees
(deferred commissions) paid to securities dealers who have executed a selling
agreement with the Distributor. The Distributor is not reimbursed for any
unreimbursed prior years expenses.
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Privileges, Plans and Services for Shareholders
Open Account - Unless another distribution option is elected, an Open Account is
automatically established for each new investor. In an Open Account, all income
dividends and any capital gains distributions are reinvested in additional
shares at net asset value and without charge.
Other Distribution Options - Upon written notice to Sentinel Administrative
Service Company, you may elect one of the following options:
1. Receive dividends in cash and reinvest any capital gains distributions in
additional shares of any of the Sentinel Funds, of the same class, at net
asset value.
2. Receive capital gains in cash and reinvest dividends.
3. Receive both dividends and capital gains in cash.
4. Reinvest both dividends and capital gains in another Sentinel Fund, of the
same class, at net asset value (excluding dividends earned on assets
initially invested in Sentinel U.S. Treasury Money Market Fund).
5. Reinvest a percentage of dividends and/or capital gains and receive the
remaining portion in cash.
Automatic Investment Plan - This service, provided without charge, enables you
to make regular investments of $50 or more by means of an automatic bank account
debiting service via the ACH (Automated Clearing House) network. Information and
the application necessary to establish this plan are included in the prospectus.
A separate folder and application are also available from Sentinel
Administrative Service Company, or from your investment dealer.
Systematic Withdrawal Plan - This plan enables you to receive a check on a
systematic basis, during any months of the year you specify, for a dollar amount
that you specify. Note that this plan is available only to those who own, or are
purchasing, at least $5,000 worth of shares of one or more of the Sentinel
Funds, except Sentinel U.S. Treasury Money Market Fund, as determined by the
current offering price. Payments may be made to you, your bank, or other payee
as requested on the application. Under the Systematic Withdrawal Plan, all
dividends and distributions are automatically reinvested at net asset value and
payments are made from the proceeds of redeemed shares.
High Yield Bond, Bond, Tax-Free Income, New York Tax-Free Income, Government
Securities, Short Maturity Government, U.S. Treasury Money Market and
Pennsylvania Tax-Free Fund Check Writing Service - This special feature of the
Class A shares of Sentinel High Yield Bond Fund, Sentinel Bond Fund, Sentinel
Tax-Free Income Fund, Sentinel New York Tax-Free Income Fund, Sentinel
Government Securities Fund, Sentinel Short Maturity Government Fund, Sentinel
U.S. Treasury Money Market Fund and Sentinel Pennsylvania Tax-Free Trust enables
you to draw checks (minimum amount $500 except for the U.S. Treasury Money
Market Fund which is $250) on your account through Investors Fiduciary Trust Co.
There is currently no fee for this service. Please note that this service is not
available to IRA, 403(b) or other fiduciary accounts. Information and
applications are available by contacting Sentinel Funds Investor Services at
(800) 282-FUND (3863).
Exchange Privilege - The Exchange Privilege is designed to add flexibility to
your investment program by enabling you to exchange all or part of your shares
in one Sentinel Fund for shares of the same class of another Fund in the family
without payment of any additional sales charge. The exception to no additional
sales charge is when shares are exchanged from the U.S. Treasury Money Market
Fund to Class A shares of another Sentinel Fund, a sales charge will be imposed
unless the assets in the U.S. Treasury Money Market Fund were in another
Sentinel Fund and were previously subject to a sales charge. Shares being
exchanged into another Fund must have a value of at least $1,000 (the minimum
investment required to open a new account) unless you already have an account in
that Fund. New assets must remain in an account for a minimum of 15 days before
they can be exchanged to another fund (90 days in the case of funds initially
invested in the Sentinel Short Maturity Government Fund or exchanged into such
Fund from funds initially invested in the Sentinel U.S. Treasury Money Market
Fund). Account registrations must be identical. Exchanges may be made by calling
toll-free, (800) 282-FUND (3863), or by writing Sentinel Funds, P. O. Box 1499,
Montpelier, Vermont 05601-1499. Note that an exchange is a taxable transaction
for federal income tax purposes.
Reinstatement Privilege - A shareholder who redeems all or part of
an account may reinvest all or part of the redemption proceeds at the then
current net asset value if a written request to the Fund is received or
postmarked within one year after the date of the redemption. Sentinel Short
Maturity Government Fund shareholders who have held their shares for 90 days or
less, however, may only use this reinstatement privilege to reinvest in the
Short Maturity Government Fund.
