<PAGE>
Sentinel Family of Funds
Semi-Annual Report
May 31, 2000
[GRAPHIC]
<PAGE>
[LOGO OF NATIONAL LIFE INSURANCE COMPANY]
Sentinel Group Funds, Inc. (SGF)
Sentinel Pennsylvania
Tax-Free Trust (PA)
National Life Drive,
Montpelier, Vermont 05604
(800) 282-FUND(3863)
--------------------------------------------------------------------------------
Table of Contents
2 Message to Shareholders
4 Understanding your Sentinel Funds Financial Statements
5 Fund Performance
6 Sentinel Flex Cap Opportunity Fund
11 Sentinel Small Company Fund
16 Sentinel Mid Cap Growth Fund
21 Sentinel World Fund
27 Sentinel Growth Index Fund
32 Sentinel Common Stock Fund
38 Sentinel Balanced Fund
46 Sentinel High Yield Bond Fund
53 Sentinel Bond Fund
58 Sentinel Tax-Free Income Fund
63 Sentinel New York Tax-Free Income Fund
67 Sentinel Government Securities Fund
71 Sentinel Short Maturity Government Fund
76 Sentinel U.S. Treasury Money Market Fund
81 Notes to Financial Statements (SGF)
87 Sentinel Pennsylvania Tax-Free Trust
91 Notes to Financial Statements (PA)
93 Privileges, Plans and Services for Shareholders
95 Directors/Trustees and Officers
96 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]
Patrick E. Welch
Chairman
[PHOTO]
Joseph M. Rob
Director and President
Dear Shareholder:
We are pleased to submit our semi-annual report for the six months ended May 31,
2000.
The Economy
According to the latest government reports, the U.S. economy grew at a strong
pace during the first quarter of the year 2000. Nominal GDP increased 5.5% on a
year-over-year basis during the three-month period. This rate of growth exceeded
the expectations of most economists and raised concerns about increasing
inflation.
While most of the broad measures of inflation suggest that price increases are
minimal, the Federal Reserve raised the target rate for Federal Funds several
times during the first half of the year. The Fed's preemptive tightening was
designed to slow the economy, lessen inflation pressures, and cool off rampant
speculation in the stock market. At mid-year, it appears that the Fed has
entered a "wait-and-see" mode as the central bankers await further data
regarding the strength of the economy and inflation pressures.
The Financial Markets
It would not be an overstatement to say that it has been a roller-coaster year
for the stock market. While the market showed only small gains for the first
half of the year, there was quite a bit of volatility during the period.
The NASDAQ Composite started the new year in much the same way it had finished
1999, with aggressive growth stocks soaring to new highs in January and
February. As the markets began to digest the news of the Fed's interest rate
increases in March, investors' enthusiasm cooled off and they moved to take
profits in the same aggressive stocks that had led the market higher. The NASDAQ
corrected more than 30% from its highs and the market for initial public
offerings fizzled.
At mid-year, it appears that the market is in a critical crossroad. Strong
economic growth is driving corporate profits higher; earnings in the second
quarter are likely to be up 18-20% year-over-year. At the same time, the Federal
Reserve remains concerned about the inflation outlook and price/earnings ratios
in the stock market are high on an historical basis. We, along with the Fed,
will be watching earnings reports and key economic indicators closely in the
weeks ahead to determine the most likely outcome for the market.
We are pleased to report that our equity funds are off to an outstanding start
in calendar year 2000. The lackluster performance of the overall market has
allowed managers with strong stock selection skills to stand out. As of the end
of May, the Common Stock Fund, the Mid Cap Growth Fund, the Small Company Fund,
and the Balanced Fund were all in the top quartile of their respective peer
groups on a year-to-date basis.
2
<PAGE>
The bond market experienced much of the same volatility exhibited in the equity
markets. The U.S. Treasury yield curve inverted for the first time since 1989 as
short-term interest rates rose in response to a more aggressive Fed, while
30-year U.S. Treasury Bond yields fell sharply as the U.S. Treasury Department
commenced "buyback" operations focusing on longer-maturity issues. Corporate
bonds and mortgage-backed securities posted modest returns, through May 31st,
relative to U.S. Treasury securities.
We appreciate your support and look forward to continuing to help you achieve
your long-term investment goals.
Sincerely,
/s/ Patrick Welch /s/ Joseph M. Rob
Patrick Welch Joseph M. Rob
Chairman Director & President
May 31, 2000
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.
4
<PAGE>
--------------------------------------------------------------------------------
Fund Performance
Performance data for each Sentinel Fund is provided in this table. Financial
data is contained in the following pages.
<TABLE>
<CAPTION>
For the period from
12/1/99 through 05/31/00
------------------------------------------------------------
05/31/00
Net Asset Capital
Sentinel Value Per Income Gain Total
Fund Share Dividends Distributions Return*
<S> <C> <C> <C> <C> <C>
Flex Cap Opportunity "A" Shares ** $ 7.36 $ - $ - -26.4%
-------------------------------------------------------------------------------------------------------------------------
"B" Shares ** 7.34 - - -26.6
-------------------------------------------------------------------------------------------------------------------------
"C" Shares ** 7.34 - - -26.6
-------------------------------------------------------------------------------------------------------------------------
Small Company "A" Shares 6.09 - 0.72 21.0
-------------------------------------------------------------------------------------------------------------------------
"B" Shares 5.78 - 0.72 20.4
-------------------------------------------------------------------------------------------------------------------------
Mid Cap Growth "A" Shares 20.59 - 1.18 23.6
-------------------------------------------------------------------------------------------------------------------------
"B" Shares 20.04 - 1.18 23.0
-------------------------------------------------------------------------------------------------------------------------
"C" Shares *** 20.56 - - -9.8
-------------------------------------------------------------------------------------------------------------------------
World "A" Shares 19.90 0.26 1.69 2.6
-------------------------------------------------------------------------------------------------------------------------
"B" Shares 19.63 0.09 1.69 2.1
-------------------------------------------------------------------------------------------------------------------------
"C" Shares 19.84 - 1.69 2.0
-------------------------------------------------------------------------------------------------------------------------
Growth Index "A" Shares 21.66 0.01 0.00 1.7
-------------------------------------------------------------------------------------------------------------------------
"B" Shares 21.58 - 0.00 1.4
-------------------------------------------------------------------------------------------------------------------------
"C" Shares *** 21.65 - - -8.2
-------------------------------------------------------------------------------------------------------------------------
Common Stock "A" Shares 40.89 0.18 3.22 3.6
-------------------------------------------------------------------------------------------------------------------------
"B" Shares 40.78 0.02 3.22 3.2
-------------------------------------------------------------------------------------------------------------------------
"C" Shares 40.89 - 3.22 3.2
-------------------------------------------------------------------------------------------------------------------------
Balanced "A" Shares 18.53 0.31 0.95 2.3
-------------------------------------------------------------------------------------------------------------------------
"B" Shares 18.55 0.25 0.95 1.9
-------------------------------------------------------------------------------------------------------------------------
"C" Shares 18.53 0.22 0.95 1.7
-------------------------------------------------------------------------------------------------------------------------
"D" Shares 18.48 0.18 0.95 1.6
-------------------------------------------------------------------------------------------------------------------------
High Yield "A" Shares 8.52 0.43 - -2.8
-------------------------------------------------------------------------------------------------------------------------
"B" Shares 8.52 0.41 - -2.9
-------------------------------------------------------------------------------------------------------------------------
"C" Shares 8.54 0.37 - -3.2
-------------------------------------------------------------------------------------------------------------------------
Bond "A" Shares 5.68 0.21 - -0.9
-------------------------------------------------------------------------------------------------------------------------
"B" Shares 5.69 0.18 - -1.5
-------------------------------------------------------------------------------------------------------------------------
Tax-Free Income 12.39 0.33 - 0.9
-------------------------------------------------------------------------------------------------------------------------
New York Tax-Free Income 11.01 0.32 - 1.1
-------------------------------------------------------------------------------------------------------------------------
Government Securities 9.45 0.33 - 2.3
-------------------------------------------------------------------------------------------------------------------------
Short Maturity Government 9.41 0.32 - 1.6
-------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Money Market "A" Shares 1.00 0.02 - 2.4
-------------------------------------------------------------------------------------------------------------------------
"B" Shares 1.00 0.02 - 2.3
-------------------------------------------------------------------------------------------------------------------------
Pennsylvania Tax-Free Trust 11.90 0.31 - 0.5
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 + - - - 2.7
-------------------------------------------------------------------------------------------------------------------------
Lehman Aggregate Bond Index ++ - - - 1.4
-------------------------------------------------------------------------------------------------------------------------
Lehman Municipal Bond Index +++ - - - 1.0
-------------------------------------------------------------------------------------------------------------------------
</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.
** Commenced operations February 25, 2000.
*** Commenced operations March 30, 2000.
+ 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 Flex Cap Opportunity Fund
Investment in Securities
at May 31, 2000 (Unaudited)
---------------------------------------------------------
Shares Value
(Note 1)
---------------------------------------------------------
Common Stocks 74.4%
Advertising 0.3%
Omnicom Group, Inc. 2,000 $ 167,875
------------
Biotechnology 2.9%
* Affymetrix, Inc. 2,200 261,250
* Amgen, Inc. 12,800 814,400
* Genentech, Inc. 2,900 311,388
------------
1,387,038
------------
Broadcasting 2.1%
* Clear Channel Communications 13,700 1,025,787
------------
Brokerage 0.5%
Morgan Stanley, Dean Witter
& Co 3,500 251,781
------------
Business Services 0.9%
* Ariba, Inc. 8,800 458,700
------------
Communications 6.0%
* Allegiance Telecom, Inc. 5,800 306,675
* AT&T Corporation Liberty
Media Group 6,500 288,031
Comcast Corp Special A 5,900 223,462
* Cox Communication 5,500 242,688
* MCI Worldcom, Inc. 10,600 398,825
* McLeodusa, Inc. 9,000 180,000
Nortel Networks Corporation 6,000 325,875
* Qualcomm, Inc. 7,400 491,175
* Sprint Corp. PCS Ser. 1 8,000 444,000
------------
2,900,731
------------
Communications Equipment 11.4%
* Brocade Communications
Systems, Inc. 1,000 117,937
* Cisco Systems, Inc. 11,000 627,000
Corning, Inc 2,800 541,625
* Efficient Networks, Inc. 2,800 135,800
* E-Tek Dynamics, Inc. 2,200 404,388
* Foundry Networks, Inc. 900 56,756
* JDS Uniphase Corporation 2,500 220,000
LM Ericsson
Telephone Company 27,200 557,600
Motorola, Inc. 5,100 478,125
* Nextel Communications, Inc. 4,500 416,812
Nokia Corporation 17,600 915,200
* PMC-Sierra, Inc. 1,900 291,175
* SDL, Inc. 1,500 339,844
* Verisign, Inc. 3,000 406,125
------------
5,508,387
------------
Computer Related & Business Services 4.7%
* America Online, Inc. 14,200 752,600
* Dell Computer Corporation 5,000 215,625
Hewlett Packard Company 7,200 864,900
* Sun Microsystems, Inc. 5,900 452,088
------------
2,285,213
------------
Computer Services 7.3%
* Amdocs LTD 6,200 384,013
* E-Bay, Inc. 17,600 1,101,100
* Exodus Communications, Inc. 7,600 536,275
* Infospace, Inc. 8,200 355,675
* Inktomi Corporation 300 33,488
* Vignette Corporation 10,600 292,162
* Yahoo, Inc. 7,600 859,275
------------
3,561,988
------------
Computer Software 7.0%
* Aspect Development, Inc. 5,300 $ 310,050
* Commerce One, Inc. 8,200 293,406
* 12 Technologies, Inc. 1,600 170,200
* Microsoft Corporation 16,900 1,057,306
* Oracle Corporation 7,900 567,813
* Phone.Com, Inc. 2,700 188,831
* Realnetworks, Inc. 5,000 181,563
* Veritas Software Corporation 5,400 629,100
------------
3,398,269
------------
Energy & Energy Services 1.6%
Halliburton Company 10,000 510,000
* Nabors Industries, Inc. 5,800 249,400
------------
759,400
------------
Financial Services 2.1%
Citigroup, Inc. 16,000 995,000
------------
Industrial Equipment 1.0%
* Waters Corporation 5,300 500,850
------------
Medical Services & Supplies 3.1%
* Cephalon, Inc. 6,800 351,900
Medtronic, Inc. 9,200 474,950
* PE Corporation / Celera
Genomics Group 900 50,063
PE Corporation / PE
Biosystems Group 11,500 638,250
------------
1,515,163
------------
Pharmaceuticals 0.3%
* Celgene Corporation 4,200 154,350
------------
Retailing 3.6%
* Costco Wholesale Corporation 4,700 150,106
Home Depot, Inc. 17,900 873,743
Wal-Mart Stores, Inc. 12,100 697,262
------------
1,721,111
------------
Semiconductors 15.2%
* Altera Corporation 9,800 841,575
* Applied Micro Circuits
Corporation 4,800 476,400
* Broadcom Corporation 1,600 208,100
* Conexant Systems, Inc. 3,700 139,213
Intel Corporation 7,100 885,281
Linear Technology
Corporation 8,400 496,125
* LSI Logic Corporation 26,000 1,369,875
Micron Technology, Inc 9,800 685,388
Texas Instruments, Inc. 19,200 1,387,200
* Vitesse Semiconductor 12,000 607,500
* Xilinx, Inc. 3,500 266,437
------------
7,363,094
------------
Semiconductors Capital Equipment 4.4%
* Applied Materials, Inc 5,700 475,950
* ASM Lithography
Holdings NV 11,100 394,744
* Numerical Technologies, Inc. 25,000 1,035,938
* Teradyne, Inc. 2,600 223,600
------------
2,130,232
------------
Total Common Stocks
(Cost $44,810,397) 36,084,969
------------
----------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
----------------------------------------------------------
Corporate Short-Term Notes 24.5%
Aetna Services
6.50%, 06/06/00 800M $ 799,278
Aetna Services
6.55%. 06/06/00 100M 99,909
Aetna Services
6.58%, 06/06/00 100M 99,909
Artesia North American
6.49%, 06/08/00 1,100M 1,098,612
Atlantis One
6.43%, 06/06/00 700M 699,375
Baus Funding
6.48%, 06/23/00 300M 298,812
Carondelet Health
6.50%, 06/08/00 400M 399,494
Consolidated Natural
6.55%, 06/12/00 900M 898,199
Coop Trac
6.37%, 06/01/00 1,000M 1,000,000
GM Corporation
6.47%, 06/09/00 600M 599,137
GTE Funding, Inc.
6.46%, 06/19/00 1,000M 996,770
Honeywell International
6.50%, 06/27/00 200M 199,061
National Fuel Gas
6.55%, 06/06/00 1,000M 999,090
Progress Capital
6.52%, 06/06/00 1,100M 1,099,004
Repsol Intc.
6.52%, 06/07/00 1,200M 1,198,696
Swedbank
6.47%, 06/02/00 900M 899,838
Wells Fargo & Company
6.35%, 06/06/00 500M 499,559
------------
Total Corporate Short-Term Notes
(Cost $11,884,743) 11,884,743
------------
Total Investments
(Cost $56,695,140)** 47,969,712
Excess of Other Assets
Over Liabilities 1.1% 533,996
------------
Net Assets $48,503,708
============
--------------------------------------------------------------------------------
* Non-income producing.
** Also cost for federal income tax purposes. At May 31, 2000 net unrealized
depreciation for federal income tax purposes aggregated $8,725,428 of which
$1,496,984 related to appreciated securities and $10,222,412 related to
depreciated securities.
6
<PAGE>
Sentinel Flex Cap Opportunity Fund
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
Investments at value (Cost $56,695,140) $47,969,712
Cash and cash equivalents 45,014
Receivable for securities sold 173,756
Receivable for fund shares sold 381,882
Receivable for dividends and interest 1,952
-----------
Total Assets 48,572,316
-----------
Liabilities
Payable for securities purchased 5,700
Payable for fund shares repurchased 6,024
Accrued expenses 677
Management fee payable 35,896
Distribution fee payable (Class A Shares) 5,704
Distribution fee payable (Class B Shares) 6,857
Distribution fee payable (Class C Shares) 3,516
Fund service fee payable 4,234
-----------
Total Liabilities 68,608
-----------
Net Assets Applicable to Outstanding shares $48,503,708
===========
Net Asset Value and Offering Price per Share
Class A Shares
$30,526,154 / 4,145,460 shares outstanding $ 7.36
Sales Charge -- 5.00% of offering price 0.39
-----------
Maximum Offering Price $ 7.75
===========
Class B Shares
$13,436,375 / 1,829,429 shares outstanding $ 7.34
===========
Class C Shares
$4,541,179 / 618,369 shares outstanding $ 7.34
===========
Net Assets Represent
Capital stock at par value $ 65,933
Paid-in capital 63,273,958
Accumulated distributions in excess of
net investment income (13,673)
Accumulated undistributed net realized loss
on investments (6,097,082)
Unrealized depreciation of investments (8,725,428)
-----------
Net Assets $48,503,708
===========
See Notes to Financial Statements.
Sentinel Flex Cap Opportunity Fund
Statement of Operations (Unaudited)
For the Period from February 25, 2000 through May 31, 2000
--------------------------------------------------------------------------------
Investment Income
Income:
Dividends $ 6,944
Interest 153,978
------------
Total Income 160,922
------------
Expenses:
Management advisory fee 93,542
Transfer agent and custodian 22,586
Distribution expense (Class A Shares) 17,562
Distribution expense (Class B Shares) 25,595
Distribution expense (Class C Shares) 8,135
Accounting services 3,035
Auditing fees 135
Legal fees 225
Reports and notices to shareholders 80
Registration and filing fees 2,801
Directors' fees and expenses 666
Other 744
------------
Total Expenses 175,106
Expense Offset (511)
------------
Net Expenses 174,595
------------
Net Investment Loss (13,673)
------------
Realized and Unrealized Loss on Investments
Net realized loss on sales of investments (6,097,082)
Net change in unrealized appreciation (depreciation) (8,725,428)
------------
Net Realized and Unrealized Loss on Investments (14,822,510)
------------
Net Decrease in Net Assets from Operations $(14,836,183)
============
See Notes to Financial Statements.
7
<PAGE>
Sentinel Flex Cap Opportunity Fund
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
Period from
2/25/00 through
5/31/00
(Unaudited)
------------------
Decrease in Net Assets from Operations
Net investment loss $ (13,673)
Net realized loss on sales of investments (6,097,082)
Net change in unrealized appreciation (depreciation) (8,725,428)
-------------
Net decrease in net assets from operations (14,836,183)
-------------
Distributions to Shareholders
From net investment income
Class A Shares -
Class B Shares -
Class C Shares -
From net realized gain on investments
Class A Shares -
Class B Shares -
Class C Shares -
-------------
Total distributions to shareholders -
-------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 41,176,111
Class B Shares 17,660,623
Class C Shares 5,849,312
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares -
Class B Shares -
Class C Shares -
-------------
64,686,046
Less: Payments for shares reacquired
Class A Shares (927,673)
Class B Shares (401,210)
Class C Shares (17,272)
-------------
Increase in net assets from capital share transactions 63,339,891
-------------
Total Increase in Net Assets for period 48,503,708
Net Assets: Beginning of period -
-------------
Net Assets: End of period $48,503,708
=============
Distributions in Excess of Net Investment Income
at End of Period $ (13,673)
=============
See Notes to Financial Statements.
8
<PAGE>
Sentinel Flex Cap Opportunity Fund
Financial Highlights
Selected per share data and ratios
Selected data for a share of capital stock outstanding throughout each fiscal
period.
--------------------------------------------------------------------------------
Period from
2/25/00 through
5/31/00 (A)(B)
Class A Shares (Unaudited)
------------------
Net asset value at beginning of period $ 10.00
------------------
Income (Loss) from Investment Operations
Net investment income (loss) -
Net realized and unrealized gain (loss)
on investments (2.64)
------------------
Total from investment operations (2.64)
------------------
Less Distributions
Dividends from net investment income -
Distributions from realized gains on
investments -
------------------
Total Distributions -
------------------
Net asset value at end of period $ 7.36
==================
Total Return (%) * (26.4)++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.45 +
Ratio of expenses to average net assets before
expense reductions (%)** 1.45 +
Ratio of net investment income (loss)
to average net assets (%) 0.13 +
Portfolio turnover rate (%) 39 ++
Net assets at end of period (000 omitted) $30,526
(A) Commenced operations February 25, 2000.
(B) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earnings credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
9
<PAGE>
Sentinel Flex Cap Opportunity 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>
Period from Period from
2/25/00 through 2/25/00 through
5/31/00 (A)(B) 5/31/00 (A)(B)
Class B Shares (Unaudited) Class C Shares (Unaudited)
------------------- ------------------
<S> <C> <C>
Net asset value at beginning of period $ 10.00 $10.00
------------------- ------------------
Income (Loss) from Investment Operations
Net investment income (loss) (0.02) (0.02)
Net realized and unrealized gain (loss)
on investments (2.64) (2.64)
------------------- ------------------
Total from investment operations (2.66) (2.66)
------------------- ------------------
Less Distributions
Dividends from net investment income - -
Distributions from realized gains on investments - -
------------------- ------------------
Total Distributions - -
------------------- ------------------
Net asset value at end of period $ 7.34 $ 7.34
=================== ==================
Total Return (%) * (26.6) ++ (26.6) ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 2.14 + 2.14 +
Ratio of expenses to average net assets before
expense reductions (%)** 2.14 + 2.14 +
Ratio of net investment income (loss)
to average net assets (%) (0.63)+ (0.68)+
Portfolio turnover rate (%) 39 ++ 39 ++
Net assets at end of period (000 omitted) $13,436 $4,541
</TABLE>
(A) Commenced operations February 25, 2000.
(B) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earnings credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
10
<PAGE>
Sentinel Small Company Fund
Investment in Securities
at May 31, 2000 (Unaudited)
----------------------------------------------------------
Shares Value
(Note 1)
----------------------------------------------------------
Common Stocks 87.1%
Basic Materials 2.7%
Bemis Co. 30,000 $ 1,031,250
Goodrich (B.F.) Co. 40,000 1,420,000
Vulcan Materials Co. 30,000 1,402,500
--------------
3,853,750
--------------
Capital Goods 12.2%
AAR Corp. 100,000 1,387,500
Applied Power - Class A 110,000 3,045,625
Aptargroup, Inc. 100,000 2,656,250
* Black Box Corp. 15,000 1,177,500
CTS Corp. 40,000 2,207,500
Donaldson Co., Inc. 80,000 1,830,000
* Gardner Denver, Inc. 50,000 875,000
* Plexus Corp. 20,000 1,670,000
Robbins and Myers, Inc. 40,000 865,000
* TETRA Technologies, Inc. 150,000 1,940,625
--------------
17,655,000
--------------
Consumer Cyclicals 10.2%
* Acxiom Corp. 80,000 2,340,000
* Administaff, Inc. 40,000 2,077,500
Casey's General Stores 111,500 1,317,094
* Catalina Marketing Corp. 15,000 1,448,437
Claire's Stores, Inc. 40,000 810,000
Ethan Allen Interiors, Inc. 20,000 465,000
Harman Int'l. Industries 50,000 2,893,750
* IDG Books Worldwide, Inc. -
Class A 40,000 360,000
Meredith Corp. 40,000 1,217,500
* Payless Shoesource, Inc. 10,000 505,000
True North Communications 30,000 1,310,625
--------------
14,744,906
--------------
Consumer Staples 11.2%
ABM Industries 30,000 695,625
Alberto-Culver Co. - Class A 50,000 1,125,000
* Ames Department Stores, Inc. 19,000 225,625
Applebee's Int'l., Inc. 50,000 1,603,125
* Bush Boake Allen, Inc. 50,000 1,631,250
* Hotel Reservations
Network, Inc. 30,000 682,500
* Jack in the Box, Inc. 100,000 2,481,250
McCormick & Co. 20,000 650,000
* Mondavi (Robert) `A' 30,000 941,250
Ruby Tuesday, Inc. 140,000 1,382,500
* Shopko Stores, Inc. 30,000 551,250
Smart & Final, Inc. 100,000 818,750
Tootsie Roll Industries 30,000 1,035,000
Unifirst Corporation 125,000 1,023,438
* Whole Foods Market, Inc. 40,000 1,390,000
--------------
16,236,563
--------------
Energy 5.0%
* Cal Dive Int'l., Inc. 30,000 1,381,875
Carbo Ceramics, Inc. 40,000 1,250,000
Helmerich & Payne 30,000 1,117,500
* Oceaneering Int'l., Inc. 80,000 1,560,000
Santa Fe International Corp. 50,000 1,940,625
--------------
7,250,000
--------------
Financials 9.6%
Chateau Communitites 100,000 $ 2,712,500
Cullen Frost Bankers, Inc. 30,000 795,000
Enhance Financial
Service Group 50,000 687,500
HCC Insurance
Holdings, Inc. 150,000 2,559,375
HSB Group, Inc. 30,000 871,875
Liberty Property Trust 50,000 1,250,000
Waddell & Reed Financial -
Class A 105,000 2,880,938
Waddell & Reed Financial -
Class B 45,000 1,099,687
Wilmington Trust Corp. 20,000 1,015,000
--------------
13,871,875
--------------
Health Care 16.4%
* Barr Laboratories, Inc. 50,000 2,706,250
Cambrex Corp. 100,000 4,212,500
* Cell Therapeutics, Inc. 30,000 483,750
* Chirex, Inc. 100,000 1,731,250
* Colorado MEDtech, Inc. 100,000 506,250
* Covance, Inc. 100,000 712,500
Diagnostic Products Corp. 15,000 466,875
* Healthcare Services Group 94,800 408,825
* Invitrogen Corp. 10,000 398,750
* Medicis Pharmaceutical Corp. -
Class A 50,000 2,337,500
Mentor Corp. 50,000 1,200,000
* Millennium Pharmaceuticals 10,000 836,250
Minntech Corp. 90,000 663,750
* Myriad Genetics, Inc. 8,000 631,000
* Orthodontic Center
of America 100,000 2,293,750
* Regeneron Pharmaceuticals,
Inc. 20,000 407,500
* Shire Pharmaceuticals
Group plc (ADR) 15,000 654,375
* Staar Surgical Co. 60,000 817,500
* Watson Pharmaceuticals 50,000 2,206,250
--------------
23,674,825
--------------
Technology 17.2%
* Aeroflex, Inc. 25,000 903,125
* Affiliated Computer
Services, Inc. 100,000 3,406,250
* Alpha Industries, Inc. 15,000 690,937
* American Management
Systems, Inc. 40,000 1,497,500
* Burr Brown Corp. 20,000 1,138,750
* Cable Design Technologies 75,000 2,076,562
* CACI Int'l. 50,000 987,500
* C-Cube Microsystems, Inc. 30,000 515,625
* Ciber, Inc. 75,000 1,214,063
Dallas Semicondutor Corp. 100,000 4,000,000
* Dynatech Corp. 17,500 209,453
* Extreme Networks, Inc. 15,000 733,125
* FileNet Corp. 75,000 $ 1,575,000
* Kronos, Inc. 30,000 892,500
Methode Electronics `A' 30,000 1,076,250
* PLX Technology, Inc. 30,000 759,375
* Silicon Storage
Technology, Inc. 15,000 1,113,750
* Tekelec 30,000 990,000
* Wind River Systems 30,000 1,087,500
--------------
24,867,265
--------------
Transportation 2.6%
C.H. Robinson
Worldwide, Inc. 40,000 1,797,500
* EGL, Inc. 30,000 721,875
Expeditors Int'l. Of WA, Inc. 20,000 811,250
* RailAmerica, Inc. 30,000 157,500
USFreightways Corp. 10,000 274,375
--------------
3,762,500
--------------
Total Common Stocks
(Cost $107,180,644) 125,916,684
--------------
----------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
----------------------------------------------------------
Corporate Convertible Bonds 0.2%
Phoenix Investment Partners 6%, '15
(Cost $403,571) 250M 262,500
--------------
Corporate Short-Term Notes 11.1%
Assoc. Corp. of NA
6.50%, 06/15/00 4,500M 4,488,625
Florida Power Corp.
6.48%, 06/12/00 4,000M 3,992,080
GTE Funding, Inc.
6.43%, 06/02/00 2,600M 2,599,536
Transamerica Finance Corp.
6.50%, 06/07/00 5,000M 4,994,583
Total Corporate Short-Term Notes
(Cost $16,074,824) 16,074,824
--------------
Total Investments
(Cost $123,659,039)** 142,254,008
Excess of Other Assets
Over Liabilities 1.6% 2,324,961
--------------
Net Assets $144,578,969
==============
----------
* Non-income producing.
** Cost for federal income tax purposes is substantially similar. At May 31,
2000 net unrealized appreciation for federal income tax purposes aggregated
$18,594,969 of which $29,986,792 related to appreciated securities and
$11,391,823 related to depreciated securities.
See Notes to Financial Statements.
11
<PAGE>
Sentinel Small Company Fund
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------
Assets
Investments at value (Cost $123,659,039) $142,254,008
Cash and cash equivalents 818,650
Receivable for securities sold 3,648,216
Receivable for fund shares sold 73,500
Receivable for dividends and interest 40,925
------------------
Total Assets 146,835,299
------------------
Liabilities
Payable for securities purchased 1,068,640
Payable for fund shares repurchased 961,091
Accrued expenses 34,937
Management fee payable 74,530
Distribution fee payable (Class A Shares) 72,436
Distribution fee payable (Class B Shares) 18,616
Fund service fee payable 26,080
------------------
Total Liabilities 2,256,330
------------------
Net Assets Applicable to Outstanding Shares $144,578,969
==================
Net Asset Value and Offering Price per Share
Class A Shares
$126,207,342 / 20,735,556 shares outstanding $ 6.09
Sales Charge-- 5.00% of offering price 0.32
------------------
Maximum Offering Price $ 6.41
==================
Class B Shares
$18,371,627 / 3,180,709 shares outstanding $ 5.78
==================
Net Assets Represent
Capital stock at par value $ 239,163
Paid-in capital 102,210,880
Accumulated distributions in excess of
net investment income (211,518)
Accumulated undistributed net realized gain
on investments 23,745,475
Unrealized appreciation of investments 18,594,969
------------------
Net Assets $144,578,969
==================
Investment Income
Income:
Dividends $ 449,993
Interest 266,600
------------------
Total Income 716,593
------------------
Expenses:
Management advisory fee 417,400
Transfer agent and custodian 190,093
Distribution expense (Class A Shares) 182,186
Distribution expense (Class B Shares) 84,126
Accounting services 21,560
Auditing fees 4,950
Legal fees 4,450
Reports and notices to shareholders 9,500
Registration and filing fees 22,104
Directors' fees and expenses 5,195
Other 3,390
------------------
Total Expenses 944,954
Expense Offset (16,843)
------------------
Net Expenses 928,111
------------------
Net Investment Loss (211,518)
------------------
Realized and Unrealized Gain on Investments
Net realized gain on sales of investments 23,623,427
Net change in unrealized appreciation 1,580,982
------------------
Net Realized and Unrealized Gain on Investments 25,204,409
------------------
Net Increase in Net Assets from Operations $24,992,891
==================
See Notes to Financial Statements.
12
<PAGE>
Sentinel Small Company Fund
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
5/31/00 11/30/99
(Unaudited)
------------------ ------------------
<S> <C> <C>
Increase in Net Assets from Operations
Net investment loss $ (211,518) $ (298,566)
Net realized gain on sales of investments 23,623,427 15,708,954
Net change in unrealized appreciation (depreciation) 1,580,982 (461,717)
------------------ ------------------
Net increase in net assets from operations 24,992,891 14,948,671
------------------ ------------------
Distributions to Shareholders
From net investment income
Class A Shares - -
Class B Shares - -
From realized gain on investments
Class A Shares (13,534,817) (11,668,708)
Class B Shares (1,869,123) (1,353,508)
------------------ ------------------
Total distributions to shareholders (15,403,940) (13,022,216)
------------------ ------------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 34,274,454 28,602,876
Class B Shares 2,611,562 3,276,653
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 12,511,194 10,889,296
Class B Shares 1,864,542 1,352,352
------------------ ------------------
51,261,752 44,121,177
Less: Payments for shares reacquired
Class A Shares (37,031,810) (42,938,531)
Class B Shares (1,444,227) (2,605,732)
------------------ ------------------
Increase (decrease) in net assets from
capital share transactions 12,785,715 (1,423,086)
------------------ ------------------
Total Increase in Net Assets for period 22,374,666 503,369
Net Assets: Beginning of period 122,204,303 121,700,934
------------------ ------------------
Net Assets: End of period $144,578,969 $122,204,303
================== ==================
Accumulated undistributed (distributions in excess of)
Net Investment Income at End of Period $ (211,518) $ -
================== ==================
</TABLE>
See Notes to Financial Statements.
13
<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
5/31/00 (B) Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 5.74 $ 5.67 $ 6.30 $ 5.17 $ 5.20 $ 5.53
----------- ----------- ----------- ----------- ----------- -----------
Income from Investment Operations
Net investment income (loss) (0.01) (0.01) -- 0.02 0.01 0.02
Net realized and unrealized gain on investments 1.08 0.69 0.14 1.16 0.95 0.56
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations 1.07 0.68 0.14 1.18 0.96 0.58
----------- ----------- ----------- ----------- ----------- -----------
Less Distributions
Dividends from net investment income -- -- 0.02 0.01 0.03 --
Distributions from realized gains on investments 0.72 0.61 0.75 0.04 0.96 0.91
----------- ----------- ----------- ----------- ----------- -----------
Total Distributions 0.72 0.61 0.77 0.05 0.99 0.91
----------- ----------- ----------- ----------- ----------- -----------
Net asset value at end of period $ 6.09 $ 5.74 $ 5.67 $ 6.30 $ 5.17 $ 5.20
=========== =========== =========== =========== =========== ===========
Total Return (%) * 21.0 ++ 13.3 2.7 23.0 22.0 12.2
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.23 + 1.30 1.31 1.34 1.47 1.56
Ratio of expenses to average net assets before
expense reductions (%) ** 1.25 + 1.31 1.33 1.36 1.51 1.60
Ratio of net investment income (loss)
to average net assets (%) (0.19) + (0.14) (0.07) 0.38 0.23 0.26
Portfolio turnover rate (%) 44 ++ 43 45 45 60 79
Net assets at end of period (000 omitted) $ 126,207 $ 107,919 $ 109,598 $ 115,532 $ 99,393 $ 89,321
</TABLE>
----------
(A) Commenced operations April 1, 1996.
(B) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earnings credits as described in Notes
(2) and (1) H.
See Notes to Financial Statements.
14
<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
Ended
5/31/00 (B) Year Ended Year Ended Year Ended Year Ended
Class B Shares (Unaudited) 11/30/99 (B) 11/30/98 (B) 11/30/97 (B) 11/30/96 (A)(B)
----------- ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 5.51 $ 5.51 $ 6.18 $ 5.12 $ 4.82
---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income (loss) (0.03) (0.06) (0.03) (0.03) (0.03)
Net realized and unrealized gain on investments 1.02 0.67 0.11 1.13 0.33
---------- ---------- ---------- ---------- ----------
Total from investment operations 0.99 0.61 0.08 1.10 0.30
---------- ---------- ---------- ---------- ----------
Less Distributions
Dividends from net investment income -- -- -- -- --
Distributions from realized gains on investments 0.72 0.61 0.75 0.04
----------
---------- ---------- ---------- ---------- ----------
Total Distributions 0.72 0.61 0.75 0.04 --
---------- ---------- ---------- ---------- ----------
Net asset value at end of period $ 5.78 $ 5.51 $ 5.51 $ 6.18 $ 5.12
========== ========== ========== ========== ==========
Total Return (%) * 20.4++ 12.3 1.7 21.6 6.2++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 2.16+ 2.27 2.24 2.35 2.62+
Ratio of expenses to average net assets before
expense reductions (%) ** 2.18+ 2.28 2.25 2.36 2.64+
Ratio of net investment income (loss)
to average net assets (%) (1.12)+ (1.11) (1.00) (0.62) (0.91)+
Portfolio turnover rate (%) 44++ 43 45 45 60
Net assets at end of period (000 omitted) $ 18,372 $ 14,285 $ 12,103 $ 7,656 $ 1,943
</TABLE>
----------
(A) Commenced operations April 1, 1996.
(B) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earnings credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
15
<PAGE>
Sentinel Mid Cap Growth Fund
Investment in Securities
at May 31, 2000 (Unaudited)
----------------------------------------------------------
Shares Value
(Note 1)
----------------------------------------------------------
Common Stocks 100.0%
Basic Materials 2.3%
Bemis Co. 60,000 $ 2,062,500
Vulcan Materials Co. 80,000 3,740,000
--------------
5,802,500
--------------
Capital Goods 6.0%
* Black Box Corp. 43,000 3,375,500
Dover Corp. 72,000 3,348,000
* Plexus Corp. 80,000 6,680,000
Tyco International Ltd. 30,000 1,411,875
--------------
14,815,375
--------------
Communications Services 2.2%
* NEXTLINK Communications -
Class A 54,400 3,811,400
* WinStar Communications 55,500 1,574,812
--------------
5,386,212
--------------
Consumer Cyclicals 7.3%
* Administaff, Inc. 100,000 5,193,750
* Bed Bath & Beyond, Inc. 50,000 1,840,625
* Best Buy Co., Inc. 60,000 3,840,000
Home Depot, Inc. 28,000 1,366,750
Scientific Atlanta 50,000 2,818,750
Tiffany & Company 20,000 1,218,750
Wal-Mart Stores, Inc. 32,000 1,844,000
--------------
18,122,625
--------------
Consumer Staples 1.2%
* Starbucks Corporation 50,000 1,700,000
Walt Disney Co. 30,000 1,265,625
--------------
2,965,625
--------------
Energy 10.0%
Burlington Resources, Inc. 35,000 1,601,250
* Cal Dive Int'l., Inc. 112,000 5,159,000
EOG Resources, Inc. 155,000 5,037,500
* Global Marine, Inc. 50,000 1,415,625
* Ocean Energy, Inc. 150,000 2,250,000
Santa Fe Int'l. Corp. 105,000 4,075,313
* Smith International, Inc. 66,000 5,218,125
--------------
24,756,813
--------------
Financials 8.3%
American Int'l. Group 40,000 4,502,500
Bank of New York Co. 80,000 3,755,000
Citigroup, Inc. 40,000 2,487,500
HSB Group Holding 50,000 1,453,125
Marsh & McLennan Co. 65,000 7,154,063
Waddell & Reed Fin'l. -
Class B 50,000 1,221,875
--------------
20,574,063
--------------
Health Care 19.8%
American Home
Products Corp. 46,300 2,494,412
* Barr Laboratories, Inc. 80,000 4,330,000
Cambrex Corp. 70,000 2,948,750
* Chiron Corp. 52,000 1,972,750
* Forest Labs, Inc. - Class A 40,000 3,540,000
* Genzyme General 90,000 5,113,125
* Human Genome Sciences 54,200 4,756,050
* Incyte Pharmaceuticals, Inc. 40,000 2,110,000
* Medicis Pharmaceutical -
Class A 50,000 2,337,500
* Medtronic, Inc. 42,000 2,168,250
* Millennium Pharmaceuticals 60,000 5,017,500
* Myriad Genetics, Inc. 66,300 5,229,413
Pfizer, Inc. 78,000 3,475,875
* Watson Pharmaceuticals, Inc. 80,000 3,530,000
--------------
49,023,625
--------------
Technology 40.1%
* Alpha Industries, Inc. 76,400 3,519,175
* Analog Devices 74,000 5,698,000
* Applied Materials, Inc. 51,500 4,300,250
* Broadcom Corporation -
Class A 25,200 3,277,575
* Cable Design Technologies 56,300 1,558,806
* C-Cube Microsystems 55,600 955,625
* Cisco Systems, Inc. 84,400 4,810,800
* Convergys Corp. 80,000 3,595,000
Dallas Semiconductor Corp. 115,000 4,600,000
* EMC Corp. 38,000 4,419,875
* Harmonic, Inc. 30,174 1,348,401
* Inktomi Corp. 37,600 4,197,100
Intel Corporation 39,500 4,925,156
* JDS Uniphase 40,100 3,528,800
* Juniper Networks, Inc. 21,400 3,749,013
KLA Tencor Corp. 32,100 1,590,956
Linear Technology Corp. 73,400 4,335,188
* Micrel, Inc. 53,100 3,385,125
Nortel Networks Corp. 92,800 5,040,200
* Novellus Systems 69,400 3,344,213
* Oracle Corporation 60,600 4,355,625
* Siebel Systems, Inc. 33,000 3,861,000
* Silicon Storage
Technology, Inc. 59,400 4,410,450
* Sonus Networks, Inc. 18,000 1,312,875
* Sun Microsystems 45,300 3,471,112
* Tekelec 87,600 2,890,800
* Vitesse Semiconductor
Corporation 59,000 2,986,875
* Wind River Systems 112,000 4,060,000
--------------
99,527,995
--------------
Transportation 1.3%
C.H. Robinson
Worldwide, Inc. 70,000 3,145,625
--------------
Utilities 1.5%
Enron Corp. 53,000 3,862,375
--------------
Total Common Stocks
(Cost $219,223,237) 247,982,832
--------------
----------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
----------------------------------------------------------
Corporate Short-Term Notes 0.8%
PepsiCo, Inc.
6.73%, 06/01/00
(Cost $2,000,000) 2,000M $ 2,000,000
--------------
Total Investments
(Cost $221,223,237)** 249,982,832
Excess of Liabilities
Over Other Assets (0.8%) (2,084,602)
--------------
Net Assets $ 247,898,230
==============
----------
* Non-income producing.
** Also cost for federal income tax purposes.
At May 31, 2000 net unrealized appreciation for federal income tax purposes
aggregated $28,759,595 of which $39,461,499 related to appreciated securities
and $10,701,904 related to depreciated securities.
16
<PAGE>
Sentinel Mid Cap Growth Fund
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
Investments at value (Cost $221,223,237) $249,982,832
Cash and cash equivalents 910,554
Receivable for securities sold 10,375,384
Receivable for fund shares sold 328,640
Receivable for dividends 79,290
---------------
Total Assets 261,676,700
---------------
Liabilities
Payable for securities purchased 12,721,402
Payable for fund shares repurchased 693,707
Accrued expenses 43,482
Management fee payable 128,607
Distribution fee payable (Class A Shares) 127,592
Distribution fee payable (Class B Shares) 31,390
Distribution fee payable (Class C Shares) 212
Fund service fee payable 32,078
---------------
Total Liabilities 13,778,470
---------------
Net Assets Applicable to Outstanding Shares $247,898,230
===============
Class A Shares
$213,286,390/10,359,122 shares outstanding $ 20.59
Sales Charge -- 5.00% of offering price 1.08
---------------
Maximum Offering Price $ 21.67
===============
Class B Shares
$34,262,164/1,709,860 shares outstanding $ 20.04
===============
Class C Shares
$349,676/17,007 shares outstanding $ 20.56
===============
Net Assets Represent
Capital stock at par value $ 120,860
Paid-in capital 185,984,129
Accumulated distributions in excess of
net investment income (983,073)
Accumulated undistributed net realized gain
on investments 34,016,719
Unrealized appreciation of investments 28,759,595
---------------
Net Assets $247,898,230
===============
Sentinel Mid Cap Growth Fund
Statement of Operations
For the Six Months Ended May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income
Income:
Dividends $ 328,691
Interest 148,308
---------------
Total Income 476,999
---------------
Expenses:
Management advisory fee 705,376
Transfer agent and custodian 204,037
Distribution expense (Class A Shares) 308,983
Distribution expense (Class B Shares) 139,673
Distribution expense (Class C Shares)* 329
Accounting services 36,672
Auditing fees 9,500
Legal fees 7,000
Reports and notices to shareholders 8,250
Registration and filing fees 32,520
Directors' fees and expenses 8,451
Other 5,201
---------------
Total Expenses 1,465,992
Expense Offset (27,549)
---------------
Net Expenses 1,438,443
---------------
Net Investment Loss (961,444)
---------------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain on sales of investments 33,959,812
Net change in unrealized appreciation (depreciation) (844,577)
---------------
Net Realized and Unrealized Gain on Investments 33,115,235
---------------
Net Increase in Net Assets from Operations $ 32,153,791
===============
* For the period from March 30, 2000 through May 31, 2000.
See Notes to Financial Statements.
17
<PAGE>
Sentinel Mid Cap Growth Fund
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year
5/31/00 Ended
(Unaudited) 11/30/99
------------------ ------------------
<S> <C> <C>
Increase in Net Assets from Operations
Net investment loss $ (961,444) $ (616,481)
Net realized gain on sales of investments 33,959,812 11,126,651
Net change in unrealized appreciation (depreciation) (844,577) 21,994,916
------------------ ------------------
Net increase in net assets from operations 32,153,791 32,505,086
------------------ ------------------
Distributions to Shareholders
From net investment income
Class A Shares - -
Class B Shares - -
Class C Shares* - -
From net realized gain on investments
Class A Shares (9,425,171) (7,360,527)
Class B Shares (1,024,929) (288,532)
Class C Shares* - -
------------------ ------------------
Total distributions to shareholders (10,450,100) (7,649,059)
------------------ ------------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 107,856,290 53,398,987
Class B Shares 19,667,017 10,177,807
Class C Shares* 395,705 -
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 8,739,915 6,662,042
Class B Shares 1,022,706 288,437
Class C Shares* - -
------------------ ------------------
137,681,633 70,527,273
Less: Payments for shares reacquired
Class A Shares (64,534,145) (40,685,086)
Class B Shares (2,451,167) (910,887)
Class C Shares* (25,163) -
------------------ ------------------
Increase in net assets from capital share transactions 70,671,158 28,931,300
------------------ ------------------
Total Increase in Net Assets for period 92,374,849 53,787,327
Net Assets: Beginning of period 155,523,381 101,736,054
------------------ ------------------
Net Assets: End of period $247,898,230 $155,523,381
================== ==================
Distributions in Excess of Net Investment Income
at End of Period $ (983,073) $ (21,629)
================== ==================
</TABLE>
* For the period from March 30, 2000 through May 31, 2000.
See Notes to Financial Statements.
18
<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
5/31/00 (B) Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 17.80 $ 14.65 $ 18.73 $ 17.57 $ 16.93 $ 16.15
----------- ----------- ------------ ----------- ----------- -----------
Income (Loss) from Investment Operations
Net investment income (loss) (0.07) (0.06) (0.03) (0.02) 0.03 0.07
Net realized and unrealized gain (loss)
on investments 4.04 4.29 1.08 4.00 3.23 3.33
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations 3.97 4.23 1.05 3.98 3.26 3.40
----------- ----------- ----------- ----------- ----------- -----------
Less Distributions
Dividends from net investment income -- -- -- 0.02 0.07 0.05
Distributions from realized gains on investments 1.18 1.08 5.13 2.80 2.55 2.57
----------- ----------- ----------- ----------- ----------- -----------
Total Distributions 1.18 1.08 5.13 2.82 2.62 2.62
----------- ----------- ------------ ----------- ----------- -----------
Net asset value at end of period $ 20.59 $ 17.80 $ 14.65 $ 18.73 $ 17.57 $ 16.93
=========== =========== =========== =========== =========== ===========
Total Return (%) * 23.6++ 30.5 8.3 27.3 22.6 24.9
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.12+ 1.20 1.26 1.29 1.40 1.50
Ratio of expenses to average net assets before
expense reductions (%) ** 1.14+ 1.22 1.29 1.32 1.43 1.54
Ratio of net investment income (loss)
to average net assets (%) (0.71)+ (0.41) (0.23) (0.15) 0.16 0.42
Portfolio turnover rate (%) 118++ 118 97 161 98 84
Net assets at end of period (000 omitted) $ 213,286 $ 140,633 $ 97,895 $ 88,184 $ 69,816 $ 60,446
</TABLE>
(A) Commenced operations January 12, 1998.
(B) Per share data calculated utilizing average daily shares outstanding.
(C) Commenced operations March 30, 2000.