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<PAGE>
Telephone Redemption - Up to $1,000,000 in funds may be redeemed by telephone
upon completion of the appropriate section of the Application, or subsequent
submission of such, with proper signature guarantee. Under this service,
proceeds may either be sent to the address of record or a pre-designated bank. A
signature guarantee is required on any change in redemption instructions as well
as a 30 day waiting period for changes to become effective. To redeem shares by
telephone, you may call (800) 282-FUND (3863).
Tax-Deferred Retirement Plans -Shares of Sentinel Group Funds may be purchased
by all types of tax-deferred retirement plans, including self-employed
individuals and partnerships ("Keogh Plans"), Individual Retirement Accounts
("IRAs"), SIMPLE IRAs, Simplified Employee Pension Plans ("SEP-IRAs"), 403(b)
Plans (deferred compensation arrangements for employees of public school systems
and certain non-profit organizations), Section 457 Plans and other corporate
pension and profit-sharing plans. Consult your tax advisor for details.
Please refer to the prospectus for complete details regarding these privileges,
plans and services.
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<PAGE>
Directors/Trustees and Officers
Sentinel Group Funds, Inc. and
Sentinel Pennsylvania Tax-Free Trust
Patrick E. Welch
Chairman and Chief Executive Officer
Chairman and Chief Executive Officer,
National Life Insurance Company
Joseph M. Rob
Director/Trustee and President
Chief Executive Officer,
Sentinel Management Company
Richard J. Borda
Director/Trustee
Former Vice Chairman,
National Life Insurance Company
Dr. Kalman J. Cohen
Director/Trustee
Distinguished Bank Research
Professor Emeritus,
The Fuqua School of Business,
Duke University
John D. Feerick
Director/Trustee
Dean, Fordham University
School of Law
Richard I. Johannesen, Jr.
Director/Trustee
Former Vice President and Manager -
Bond Market Research Department,
Salomon Brothers, Inc.
Robert B. Mathias
Director/Trustee
Sports Consultant;
Former U.S. Congressman
Keniston P. Merrill
Director/Trustee
Former Chairman and
Chief Executive Officer,
Sentinel Advisors Company
Deborah G. Miller
Director/Trustee
Vice President
Digital Equipment Corporation
John Raisian
Director/Trustee
Director and Senior Fellow,
Hoover Institution,
Stanford University
Susan M. Sterne
Director/Trustee
President, Economic Analysis Associates, Inc.
Angela E. Vallot
Director/Trustee
Counsel, Texaco, Inc.
John M. Grab, Jr.
Vice President
Thomas P. Malone
Vice President and Treasurer
Scott G. Wheeler
Assistant Treasurer
D. Russell Morgan
Secretary
Investment Adviser
Sentinel Advisors Company
Principal Underwriter
Sentinel Financial Services Company
Counsel
Brown & Wood
Independent Accountants
PricewaterhouseCoopers LLP
Custodian and Dividend Paying Agent
Investors Fiduciary Trust Company
Transfer Agent, Shareholder Servicing Agent and Administrator
Sentinel Administrative Service Company
83
<PAGE>
A Brief History
[LOGO APPEARS HERE]
The Sentinel Family of Funds is one of America's oldest fund families. Its
largest member, Sentinel Group Funds, Inc., was originally incorporated as Group
Securities, Inc. in the state of Delaware on December 3, 1933. Designed as a
series type of investment company, its main objectives were to offer
shareholders the benefits of "group security investing" along with the ability
to invest in individual industries or industrial groups readily and
conveniently, each in the form of a single stock.
Shares of 17 individual classes of stock were first offered to the public at
$1.10 per share on January 12, 1934 - virtually at the bottom of the Great
Depression.
Following several additions and deletions, 21 classes of stock were maintained
for an extended period of time. Subsequent consolidations, mergers and name
changes combined the classes of stock into what are today the two original
remaining funds in Sentinel Group Funds, Inc., Sentinel Common Stock Fund and
Sentinel Balanced Fund. Sentinel Growth Fund and Sentinel Bond Fund were
organized by National Life Insurance Company in 1969 and merged into the
Sentinel Group in 1978. Three more additions, Sentinel Government Securities
Fund, Sentinel Tax-Free Income Fund and Sentinel High Yield Bond Fund (Class A
and Class B shares) were introduced on September 2, 1986, October 1, 1990 and
June 23, 1997, respectively.
In May, 1981, Sentinel Cash Management Fund, Inc. was organized as a no-load
money market fund. The "Cash Fund" was also organized as a series fund, and was
designed to operate independently of Sentinel Group Funds, Inc., while at the
same time sharing the Group's management, distribution, transfer agent and other
servicing and administrative arrangements.