+ 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 the earning credits as described in Notes (2)
and (1) H.
See Notes to Financial Statements.
19
<PAGE>
Sentinel Mid Cap Growth 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>
------------------------------------------------------------------------------------------------------------------------------------
Period from Period from
Six Months 01/12/98 3/30/00 through
Ended 5/31/00 (B) Year Ended through 5/31/00 (B)(C)
Class B Shares (Unaudited) 11/30/99(B) 11/30/98(A)(B) Class C Shares (Unaudited)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 17.43 $ 14.52 $ 13.08 $ 22.79
------------- ------------- ------------- -------------
Income (Loss) from Investment Operations
Net investment income (loss) (0.16) (0.23) (0.17) (0.08)
Net realized and unrealized gain (loss) on investments 3.95 4.22 1.61 (2.15)
------------- ------------- ------------- -------------
Total from investment operations 3.79 3.99 1.44 (2.23)
------------- ------------- ------------- -------------
Less Distributions
Dividends from net investment income -- -- -- --
Distributions from realized gains on investments 1.18 1.08 -- --
------------- ------------- ------------- -------------
Total Distributions 1.18 1.08 -- --
------------- ------------- ------------- -------------
Net asset value at end of period $ 20.04 $ 17.43 $ 14.52 $ 20.56
============= ============= ============= =============
Total Return (%) * 23.0 ++ 29.0 11.0 ++ (9.8)++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 2.04 + 2.27 2.27 + 2.05 +
Ratio of expenses to average net assets before
expense reductions (%)** 2.06 + 2.29 2.29 + 2.07 +
Ratio of net investment income (loss)
to average net assets (%) (1.63)+ (1.53) (1.24)+ (1.50)+
Portfolio turnover rate (%) 118 ++ 118 97 118++
Net assets at end of period (000 omitted) $ 34,262 $ 14,891 $ 3,841 $ 350
</TABLE>
(A) Commenced operations January 12, 1998.
(B) Per share data calculated utilizing average daily shares outstanding.
(C) Commenced operations March 30, 2000.
+ 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 the earning credits as described in Notes (2)
and (1) H.
See Notes to Financial Statements.
20
<PAGE>
Sentinel World Fund
Investment in Securities
at May 31, 2000 (Unaudited)
----------------------------------------------------------
Shares Value
(Note 1)
----------------------------------------------------------
Common Stocks 94.5%
Australia 3.3%
National Australia 163,600 $ 2,444,031
News Corporation 100,000 1,133,867
Rio Tinto Limited 75,000 1,074,710
--------------
4,652,608
--------------
Denmark 1.6%
Den Danske Bank 19,600 2,283,438
--------------
France 9.5%
Alcatel Alsthom (ADR) 60,005 3,274,023
Michelin 45,000 1,494,142
Societe Generale 48,400 2,799,858
Total Fina (ADR) 45,000 3,552,188
Vivendi 20,000 2,151,190
--------------
13,271,401
--------------
Germany 6.9%
BASF A.G. 45,000 1,847,685
Bayer A.G. Ord. 45,000 1,750,882
DaimlerChrysler (ADR) 20,000 1,078,750
Deutsche Bank 37,000 2,816,937
SAP A.G. (ADR) 50,000 2,143,750
--------------
9,638,004
--------------
Hong Kong 2.4%
HSBC Holdings 299,870 3,309,441
--------------
Italy 4.5%
Enel SpA 300,000 1,341,220
San Paolo IMI SpA (ADR) 54,500 1,624,781
Telecom Italia (ADR) 14,901 2,069,376
Telecom Italia Mobile 125,000 1,305,913
--------------
6,341,290
--------------
Japan 23.0%
Bank of Tokyo 200,000 2,502,897
Canon 80,000 3,678,331
Fuji Photo Film 75,000 2,614,137
Honda Motors 67,000 2,204,867
Ito-Yokado Co LTD 25,000 1,480,881
Kyocera Corp. 24,200 4,011,087
Mitsubishi Heavy Industry 500,000 1,733,488
Nintendo Co. 17,000 2,521,437
Nippon Express 220,000 1,223,638
Nippon Telegraph
& Telephone 265 3,144,380
Shin-etsu Chem 36,000 1,762,039
Sony Corp. 20,000 1,807,648
Takefuji Corp. 15,000 1,585,168
Toyota Motor 40,000 1,813,210
--------------
32,083,208
--------------
Mexico 2.0%
Grupo Televisa SA (ADR) 25,000 1,392,187
Telefonos de Mexico (ADR) 28,500 1,387,594
--------------
2,779,781
--------------
Netherlands 8.4%
ABN Amro Bank 104,000 2,383,144
ING Groep N.V. 43,976 2,636,893
Koninklijke Philips
Electronics N.V. (ADR) 60,000 2,651,250
Unilever N.V. (ADR) 79,999 4,064,949
--------------
11,736,236
--------------
Portugal 1.9%
Portugal Telecom (ADR) 240,000 2,610,000
--------------
South Korea 2.7%
Korea Telecom
Corp SA (ADR) 35,000 1,295,000
Samsung Electronics 9,300 2,535,989
--------------
3,830,989
--------------
Spain 5.3%
Banco Popular 60,000 1,924,847
Endesa (ADR) 107,700 2,268,431
E.N.I. SpA (ADR) 20,000 1,086,250
Repsol (ADR) 100,000 2,106,250
--------------
7,385,778
--------------
Sweden 1.4%
Astrazeneca 45,000 1,890,229
--------------
Switzerland 5.8%
Nestle A.G. Registered 1,200 2,296,719
Novartis A.G. Registered 1,948 2,883,095
Zurich Allied 6,000 2,960,057
--------------
8,139,871
--------------
United Kingdom 15.8%
British Airways plc (ADR) 25,000 1,407,813
British Telecom plc (ADR) 18,400 2,681,800
Corus Group plc (ADR) 75,000 1,125,000
Diageo plc 200,000 1,705,735
Glaxo Hldg plc (ADR) 36,000 2,027,250
Johnson Matthey plc 100,000 1,097,961
Marks & Spencer plc 450,000 1,673,343
Powergen plc 250,000 1,638,329
Royal Bank of Scotland 107,779 1,773,040
Scottish Power 250,000 1,990,336
Shell Transport &
Trading (ADR) 62,000 3,123,250
Smithkline Beecham
plc (ADR) 30,000 1,895,625
--------------
22,139,482
--------------
Total Common Stocks
(Cost $112,576,043) 132,091,756
--------------
----------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
----------------------------------------------------------
Corporate Short-Term Notes 7.3%
Transamerica Financial
6.77%, 06/01/00 6,500M $ 6,500,000
USAA Cap. Corp.
6.74%, 06/01/00 3,600M 3,600,000
--------------
Total Corporate Short-Term Notes
(Cost $10,100,000) 10,100,000
--------------
Total Investments
(Cost $122,676,043) 142,191,756
Excess of Liabilities
Over Other Assets (1.8%) (2,446,181)
--------------
Net Assets $139,745,575
==============
----------------------------------------------------------
Summary of Foreign Securities
by Industry Classification
Percent of Market
Industry Net Assets Value
Airlines 1.0% $ 1,407,813
Automobiles, Auto Parts 4.7% 6,590,969
Banks 15.1% 21,045,477
Broadcasting 0.8% 1,133,867
Chemicals 2.5% 3,512,921
Computers 1.5% 2,143,750
Consumer Products 4.1% 5,770,684
Electrical Components 4.7% 6,547,076
Electrical Equipment 1.9% 2,651,250
Entertainment 1.8% 2,521,437
Financial 3.2% 4,402,105
Financial Services 1.9% 2,636,893
Foods, Grocery 1.1% 1,480,881
Gold, Precious Metals 1.6% 2,172,671
Healthcare - Drug/Pharmacy 6.2% 8,696,199
Household Furniture
& Appliance 1.3% 1,807,648
Industrial - Diversified 1.5% 2,151,190
Insurance 2.1% 2,960,057
Machinery 1.2% 1,733,488
Manufacturing & Process 1.3% 1,847,685
Office Equipment & Supply 2.6% 3,678,331
Oil 7.1% 9,867,938
Photography 1.9% 2,614,137
Retail 2.8% 3,970,062
Steel 0.8% 1,125,000
Telecommunications 12.7% 17,768,086
Television 1.0% 1,392,187
Transportation 0.9% 1,223,638
Utilities - Electric 5.2% 7,238,316
------- --------------
94.5% $ 132,091,756
======= ==============
----------------------------------------------------------
* Also cost for federal income tax purposes.
At May 31, 2000 net unrealized appreciation for federal income tax purposes
aggregated $19,515,713 of which $30,259,653 related to appreciated securities
and $10,743,940 related to depreciated securities.
(ADR) - American Depository Receipt
See Notes to Financial Statements.
21
<PAGE>
Sentinel World Fund
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
Investments at value (Cost $122,676,043) $142,191,756
Cash and cash equivalents 47,609
Foreign currency (Cost $1,092,761) 1,094,423
Receivable for fund shares sold 523,504
Receivable for dividends and interest 602,086
------------------
Total Assets 144,459,378
==================
Liabilities
Payable for fund shares repurchased 4,552,173
Accrued expenses 3,165
Management fee payable 70,712
Distribution fee payable (Class A Shares) 51,091
Distribution fee payable (Class B Shares) 21,131
Distribution fee payable (Class C Shares) 2,882
Fund service fee payable 12,649
------------------
Total Liabilities 4,713,803
------------------
Net Assets Applicable to Outstanding Shares $139,745,575
==================
------------------
Net Asset Value and Offering Price per Share
Class A Shares
$112,784,584/5,667,769 shares outstanding $ 19.90
Sales Charge--5.00% of offering price 1.05
------------------
Maximum Offering Price $ 20.95
==================
Class B Shares
$24,780,698/1,262,124 shares outstanding $ 19.63
==================
Class C Shares
$2,180,293/109,918 shares outstanding $ 19.84
==================
Net Assets Represent
Capital stock at par value $ 70,398
Paid-in capital 100,992,640
Accumulated undistributed net investment income 877,770
Accumulated undistributed net realized gain
on investments and foreign exchange 18,294,598
Unrealized appreciation of investments
and foreign exchange 19,510,169
------------------
Net Assets $139,745,575
==================
Sentinel World Fund
Statement of Operations
For the Six Months Ended May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income
Income:
Dividends $ 1,976,910 *
Interest 112,377
------------------
Total Income 2,089,287
------------------
Expenses:
Management advisory fee 433,770
Transfer agent and custodian 172,420
Distribution expense (Class A Shares) 173,423
Distribution expense (Class B Shares) 125,601
Distribution expense (Class C Shares) 14,671
Accounting services 14,050
Auditing fees 3,750
Legal fees 1,575
Reports and notices to shareholders 2,125
Registration and filing fees 23,442
Directors' fees and expenses 5,439
Other 1,111
------------------
Total Expenses 971,377
Expense Offset (6,421)
------------------
Net Expenses 964,956
------------------
Net Investment Income 1,124,331
------------------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) from:
Investments 18,294,522
Foreign currency transactions (305,487)
------------------
Net realized gain 17,989,035
------------------
Net change in unrealized appreciation (depreciation)
during the period:
Investments (15,000,900)
Foreign currency transactions (836)
------------------
Net change in unrealized appreciation (depreciation) (15,001,736)
------------------
Net Realized and Unrealized Gain on Investments 2,987,299
------------------
Net Increase in Net Assets from Operations $ 4,111,630
==================
* Net of Foreign Tax Withholding of $171,231
See Notes to Financial Statements.
22
<PAGE>
Sentinel World Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/00 11/30/99
(Unaudited)
------------------ ------------------
<S> <C> <C>
Increase in Net Assets from Operations
Net investment income $ 1,124,331 $ 1,788,010
Net realized gain on sales of investments 17,989,035 11,911,864
Net change in unrealized appreciation (depreciation) (15,001,736) 7,979,628
------------------ ------------------
Net increase in net assets from operations 4,111,630 21,679,502
------------------ ------------------
Distributions to Shareholders
From net investment income
Class A Shares (1,389,189) (949,988)
Class B Shares (105,915) (22,623)
Class C Shares - -
From realized gain on investments
Class A Shares (8,841,271) -
Class B Shares (1,900,320) -
Class C Shares (147,057) -
------------------ ------------------
Total distributions to shareholders (12,383,752) (972,611)
------------------ ------------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 218,450,721 135,953,410
Class B Shares 3,780,424 4,677,480
Class C Shares 21,813,384 26,898,630
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 9,530,430 777,351
Class B Shares 1,965,603 19,186
Class C Shares 147,057 -
------------------ ------------------
255,687,619 168,326,057
Less: Payments for shares reacquired
Class A Shares (215,929,398) (146,869,052)
Class B Shares (2,984,508) (2,574,022)
Class C Shares (21,525,118) (26,785,793)
------------------ ------------------
Increase (decrease) in net assets from capital
share transactions 15,248,595 (7,902,810)
------------------ ------------------
Total Increase in Net Assets for period 6,976,473 12,804,081
Net Assets: Beginning of period 132,769,102 119,965,021
------------------ ------------------
Net Assets: End of period $139,745,575 $132,769,102
================== ==================
Undistributed Net Investment Income
at End of Period $ 877,770 $ 1,554,029
================== ==================
</TABLE>
See Notes to Financial Statements.
23
<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>
----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended 5/31/00 (D) Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
----------- ----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 21.28 $ 18.19 $ 17.25 $ 15.69 $ 13.78 $ 12.74
----------- ----------- ----------- ----------- ---------- ----------
Income (Loss) from Investment Operations
Net investment income (loss) 0.12 0.28 0.18 0.11 0.12 0.14
Net realized and unrealized gain (loss) on investments 0.45 2.98 1.52 1.80 1.99 1.14
----------- ----------- ----------- ----------- ---------- ----------
Total from investment operations 0.57 3.26 1.70 1.91 2.11 1.28
----------- ----------- ----------- ----------- ---------- ----------
Less Distributions
Dividends from net investment income 0.26 0.17 0.12 0.11 0.13 0.09
Distributions from realized gains on investments 1.69 -- 0.64 0.24 0.07 0.15
----------- ----------- ----------- ----------- ---------- ----------
Total Distributions 1.95 0.17 0.76 0.35 0.20 0.24
----------- ----------- ----------- ----------- ---------- ----------
Net asset value at end of period $ 19.90 $ 21.28 $ 18.19 $ 17.25 $ 15.69 $ 13.78
=========== =========== =========== =========== ========== ==========
Total Return (%) * 2.6 ++ 18.1 10.3 12.5 15.5 10.2
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.16 + 1.24 1.24 1.29 1.43 1.56
Ratio of expenses to average net assets before
expense reductions (%) ** 1.17 + 1.25 1.26 1.32 1.48 1.63
Ratio of net investment income (loss)
to average net assets (%) 1.98 + 1.86 1.18 1.14 0.94 0.79
Portfolio turnover rate (%) 25 ++ 35 12 21 14 32
Net assets at end of period (000 omitted) $ 112,785 $ 107,413 $ 100,790 $ 89,740 $ 71,458 $ 47,702
</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.
(D) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
24
<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 5/31/00 (D) Year Ended Year Ended Year Ended Ended
Class B Shares (Unaudited) 11/30/99 (D) 11/30/98 (D) 11/30/97 (D) 11/30/96 (B)(D)
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 20.95 $ 17.92 $ 17.05 $ 15.58 $ 14.49
------------- ------------- ------------- ------------- -------------
Income (Loss) from Investment Operations
Net investment income (loss) 0.04 0.10 0.04 0.01 (0.08)
Net realized and unrealized gain (loss) on investments 0.42 2.95 1.47 1.74 1.17
------------- ------------- ------------- ------------- -------------
Total from investment operations 0.46 3.05 1.51 1.75 1.09
------------- ------------- ------------- ------------- -------------
Less Distributions
Dividends from net investment income 0.09 0.02 -- 0.04 --
Distributions from realized gains on investments 1.69 -- 0.64 0.24 --
------------- ------------- ------------- ------------- -------------
Total Distributions 1.78 0.02 0.64 0.28 --
------------- ------------- ------------- ------------- -------------
Net asset value at end of period $ 19.63 $ 20.95 $ 17.92 $ 17.05 $ 15.58
============= ============= ============= ============= =============
Total Return (%) * 2.1 ++ 17.1 9.2 11.5 7.5 ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 2.07 + 2.15 2.23 2.16 2.56 +
Ratio of expenses to average net assets before
expense reductions (%) ** 2.08 + 2.16 2.25 2.18 2.59 +
Ratio of net investment income (loss)
to average net assets (%) 1.04 + 0.98 0.19 0.23 (0.19)+
Portfolio turnover rate (%) 25 ++ 35 12 21 14
Net assets at end of period (000 omitted) $ 24,781 $ 23,536 $ 18,163 $ 10,121 $ 3,188
</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.
(D) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
25
<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>
---------------------------------------------------------------------------------------------------
Period from
Six Months Period from 5/4/98
Ended 5/31/00 (D) Ended through
Class C Shares (Unaudited) 11/30/99 (D) 11/30/98 (C)(D)
------------ ------------ ------------
<S> <C> <C> <C>
Net asset value at beginning of period $ 21.08 $ 18.05 $ 19.57
------------ ------------ ------------
Income (Loss) from Investment Operations
Net investment income (loss) 0.08 0.09 (0.02)
Net realized and unrealized gain (loss) on investments 0.37 2.94 (1.50)
------------ ------------ ------------
Total from investment operations 0.45 3.03 (1.52)
------------ ------------ ------------
Less Distributions
Dividends from net investment income -- -- --
Distributions from realized gains on investments 1.69 -- --
------------ ------------ ------------
Total Distributions 1.69 -- --
------------ ------------ ------------
Net asset value at end of period $ 19.84 $ 21.08 $ 18.05
============ ============ ============
Total Return (%) * 2.0 ++ 16.8 (7.8) ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 2.22 + 2.28 2.20 +
Ratio of expenses to average net assets before
expense reductions (%) ** 2.23 + 2.29 2.21 +
Ratio of net investment income (loss)
to average net assets (%) 1.57 + 0.85 0.23 +
Portfolio turnover rate (%) 25 ++ 35 12
Net assets at end of period (000 omitted) $ 2,180 $ 1,820 $ 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.
(D) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
26
<PAGE>
Sentinel Growth Index Fund
Investment in Securities
at May 31, 2000 (Unaudited)
----------------------------------------------------------
Shares Value
(Note 1)
----------------------------------------------------------
Common Stocks 98.9%
Basic Materials 0.1%
Freeport McMoran Cop. &
Gld. Cl. B 2,318 $ 21,297
* Grace, W.R. & Co. 998 12,537
------------
33,834
------------
Capital Goods 9.5%
General Electric Company 142,855 7,517,744
Millipore Corp. 697 50,445
Pitney Bowes, Inc. 3,857 167,779
* Sealed Air Corp. 1,231 68,936
Tyco International Ltd. 24,528 1,154,349
------------
8,959,253
------------
Communication Services 4.1%
* Nextel Communications 5,350 495,544
SBC Communications, Inc. 49,536 2,164,104
* Sprint Corp. PCS Ser. 1 12,510 694,305
U S West, Inc. 7,336 528,192
------------
3,882,145
------------
Consumer Cyclicals 8.7%
Avery Dennison Corp. 1,656 101,430
* Bed Bath & Beyond, Inc. 1,950 71,784
* Best Buy Company, Inc. 2,983 190,912
Corning, Inc. 4,036 780,714
Dow Jones & Co., Inc. 1,297 88,196
Dun & Bradstreet Corp. 2,289 70,387
Gap, Inc. 12,346 432,882
Harley-Davidson, Inc. 4,380 163,155
Hilton Hotels Corp. 5,308 45,118
Home Depot, Inc. 33,368 1,628,776
Interpublic Group of Cos. 4,028 172,952
* Kohls Corp. 4,736 245,088
Maytag Corp. 1,235 40,446
Omnicom Group, Inc. 2,581 216,643
Owens Corning 706 10,899
Radioshack Corp. 2,754 116,873
Wal-Mart Stores, Inc. 64,621 3,723,785
Young & Rubicam, Inc. 970 46,318
------------
8,146,358
------------
Consumer Staples 11.8%
Anheuser-Busch Cos., Inc. 6,792 526,380
Avon Products 3,501 144,635
Bestfoods 4,006 258,387
Campbell Soup Co. 6,169 191,239
Coca-Cola Co. 35,845 1,913,227
Colgate Palmolive Co. 8,494 446,997
Comcast Class A Special 13,370 506,389
General Mills, Inc. 4,388 174,149
Gillette Co. 15,557 519,215
Heinz, H.J. Co. 5,094 199,621
Kellogg Co. 5,812 176,540
Kimberly Clark Corp. 8,070 488,235
* Kroger Co. 12,068 239,852
PepsiCo, Inc. 21,128 859,645
Procter & Gamble Co. 19,153 1,273,674
Quaker Oats Co. 1,994 146,684
Ralston Purina Co. 4,295 79,726
Sara Lee Corp. 13,124 236,232
Sysco Corp. 4,770 200,042
Time Warner, Inc. 18,648 1,472,026
* Tricon Global Restaurants 2,110 61,849
Tupperware Corp. 739 16,304
Unilever NV 8,273 420,372
UST, Inc. 2,399 39,883
Walgreen 14,586 413,878
Wrigley (Wm) Jr. Co. 1,688 135,145
------------
11,140,326
------------
Financials 1.2%
Equifax, Inc. 1,972 54,600
MBNA Corp. 11,640 324,465
Providian Financial Corp. 2,080 184,990
Schwab, Charles Corp. 17,760 510,600
SLM Holding Corp. 2,268 76,403
------------
1,151,058
------------
Health Care 16.5%
Abbott Laboratories 22,335 908,755
Allergan, Inc. 1,962 134,765
* Amgen, Inc. 14,786 940,759
* Biogen, Inc. 2,180 118,810
Bristol-Myers Squibb Co. 28,818 1,586,791
Eli Lilly & Co. 15,860 1,207,342
* Guidant Corp. 4,425 224,015
IMS Health, Inc. 4,428 73,062
Johnson & Johnson 20,207 1,808,527
* Medtronic, Inc. 17,328 894,558
Merck & Co. 33,965 2,534,638
Pfizer, Inc. 56,161 2,502,675
Schering Plough Corp. 21,274 1,029,130
Warner Lambert Co. 12,479 1,523,998
------------
15,487,825
------------
Technology 46.9%
* ADC Telecomunications, Inc. 4,340 291,594
Adobe Systems, Inc. 1,744 196,309
* Altera Corp. 2,900 249,038
* America Online, Inc. 33,126 1,755,678
* Applied Materials, Inc. 11,150 931,025
Automatic Data Processing 9,163 503,392
* BMC Software, Inc. 3,499 153,956
* Cisco Systems, Inc. 99,360 5,663,520
* Citrix Systems, Inc. 2,600 136,825
Computer Associates Int'l., Inc. 8,513 438,420
* Compuware Corp. 5,181 52,781
* Comverse Technology 2,200 201,025
* Conexant Systems, Inc. 3,090 116,261
* Dell Computer Corp. 37,223 1,605,242
* EMC Corp. 14,846 1,726,775
* Gateway, Inc. 4,625 228,937
Intel Corporation 48,554 6,054,077
International Business
Machines 26,204 2,812,017
* Lexmark Int'l. Group, Inc.
Class A 1,829 127,573
Linear Technology Corp. 4,500 265,781
Lucent Technologies, Inc. 46,239 2,652,963
* Maxim Integrated
Products, Inc. 4,000 253,750
* Microsoft Corp. 75,543 4,726,159
* Network Appliance, Inc. 4,444 286,916
Nortel Networks Corp. 41,900 2,275,694
* Oracle Corporation 40,954 2,943,569
PE Corp. / PE Biosystems
Group 3,012 167,166
* Parametric Technology Corp. 3,899 41,427
Paychex, Inc. 5,322 186,270
* Peoplesoft, Inc. 3,893 53,772
* Qualcomm, Inc. 10,758 714,062
* Sapient Corp. 900 89,944
* Siebel Systems, Inc. 2,800 327,600
* Solectron Corp. 8,534 282,155
* Sun Microsytems, Inc. 22,918 1,756,092
* Tellabs, Inc. 5,881 381,897
Texas Instruments, Inc. 23,586 1,704,088
* Veritas Software Corp. 5,700 664,050
* Xilinx, Inc. 4,650 353,981
* Yahoo, Inc. 7,680 868,320
------------
44,240,101
------------
Transportation 0.1%
* US Airways Group, Inc. 992 42,160
------------
Total Common Stocks
(Cost $91,376,379) 93,083,060
------------
Principal Amount Value
(M=$1,000) (Note 1)
Corporate Short-Term Notes 1.4%
Ford Motor Credit Corp.
6.44%, 06/01/00 785M 785,000
USAA Capital Corp.
6.74%,06/01/00 560M 560,000
------------
Total Corporate Short-Term Notes
(Cost $1,345,000) 1,345,000
------------
Total Investments
(Cost $92,721,379)** 94,428,060
Excess of Liabilities
Over Other Assets (0.3%) (328,645)
------------
Net Assets $94,099,415
============
* Non-income producing.
** Cost for federal income tax purposes is substantially similar. At May 31,
2000 net unrealized appreciation for federal income tax purposes aggregated
$1,706,681 of which $10,111,029 related to appreciated securities and
$8,404,348 related to depreciated securities.
See Notes to Financial Statements.
27
<PAGE>
Sentinel Growth Index Fund
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
Investments at value (Cost $92,721,379) $94,428,060
Cash and cash equivalents 3,822
Receivable for fund shares sold 653,004
Receivable for dividends 44,951
Receivable from fund administrator 13,321
------------------
Total Assets 95,143,158
------------------
Liabilities
Payable for securities purchased 940,481
Payable for fund shares repurchased 14,768
Accrued expenses 20,064
Management fee payable 23,029
Distribution fee payable (Class A Shares) 21,495
Distribution fee payable (Class B Shares) 15,379
Distribution fee payable (Class C Shares) 72
Fund service fee payable 8,455
------------------
Total Liabilities 1,043,743
------------------
Net Assets Applicable to Outstanding Shares $94,099,415
==================
Class A Shares
$72,265,745 / 3,336,774 shares outstanding $ 21.66
Sales Charge-- 2.50% of offering price 0.56
------------------
Maximum Offering Price $ 22.22
==================
Class B Shares
$21,712,815 / 1,006,068 shares outstanding $ 21.58
==================
Class C Shares
$120,855 / 5,583 shares outstanding $ 21.65
==================
Net Assets Represent
Capital stock at par value $ 43,484
Paid-in capital 93,168,983
Accumulated distributions in excess of
net investment income (30,704)
Accumulated undistributed net realized loss
on investments (789,029)
Unrealized appreciation of investments 1,706,681
------------------
Net Assets $94,099,415
==================
Sentinel Growth Index Fund
Statement of Operations
For the Six Months Ended May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income
Income:
Dividends $ 214,805
Interest 36,763
------------------
Total Income 251,568
------------------
Expenses:
Management advisory fee 109,046
Transfer agent and custodian 89,924
Distribution expense (Class A Shares) 43,873
Distribution expense (Class B Shares) 65,961
Distribution expense (Class C Shares)* 108
Accounting services 11,628
Auditing fees 3,800
Legal fees 3,700
Reports and notices to shareholders 2,950
Registration and filing fees 23,645
Directors' fees and expenses 2,665
Other 11,747
------------------
Total Expenses 369,047
Expense Reimbursement (80,957)
Expense Offset (4,637)
------------------
Net Expenses 283,453
------------------
Net Investment Loss (31,885)
------------------
Realized and Unrealized Gain (Loss) on Investments
Net realized loss on sales of investments (766,882)
Net change in unrealized appreciation 56,035
------------------
Net Realized and Unrealized Loss on Investments (710,847)
------------------
Net Decrease in Net Assets from Operations $(742,732)
==================
* For the period from March 30, 2000 through May 31, 2000.
See Notes to Financial Statements.
28
<PAGE>
Sentinel Growth Index Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
Six Months Period from
Ended 5/31/00 9/13/99 through
(Unaudited) 11/30/99
------------------ ------------------
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income (loss) $ (31,885) $ 12,159
Net realized loss on sales of investments (766,882) (16,925)
Net change in unrealized appreciation 56,035 1,650,646
------------------ ------------------
Net increase (decrease) in net assets from operations (742,732) 1,645,880
------------------ ------------------
Distributions to Shareholders
From net investment income
Class A Shares (10,978) -
Class B Shares - -
Class C Shares* - -
From net realized gain on investments
Class A Shares (3,984) -
Class B Shares (1,238) -
Class C Shares* - -
------------------ ------------------
Total distributions to shareholders (16,200) -
------------------ ------------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 56,394,465 27,495,569
Class B Shares 15,681,018 8,101,219
Class C Shares* 127,544 -
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 9,849 -
Class B Shares 1,182 -
Class C Shares* - -
------------------ ------------------
72,214,058 35,596,788
Less: Payments for shares reacquired
Class A Shares (12,192,532) (149,693)
Class B Shares (2,145,185) (110,969)
Class C Shares* - -
------------------ ------------------
Increase in net assets from capital share transactions 57,876,341 35,336,126
------------------ ------------------
Total Increase in Net Assets for period 57,117,409 36,982,006
Net Assets: Beginning of period 36,982,006 -
------------------ ------------------
Net Assets: End of period $94,099,415 $36,982,006
================== ==================
Undistributed (Distributions in Excess of)
Net Investment Income at End of Period $ (30,704) $ 12,159
================== ==================
</TABLE>
* For the period from March 30, 2000 through May 31, 2000.
See Notes to Financial Statements.
29
<PAGE>
Sentinel Growth Index 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 Period from
Ended 5/31/00 (B) 9/13/99 through
Class A Shares (Unaudited) 11/30/99 (A)(B)
----------------- ---------------
<S> <C> <C>
Net asset value at beginning of period $ 21.30 $ 20.00
----------------- ---------------
Income (Loss) from Investment Operations
Net investment income (loss) (0.01) 0.02
Net realized and unrealized gain (loss) on investments 0.38 1.28
----------------- ---------------
Total from investment operations 0.37 1.30
----------------- ---------------
Less Distributions
Dividends from net investment income 0.01 --
Distributions from realized gains on investments -- --
----------------- ---------------
Total Distributions 0.01 --
----------------- ---------------
Net asset value at end of period $ 21.66 $ 21.30
================= ===============
Total Return (%) * 1.7 ++ 6.5 ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.65 + 0.63 +
Ratio of expenses to average net assets before
expense reductions (%) ** 0.83 + 1.11 +
Ratio of net investment income (loss)
to average net assets (%) 0.05 + 0.46 +
Ratio of net investment income (loss) to average net
assets before voluntary expense reimbursements (%) (0.13)+ (0.01)+
Portfolio turnover rate (%) 13 ++ 3 ++
Net assets at end of period (000 omitted) $72,266 $28,530
</TABLE>
(A) Commenced operations September 13, 1999.
(B) Per share data calculated utilizing average daily shares outstanding.
(C) Commenced operations March 30, 2000.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
30
<PAGE>
Sentinel Growth Index 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 from Period from
Ended 9/13/99 3/30/00 through
5/31/00 (B) through 5/31/00 (B)(C)
Class B Shares (Unaudited) 11/30/99 (A)(B) Class C Shares (Unaudited)
--------------- --------------- ---------------
<S> <C> <C> <C>
Net asset value at beginning of period $ 21.28 $20.00 $23.59
--------------- --------------- ---------------
Income (Loss) from Investment Operations
Net investment income (loss) (0.05) (0.01) (0.03)
Net realized and unrealized gain (loss) on investments 0.35 1.29 (1.91)
--------------- --------------- ---------------
Total from investment operations 0.30 1.28 (1.94)
--------------- --------------- ---------------
Less Distributions
Dividends from net investment income -- -- --
Distributions from realized gains on investments -- -- --
--------------- --------------- ---------------
Total Distributions -- -- --
--------------- --------------- ---------------
Net asset value at end of period $ 21.58 $21.28 $21.65
=============== =============== ===============
Total Return (%) * 1.4 ++ 6.4 ++ (8.2)++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.19 + 1.17 + 1.16 +
Ratio of expenses to average net assets before
expense reductions (%)** 1.59 + 1.66 + 2.87 +
Ratio of net investment income (loss)
to average net assets (%) (0.50)+ 0.14 + (0.48)+
Ratio of net investment income (loss) to average net
assets before voluntary expense reimbursements (%) (0.88)+ (0.62)+ (2.19)+
Portfolio turnover rate (%) 13 ++ 3 ++ 13 ++
Net assets at end of period (000 omitted) $21,713 $8,452 $ 121
</TABLE>
(A) Commenced operations September 13, 1999.
(B) Per share data calculated utilizing average daily shares outstanding.
(C) Commenced operations March 30, 2000.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements. 31
<PAGE>
Sentinel Common Stock Fund
Investment in Securities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Shares Value
(Note 1)
--------------------------------------------------------------------------------
Common Stocks 95.1%
Basic Materials 5.3%
Alcoa, Inc. 150,000 $ 8,765,625
Bemis Company 89,800 3,086,875
Dupont (EI) de Nemours 135,000 6,615,000
International Paper Co. 671,500 23,376,594
Martin Marietta Materials 159,700 7,815,318
Praxair, Inc. 145,900 6,127,800
Vulcan Materials Co. 282,800 13,220,900
Weyerhaeuser Co. 228,700 11,349,238
--------------
80,357,350
--------------
Capital Goods 5.0%
Boeing Co. 193,200 7,546,875
Dover Corp. 290,000 13,485,000
General Electric Company 491,100 25,844,137
Minnesota Mining & Mfg. 85,600 7,340,200
Parker-Hannifin Corp. 320,200 13,348,338
Tyco International Ltd. 175,800 8,273,588
--------------
75,838,138
--------------
Communications Services 4.7%
ALLTEL Corporation 228,500 14,952,468
AT & T Corporation 450,000 15,609,375
GTE Corporation 540,000 34,155,000
SBC Communications, Inc. 169,400 7,400,663
--------------
72,117,506
--------------
Consumer Cyclicals 6.1%
Ford Motor Co. 688,300 33,425,569
Harcourt General, Inc. 16,700 659,650
Marriott Int'l. - Class A 374,500 13,575,625
McGraw-Hill Cos. 600,000 30,862,500
Omnicom Group, Inc. 165,000 13,849,687
--------------
92,373,031
--------------
Consumer Staples 10.7%
BestFoods 200,000 12,900,000
Kimberly-Clark Corp. 675,000 40,837,500
* Kroger Co. 931,100 18,505,612
McCormick & Company 474,000 15,405,000
PepsiCo, Inc. 1,025,000 41,704,688
Philip Morris Cos., Inc. 390,000 10,188,750
Sara Lee Corp. 820,000 14,760,000
Walt Disney Co. 218,800 9,230,625
--------------
163,532,175
--------------
Energy 15.7%
Burlington Resources, Inc. 540,500 24,727,875
Chevron Corp. 240,000 22,185,000
Conoco Inc. - Class B 677,329 19,303,876
EOG Resources, Inc. 418,300 13,594,750
Exxon Mobil Corp. 688,455 57,356,907
* Global Marine, Inc. 305,700 8,655,131
Halliburton Company 570,000 29,070,000
* Ocean Energy, Inc. 390,000 5,850,000
Royal Dutch Petroleum Co. 325,000 20,292,188
Santa Fe Int'l. Corp. 380,600 14,772,037
Schlumberger Ltd. 240,000 17,655,000
Transocean Sedco Forex 116,660 5,738,214
--------------
239,200,978
--------------
Financials 16.6%
Aetna, Inc. 110,000 7,342,500
American Express Co. 429,600 23,117,850
American General Corp. 355,000 22,742,188
American Int'l. Group 328,187 36,941,549
Bank of America Corp. 367,770 20,434,220
Bank of New York Co. 869,200 40,798,075
Chase Manhattan Corp. 325,000 24,273,438
Citigroup, Inc. 600,000 37,312,500
Jefferson-Pilot Corp. 190,000 13,038,750
Wells Fargo & Co. 600,000 27,150,000
--------------
253,151,070
--------------
Health Care 13.1%
American Home
Products Corp. 815,000 43,908,125
Baxter International, Inc. 315,000 20,947,500
Becton Dickinson & Co. 400,000 11,675,000
* Boston Scientific Corp. 350,000 8,968,750
Bristol-Myers Squibb Co. 133,100 7,328,819
* Edwards Lifesciences
Corporation 63,000 1,279,688
* Elan Corp. plc (ADR) 146,000 5,812,625
Eli Lilly & Co. 108,300 8,244,338
* Genzyme General 138,600 7,874,212
HCA - The Healthcare
Company 285,200 7,700,400
Johnson & Johnson 270,000 24,165,000
Pharmacia Corporation 586,000 30,435,375
* Tenet Healthcare Corp. 235,100 6,024,438
Unitedhealth Group, Inc. 80,000 5,965,000
* Watson Pharmaceuticals,
Inc. 220,700 9,738,387
--------------
200,067,657
--------------
Technology 11.9%
Automatic Data Processing 318,400 17,492,100
Compaq Computer Corp. 303,100 7,956,375
* Convergys Corp. 274,300 12,326,356
Electronic Data
Systems Corp. 400,000 25,725,000
First Data Corp. 230,200 12,905,588
Hewlett-Packard Co. 127,000 15,255,875
Intel Corporation 100,000 12,468,750
International Business
Machines 289,000 31,013,312
Koninklijke Philips
Electronics NV (ADR) 280,000 12,372,500
Motorola, Inc. 113,400 10,631,250
* National Semiconductor
Corp. 100,000 5,375,000
* Network Associates, Inc. 279,200 6,107,500
* Solectron Corp. 100,000 3,306,250
Texas Instruments, Inc. 125,000 9,031,250
--------------
181,967,106
--------------
Transportation 1.0%
Union Pacific Corp. 348,900 14,762,831
--------------
Utilities 5.0%
Duke Energy Corp. 640,000 37,280,000
Enron Corp. 522,800 38,099,050
--------------
75,379,050
--------------
Total Common Stocks
(Cost $843,581,157) 1,448,746,892
--------------
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
Corporate Short-Term Notes 6.4%
American Express
6.49%, 06/23/00 10,000M $ 9,960,339
Daimlerchrysler
6.48%, 06/28/00 10,000M 9,951,400
Dow Chemical
6.48%, 06/13/00 10,000M 9,978,400
Florida Power Corp.
6.49%, 06/20/00 16,000M 15,945,196
Ford Motor Credit
6.48%, 06/02/00 8,500M 8,498,470
General Motors
6.45%, 06/16/00 4,000M 3,989,250
General Motors
6.49%, 06/16/00 10,000M 9,972,959
Prudential Funding
6.46%, 06/02/00 7,000M 6,998,744
Prudential Funding
6.46%, 06/08/00 10,000M 9,987,438
Transamerica Finance
6.55%, 06/05/00 12,000M 11,991,267
--------------
Total Corporate Short-Term Notes
(Cost $97,273,463) 97,273,463
--------------
Total Investments
(Cost $940,854,620)** 1,546,020,355
Excess of Liabilities
Over Other Assets (1.5%) (23,709,005)
--------------
Net Assets $1,522,311,350
==============
--------------------------------------------------------------------------------
* Non-income producing.
** Also cost for federal income tax purposes. At May 31, 2000 unrealized
appreciation for federal income tax purposes aggregated $605,165,735 of
which $634,632,142 related to appreciated securities and $29,466,407
related to depreciated securities.
See Notes to Financial Statements.
32
<PAGE>
Sentinel Common Stock Fund
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
Investments at value ($940,854,620) $1,546,020,355
Cash and cash equivalents 4,109,474
Receivable for fund shares sold 214,483
Receivable for dividends and interest 3,356,272
--------------
Total Assets 1,553,700,584
--------------
Liabilities
Payable for securities purchased 27,151,894
Payable for fund shares repurchased 1,814,865
Accrued expenses 312,019
Management fee payable 706,847
Distribution fee payable (Class A Shares) 1,150,608
Distribution fee payable (Class B Shares) 113,874
Distribution fee payable (Class C Shares) 5,814
Fund service fee payable 133,313
--------------
Total Liabilities 31,389,234
--------------
Net Assets Applicable to Outstanding shares $1,522,311,350
==============
Net Asset Value and Offering Price per Share
Class A Shares
$1,383,924,164 / 33,845,588 shares outstanding $ 40.89
Sales Charge--5.00% of offering price 2.15
--------------
Maximum Offering Price $ 43.04
==============
Class B Shares
$130,684,487 / 3,204,982 shares outstanding $ 40.78
==============
Class C Shares
$7,702,699 / 188,396 shares outstanding $ 40.89
==============
Net Assets Represent
Capital stock at par value $ 372,390
Paid-in capital 744,509,155
Accumulated undistributed net investment income 1,597,545
Accumulated undistributed net realized gain
on investments 170,666,525
Unrealized appreciation of investments 605,165,735
--------------
Net Assets $1,522,311,350
==============
Sentinel Common Stock Fund
Statement of Operations
For the Six Months Ended May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income
Income:
Dividends $12,565,858
Interest 1,595,032
--------------
Total Income 14,160,890
--------------
Expenses:
Management advisory fee 4,253,141
Transfer agent and custodian 939,152
Distribution expense (Class A Shares) 2,042,000
Distribution expense (Class B Shares) 676,090
Distribution expense (Class C Shares) 36,541
Accounting services 238,975
Auditing fees 56,250
Legal fees 55,250
Reports and notices to shareholders 53,000
Registration and filing fees 39,418
Directors' fees and expenses 59,855
Other 24,418
--------------
Total Expenses 8,474,090
Expense Offset (62,802)
--------------
Net Expenses 8,411,288
--------------
Net Investment Income 5,749,602
--------------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain on sales of investments 170,664,994
Net change in unrealized appreciation (depreciation) (130,492,341)
--------------
Net Realized and Unrealized Gain on Investments 40,172,653
--------------
Net Increase in Net Assets from Operations $45,922,255
==============
See Notes to Financial Statements. 33
<PAGE>
Sentinel Common Stock Fund
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
5/31/00 11/30/99
(Unaudited)
-------------- --------------
<S> <C> <C>
Increase in Net Assets from Operations
Net investment income $ 5,749,602 $ 13,882,299
Net realized gain on sales of investments 170,664,994 126,280,438
Net change in unrealized appreciation (depreciation) (130,492,341) (37,607,465)
-------------- --------------
Net increase in net assets from operations 45,922,255 102,555,272
-------------- --------------
Distributions to Shareholders
From net investment income
Class A Shares (6,287,532) (14,106,752)
Class B Shares (76,189) (147,613)
Class C Shares -- (1,207)
From net realized gain on investments
Class A Shares (114,593,000) (137,654,972)
Class B Shares (11,148,358) (11,316,488)
Class C Shares (535,304) (434,275)
-------------- --------------
Total distributions to shareholders (132,640,383) (163,661,307)
-------------- --------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 73,106,757 143,448,642
Class B Shares 9,991,160 36,334,463
Class C Shares 33,779,933 36,129,387
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 100,572,334 126,055,269
Class B Shares 11,050,844 11,241,443
Class C Shares 532,712 432,773
-------------- --------------
229,033,740 353,641,977
Less: Payments for shares reacquired
Class A Shares (250,374,359) (285,334,612)
Class B Shares (31,767,304) (23,100,421)
Class C Shares (33,441,825) (34,476,507)
-------------- --------------
Increase (decrease) in net assets from capital
share transactions (86,549,748) 10,730,437
-------------- --------------
Total Decrease in Net Assets for period (173,267,876) (50,375,598)
Net Assets: Beginning of period 1,695,579,226 1,745,954,824
-------------- --------------
Net Assets: End of period $1,522,311,350 $1,695,579,226
============== ==============
Undistributed Net Investment Income
at End of Period $ 1,597,545 $ 2,211,664
============== ==============
</TABLE>
See Notes to Financial Statements.
34
<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 5/31/00 (C) Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 42.91 $ 44.56 $ 44.09 $ 40.60 $ 35.21 $ 28.25
---------- ---------- ---------- ---------- ---------- ----------
Income (Loss) from Investment Operations
Net investment income (loss) 0.17 0.37 0.42 0.57 0.59 0.72
Net realized and unrealized gain (loss) on investments 1.21 2.17 5.19 7.03 8.18 8.09
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 1.38 2.54 5.61 7.60 8.77 8.81
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions
Dividends from net investment income 0.18 0.38 0.45 0.57 0.61 0.74
Distributions from realized gains on investments 3.22 3.81 4.69 3.54 2.77 1.11
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions 3.40 4.19 5.14 4.11 3.38 1.85
---------- ---------- ---------- ---------- ---------- ----------
Net asset value at end of period $ 40.89 $ 42.91 $ 44.56 $ 44.09 $ 40.60 $ 35.21
========== ========== ========== ========== ========== ==========
Total Return (%) * 3.6 ++ 6.0 14.3 20.9 27.2 32.8
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.01 + 1.00 1.01 1.04 1.06 1.09
Ratio of expenses to average net assets before
expense reductions (%)** 1.02 + 1.00 1.02 1.05 1.07 1.10
Ratio of net investment income (loss)
to average net assets (%) 0.82 + 0.85 0.98 1.41 1.64 2.29
Portfolio turnover rate (%) 28 ++ 37 28 24 22 22
Net assets at end of period (000 omitted) $1,383,924 $1,538,671 $1,610,630 $1,509,999 $1,306,592 $1,057,944
</TABLE>
(A) Commenced operations April 1, 1996.
(B) Commenced operations May 4, 1998.
(C) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
35
<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>
Six Months
Ended 5/31/00 (C) Year Ended Year Ended Year Ended Year Ended
Class B Shares (Unaudited) 11/30/99 (C) 11/30/98 (C) 11/30/97 (C) 11/30/96 (A)(C)
---------------- ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 42.82 $ 44.47 $ 44.03 $ 40.57 $ 35.43
---------------- ----------- ----------- ----------- --------------
Income (Loss) from Investment Operations
Net investment income (loss) (0.01) 0.03 0.07 0.27 0.22
Net realized and unrealized gain (loss) on investments 1.21 2.18 5.19 6.99 5.05
---------------- ----------- ----------- ----------- --------------
Total from investment operations 1.20 2.21 5.26 7.26 5.27
---------------- ----------- ----------- ----------- --------------
Less Distributions
Dividends from net investment income 0.02 0.05 0.13 0.26 0.13
Distributions from realized gains on investments 3.22 3.81 4.69 3.54 --
---------------- ----------- ----------- ----------- --------------
Total Distributions 3.24 3.86 4.82 3.80 0.13
---------------- ----------- ----------- ----------- --------------
Net asset value at end of period $ 40.78 $ 42.82 $ 44.47 $ 44.03 $ 40.57
================ =========== =========== =========== ==============
Total Return (%) * 3.2 ++ 5.1 13.4 19.9 14.9 ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.86 + 1.80 1.81 1.79 1.91 +
Ratio of expenses to average net assets before
expense reductions (%)** 1.87 + 1.81 1.81 1.80 1.92 +
Ratio of net investment income (loss)
to average net assets (%) (0.03)+ 0.05 0.19 0.66 0.80 +
Portfolio turnover rate (%) 28 ++ 37 28 24 22
Net assets at end of period (000 omitted) $130,684 $149,586 $129,966 $77,299 $27,257
</TABLE>
(A) Commenced operations April 1, 1996.
(B) Commenced operations May 4, 1998.