On March 1, 1993, National Life Insurance Company and Provident Mutual Life
Insurance Company of Philadelphia entered into a joint venture arrangement which
resulted in the merging of the nine ProvidentMutual Funds into the Sentinel
Family of Funds. With the merger, three new classes of stock were added to
Sentinel Group Funds, Inc., and a fourth new member of the broader Sentinel
Family of Funds was added. The three new members of Sentinel Group Funds, Inc.
are Sentinel Small Company Fund, Sentinel World Fund and Sentinel U.S. Treasury
Money Market Fund. The fourth new member of the Sentinel Family of Funds is
Sentinel Pennsylvania Tax-Free Trust (the "Trust"). The Trust operates as a
separate investment company with respect to Sentinel Group Funds, Inc., but
shares management, distribution, fund accounting, transfer agent and other
arrangements with the Sentinel Group.
Also on March 1, 1993, Sentinel Cash Management Fund, Inc. was merged into the
Sentinel U.S. Treasury Money Market Fund.
On March 27, 1995, Penn Mutual Life Insurance Company joined National Life
Insurance Company and Provident Mutual Life Insurance Company in their mutual
fund operation. This resulted in the merging of seven funds of The Independence
Capital Group of Funds into Sentinel Group Funds, Inc., and the creation of two
new classes of stock - Sentinel New York Tax-Free Income Fund and Sentinel Short
Maturity Government Fund.
Effective April 1, 1996, five Sentinel Funds offered two classes of shares:
Sentinel Small Company, Sentinel World, Sentinel Common Stock, Sentinel Balanced
and Sentinel Bond funds. The new class is called "Class B shares" while the
original class is called "Class A shares." Sentinel U.S. Treasury Money Market
Fund also has Class B shares which are primarily available through exchanges
from the other Class B shares. On January 12, 1998 Sentinel Mid Cap Growth
(formerly Growth Fund) also offered Class B shares. Effective May 4, 1998 a
third class of shares, Class C shares, was offered on Sentinel Common Stock,
Sentinel Balanced, Sentinel World and Sentinel High Yield Bond funds. Also on
January 4, 1999 a fourth class of shares, Class D shares, was offered on the
Sentinel Balanced Fund.
The thirteen funds in the Sentinel Family of Funds, which includes the twelve
funds in Sentinel Group Funds, Inc., and the Sentinel Pennsylvania Tax-Free
Trust, now represent net assets of $3.1 billion which are managed on behalf of
approximately 116,600 individual, corporate and institutional shareholders
located across the country and around the world. Shares are distributed by
registered representatives and independent broker/dealers through Sentinel
Financial Services Company, an affiliate of the partnership between National
Life, Provident Mutual and Penn Mutual. Sentinel Advisors Company and Sentinel
Administrative Service Company, which are also affiliates of the partnership,
provide respective investment management and shareholder services to the funds.
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Sentinel Funds
Integrity Since 1934
[LOGO APPEARS HERE]
Sentinel Small Company Fund
Sentinel Mid Cap Growth Fund
Sentinel World Fund
Sentinel Common Stock Fund
Sentinel Balanced Fund
Sentinel Bond Fund
Sentinel Tax-Free Income Fund
Sentinel New York Tax-Free Income Fund
Sentinel Government Securities Fund
Sentinel Short Maturity Government Fund
Sentinel U.S. Treasury Money Market Fund
Sentinel Pennsylvania Tax-Free Trust
This brochure is authorized for distribution
to prospective investors only when preceded or
accompanied by an effective Prospectus.
Distributed by
Sentinel Financial Services Company
National Life Drive
Montpelier, Vermont 05604
(800) 233-4332
Member of
FORUM for INVESTOR ADVICE
Investment Professionals Helping Investors
<PAGE>
Sentinel Funds
Integrity Since 1934
[LOGO APPEARS HERE]
Sentinel Small Company Fund
Sentinel Mid Cap Growth Fund
Sentinel World Fund
Sentinel Common Stock Fund
Sentinel Balanced Fund
Sentinel Bond Fund
Sentinel Tax-Free Income Fund
Sentinel New York Tax-Free Income Fund
Sentinel Government Securities Fund
Sentinel Short Maturity Government Fund
Sentinel U.S. Treasury Money Market Fund
Sentinel Pennsylvania Tax-Free Trust
This brochure is authorized for distribution
to prospective investors only when preceded or
accompanied by an effective Prospectus.
Distributed by -----------------
Sentinel Financial Services Company Bulk Rate
National Life Drive U.S. Postage
Montpelier, Vermont 05604 PAID
(800) 233-4332 Hudson, MA
Permit No. 19
Member of -----------------
FORUM for INVESTOR ADVICE
Investment Professionals Helping Investors