(C) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
36
<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>
Six Months Period from
Ended 5/31/00 (C) Year Ended 5/4/98 through
Class C Shares (Unaudited) 11/30/99 (C) 11/30/98 (B)(C)
---------------- ----------- --------------
<S> <C> <C> <C>
Net asset value at beginning of period $42.90 $44.55 $45.23
---------------- ----------- --------------
Income (Loss) from Investment Operations
Net investment income (loss) (0.02) (0.03) 0.06
Net realized and unrealized gain (loss) on investments 1.23 2.20 (0.71)
---------------- ----------- --------------
Total from investment operations 1.21 2.17 (0.65)
---------------- ----------- --------------
Less Distributions
Dividends from net investment income -- 0.01 0.03
Distributions from realized gains on investments 3.22 3.81 --
---------------- ----------- --------------
Total Distributions 3.22 3.82 0.03
---------------- ----------- --------------
Net asset value at end of period $40.89 $42.90 $44.55
================ =========== ==============
Total Return (%) * 3.2 ++ 5.0 (1.4)++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.95 + 1.90 1.92 +
Ratio of expenses to average net assets before
expense reductions (%)** 1.96 + 1.90 1.92 +
Ratio of net investment income (loss)
to average net assets (%) (0.11)+ (0.04) 0.08 +
Portfolio turnover rate (%) 28 ++ 37 28
Net assets at end of period (000 omitted) $7,703 $7,323 $5,358
</TABLE>
(A) Commenced operations April 1, 1996.
(B) Commenced operations May 4, 1998.
(C) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements. 37
<PAGE>
Sentinel Balanced Fund
Investment in Securities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
U.S. Government Obligations 25.6%
U.S. Treasury Obligations 16.6%
10-Year:
Note 6.5%, '10 30,500M $30,956,280
-----------
30-Year:
Bond 6.25%, '30 18,500M 19,086,450
-----------
Total U.S. Treasury Obligations 50,042,730
-----------
U.S. Government Agency Obligations 9.0%
Federal Home Loan Mortgage Corporation 2.4%
Mortgage-Backed Securities:
15-Year:
9%, '05 842M 867,871
9.5%, '05 1,758M 1,841,328
9.5%, '06 704M 740,002
-----------
3,449,201
-----------
30-Year:
8%, '08 815M 826,395
9.25%, '11 2,917M 2,975,149
-----------
3,801,544
-----------
Total Federal Home
Loan Mortgage Corporation 7,250,745
-----------
Federal National Mortgage Association 6.6%
Mortgage-Backed Securities:
10-Year:
9%, '06 971M 1,009,420
-----------
15-Year:
10.5%, '12 205M 216,666
-----------
30-Year:
10.25%, '17 713M 767,159
8.5%, '24 1,094M 1,106,468
8.5%, '26 2,661M 2,691,703
8%, '27 1,397M 1,386,791
6%, '28 1,086M 978,674
7.5%, '28 1,504M 1,462,244
8%, '28 565M 560,892
8.5%, '28 1,666M 1,684,832
6%, '29 459M 412,512
6%, '29 1,430M 1,285,179
7%, '29 1,384M 1,315,645
7%, '29 2,019M 1,918,271
7%, '29 1,987M 1,887,275
9%, '29 1,123M 1,152,848
-----------
18,610,493
-----------
Total Federal National
Mortgage Association 19,836,579
-----------
Government National Mortgage Association 0.0%
Mortgage-Backed Securities:
30-Year:
9%, '09 25M 25,602
-----------
Total U.S. Government
Agency Obligations 27,112,926
-----------
Total U.S. Government Obligations
(Cost $76,971,226) 77,155,656
-----------
Collateralized Mortgage
Obligations 1.3%
GECMS 2000-5 A 7.25%, '15
(Cost $3,816,676) 5,500M 3,833,188
-----------
Bonds 13.8%
Aerospace 0.6%
Lockheed Martin Corp.
8.5%, '29 2,000M 1,955,000
-----------
Automobile & Auto Parts 1.3%
Ford Motor Company
7.375%, '09 4,000M 3,800,000
-----------
Chemicals 0.7%
IMC Global, Inc. 7.4%, '02 2,000M 1,967,500
-----------
Computer Products & Services 0.5%
Sun Microsystems, Inc.
7%, '02 1,500M 1,477,500
-----------
Consumer Services 1.1%
Service Corp. 6.75%, '01 4,000M 3,420,000
-----------
Containers & Packaging 0.7%
Crown Cork & Seal
7.125%, '02 2,250M 2,160,000
-----------
Energy 0.3%
Kinder Morgan, Inc.
6.45%, '03 1,000M 965,000
-----------
Financial Institutions 1.3%
Goldman Sachs Group, Inc.
7.8%. '10 4,000M 3,890,000
-----------
Foreign Industrial 0.3%
**Laidlaw, Inc. 7.7%, '02 4,000M 1,000,000
-----------
Foreign Utilities-Telephone 0.7%
Vodafone Airtouch plc
7.75%, '10 (a) 2,000M 1,942,500
-----------
Lodging 0.6%
Marriott Int'l., Inc.
6.625%, '03 1,750M 1,662,500
-----------
Manufacturing 1.3%
FMC Corp. 7.125%, '02 4,000M 3,890,000
-----------
Real Estate Investment Trusts 0.3%
Simon Debartolo
6.625%, '03 1,000M 946,250
-----------
Retail 1.9%
J. C. Penney, Inc. 7.25%, '02 4,500M 4,308,750
Safeway Stores 7%, '02 1,500M 1,473,750
-----------
5,782,500
-----------
Telecommunications 1.9%
Comsat 8.55%, '06 2,000M 2,077,300
MCI Worldcom, Inc.
6.4%, '05 2,000M 1,877,500
US West Capital Funding
6.25%, '05 2,000M 1,862,500
-----------
5,817,300
-----------
Tobacco 0.0%
Dimon, Inc. 8.875%, '06 60M 53,475
-----------
Utilities-Electric 0.3%
CMS Energy Corp.
6.75%, '04 1,000M 901,250
-----------
Total Bonds
(Cost $44,545,739) 41,630,775
-----------
--------------------------------------------------------------------------------
Shares Value
(Note 1)
--------------------------------------------------------------------------------
Common Stocks 55.2%
Basic Materials 1.8%
International Paper Co. 77,800 $ 2,708,413
Martin Marietta Materials 9,400 460,012
Praxair, Inc. 17,900 751,800
Vulcan Materials Co. 29,750 1,390,813
-----------
5,311,038
-----------
Capital Goods 2.6%
Dover Corp. 42,688 1,984,992
General Electric Company 57,000 2,999,625
Minnesota Mining & Mfg. 5,900 505,925
Parker-Hannifin Corp. 34,200 1,425,712
Tyco International Ltd. 23,000 1,082,438
-----------
7,998,692
-----------
Communications Services 3.1%
ALLTEL Corporation 28,200 1,845,337
AT & T Corporation 58,000 2,011,875
GTE Corporation 70,000 4,427,500
SBC Communications, Inc. 21,300 930,544
-----------
9,215,256
-----------
Consumer Cyclicals 3.1%
Ford Motor Co. 70,000 3,399,375
Harcourt General, Inc. 3,000 118,500
Marriott Int'l. - Class A 37,500 1,359,375
McGraw-Hill Cos. 52,200 2,685,037
Omnicom Group, Inc. 22,000 1,846,625
-----------
9,408,912
-----------
Consumer Staples 4.8%
BestFoods 20,000 1,290,000
Kimberly-Clark Corp. 74,500 4,507,250
* Kroger Co. 108,200 2,150,475
McCormick & Company 24,300 789,750
PepsiCo, Inc. 103,100 4,194,882
Walt Disney Co. 37,800 1,594,688
-----------
14,527,045
-----------
Energy 9.1%
Burlington Resources, Inc. 66,000 3,019,500
Chevron Corp. 28,600 2,643,713
Conoco, Inc. - Class B 84,189 2,399,387
EOG Resources, Inc. 49,000 1,592,500
Exxon Mobil Corp. 69,199 5,765,142
* Global Marine, Inc. 36,000 1,019,250
Halliburton Company 65,000 3,315,000
* Ocean Energy, Inc. 45,000 675,000
Royal Dutch Petroleum Co. 40,000 2,497,500
Santa Fe Int'l. Corp. 49,600 1,925,100
Schlumberger Ltd. 26,700 1,964,119
Transocean Sedco Forex 13,976 687,445
-----------
27,503,656
-----------
(continued)
38
<PAGE>
Sentinel Balanced Fund
Investment in Securities (cont'd.)
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Shares Value
(Note 1)
--------------------------------------------------------------------------------
Financials 10.2%
Aetna, Inc. 12,600 $ 841,050
American Express Co. 51,600 2,776,725
American General Corp. 41,400 2,652,187
American Int'l. Group 42,187 4,748,674
Bank of America Corp. 50,922 2,829,354
Bank of New York Co. 122,000 5,726,375
Chase Manhattan Corp. 40,000 2,987,500
Citigroup, Inc. 90,000 5,596,875
Wells Fargo & Co. 60,000 2,715,000
-----------
30,873,740
-----------
Health Care 8.6%
American Home
Products Corp. 93,800 5,053,475
Baxter International, Inc. 45,000 2,992,500
Becton Dickinson & Co. 45,800 1,336,787
* Boston Scientific Corp. 60,000 1,537,500
Bristol-Myers Squibb Co. 18,400 1,013,150
* Edward Lifesciences
Corporation 9,000 182,813
* Elan Corp. plc (ADR) 25,000 995,312
Eli Lilly & Co. 12,700 966,787
* Genzyme General 18,400 1,045,350
HCA - The Healthcare
Company 40,100 1,082,700
Johnson & Johnson 28,500 2,550,750
Pharmacia Corporation 74,000 3,843,375
* Tenet Healthcare Corp. 30,500 781,563
Unitedhealth Group, Inc. 11,800 879,837
* Watson Pharmaceuticals, Inc. 35,000 1,544,375
-----------
25,806,274
-----------
Technology 8.4%
Automatic Data Processing 38,800 2,131,575
Compaq Computer Corp. 35,800 939,750
* Convergys Corp. 50,200 2,255,862
Electronic Data Systems Corp. 49,400 3,177,038
First Data Corp. 33,000 1,850,062
Hewlett-Packard Co. 16,000 1,922,000
Intel Corporation 13,000 1,620,937
International Business
Machines 36,600 3,927,637
Koninklijke Philips
Electronics NV (ADR) 40,000 1,767,500
Motorola, Inc. 13,200 1,237,500
* National Semiconductor
Corp. 20,000 1,075,000
* Network Associates, Inc. 46,200 1,010,625
* Solectron Corp. 20,000 661,250
Texas Instruments, Inc. 23,000 1,661,750
-----------
25,238,486
-----------
Transportation 0.7%
Union Pacific Corp. 47,000 1,988,688
-----------
Utilities 2.8%
Duke Energy Corp. 67,500 3,931,875
Enron Corp. 62,500 4,554,687
-----------
8,486,562
-----------
Total Common Stocks
(Cost $97,692,648) 166,358,349
-----------
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
Corporate Short-Term Notes 21.2%
American Express
6.46%, 06/06/00 8,000M $ 7,992,822
American Express
6.51%, 07/06/00 3,000M 2,981,012
Assoc. Corp. of NA
6.5%, 06/16/00 6,000M 5,983,750
Daimler Chrysler
6.47%, 06/30/00 8,000M 7,958,305
Florida Power Corp.
6.48%, 06/19/00 4,300M 4,286,068
Ford Motor Credit
6.49%, 06/02/00 7,000M 6,998,738
General Motors Acceptance
6.48%, 05/26/00 13,000M 12,971,920
Monsanto Company
6.48%, 06/08/00 4,700M 4,694,078
Transamerica Financial
6.53%, 07/06/00 10,000M 9,936,514
------------
Total Corporate Short-Term Notes
(Cost $63,803,207) 63,803,207
------------
Total Investments
(Cost $286,829,496)*** 352,781,175
Excess of Liabilities
Over Other Assets (17.1%) (51,545,364)
------------
Net Assets $301,235,811
============
--------------------------------------------------------------------------------
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registrations, normally to qualified institutional buyers. At May 31,
2000, the market value of rule 144A securities amounted to $1,942,500 or
0.7% of net assets.
* Non-income producing.
** Laidlaw, Inc. has declared an interest payment moratorium until further
notice.
*** Also cost for federal income tax purposes. At May 31, 2000 net unrealized
appreciation for federal income tax purposes aggregated $65,951,679 of
which $72,812,516 related to appreciated securities and $6,860,837 related
to depreciated securities.
See Notes to Financial Statements.
39
<PAGE>
Sentinel Balanced Fund
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
Investments at value (Cost $286,829,496) $352,781,175
Cash and cash equivalents 692,474
Receivable for securities sold 17,903,442
Receivable for fund shares sold 17,645
Receivable for dividends and interest 1,582,188
------------
Total Assets 372,976,924
------------
Liabilities
Payable for securities purchased 71,129,075
Payable for fund shares repurchased 161,162
Accrued expenses 64,213
Management fee payable 153,560
Distribution fee payable (Class A Shares) 154,427
Distribution fee payable (Class B Shares) 40,085
Distribution fee payable (Class C Shares) 4,156
Distribution fee payable (Class D Shares) 960
Fund service fee payable 33,475
------------
Total Liabilities 71,741,113
------------
Net Assets Applicable to Outstanding Shares $301,235,811
============
Net Asset Value and Offering Price per Share
Class A Shares
$251,154,824 / 13,557,297 shares outstanding $ 18.53
Sales Charge--5.00% of offering price 0.98
------------
Maximum Offering Price $ 19.51
============
Class B Shares
$45,478,495/2,451,374 shares outstanding $ 18.55
============
Class C Shares
$3,134,419/169,153 shares outstanding $ 18.53
============
Class D Shares
$1,468,073/79,426 shares outstanding $ 18.48
============
Net Assets Represent
Capital stock at par value $ 162,573
Paid-in capital 216,816,227
Accumulated undistributed net investment income 1,379,647
Accumulated undistributed net realized gain
on investments 16,925,685
Unrealized appreciation of investments 65,951,679
------------
Net Assets $301,235,811
============
See Notes to Financial Statements.
Sentinel Balanced Fund
Statement of Operations
For the Six Months Ended May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income
Income:
Dividends $ 1,320,148
Interest 5,826,982
------------
Total Income 7,147,130
------------
Expenses:
Management advisory fee 968,218
Transfer agent and custodian 249,808
Distribution expense (Class A Shares) 402,827
Distribution expense (Class B Shares) 237,976
Distribution expense (Class C Shares) 15,447
Distribution expense (Class D Shares) 4,832
Accounting services 48,845
Auditing fees 9,990
Legal fees 8,190
Reports and notices to shareholders 10,190
Registration and filing fees 34,574
Directors' fees and expenses 12,359
Other 6,749
------------
Total Expenses 2,010,005
Expense Offset (26,963)
------------
Net Expenses 1,983,042
------------
Net Investment Income 5,164,088
------------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain on sales of investments 16,921,987
Net change in unrealized appreciation (depreciation) (16,192,350)
------------
Net Realized and Unrealized Gain on Investments 729,637
------------
Net Increase in Net Assets from Operations $ 5,893,725
============
See Notes to Financial Statements.
40
<PAGE>
Sentinel Balanced Fund
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
5/31/00 11/30/99
(Unaudited)
------------ ------------
<S> <C> <C>
Increase in Net Assets from Operations
Net investment income $ 5,164,088 $ 9,940,509
Net realized gain on sales of investments 16,921,987 17,239,737
Net change in unrealized appreciation (depreciation) (16,192,350) (17,640,672)
------------ ------------
Net increase in net assets from operations 5,893,725 9,539,574
------------ ------------
Distributions to Shareholders
From net investment income
Class A Shares (4,613,462) (8,652,112)
Class B Shares (632,095) (1,011,062)
Class C Shares (35,390) (44,400)
Class D Shares (11,822) (9,280)
From net realized gain on investments
Class A Shares (14,368,418) (23,432,737)
Class B Shares (2,513,315) (3,424,615)
Class C Shares (163,958) (137,453)
Class D Shares (57,970) --
------------ ------------
Total distributions to shareholders (22,396,430) (36,711,659)
------------ ------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 7,783,915 25,591,257
Class B Shares 3,082,996 15,013,233
Class C Shares 812,490 2,098,921
Class D Shares 634,984 1,190,850
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 17,647,104 29,834,718
Class B Shares 3,032,200 4,271,817
Class C Shares 195,441 179,289
Class D Shares 63,242 9,280
------------ ------------
33,252,372 78,189,365
------------ ------------
Less: Payments for shares reacquired
Class A Shares (57,442,128) (65,079,933)
Class B Shares (10,288,717) (10,550,244)
Class C Shares (1,064,312) (273,939)
Class D Shares (319,611) (47,378)
------------ ------------
Increase (Decrease) in net assets from
capital share transactions (35,862,396) 2,237,871
------------ ------------
Total Decrease in Net Assets for period (52,365,101) (24,934,214)
Net Assets: Beginning of period 353,600,912 378,535,126
------------ ------------
Net Assets: End of period $301,235,811 $353,600,912
============ ============
Undistributed Net Investment Income
at End of Period $ 1,379,647 $ 1,511,913
============ ============
</TABLE>
See Notes to Financial Statements.
41
<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 5/31/00 (D) Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
------------ ---------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $19.38 $ 20.88 $ 20.29 $ 18.55 $ 16.84 $ 14.08
------------ ---------- --------- --------- ---------- ---------
Income (Loss) from Investment Operations
Net investment income 0.31 0.55 0.54 0.56 0.54 0.58
Net realized and unrealized gain (loss) on
investments 0.10 (0.03) 1.76 2.18 2.13 2.78
------------ ---------- --------- --------- ---------- ---------
Total from investment operations 0.41 0.52 2.30 2.74 2.67 3.36
------------ ---------- --------- --------- ---------- ---------
Less Distributions
Dividends from net investment income 0.31 0.54 0.55 0.55 0.54 0.59
Distributions from realized gains on
investments 0.95 1.48 1.16 0.45 0.42 0.01
------------ ---------- --------- --------- ---------- ---------
Total Distributions 1.26 2.02 1.71 1.00 0.96 0.60
------------ ---------- --------- --------- ---------- ---------
Net asset value at end of period $18.53 $ 19.38 $ 20.88 $ 20.29 $ 18.55 $ 16.84
============ ========== ========= ========= ========== =========
Total Return (%) * 2.3 ++ 2.6 12.2 15.4 16.6 24.4
Ratios/Supplemental Data
Ratio of net expenses to average net assets
(%) 1.11 + 1.10 1.12 1.16 1.20 1.27
Ratio of expenses to average net assets before
expense reductions (%) ** 1.12 + 1.12 1.13 1.17 1.22 1.29
Ratio of net investment income to average net
assets (%) 3.35 + 2.73 2.69 2.93 3.13 3.77
Portfolio turnover rate (%) 68 ++ 110 81 63 83 110
Net assets at end of period (000 omitted) $251,155 $ 297,027 $ 330,067 $ 314,948 $ 297,288 $ 267,103
</TABLE>
(A) Commenced operations April 1, 1996.
(B) Commenced operations May 4, 1998.
(C) Commenced operations January 4, 1999.
(D) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
42
<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 5/31/00 (D) Year Ended Year Ended Year Ended Ended
Class B Shares (Unaudited) 11/30/99 (D) 11/30/98 (D) 11/30/97 (D) 11/30/96 (A)(D)
------------ ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 19.41 $ 20.91 $ 20.32 $ 18.58 $ 17.09
------------ ----------- ----------- ----------- --------------
Income (Loss) from Investment Operations
Net investment income 0.24 0.39 0.38 0.42 0.26
Net realized and unrealized gain (loss) on
investments 0.10 (0.02) 1.77 2.18 1.37
------------ ----------- ----------- ----------- --------------
Total from investment operations 0.34 0.37 2.15 2.60 1.63
------------ ----------- ----------- ----------- --------------
Less Distributions
Dividends from net investment income 0.25 0.39 0.40 0.41 0.14
Distributions from realized gains on investments 0.95 1.48 1.16 0.45 -
------------ ----------- ----------- ----------- --------------
Total Distributions 1.20 1.87 1.56 0.86 0.14
------------ ----------- ----------- ----------- --------------
Net asset value at end of period $ 18.55 $ 19.41 $ 20.91 $ 20.32 $ 18.58
============ =========== =========== =========== ==============
Total Return (%) * 1.9 ++ 1.8 11.3 14.6 9.6 ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.87 + 1.86 1.89 1.88 2.12 +
Ratio of expenses to average net assets before
expense reductions (%) ** 1.89 + 1.87 1.90 1.89 2.13 +
Ratio of net investment income to average net
assets (%) 2.59 + 2.00 1.91 2.21 2.21 +
Portfolio turnover rate (%) 68 ++ 110 81 63 83
Net assets at end of period (000 omitted) $45,478 $52,086 $46,946 $26,593 $10,948
</TABLE>
(A) Commenced operations April 1, 1996.
(B) Commenced operations May 4, 1998.
(C) Commenced operations January 4, 1999.
(D) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
43
<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 from
Ended 5/31/00 (D) Year Ended 5/4/98 through
Class C Shares (Unaudited) 11/30/99 (D) 11/30/98 (B)(D)
------------- ------------ ---------------
<S> <C> <C> <C>
Net asset value at beginning of
period $19.39 $20.90 $20.87
------------- ------------ ---------------
Income (Loss) from Investment
Operations
Net investment income 0.21 0.32 0.20
Net realized and unrealized gain
(loss) on investments 0.10 (0.03) (0.01)
------------- ------------ ---------------
Total from investment operations 0.31 0.29 0.19
------------- ------------ ---------------
Less Distributions
Dividends from net investment income 0.22 0.32 0.16
Distributions from realized gains on
investments 0.95 1.48 -
------------- ------------ ---------------
Total Distributions 1.17 1.80 0.16
------------- ------------ ---------------
Net asset value at end of period $18.53 $19.39 $20.90
============= ============ ===============
Total Return (%) * 1.7 ++ 1.4 0.9 ++
Ratios/Supplemental Data
Ratio of net expenses to average net
assets (%) 2.26 + 2.24 2.17 +
Ratio of expenses to average net
assets before expense
reductions (%) ** 2.28 + 2.25 2.18 +
Ratio of net investment income to
average net assets (%) 2.21 + 1.65 1.63 +
Portfolio turnover rate (%) 68 ++ 110 81
Net assets at end of period
(000 omitted) $3,134 $3,350 $1,523
</TABLE>
(A) Commenced operations April 1, 1996.
(B) Commenced operations May 4, 1998.
(C) Commenced operations January 4, 1999.
(D) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
44
<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 from
Ended 5/31/00 (D) 1/4/99 through
Class D Shares (Unaudited) 11/30/99 (C)(D)
----------------- ---------------
<S> <C> <C>
Net asset value at beginning of period $19.32 $19.68
---------------- --------------
Income (Loss) from Investment Operations
Net investment income 0.19 0.33
Net realized and unrealized gain (loss) on
investments 0.10 (0.38)
---------------- --------------
Total from investment operations 0.29 (0.05)
---------------- --------------
Less Distributions
Dividends from net investment income 0.18 0.31
Distributions from realized gains on
investments 0.95 -
---------------- --------------
Total Distributions 1.13 0.31
---------------- --------------
Net asset value at end of period $18.48 $19.32
================ ==============
Total Return (%) * 1.6 ++ (0.2)++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 2.49 + 2.07 +
Ratio of expenses to average net assets before
expense reductions (%) ** 2.51 + 2.08 +
Ratio of net investment income to average net
assets (%) 1.98 + 1.93 +
Portfolio turnover rate (%) 68 ++ 110
Net assets at end of period (000 omitted) $1,468 $1,138
</TABLE>
(A) Commenced operations April 1, 1996.
(B) Commenced operations May 4, 1998.
(C) Commenced operations January 4, 1999.
(D) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
45
<PAGE>
Sentinel High Yield Bond Fund
Investment in Securities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Shares Value
(Note 1)
--------------------------------------------------------------------------------
Common Stocks 2.2%
Energy 0.4%
* Ocean Energy 20,000 $ 300,000
----------
Entertainment 0.3%
* Premier Cruises LTD. 74,059 240,692
----------
Retail 0.0%
* Ames Department Stores 1,700 20,188
----------
Telecommunications 0.4%
* Telecorp PCS, Inc. 7,300 221,737
* Tritel Class A 5,000 114,687
----------
336,424
----------
Waste Management 0.2%
* Waste Systems International 71,428 116,071
----------
Wireless Telecommunication 0.9%
* Intermedia Communications 15,000 375,000
* Spectrasite Holdings, Inc. 20,000 338,750
----------
713,750
----------
Total Common Stocks
(Cost $3,006,127) 1,727,125
----------
Preferred Stocks 5.8%
Cable/Other Video Distribution 2.3%
Adelphia Communications 13% 6,500 693,875
CSC Holdings 11.125% 10,045 1,067,282
----------
1,761,157
----------
Financial Services 1.0%
Crown Castle International
Group 12.75% 797 781,060
----------
Telecommunications 2.5%
Global Crossing 7% 4,000 714,000
Rural Cellular Corp. 11.375% 1,250 1,173,758
----------
1,887,758
----------
Total Preferred Stocks
(Cost $4,790,495) 4,429,975
----------
Warrants 0.2%
* Motient Corp. (a) 1,000 30,000
* Ono Finance plc Warrants (a) 1,000 100,000
* Waste System Warrants (a) 11,250 5,625
----------
Total Warrants
(Cost $71,874) 135,625
----------
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
Bonds 89.6%
Automobiles & Auto Parts 4.0%
Eagle-Picher 9.375%, '08 750M $ 637,500
Hayes Lemmerz 9.125%, '07 1,000M 907,500
Holley Performance
12.25%, '07 (a) 1,000M 775,000
Oxford Automotive
10.125%, '07 250M 235,000
Tenneco Automative, Inc.
11.625%, '09 500M 470,000
----------
3,025,000
----------
Broadcasting 3.2%
ACME Television
0%, '00
10.875%, '04 800M 748,000
SFX Entertainment
9.125%, '08 1,000M 1,010,000
XM Satellite Radio, Inc.
14%,'10 750M 663,750
----------
2,421,750
----------
Building Residential & Commercial 1.1%
Webb (Del E) 9.375%, '09 1,000M 805,000
----------
Cable/Other Video Distribution 7.9%
Echostar Communications
9.375%, '09 1,000M 950,000
Ono Finance plc 13%, '09 (a) 1,000M 995,000
Pegasus Communications
9.625%, '05 1,500M 1,447,500
Star Choice 13.0%, '05 1,250M 1,268,750
Telewest Communications
0%, '00
11%, '07 1,500M 1,417,500
----------
6,078,750
----------
Chemicals 1.2%
Lyondell Chemical Co.
9.625%, '07 1,000M 970,000
----------
Consumer Products 1.6%
Outboard Marine
10.75%, '08 1,000M 365,000
Simmons Co. 10.25%, '09 1,000M 885,000
----------
1,250,000
----------
Energy, Oil & Gas 9.5%
Benton Oil & Gas 9.375%, '07 800M 436,000
Chesapeake Energy Corp.
9.625%, '05 1,000M 958,750
Energy Corp. 9.5%, '07 500M 332,500
Giant Industries 9%, '07 940M 846,000
HS Resources, Inc.
9.25%, '06 1,000M 962,500
Nuevo Energy Co.
9.5%, '08 (a) 1,000M 967,500
**Petsec Energy 9.5%, '07 1,500M 750,000
----------
Pioneer Natural Resources
9.625%, '10 1,000M 1,017,500
Western Gas Resources
10%, '09 1,000M 1,010,000
----------
7,280,750
----------
Entertainment/Gaming 9.7%
Ameristar Casinos
10.5%, '04 1,000M 995,000
Argosy Gaming 10.75%, '09 1,000M 1,032,500
Boyd Gaming 9.5%, '07 1,000M 940,000
Carmike Cinemas, Inc.
9.375%, '09 850M 514,250
Coast Hotels & Casino
9.5%, '09 1,000M 942,500
Hollywood Casinos
13%, '06 (a) 1,000M 1,070,000
Isle of Capri Casinos
8.75%, '09 1,000M 897,500
Premier Parks
0%, '01
10%, 08 1,500M 997,500
----------
7,389,250
----------
Food/Restaurants 1.9%
Aurora Foods 9.875%, '07 1,000M 520,000
Sun World Int'l. 11.25%, '04 1,000M 910,000
----------
1,430,000
----------
Foreign Bonds 3.7%
Republic of Brazil 8.0%, '14 2,463M 1,733,210
United Mexican States
11.50%, '26 1,000M 1,122,500
----------
2,855,710
----------
Hospitals and Healthcare/
Medical Technology 3.7%
Kelso & Company
12.75%, '09 1,000M 1,025,000
Lifepoint Hospital
10.75%, '09 (a) 1,000M 1,025,000
Prime Medical Services, Inc.
8.75%, '08 1,000M 815,000
----------
2,865,000
----------
Manufacturing 1.1%
Transdigm, Inc.
10.375%, '08 1,000M 825,000
----------
Metals/Minerals 1.5%
**ACME Metal, Inc.
10.875%, '07 1,000M 135,000
Bulong Operations Pty
12.5%, '08 1,000M 505,000
Kaiser Aluminum
12.75%, '03 550M 500,500
----------
1,140,500
----------
(continued)
46
<PAGE>
Sentinel High Yield Bond Fund
Investment in Securities (continued)
at May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
<S> <C> <C>
Paper & Printing 8.4%
American Tissue, Inc.
12.50%, '06 1,000M $ 995,000
Four M Corp. 12%, '06 1,000M 950,000
Merrill Corp. 12%, '09 (a) 1,000M 855,000
Repap New Brunswick
11.5%, '04 1,000M 995,000
Riverwood Int'l. 10.25%, '06 1,000M 972,500
Riverwood Int'l. 10.875%, '08 500M 466,250
Stone Containers
10.75%, '02 1,000M 1,020,000
Tembec Industries
8.625%, '09 250M 235,625
-------------
6,489,375
-------------
Retail 2.1%
Advance Stores 10.25%, '08 1,000M 807,500
Ames Department Stores
10%, '06 1,000M 785,000
-------------
1,592,500
-------------
Service 3.8%
AFC Enterprises 10.25%, '07 500M 482,500
American Lawyer 9.75%, '07 1,000M 912,500
Budget Group, Inc.
9.125%, '06 1,000M 695,000
United Rentals 9.25%, '09 1,000M 835,000
-------------
2,925,000
-------------
Shipping/Transportation 0.9%
Greyhound Lines 11.5%, '07 1,000M 650,000
-------------
Telecommunications 13.5%
Alestra SA 12.125%, '06 (a) 1,000M 892,500
Crown Castle Int'l. Corp.
0%, '04
10.375%, '11 1,325M 788,375
Hermes Europe Railtel
10.375%, '09 1,000M 770,000
Intermedia Communications
8.60%, '08 750M 665,625
0%, '02
11.25%, '07 700M 521,500
Level 3 Communications
9.125%, '08 1,200M 1,038,000
Motient Corp. 12.25%, '08 1,000M 615,000
Psinet, Inc. 11.50%, '08 1,000M 915,000
Spectrasite Holdings
0%, '04
11.25%, '09 2,000M 1,090,000
Unitedglobalcom, Inc.
0%, '03
10.75%, '08 2,000M 1,210,000
United Pan-Europe
0%, 05
13.75%, '10 1,350M 604,125
Vectura Group, Inc.
10.25%, '08 1,000M 805,000
Winstar Communications
0%, '05
14.75%, '10 1,000M 437,620
-------------
10,352,745
-------------
Waste Management 1.6%
Allied Waste North American
10%, '09 850M 675,750
Waste Systems 11.5%, '06 750M 521,250
-------------
1,197,000
-------------
Wireless Communications 9.2%
Nextel Communications
9.375%, '09 1,000M 945,000
NEXTLINK Communications
0%, '04
12.25%, 09 1,400M 808,500
Price Comm. Cellular
11.75%, '07 1,000M 1,090,000
Tritel PCS, Inc.
0%, '04
12.75%, '09 (a) 2,250M 1,507,500
Triton PCS, Inc.
0%, '03
11%, '08 900M 657,000
Voicestream 10.375%, '09 1,500M 1,545,000
0%, '04
11.875%, '09 750M 482,812
-------------
7,035,812
-------------
Total Bonds
(Cost $76,997,354) 68,579,142
-------------
U.S. Government Agency
Obligations 3.3%
Federal Home Loan Mortgage Corporation
6.27%, 06/01/00
(Cost $2,492,000) 2,492M $ 2,492,000
-------------
Total Investments
(Cost $87,357,850)*** 77,363,867
Excess of Liabilities
Over Other Assets (1.1%) (871,991)
-------------
Net Assets $76,491,876
=============
</TABLE>
--------------------------------------------------------------------------------
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registrations, normally to qualified institutional buyers. At May 31,
2000, the market value of rule 144A securities amounted to $8,223,125 or
10.8% of net assets.
* Non-income producing.
** Bond in default.
*** Also cost for federal income tax purposes.
At May 31, 2000, unrealized depreciation for federal income tax purposes
aggregated $9,993,983 of which $629,486 related to appreciated securities
and $10,623,469 related to depreciated securities.
See Notes to Financial Statements.
47
<PAGE>
Sentinel High Yield Bond Fund
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
Investments at value (Cost $87,357,850) $77,363,867
Cash and cash equivalents 458,210
Receivable for securities sold 943,591
Receivable for fund shares sold 49,394
Receivable for interest and dividends 1,636,983
------------
Total Assets 80,452,045
------------
Liabilities
Payable for securities purchased 3,779,987
Payable for fund shares repurchased 67,080
Accrued expenses 22,138
Management fee payable 50,662
Distribution fee payable (Class A Shares) 8,125
Distribution fee payable (Class B Shares) 22,030
Distribution fee payable (Class C Shares) 3,193
Fund service fee payable 6,954
------------
Total Liabilities 3,960,169
------------
Net Assets Applicable to Outstanding Shares $76,491,876
============
Net Asset Value and Offering Price per Share
Class A Shares
$23,603,405 / 2,769,151 shares outstanding $ 8.52
Sales Charge -- 4.00% of offering price 0.36
------------
Maximum Offering Price $ 8.88
============
Class B Shares
$51,295,741 / 6,022,025 shares outstanding $ 8.52
============
Class C Shares
$1,592,730 / 186,595 shares outstanding $ 8.54
============
Net Assets Represent
Capital stock at par value $ 89,778
Paid-in capital 93,018,937
Accumulated undistributed net investment income 4,076
Accumulated undistributed net realized loss
on investments (6,626,932)
Unrealized depreciation of investments (9,993,983)
------------
Net Assets $76,491,876
============
Sentinel High Yield Bond Fund
Statement of Operations
For the Six Months Ended May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income
Income:
Dividends $ 239,727
Interest 4,291,840
------------
Total Income 4,531,567
------------
Expenses:
Management advisory fee 321,755
Transfer agent and custodian 59,998
Distribution expense (Class A Shares) 26,108
Distribution expense (Class B Shares) 193,347
Distribution expense (Class C Shares) 14,773
Accounting services 13,420
Auditing fees 3,300
Legal fees 2,350
Reports and notices to shareholders 2,900
Registration and filing fees 15,326
Directors' fees and expenses 3,349
Other 11,221
------------
Total Expenses 667,847
Expense Offset (4,298)
------------
Net Expenses 663,549
------------
Net Investment Income 3,868,018
------------
Realized and Unrealized Loss on Investments
Net realized loss on sales of investments (593,330)
Net change in unrealized depreciation (5,492,141)
------------
Net Realized and Unrealized Loss on Investments (6,085,471)
------------
Net Decrease in Net Assets from Operations $ (2,217,453)
============
See Notes to Financial Statements.
48
<PAGE>
Sentinel High Yield Bond Fund
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
05/31/00 11/30/99
(Unaudited)
------------ ------------
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income $ 3,868,018 $ 7,914,333
Net realized loss on sales of investments (593,330) (4,543,183)
Net change in unrealized depreciation (5,492,141) (1,021,632)
------------ ------------
Net increase (decrease) in net assets from operations (2,217,453) 2,349,518
------------ ------------
Distributions to Shareholders
From net investment income
Class A Shares (1,224,724) (2,706,580)
Class B Shares (2,537,794) (4,996,164)
Class C Shares (112,874) (205,162)
From net realized gain on investments
Class A Shares -- --
Class B Shares -- --
Class C Shares -- --
------------ ------------
Total distributions to shareholders (3,875,392) (7,907,906)
------------ ------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 3,351,284 8,535,916
Class B Shares 2,412,176 13,454,832
Class C Shares 1,874,752 5,141,165
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 815,332 1,776,689
Class B Shares 1,009,620 2,066,854
Class C Shares 101,871 249,194
------------ ------------
9,565,035 31,224,650
Less: Payments for shares reacquired
Class A Shares (6,965,596) (11,352,238)
Class B Shares (7,572,643) (8,351,256)
Class C Shares (4,213,550) (3,177,472)
------------ ------------
Increase (Decrease) in net assets from capital
share transactions (9,186,754) 8,343,684
------------ ------------
Total Increase (Decrease) in Net Assets for period (15,279,599) 2,785,296
Net Assets: Beginning of period 91,771,475 88,986,179
------------ ------------
Net Assets: End of period $ 76,491,876 $ 91,771,475
============ ============
Accumulated undistributed Net Investment
Income at End of Period $ 4,076 $ 11,450
============ ============
</TABLE>
See Notes to Financial Statements.
49
<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 Period from
Ended 5/31/00 (C) Year Ended Year Ended 6/23/97 through
Class A Shares (Unaudited) 11/30/99 11/30/98 11/30/97 (A)
------------- ---------- --------- -------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period $9.19 $9.75 $10.41 $10.00
------------- ---------- --------- -------------
Income (Loss) from Investment Operations
Net investment income 0.43 0.84 0.87 0.32
Net realized and unrealized gain (loss) on investments (0.67) (0.56) (0.58) 0.41
------------- ---------- --------- -------------
Total from investment operations (0.24) 0.28 0.29 0.73
------------- ---------- --------- -------------
Less Distributions
Dividends from net investment income 0.43 0.84 0.86 0.32
Distributions from realized gains on investments -- -- 0.09 --
------------- ---------- --------- -------------
Total Distributions 0.43 0.84 0.95 0.32
------------- ---------- --------- -------------
Net asset value at end of period $8.52 $9.19 $9.75 $10.41
============= ========== ========= =============
Total Return (%) * (2.8) ++ 3.0 2.7 7.3 ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.20 + 1.21 1.26 1.20 +
Ratio of expenses to average net assets before
expense reductions (%) ** 1.21 + 1.22 1.28 1.26 +
Ratio of net investment income to average net assets (%) 9.37 + 8.83 8.42 7.80 +
Portfolio turnover rate (%) 48 ++ 144 139 133 ++
Net assets at end of period (000 omitted) $23,603 $28,253 $31,120 $11,084
</TABLE>
(A) Commenced operations June 23, 1997.
(B) Commenced operations May 4, 1998.
(C) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earnings credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
50
<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 Period from
Ended 5/31/00 (C) Year Ended Year Ended 6/23/97 through
Class B Shares (Unaudited) 11/30/99 (C) 11/30/98 (C) 11/30/97 (A)(C)
--------------- ------------ ------------ ---------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period $9.18 $9.74 $10.40 $10.00
--------------- ------------ ------------ ---------------
Income (Loss) from Investment Operations
Net investment income 0.41 0.79 0.84 0.32
Net realized and unrealized gain (loss) on investments (0.66) (0.56) (0.57) 0.39
--------------- ------------ ------------ ---------------
Total from investment operations (0.25) 0.23 0.27 0.71
--------------- ------------ ------------ ---------------
Less Distributions
Dividends from net investment income 0.41 0.79 0.84 0.31
Distributions from realized gains on investments -- -- 0.09 --
--------------- ------------ ------------ ---------------
Total Distributions 0.41 0.79 0.93 0.31
--------------- ------------ ------------ ---------------
Net asset value at end of period $8.52 $9.18 $9.74 $10.40
=============== ============ ============ ===============
Total Return (%) * (2.9) ++ 2.5 2.4 7.2 ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.67 + 1.65 1.49 1.30 +
Ratio of expenses to average net assets before
expense reductions (%) ** 1.68 + 1.66 1.52 1.34 +
Ratio of net investment income to average net assets (%) 8.91 + 8.40 8.19 7.70 +
Portfolio turnover rate (%) 48 ++ 144 139 133 ++
Net assets at end of period (000 omitted) $51,296 $59,518 $55,911 $33,808
</TABLE>
(A) Commenced operations June 23, 1997.
(B) Commenced operations May 4, 1998.
(C) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earnings credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
51
<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 Period from
Ended 5/31/00 (C) Year Ended 5/4/98 through
Class C Shares (Unaudited) 11/30/99 (C) 11/30/98 (B)(C)
--------------- ------------ ---------------
<S> <C> <C> <C>
Net asset value at beginning of period $ 9.19 $ 9.75 $ 10.70
--------------- ------------ ---------------
Income (Loss) from Investment Operations
Net investment income 0.40 0.72 0.41
Net realized and unrealized gain (loss) on investments (0.68) (0.56) (0.91)
--------------- ------------ ---------------
Total from investment operations (0.28) 0.16 (0.50)
--------------- ------------ ---------------
Less Distributions
Dividends from net investment income 0.37 0.72 0.45
Distributions from realized gains on investments -- -- --
--------------- ------------ ---------------
Total Distributions 0.37 0.72 0.45
--------------- ------------ ---------------
Net asset value at end of period $ 8.54 $ 9.19 $ 9.75
=============== ============ ===============
Total Return (%) * (3.2) ++ 1.7 (4.7)++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 2.25 + 2.41 2.05 +
Ratio of expenses to average net assets before
expense reductions (%) ** 2.26 + 2.42 2.06 +
Ratio of net investment income to average net assets (%) 8.15 + 7.69 7.63 +
Portfolio turnover rate (%) 48 ++ 144 139
Net assets at end of period (000 omitted) $1,593 $4,001 $1,956
</TABLE>
(A) Commenced operations June 23, 1997.
(B) Commenced operations May 4, 1998.
(C) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earnings credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
52
<PAGE>
Sentinel Bond Fund
Investment in Securities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
U.S.Government Obligations 43.3%
U.S. Treasury Obligations 25.5%
10-Year:
Note 6.5%, '10 10,250M $ 10,403,340
------------
30-Year:
Bond 6%, '26 2,500M 2,398,700
Bond 5.25%, '29 2,500M 2,177,050
Bond 6.25%, '30 7,500M 7,737,750
------------
12,313,500
------------
Total U.S. Treasury Obligations 22,716,840
------------
U.S. Government Agency Obligations 17.8%
Federal Home Loan Mortgage Corporation 3.5%
Agency Debenture
5%, '04 2,500M 2,312,225
------------
Mortgage-Backed Securities:
20-Year
8%, '08 815M 826,395
------------
Total Federal Home Loan
Mortgage Corporation 3,138,620
------------
Federal National Mortgage Association 14.3%
Mortgage-Backed Securities:
10-Year
7.5%, '04 197M 195,774
------------
15-Year:
8.5%, '10 520M 531,735
------------
30-Year:
10%, '17 454M 484,799
10%, '17 580M 619,955
8%, '22 1,552M 1,556,256
9.5%, '24 695M 725,432
6%, '28 983M 886,050
7%, '28 1,187M 1,129,158
7%, '28 1,976M 1,877,358
8.5%, '28 1,707M 1,727,620
7%, '29 3,122M 2,968,855
------------
11,975,483
------------
Total Federal National
Mortgage Association 12,702,992
------------
Government National Mortgage Association 0.0%
Mortgage-Backed Securities:
15-year:
13%, '11 7,000M 8,128
13%, '13 404M 465
------------
Total Government National
Mortgage Association 8,593
------------
Total U.S. Government
Agency Obligations 15,850,205
------------
Total U.S. Government Obligations
(Cost $38,849,315) 38,567,045
------------
Bonds 49.8%
Aerospace 1.6%
Lockheed Martin Corp. 8.5%, '29 1,500M 1,466,250
------------
Automobile & Auto Parts 2.1%
Ford Motor Company
7.375%, '09 2,000M 1,900,000
------------
Chemicals 2.2%
IMC Global, Inc. 7.4%, '02 2,000M 1,967,500
------------
Computer Products & Services 2.8%
Sun Microsystems, Inc.
7%, '02 2,500M 2,462,500
------------
Consumer Services 1.9%
Service Corp. 6.75%, '01 2,000M 1,710,000
------------
Containers & Packaging 2.1%
Crown Cork & Seal
7.125%, '02 2,000M 1,920,000
------------
Energy 3.9%
Kinder Morgan, Inc.
6.45%, '03 1,500M 1,447,500
Phillips Pete 8.50%, '05 2,000M 2,027,500
------------
3,475,000
------------
Financial Institutions 4.4%
Bank of America 7.8%, '10 2,000M 1,950,000
Goldman Sachs Group, Inc.
7.8%, '10 2,000M 1,945,000
------------
3,895,000
------------
Foreign Industrial 3.3%
Ahold Finance 6.25%, '09 2,750M 2,385,625
* Laidlaw, Inc. 7.7%, '02 2,250M 562,500
------------
2,948,125
------------
Foreign Utilities-Telephone 2.2%
Vodafone Airtouch plc
7.75%, '10 (a) 2,000M 1,942,500
------------
Lodging 1.8%
Marriott Int'l., Inc. 6.625%, '03 1,750M 1,662,500
------------
Manufacturing 2.2%
FMC Corp. 7.125%, '02 2,000M 1,945,000
------------
Real Estate Investment Trusts 1.9%
Simon Debartolo
------------
6.625%, '03 1,750M 1,655,938
Retail 5.2%
Fortune Brands, Inc.
7.125%, '04 (a) 2,000M 1,942,500
J.C. Penney, Inc. 7.25%, '02 1,500M 1,436,250
Safeway Stores 7%, '02 1,250M 1,228,125
------------
4,606,875
------------
Telecommunications 6.8%
Comsat 8.55%, '06 2,000M 2,077,300
MCI Worldcom, Inc.
6.4%, '05 2,000M 1,877,500
US West Capital Funding
6.25%, '05 2,250M 2,095,312
------------
6,050,112
------------
Utilities-Electric 5.4%
Calenergy Co. 7.52%, '08 2,000M $ 1,865,000
CMS Energy Corp.
6.75%, '04 1,000M 901,250
Emerson Electric
7.875%, '05 2,000M 2,027,500
------------
4,793,750
------------
Total Bonds
(Cost $46,691,389) 44,401,050
------------
Corporate Short-Term Notes 28.0%
Assoc. Corporation of NA
6.45%, 06/07/00 3,000M 2,996,775
G.E Capital Corporation
6.49%, 06/12/00 3,000M 2,994,051
Florida Power Corporation
6.48%, 06/14/00 3,000M 2,992,980
John Deere Capital
6.48%, 06/30/00 4,400M 4,377,032
Northern Trust Corporation
6.50%, 07/03/00 4,400M 4,374,578
Prudential Funding
6.46%, 06/02/00 4,400M 4,399,210
Salomon Smith Barney Holdings
6.55%, 06/20/00 2,800M 2,790,320
------------
Total Corporate Short-Term Notes
(Cost $24,924,946) 24,924,946
------------
Total Investments
(Cost $110,465,650)* 107,893,041
Excess of Liabilities
Over Other Assets (21.1%) (18,727,077)
------------
Net Assets $ 89,165,964
============
--------------------------------------------------------------------------------
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registrations, normally to qualified institutional buyers. At May 31,
2000, the market value of rule 144A securities amounted to $3,885,000 or
4.4% of net assets.
* Laidlaw, Inc. has declared an interest payment moratorium until further
notice.
** Also cost for federal income tax purposes.
At May 31, 2000, unrealized depreciation for federal income tax purposes
aggregated $2,572,609 of which $481,371 related to appreciated securities
and $3,053,980 related to depreciated securities.
See Notes to Financial Statements.
53
<PAGE>
Sentinel Bond Fund
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
Investments at value (Cost $110,465,650) $107,893,041
Cash and cash equivalents 177,159
Receivable for securities sold 8,039,836
Receivable for fund shares sold 8,284
Receivable for interest 1,065,194
Receivable from fund administrator 18,198
--------------
Total Assets 117,201,712
--------------
Liabilities
Payable for securities purchased 27,853,208
Payable for fund shares repurchased 67,909
Accrued expenses 24,618
Management fee payable 40,369
Distribution fee payable (Class A Shares) 28,525
Distribution fee payable (Class B Shares) 11,704
Fund service fee payable 9,415
--------------
Total Liabilities 28,035,748
--------------
Net Assets Applicable to Outstanding Shares $ 89,165,964
==============
Net Asset Value and Offering Price per Share
Class A Shares
$70,870,799 / 12,478,076 shares outstanding $5.68
Sales Charge -- 4.00% of offering price 0.24
--------------
Maximum Offering Price $ 5.92
==============
Class B Shares
$18,295,165 / 3,213,676 shares outstanding $ 5.69
==============
Net Assets Represent
Capital stock at par value $ 156,918
Paid-in capital 102,766,976
Accumulated distributions in excess of
net investment income (2,062)
Accumulated undistributed net realized loss
on investments (11,183,259)
Unrealized depreciation of investments (2,572,609)
--------------
Net Assets $ 89,165,964
==============
Sentinel Bond Fund
Statement of Operations
For the Six Months Ended May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income
Income:
Interest $3,725,798
--------------
Expenses:
Management advisory fee 253,665
Transfer agent and custodian 73,329
Distribution expense (Class A Shares) 75,868
Distribution expense (Class B Shares) 97,695
Accounting services 14,850
Auditing fees 3,500
Legal fees 2,500
Reports and notices to shareholders 4,000
Registration and filing fees 21,182
Directors' fees and expenses 3,649
Other 1,941
--------------
Total Expenses 552,179
Expense Reimbursement (92,030)
Expense Offset (12,879)
--------------
Net Expenses 447,270
--------------
Net Investment Income 3,278,528
--------------
Realized and Unrealized Gain (Loss) on Investments
Net realized loss on sales of investments (4,266,378)
Net change in unrealized appreciation (depreciation) 9,474
--------------
Net Realized and Unrealized Loss on Investments (4,256,904)
--------------
Net Decrease in Net Assets from Operations $ (978,376)
==============
See Notes to Financial Statements.
54
<PAGE>
Sentinel Bond Fund
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
5/31/00 11/30/99
(Unaudited)
----------- ------------
<S> <C> <C>
Decrease in Net Assets from Operations
Net Investment income $ 3,278,528 $ 6,438,301
Net realized loss on sales of investments (4,266,378) (3,126,993)
Net change in unrealized appreciation (depreciation) 9,474 (5,479,635)
----------- ------------
Net decrease in net assets from operations (978,376) (2,168,327)
----------- ------------
Distributions to Shareholders
From net investment income
Class A Shares (2,676,539) (5,373,942)
Class B Shares (605,296) (1,033,897)
From net realized gain on investments
Class A Shares -- --
Class B Shares -- --
----------- ------------
Total distributions to shareholders (3,281,835) (6,407,839)
----------- ------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 18,359,098 28,365,253
Class B Shares 1,699,947 9,007,466
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 1,701,418 3,533,989
Class B Shares 459,641 757,141
----------- ------------
22,220,104 41,663,849
Less: Payments for shares reacquired
Class A Shares (27,908,207) (34,076,541)
Class B Shares (3,695,490) (4,099,087)
----------- ------------
Increase (decrease) in net assets from capital
share transactions (9,383,593) 3,488,221
----------- ------------
Total Decrease in Net Assets for period (13,643,804) (5,087,945)
Net Assets: Beginning of period 102,809,768 107,897,713
----------- ------------
Net Assets: End of period $89,165,964 $102,809,768
=========== ============
Undistributed (Distributions in Excess of)
Net Investment Income at End of Period$ $ (2,062) $ 4,938
=========== ============
</TABLE>
See Notes to Financial Statements.
55
<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>
Six Months
Ended 5/31/00 (B) Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
--------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 5.94 $ 6.45 $ 6.36 $ 6.35 $ 6.49 $ 5.85
--------------- ---------- ---------- ---------- ---------- ----------
Income (Loss) from Investment Operations
Net investment income 0.21 0.39 0.40 0.40 0.41 0.42
Net realized and unrealized gain (loss) on investments (0.26) (0.51) 0.09 0.01 (0.14) 0.64
--------------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (0.05) (0.12) 0.49 0.41 0.27 1.06
--------------- ---------- ---------- ---------- ---------- ----------
Less Distributions
Dividends from net investment income 0.21 0.39 0.40 0.40 0.41 0.42
Distributions from realized gains on investments -- -- -- -- -- --
--------------- ---------- ---------- ---------- ---------- ----------
Total Distributions 0.21 0.39 0.40 0.40 0.41 0.42
--------------- ---------- ---------- ---------- ---------- ----------
Net asset value at end of period $ 5.68 $ 5.94 $ 6.45 $ 6.36 $ 6.35 $ 6.49
=============== ========== ========== ========== ========== ==========
Total Return (%) * (0.9) ++ (1.9) 8.0 6.7 4.5 18.8
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.76 + 0.73 0.77 0.97 0.98 0.99
Ratio of expenses to average net assets before
expense reductions (%) ** 0.98 + 0.94 0.95 0.99 1.00 1.03
Ratio of net investment income to average net assets (%) 7.05 + 6.29 6.26 6.37 6.46 6.81
Ratio of net investment income to average net assets
before voluntary expense reimbursements (%) 6.86 + 6.10 6.11 6.37 6.46 6.81
Portfolio turnover rate (%) 85 ++ 207 147 130 176 237
Net assets at end of period (000 omitted) $70,871 $82,107 $91,297 $88,756 $99,408 $108,755
</TABLE>
(A) Commenced operations April 1, 1996.
(B) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earnings credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
56
<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>
Six Months
Ended 5/31/00 (B) Year Ended Year Ended Year Ended Year Ended
Class B Shares (Unaudited) 1/30/99 (B) 11/30/98 (B) 11/30/97 (B) 11/30/96 (A)(B)
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 5.96 $ 6.46 $ 6.38 $ 6.36 $ 6.30
------------- ------------- ------------- ------------- --------------
Income (Loss) from Investment Operations
Net investment income 0.18 0.33 0.34 0.34 0.21
Net realized and unrealized gain (loss) on investments (0.27) (0.50) 0.08 0.02 0.06
-------------- -------------- -------------- -------------- --------------
Total from investment operations (0.09) (0.17) 0.42 0.36 0.27
-------------- -------------- -------------- -------------- --------------
Less Distributions
Dividends from net investment income 0.18 0.33 0.34 0.34 0.21
Distributions from realized gains on investments - - - - -
-------------- -------------- -------------- -------------- --------------
Total Distributions 0.18 0.33 0.34 0.34 0.21
-------------- -------------- -------------- -------------- --------------
Net asset value at end of period $ 5.69 $ 5.96 $ 6.46 $ 6.38 $ 6.36
============== ============== ============== ============== ==============
Total Return (%) * (1.5) ++ (2.6) 6.8 5.9 4.5 ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 1.64 + 1.63 1.64 1.87 2.16 +
Ratio of expenses to average net assets before
expense reductions (%) ** 1.86 + 1.81 1.84 1.90 2.18 +
Ratio of net investment income to average net assets (%) 6.17 + 5.51 5.40 5.46 5.28 +
Ratio of net investment income to average net assets
before voluntary expense reimbursements (%) 5.98 + 5.25 5.22 5.46 5.28 +
Portfolio turnover rate (%) 85 ++ 207 147 130 176
Net assets at end of period (000 omitted) $18,295 $20,703 $16,601 $8,115 $4,714
</TABLE>
(A) Commenced operations April 1, 1996.
(B) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earnings credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
57
<PAGE>
Sentinel Tax-Free Income Fund
Investment in Securities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
Bonds 96.7%
California 8.1%
Foothill/Eastern CA Toll
6.500%, 01/01/32 3,500M $3,803,100
Foothill/Eastern CA Toll
5.750%, 01/15/40 2,000M 1,821,420
----------
5,624,520
----------
Connecticut 3.3%
Bridgeport Ref. A
6.125%, 03/01/05 2,250M 2,329,718
----------
Delaware 0.8%
Delaware Health Facility Auth.
7.625%, 11/01/10 500M 527,600
----------
Florida 1.6%
Orange County Healthcare A
(MBIA)
6.250%, 10/01/13 1,060M 1,130,151
----------
Georgia 2.1%
State Housing &
Finance Authority
6.550%, 12/01/27 1,465M 1,485,481
----------
Hawaii 1.5%
Hawaii State Dept.
of Budget and Finance
7.650%, 07/01/19 1,000M 1,049,470
Hawaii State Housing Finance
7.800%, 07/01/29 5M 5,052
----------
1,054,522
----------
Idaho 0.3%
Idaho Housing Agency
Series D-1
8.000%, 01/01/20 205M 218,255
----------
Illinois 14.1%
Berwyn Corp. (AMBAC)
4.250%, 12/01/15 1,695M 1,391,272
Illinois Chicago University
Aux. (MBIA)
5.500%, 12/01/23 1,000M 935,840
Illinois Housing
Development Authority
7.000%, 07/01/10 990M 1,030,808
Illinois Metro
Peir-Mccormick (FGIC)
5.375%, 12/15/18 2,250M 2,091,577
IL MC Henry County
School (FSA)
5.850%, 01/01/16 1,000M 1,032,010
Illinois State Sales
Tax Revenue
6.500%, 06/15/13 1,000M 1,076,670
Illinois State Sales Tax
6.000%, 06/15/12 2,180M 2,262,426
----------
9,820,603
----------
Indiana 2.3%
Indianapolis IN Economic
Dev. Revenue
7.800%, 12/01/17 55M 56,303
St. Joseph Educational
Revenue
5.000%, 03/01/27 1,775M 1,532,446
----------
1,588,749
----------
Kansas 0.1%
Kansas City Leavenworth
Cnty. & City of Lenexa
Series A - Mtg. Rev.
8.400%, 05/01/15 75M 76,217
----------
Louisiana 2.7%
Government Development
Authority Revenue (AMBAC)
5.250%, 12/01/18 1,000M 919,700
New Orleans Ref. (FGIC)
5.500%, 12/01/17 1,000M 974,800
----------
1,894,500
----------
Massachusetts 5.7%
Massachusetts State
G/O (FGIC)
6.000%, 08/01/09 1,000M 1,048,700
Massachusetts State G/O
6.875%, 07/01/10 1,000M 1,040,930
Mass. State Health &
Educational Facs. New England
Baptist Hospital Revenue
7.300%, 07/01/11 1,000M 1,045,320
Mass. Water Revenue (MBIA)
5.000%, 08/01/24 1,000M 850,910
----------
3,985,860
----------
Michigan 0.3%
Michigan State
Building Authority
6.250%, 10/01/20 170M 171,550
----------
Missouri 1.5%
Central Missouri St.
University (MBIA)
7.000%, 07/01/14 1,000M 1,042,760
Missouri Housing
Development Comm.
9.375%, 04/01/16 5M 5,142
----------
1,047,902
----------
Nebraska 1.5%
Omaha Public Power District
6.150%, 02/01/12 1,000M 1,056,180
----------
New Mexico 3.6%
Sante Fe County NM
Revenue (FSA)
6.000%, 02/01/27 2,500M 2,509,700
----------
New York 18.6%
New York City NY
(Prerefunded)
7.100%, 02/01/09 1,105M 1,158,405
New York City NY
7.100%, 02/01/09 95M 99,219
NYC Municipal Water
Fin. Authority
7.000%, 06/15/09 250M 258,210
NYC University
Certificates of Participation
5.750%, 08/15/05 2,000M 2,038,400
New York NY Series G
5.750%, 02/01/20 1,600M 1,539,776
NY State Dorm. Authority
6.375%, 07/01/08 1,275M 1,327,454
NY State Dorm.
Mental Health Services
6.000%, 08/15/16 2,800M 2,828,672
NY State Envir. Facs.
Corp. (Prerefunded)
7.250%, 06/15/10 40M 41,794
NY State Environmental
Facs. Corp.
7.250%, 06/15/10 10M 10,428
NY State Medical Care
Facs. (Prerefunded)
7.875%, 08/15/08 175M 179,554
NY State Medical
Care Facs.
7.875%, 08/15/08 75M 76,894
Triborough Bridge &
Tunnel Authority
6.000%, 01/01/12 3,250M 3,396,088
----------
12,954,894
----------
Pennsylvania 6.6%
Lancaster Sewer
Revenue (MBIA)
4.500%, 04/01/18 1,650M 1,353,643
Montgomery Cnty.
Higher Edl. & Health
8.300%, 06/01/10 500M 510,000
Pennsylvania State G/O
6.250%, 07/01/11 2,000M 2,135,040
Southeast Delco School
District (MBIA)
0.000%, 02/01/10 1,005M 583,553
----------
4,582,236
----------
Tennessee 3.0%
Lawrenceburg TN
Electrical Revenue (MBIA)
6.625%, 07/01/18 1,910M 2,082,645
----------
(continued)
58
<PAGE>
Sentinel Tax-Free Income Fund
Investment in Securities (cont'd.)
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
Texas 1.5%
North Central TX Health
6.250%, 05/15/10 1,000M $ 1,037,430
-----------
Utah 0.0%
Utah State Housing
Finance Authority
7.250%, 07/01/22 10M 10,244
-----------
Vermont 5.8%
Vermont Education &
Health Norwich
6.000%, 09/01/13 1,070M 1,058,348
Vermont Education &
Health Norwich
5.500%, 07/01/18 2,295M 2,043,055
Vermont Education &
Health St. Michaels
7.050%, 10/01/16 900M 956,349
-----------
4,057,752
-----------
Virginia 3.4%
VA Pocahontas Parkway
5.500%, 08/15/28 3,000M 2,354,940
-----------
Washington 8.3%
Snohomish County
Washington School Dist
7.100%, 12/01/07 500M 510,975
Washington State G/O
6.200%, 03/01/11 1,220M 1,286,417
Washington State
Public Power
7.625%, 07/01/10 250M 258,938
Washington State Public
Power (MBIA)
7.125%, 07/01/16 3,295M 3,754,685
-----------
5,811,015
-----------
Total Bonds
(Cost $67,657,817) 67,412,664
-----------
Short-Term Investments 1.6%
Provident Institutional Municipal
Fund #50 3.94% (a)
(Cost $1,150,000) 1,150M $ 1,150,000
-----------
Total Investments
(Cost $68,807,817)* 68,562,664
Excess of Other Assets
Over Liabilities 1.7% 1,202,565
-----------
Net Assets $69,765,229
===========
* Also cost for federal income tax purposes.
At May 31, 2000, net unrealized depreciation for federal income tax
purposes aggregated $245,153 of which $1,771,231 related to appreciated
securities and $2,016,384 related to depreciated securities.
(a) Variable rate security that may be tendered back to issuer at par.
The following abbreviations are used in 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.
59
<PAGE>
Sentinel Tax-Free Income Fund
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
Investments at value (Cost $68,807,817) $68,562,664
Receivable for fund shares sold 9,868
Receivable for interest 1,499,880
Receivable from fund administrator 15,561
-----------
Total Assets 70,087,973
-----------
Liabilities
Payable for fund shares repurchased 234,357
Payable to custodian 14,330
Accrued expenses 10,094
Management fee payable 31,814
Distribution fee payable 26,460
Fund service fee payable 5,689
-----------
Total Liabilities 322,744
-----------
Net Assets Applicable to Outstanding Shares $69,765,229
===========
Net Asset Value and Offering Price per Share
$69,765,229 / 5,630,753 shares outstanding $ 12.39
Sales Charge ' 4.00% of offering price 0.52
-----------
Maximum Offering Price $ 12.91
===========
Net Assets Represent
Capital stock at par value $ 56,308
Paid-in capital 70,653,442
Accumulated undistributed net investment income 4,753
Accumulated undistributed net realized loss
on investments (704,121)
Unrealized depreciation of investments (245,153)
-----------
Net Assets $69,765,229
===========
Sentinel Tax-Free Income Fund
Statement of Operations
For the Six Months Ended May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income
Income:
Interest $2,317,554
----------
Expenses:
Management advisory fee 207,487
Transfer agent and custodian 53,161
Distribution expense 78,007
Accounting services 12,300
Auditing fees 2,750
Legal fees 1,500
Reports and notices to shareholders 1,100
Registration and filing fees 12,904
Directors' fees and expenses 3,002
Other 5,500
----------
Total Expenses 377,711
Expense Reimbursement (85,378)
Expense Offset (2,211)
----------
Net Expenses 290,122
----------
Net Investment Income 2,027,432
----------
Realized and Unrealized Loss on Investments
Net realized loss on sales of investments (35,690)
Net change in unrealized appreciation (depreciation)
(1,294,972)
----------
Net Realized and Unrealized Loss on Investments (1,330,662)
----------
Net Increase in Net Assets from Operations $ 696,770
==========
See Notes to Financial Statements.
60
<PAGE>
Sentinel Tax-Free Income Fund
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year
5/31/00 Ended
(Unaudited) 11/30/99
------------ -----------
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income $ 2,027,432 $ 4,290,717
Net realized loss on sales of investments (35,690) (668,431)
Net change in unrealized appreciation (depreciation) (1,294,972) (6,235,157)
------------ ------------
Net increase (decrease) in net assets from operations 696,770 (2,612,871)
------------ ------------
Distributions to Shareholders
From net investment income (2,029,368) (4,286,751)
From net realized gain on investments -- (1,104,934)
------------ ------------
Total distributions to shareholders (2,029,368) (5,391,685)
------------ ------------
From Capital Share Transactions
Net proceeds from sales of shares 3,068,906 38,537,008
Net asset value of shares in reinvestment
of dividends and distributions 1,371,719 3,857,794
------------ ------------
4,440,625 42,394,802
Less: Payments for shares reacquired (19,317,520) (37,098,950)
------------ ------------
Increase (decrease) in net assets from capital
share transactions (14,876,895) 5,295,852
------------ ------------
Total Decrease in Net Assets for period (16,209,493) (2,708,704)
Net Assets: Beginning of period 85,974,722 88,683,426
------------ ------------
Net Assets: End of period $ 69,765,229 $ 85,974,722
============ ============
Undistributed Net Investment Income
at End of Period $4,753 $6,690
============ ============
</TABLE>
See Notes to Financial Statements.
61
<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 5/31/00 (A) Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
----------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 12.60 $13.78 $13.64 $13.53 $13.62 $12.35
------- ------ ------ ------ ------ ------
Income (Loss) from Investment Operations
Net investment income 0.33 0.64 0.65 0.65 0.65 0.67
Net realized and unrealized gain (loss) on investments (0.21) (1.01) 0.33 0.24 (0.09) 1.27
------- ------ ------ ------ ------ ------
Total from investment operations 0.12 (0.37) 0.98 0.89 0.56 1.94
------- ------ ------ ------ ------ ------
Less Distributions
Dividends from net investment income 0.33 0.64 0.65 0.65 0.65 0.67
Distributions from realized gains on investments -- 0.17 0.19 0.13 -- --
------- ------ ------ ------ ------ ------
Total Distributions 0.33 0.81 0.84 0.78 0.65 0.67
------- ------ ------ ------ ------ ------
Net asset value at end of period $ 12.39 $12.60 $13.78 $13.64 $13.53 $13.62
======= ====== ====== ====== ====== ======
Total Return (%) * 0.9 ++ (2.8) 7.4 6.9 4.3 16.0
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.74 0.73 0.74 0.91 0.94 0.90
Ratio of expenses to average net assets before
expense reductions (%) ** 0.97 0.91 0.92 0.95 0.97 0.99
Ratio of net investment income to average net assets (%) 5.20 + 4.84 4.77 4.84 4.86 5.06
Ratio of net investment income to average net assets before
voluntary expense reimbursement (%) 4.98 4.66 4.59 4.84 4.86 5.00
Portfolio turnover rate (%) 2 ++ 34 37 47 112 112
Net assets at end of period (000 omitted) $69,765 $85,975 $88,683 $87,935 $99,967 $110,506
</TABLE>
(A) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
62
<PAGE>
Sentinel New York Tax-Free Income Fund
Investment in Securities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
Bonds 93.7%
New York 83.4%
City University NY
Certificate of Participation
5.75%, 08/15/05 300M $305,760
Clifton Park NY Water
Authority Revenue
5.00%, 10/01/29 (FGIC) 650M 545,967
Dutchess County NY G/O
5.00%, 06/15/17 325M 289,712
Long Island NY Electric
Power Revenue
5.25%, 12/01/26 200M 173,362
Metro Transportation Authority
5.75%, 07/01/13 250M 248,628
5.00%, 04/01/23 250M 213,992
Monroe County G/O
6.00%, 03/01/14 250M 260,690
Monroe County Industrial
Dev. Agency
5.375%, 04/01/29 510M 421,505
Monroe Woodbury
Central School Dist
5.625%, 05/15/22 (MBIA) 250M 238,635
New York City Municipal
Water Fin. Auth
6.00%, 06/15/17 100M 100,636
5.75%, 06/15/20 (MBIA) 220M 214,885
5.875%, 06/15/25 (MBIA) 500M 489,410
5.125%, 06/15/30 (FGIC) 300M 255,375
New York NY G/O Series G
5.75%, 02/01/20 400M 384,944
New York NY
Transitional Fin. Auth
4.75%, 11/01/18 200M 169,814
5.00%, 05/01/29 500M 421,500
New York State Dorm
Authority Revenue
City University System
5.625%, 07/01/16 250M 242,913
5.375%, 07/01/25
(AMBAC) 200M 181,966
Cornell Univ. - Ser A
7.375%, 07/01/30 50M 51,093
Department of Health
5.50%, 07/01/20 125M 115,835
Fordham University (FGIC)
5.75%, 07/01/15 215M 215,206
Nursing Home-Hebrew Home
5.625%, 02/01/17 205M 197,374
NY Medical College
4.75%, 07/01/27 (MBIA) 250M 199,055
Memorial Sloan Kettering
Cancer Center
5.50%, 07/01/23 (MBIA) 500M 471,935
Mental Health Services
5.70%, 08/15/09 250M 252,880
5.50%, 08/15/17 600M 567,420
4.50%, 08/15/28 (AMBAC) 500M 385,195
State Univ. Educ. Fac. - Ser A
7.20%, 05/15/06 200M $212,066
6.375%, 05/15/14 250M 263,688
State Univ. Educ. Fac. - Ser B
4.75%, 05/15/28 250M 199,817
St. Johns Univ
5.25%, 07/01/18 (MBIA) 205M 186,722
Wyckoff Heights Medical Ctr
5.3%, 08/15/21 250M 220,433
New York State
Environmental Facilities
5.75%, 01/15/13 250M 253,362
5.75%, 03/15/13 300M 298,362
New York State Environmental
Water Revenue
7.25%, 06/15/10 5M 5,214
7.25%, 06/15/10 (Prerefunded) 55M 57,467
New York State Housing
Finance Agency
5.625%, 05/01/02 250M 252,477
New York State Local
Govt. Assistance Corp.
7.00%, 04/01/08 100M 105,530
5.375%, 04/01/16 (AMBAC) 300M 286,887
New York State Medical
Care Facilities
7.875%, 08/15/20 10M 10,246
7.875%, 08/15/20
(Prerefunded) 10M 10,260
7.30%, 02/15/21 10M 10,400
7.30%, 02/15/21
(Prerefunded) 15M 15,718
Hospitals & Nursing Homes
6.45%, 02/15/09 95M 98,442
6.45%, 02/15/09
(Prerefunded) 120M 126,456
New York State Thruway
Auth. Service Contract
6.25%, 04/01/14 200M 212,666
New York State Urban
Development Corp.
6.00%, 01/01/15 (AMBAC) 485M 494,161
5.70%, 04/01/20 250M 240,787
4.75%, 01/01/28 (AMBAC) 250M 201,405
North Hempstead NY G/O
6.00%, 07/15/15 (FGIC) 500M 512,530
Saint Lawrence University
5.625%, 07/01/13 (MBIA) 250M 250,638
Suffolk County NY
Judicial Svc. Agreement
5.75%, 10/15/13 (AMBAC) 500M 507,040
Suffolk County NY
Water Authority
5.625%, 06/01/16 (AMBAC) 170M 167,273
Triborough Bridge &
Tunnel Authority
6.00%, 01/01/12 250M 261,238
6.875%, 01/01/15 65M 66,813
5.125%, 01/01/22 250M 219,735
United Nations
Development Corp.
6.00%, 07/01/12 250M $261,395
------------
13,624,915
------------
Puerto Rico 10.3%
Puerto Rico Commonwealth
5.375%, 07/01/21 (MBIA) 255M 239,544
5.40%, 07/01/25 300M 274,626
Puerto Rico Commonwealth
Aqueduct & Sewer
6.00%, 07/01/09 250M 261,183
Puerto Rico Electric
Power Authority
4.50%, 07/01/18 (MBIA) 300M 251,271
Puerto Rico Indl. Tourist Edl
Med. & Envir. Ctl. Facs
5.00%, 10/01/22 (MBIA) 300M 262,509
Puerto Rico Public
Building Authority
5.75%, 07/01/15 400M 399,180
------------
1,688,313
------------
Total Bonds
(Cost $15,949,986) 15,313,228
------------
Short-Term Investments 0.5%
Provident New York
Money Fund #53 3.48% (a)
(Cost $80,000) 80M 80,000
------------
Total Investments
(Cost $16,029,986)* 15,393,228
Excess of Other Assets
Over Liabilities 5.8% 954,477
------------
Net Assets $16,347,705
============
* Also cost for federal income tax purposes. At May 31, 2000, net unrealized
depreciation for federal income tax purposes aggregated $636,758 of which
$177,129 related to appreciated securities and $813,887 related to
depreciated securities.
(a) Variable rate security that may be tendered back to issuer at par.
The following abbreviations are used in portfolio descriptions:
(AMBAC) - Guaranteed by AMBAC Indemnity 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.
63
<PAGE>
Sentinel New York Tax-Free Income Fund
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
Investments at value (Cost $16,029,986) $15,393,228
Cash and cash equivalents 671,326
Receivable for fund shares sold 113
Receivable for interest 289,398
Receivable from fund administrator 12,775
------------
Total Assets 16,366,840
------------
Liabilities
Accrued expenses 5,437
Management fee payable 7,131
Distribution fee payable 5,709
Fund service fee payable 858
------------
Total Liabilities 19,135
------------
Net Assets Applicable to Outstanding Shares $16,347,705
============
Net Asset Value and Offering Price Per Share
$16,347,705 / 1,484,836 shares outstanding $11.01
Sales Charge -- 4.00% of Offering Price 0.46
------------
Maximum Offering Price Per Share $11.47
============
Net Assets Represent
Capital stock at par value $14,848
Paid-in capital 17,299,804
Accumulated undistributed net investment income 227
Accumulated undistributed net realized loss
on investments (330,416)
Unrealized depreciation of investments (636,758)
------------
Net Assets $16,347,705
============
Sentinel New York Tax-Free Income Fund
Statement of Operations
For the Six Months Ended May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income
Income:
Interest $455,608
------------
Expenses:
Management advisory fee 42,807
Transfer agent and custodian 6,397
Distribution expense 16,093
Accounting services 2,495
Auditing fees 1,250
Legal fees 500
Reports and notices to shareholders 500
Registration and filing fees 2,178
Directors' fees and expenses 616
Other 5,751
------------
Total Expenses 78,587
Expense Reimbursement (76,500)
Expense Offset (2,087)
------------
Net Expenses --
------------
Net Investment Income 455,608
------------
Realized and Unrealized Loss on Investments
Net realized loss on sales of investments (20,186)
Net change in unrealized appreciation (depreciation) (240,219)
------------
Net Realized and Unrealized Loss on Investments (260,405)
------------
Net Increase in Net Assets from Operations $195,203
============
See Notes to Financial Statements.
64
<PAGE>
Sentinel New York Tax-Free Income Fund
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
5/31/00 11/30/99
(Unaudited)
------------- -----------
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income $ 455,608 $ 825,053
Net realized loss on sales of investments (20,186) (310,229)
Net change in unrealized appreciation (depreciation) (240,219) (1,124,860)
------------ -----------
Net increase (decrease) in net assets from operations 195,203 (610,036)
------------ -----------
Distributions to Shareholders
From net investment income (456,148) (824,836)
From realized gain on investments -- (1,773)
------------ -----------
Total distributions to shareholders (456,148) (826,609)
------------ -----------
From Capital Share Transactions
Net proceeds from sales of shares 1,685,880 8,896,645
Net asset value of shares in reinvestment
of dividends and distributions 343,600 630,118
------------ -----------
2,029,480 9,526,763
Less: Payments for shares reacquired (1,595,844) (3,892,736)
------------ -----------
Increase in net assets from capital share transactions 433,636 5,634,027
------------ -----------
Total Increase in Net Assets for period 172,691 4,197,382
Net Assets: Beginning of period 16,175,014 11,977,632
------------ -----------
Net Assets: End of period $16,347,705 $16,175,014
============ ===========
Undistributed Net Investment Income
at End of Period $ 227 $ 767
============ ===========
</TABLE>
See Notes to Financial Statements.
65
<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
Ended Eight Months
5/31/00 (B) Year Ended Year Ended Year Ended Year Ended Ended
Class A Shares (Unaudited) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95 (A)
----------- ---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 11.20 $ 12.19 $ 11.88 $ 11.72 $ 11.72 $ 11.19
--------- --------- --------- --------- --------- ---------
Income (Loss) from Investment Operations
Net investment income 0.32 0.60 0.62 0.60 0.53 0.36
Net realized and unrealized gain (loss)
on investments (0.19) (0.99) 0.34 0.25 -- 0.53
--------- --------- --------- --------- --------- ---------
Total from investment operations 0.13 (0.39) 0.96 0.85 0.53 0.89
--------- --------- --------- --------- --------- ---------
Less Distributions
Dividends from net investment income 0.32 0.60 0.62 0.60 0.53 0.36
Distributions from realized gains on
investments -- -- 0.03 0.09 -- --
--------- --------- --------- --------- --------- ---------
Total Distributions 0.32 0.60 0.65 0.69 0.53 0.36
--------- --------- --------- --------- --------- ---------
Net asset value at end of period $ 11.01 $ 11.20 $ 12.19 $ 11.88 $ 11.72 $ 11.72
========= ========= ========= ========= ========= =========
Total Return (%) * 1.1 ++ (3.3) 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 (%) ** 0.98 + 0.96 1.01 1.09 1.10 1.29 +
Ratio of net investment income to average
net assets (%) 5.66 + 5.13 5.17 5.31 4.65 4.60 +
Ratio of net investment income to average
net assets before voluntary expense
reimbursements (%) 4.71 + 4.20 4.19 4.57 4.65 4.60 +
Portfolio turnover rate (%) 1 ++ 31 6 21 48 32
Net assets at end of period (000 omitted) $ 16,348 $ 16,175 $ 11,978 $ 7,704 $ 5,749 $ 5,332
</TABLE>
(A) Commenced operations March 27, 1995.
(B) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Note (2) and (1) H
See Notes to Financial Statements.
66
<PAGE>
Sentinel Government Securities Fund
Investment in Securities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
U.S. Government Obligations 118.1%
U.S. Treasury Obligations 38.3%
10-Year:
Note 6.5%, '10 10,000M $10,149,600
30-Year: ------------
Bond 6.125%, '30 12,000M 12,380,400
------------
Total U.S. Treasury Obligations 22,530,000
U.S. Government Agency Obligations 79.8% ------------
Federal Home Loan Mortgage Corporation 10.2%
Agency Debenture
5%, '04 4,000M 3,699,560
Mortgage-Backed Securities: ------------
15-Year:
9.5%, '05 288M 300,607
9%, '06 50M 51,341
------------
351,948
------------
30-Year:
8.25%, '05 28M 28,152
11%, '09 9M 9,426
11%, '15 23M 25,479
11%, '15 16M 17,255
11%, '15 21M 23,012
11%, '17 5M 5,842
11%, '17 59M 64,489
7.5%, '24 1,791M 1,767,897
------------
1,941,552
------------
Total Federal Home Loan
Mortgage Corporation 5,993,060
------------
Federal National Mortgage Association 64.7%
Agency Discount Note:
6.34%, 06/21/00 11,000M 10,961,255
------------
Mortgage-Backed Securities:
15-Year:
8.25%, '02 34M 34,256
9.75%, '04 103M 108,268
8.5%, '10 2,691M 2,727,844
------------
2,870,368
------------
30-Year:
9.25%, '09 179M $ 186,206
8%, '16 281M 281,875
10.5%, '17 921M 998,306
10%, '18 468M 499,847
10%, '18 457M 487,480
10%, '19 361M 381,691
10.5%, '19 853M 923,898
10%, '24 856M 915,294
9%, '25 886M 909,685
9%, '25 1,445M 1,484,512
9.5%, '25 756M 788,579
8%, '27 776M 769,783
8%, '27 1,371M 1,360,983
8%, '28 826M 819,451
6%, '29 2,150M 1,933,628
6%, '29 874M 785,315
6%, '29 2,932M 2,635,505
6%, '29 2,235M 2,008,640
6%, '29 1,670M 1,501,184
6.5%, '29 1,657M 1,535,027
7%, '29 1,682M 1,599,362
7%, '29 1,477M 1,403,135
------------
24,209,386
------------
Total Federal National
Mortgage Association 38,041,009
Government National Mortgage Association 4.9% ------------
Mortgage-Backed Securities:
10-Year:
7%, '03 402M 395,095
7%, '03 566M 556,644
------------
951,739
------------
15-Year:
10%, '01 2M 2,289
30-Year: ------------
7.95%, '21 1,870M 1,889,778
------------
Total Government National
Mortgage Association 2,843,806
------------
Total U.S. Government
Agency Obligations 46,877,875
------------
Total U.S. Government Obligations
(Cost $69,712,202) 69,407,875
------------
Corporate Short-Term Notes 18.1%
American Express
6.48%, 06/16/00 2,900M $ 2,892,170
John Deere Capital Corp.
6.48%, 06/30/00 2,900M 2,884,862
Salomon Smith Barney Holdings
6.48%, 06/20/00 2,000M 1,993,160
Texaco, Inc.
6.5%, 07/05/00 2,900M 2,882,198
------------
(Cost $10,652,390) 10,652,390
------------
Total Investments
(Cost $80,364,592)* 80,060,265
Excess of Liabilities
Over Other Assets (36.2%) (21,288,182)
------------
Net Assets $58,772,083
============
--------------------------------------------------------------------------------
* Also cost for federal income tax purposes.
At May 31, 2000 unrealized depreciation for federal income tax purposes
aggregated $304,327 of which $377,648 related to appreciated securities and
$681,975 related to depreciated securities.
See Notes to Financial Statements.
67
<PAGE>
Sentinel Government Securities Fund
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
Investments at value (Cost $80,364,592) $80,060,265
Cash and cash equivalents 540,331
Receivable for securities sold 10,311,147
Receivable for fund shares sold 15,012
Receivable for interest 416,485
Receivable fund administrator 12,913
-------------
Total Assets 91,356,153
-------------
Liabilities
Payable for securities purchased 32,468,776
Payable for fund shares repurchased 40,062
Accrued expenses 17,235
Management fee payable 26,515
Distribution fee payable 24,766
Fund service fee payable 6,716
-------------
Total Liabilities 32,584,070
-------------
Net Assets Applicable to Outstanding Shares $58,772,083
=============
Net Asset Value and Offering Price Per Share
$58,772,083/6,222,202 shares outstanding $ 9.45
Sales Charge ' 4.00% of Offering Price 0.39
-------------
Maximum Offering Price Per Share $ 9.84
=============
Net Assets Represent
Capital stock at par value $ 62,222
Paid-in capital 67,842,619
Accumulated distributions in excess of
net investment income (9,493)
Accumulated undistributed net realized loss
on investments (8,818,938)
Unrealized depreciation of investments (304,327)
-------------
Net Assets $58,772,083
=============
Sentinel Government Securities Fund
Statement of Operations
For the Six Months Ended May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income
Income:
Interest $ 2,380,427
-------------
Expenses:
Management advisory fee 162,127
Transfer agent and custodian 62,660
Distribution expense 60,948
Accounting services 9,450
Auditing fees 2,200
Legal fees 1,600
Reports and notices to shareholders 1,500
Registration and filing fees 12,667
Directors' fees and expenses 2,324
Other 1,500
-------------
Total Expenses 316,976
Expense Reimbursement (55,999)
Expense Offset (6,860)
-------------
Net Expenses 254,117
-------------
Net Investment Income 2,126,310
-------------
Realized and Unrealized Gain (Loss) on Investments
Net realized loss on sales of investments (1,119,188)
Net change in unrealized appreciation (depreciation) 328,565
-------------
Net Realized and Unrealized Loss on Investments (790,623)
-------------
Net Increase in Net Assets from Operations $ 1,335,687
=============
See Notes to Financial Statements.
68
<PAGE>
Sentinel Government Securities Fund
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
5/31/00 11/30/99
(Unaudited)
------------ ------------
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income $ 2,126,310 $ 4,590,036
Net realized loss on sales of investments (1,119,188) (4,769,780)
Net change in unrealized appreciation (depreciation) 328,565 (1,694,567)
------------ ------------
Net increase (decrease) in net assets from operations 1,335,687 (1,874,311)
------------ ------------
Distributions to Shareholders
From net investment income (2,116,356) (4,572,531)
From net realized gain on investments -- --
------------ ------------
Total distributions to shareholders (2,116,356) (4,572,531)
------------ ------------
From Capital Share Transactions
Net proceeds from sales of shares 2,797,600 14,232,925
Net asset value of shares in reinvestment
of dividends and distributions 1,639,544 3,543,956
------------ ------------
4,437,144 17,776,881
Less: Payments for shares reacquired (10,020,674) (22,692,243)
------------ ------------
Decrease in net assets from capital share transactions (5,583,530) (4,915,362)
------------ ------------
Total Decrease in Net Assets for period (6,364,199) (11,362,204)
Net Assets: Beginning of period 65,136,282 76,498,486
------------ ------------
Net Assets: End of period $58,772,083 $65,136,282
============ ============
Distributions in Excess of Net Investment Income
at End of Period $ (9,493) $ (11,828)
============ ============
</TABLE>
See Notes to Financial Statements.
69
<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 5/31/00 (A) Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 9.56 $ 10.46 $ 10.09 $ 10.00 $ 10.30 $ 9.31
----------- ----------- ----------- ----------- ----------- -----------
Income (Loss) from Investment Operations
Net investment income 0.33 0.64 0.61 0.59 0.61 0.63
Net realized and unrealized gain (loss) on investments (0.11) (0.90) 0.37 0.09 (0.30) 0.99
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations 0.22 (0.26) 0.98 0.68 0.31 1.62
----------- ----------- ----------- ----------- ----------- -----------
Less Distributions
Dividends from net investment income 0.33 0.64 0.61 0.59 0.61 0.63
Distributions from realized gains on investments - - - - - -
----------- ----------- ----------- ----------- ----------- -----------
Total Distributions 0.33 0.64 0.61 0.59 0.61 0.63
----------- ----------- ----------- ----------- ----------- -----------
Net asset value at end of period $ 9.45 $ 9.56 $ 10.46 $ 10.09 $ 10.00 $ 10.30
=========== =========== =========== =========== =========== ===========
Total Return (%) * 2.3 ++ (2.5) 10.0 7.2 3.2 17.9
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.83 + 0.84 0.91 0.98 1.00 1.03
Ratio of expenses to average net assets before
expense reductions (%) ** 1.04 + 0.98 0.99 0.99 1.01 1.04
Ratio of net investment income to average net assets (%) 6.98 + 6.46 6.02 6.15 6.18 6.50
Ratio of net investment income to average net assets before
voluntary expense reimbursements (%) 6.79 + 6.34 5.94 6.15 6.18 6.50
Portfolio turnover rate (%) 119 ++ 330 355 249 614 367
Net assets at end of period (000 omitted) $58,772 $65,136 $76,498 $75,810 $92,299 $108,100
</TABLE>
(A) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1)H.
See Notes to Financial Statements.
70
<PAGE>
Sentinel Short Maturity Government Fund
Investment in Securities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
U.S. Government Obligations 98.9%
U.S. Treasury Obligations 6.1%
2-Year:
Note 6.375%, '02 3,500M $3,477,775
U.S. Government Agency Obligations 92.8% -------------
Federal Home Loan Mortgage Corporation 33.3%
Agency Debenture
5%, '04 2,000M 1,849,780
-------------
Collateralized Mortgage Obligations:
FHLMC T-2A, 7%, '21 230M 220,021
FHLMC 1057(D), 8%, '21 4M 4,034
-------------
224,055
-------------
Mortgage-Backed Securities:
15-Year:
8.5%, '01 93M 92,580
9%, '01 53M 54,224
9%, '01 45M 46,616
9.5%, '01 0M 481
7.5%, '02 132M 133,198
8%, '02 166M 167,020
9%, '02 156M 160,381
9.5%, '03 2M 2,414
9.5%, '03 93M 97,907
6.5%, '04 396M 392,309
9.5%, '04 87M 90,987
8.5%, '05 213M 215,653
9%, '05 222M 231,236
9.5%, '05 372M 391,632
10%, '05 43M 44,964
9%, '06 276M 287,613
8.5%, '07 22M 22,239
9%, '07 1,752M 1,822,581
9%, '07 181M 188,861
8%, '08 157M 157,478
5.5%, '09 476M 459,459
7.5%, '09 189M 189,026
7.5%, '11 1,236M 1,231,034
8%, '11 218M 219,485
8%, '11 699M 704,205
8%, '11 749M 754,120
-------------
8,157,703
-------------
30-Year:
8.5%, '03 218M 224,093
7%, '06 295M 292,752
6.5%, '07 287M 284,660
7%, '07 153M 151,523
8%, '07 548M 556,071
8.25%, '07 230M 236,879
7.5%, '08 531M 528,159
7.5%, '08 355M 354,431
8%, '08 149M 149,350
8%, '08 684M 693,865
8.75%, '08 191M 198,313
9.25%, '08 119M 122,802
9.25%, '08 59M 59,905
9.25%, '08 22M 22,113
7.5%, '09 340M 338,941
7.75%, '09 252M 252,742
8%, '09 96M 97,825
8%, '09 112M 113,819
8.25%, '09 418M 426,950
8.5%, '09 721M 744,350
10.25%, '09 11M 11,926
9.25%, '11 827M 850,223
9.25%, '16 70M 71,663
8.75%, '17 1,437M 1,490,505
9.25%, '17 35M 35,593
8%, '23 371M 372,484
-------------
8,681,937
-------------
Total Federal Home Loan
Mortgage Corporation 18,913,475
-------------
Federal National Mortgage Association 54.2%
Collateralized Mortgage Obligations:
FNMA 1989-96 G,
8.75%, '19 234M 235,639
Mortgage-Backed Securities: -------------
7-Year Balloon:
7%, '04 354M 346,733
-------------
10- Year
6.5%, '08 1,850M 1,800,243
-------------
15-Year:
9%, '02 3M 2,613
9%, '02 170M 176,622
6%, '03 643M 630,484
7%, '03 112M 112,744
9.5%, '03 865M 905,707
6%, '04 325M 320,571
7%, '07 300M 296,771
7%, '07 442M 436,408
7%, '07 187M 185,189
7%, '07 143M 140,694
7%, '07 150M 147,973
7%, '07 233M 229,938
7.5%, '08 1,159M 1,155,945
7.25%, '09 569M 564,731
8%, '09 2,221M 2,234,957
10%, '09 1,479M 1,558,936
8.5%, '10 1,220M 1,236,630
9.0%, '10 580M 602,514
7%, '12 1,315M 1,299,054
8.5%, '12 1,316M 1,339,413
-------------
13,577,894
-------------
20-Year:
10.5%, '18 715M 774,190
-------------
30-Year:
10.5%, '03 4M 4,336
8%, '04 96M 96,661
8%, '04 51M 51,689
9%, '04 206M 214,192
7%, '05 238M 239,385
8%, '05 650M 656,934
9%, '05 347M 360,999
7.75%, '06 247M 248,403
8%, '06 460M 464,401
8%, '06 287M 289,726
7%, '07 335M 331,832
7.5%, '07 220M 219,786
7.5%, '07 97M 97,835
7.5%, '07 701M 701,828
7.5%, '08 328M 328,177
8%, '08 337M 340,313
8.25%, '09 132M 133,271
8.25%, '09 411M 415,653
8.75%, '09 67M 69,160
9%, '09 183M 188,776
8.5%, '11 809M 823,163
8.5%, '11 111M 112,724
8%, '12 576M 581,666
8.75%, '13 31M 32,122
6.5%, '14 635M 616,186
7.5%, '14 521M 521,334
11.5%, '15 265M 293,450
12.5%, '15 238M 269,465
10.5%, '16 643M 696,489
8.25%, '17 270M 276,375
9%, '17 215M 221,698
8%, '18 1,150M 1,161,729
10.5%, '18 153M 165,586
11%, '19 290M 318,044
8.25%, '22 84M 85,368
10%, '23 456M 487,430
9%, '25 218M 224,852
10%, '25 493M 526,466
7%, '28 1,242M 1,181,751
-------------
14,049,255
-------------
Total Federal National
Mortgage Association 30,783,954
Government National Mortgage Association 5.3% -------------
Collateralized Mortgage Obligations:
CMO Trust 27(A), 7.25%, '17 112M 111,528
-------------
Mortgage-Backed Securities:
15-Year:
11%, '00 0M 452
11.25%, '00 1M 730
9%, '01 4M 4,617
9.75%, '01 1M 1,168
9.75%, '01 0M 179
8%, '02 9M 9,180
8%, '02 5M 5,213
8%, '02 21M 20,749
8%, '02 34M 34,189
9.5%, '04 2M 1,793
9.75%. '04 301M 317,018
9.75%, '05 415M 437,476
9%, '06 197M 205,773
7%, '07 351M 345,706
9%, '07 13M 13,308
7.5%, '08 236M 235,407
8%, '08 233M 234,974
9%, '11 266M 277,377
-------------
2,145,309
-------------
20-Year:
9.25%, '07 22M 22,859
9.75%, '10 39M 41,217
-------------
64,076
-------------
(continued)
71
<PAGE>
Sentinel Short Maturity Government Fund
Investment in Securities (cont'd.)
at May 31, 2000 (unaudited)
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
30-Year:
6.5%, '03 116M $ 115,219
8%, '03 137M 139,115
8%, '04 21M 21,346
7.75%, '05 172M 173,782
9%, '09 49M 50,285
10%, '09 9M 9,349
10%, '16 6M 5,869
9.25%, '26 180M 186,241
----------
701,206
----------
Total Government National
Mortgage Association 3,022,119
----------
Total U.S. Government
Agency Obligations 52,719,548
----------
Total U.S. Government Obligations
and Total Investments
(Cost $56,696,391)* 56,197,323
----------
Excess of Other Assets
Over Liabilities 1.1% 644,615
-----------
Net Assets $56,841,938
===========
* Also cost for federal income tax purposes. At May 31, 2000 unrealized
depreciation for federal income tax purposes aggregated $499,068 of which
$158,539 related to appreciated securities and $657,607 related to
depreciated securities.
See Notes to Financial Statements.
72
<PAGE>
Sentinel Short Maturity Government Fund
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
Investments at value (Cost $56,696,391) $ 56,197,323
Cash and cash equivalents 526,831
Receivable for securities sold 5,131,700
Receivable for fund shares sold 508,656
Receivable for interest 459,913
Receivable from fund administrator 25,993
------------
Total Assets 62,850,416
------------
Liabilities
Payable for securities purchased 4,954,713
Payable for fund shares repurchased 973,316
Accrued expenses 8,611
Management fee payable 25,991
Distribution fee payable 40,243
Fund service fee payable 5,604
------------
Total Liabilities 6,008,478
------------
Net Assets Applicable to Outstanding Shares $ 56,841,938
============
Net Asset Value and Offering Price Per Share
$56,841,938 / 6,040,914 shares outstanding $ 9.41
Sales Charge -- 1.00% of Offering Price 0.10
------------
Maximum Offering Price Per Share $ 9.51
============
Net Assets Represent
Capital stock at par value $ 60,409
Paid-in capital 60,711,231
Accumulated undistributed net investment income 3,311
Accumulated undistributed net realized loss
on investments (3,433,945)
Unrealized depreciation of investments (499,068)
Net Assets $ 56,841,938
============
Sentinel Short Maturity Government Fund
Statement of Operations
For the Six Months Ended May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income
Income:
Interest $ 2,340,877
------------
Expenses:
Management advisory fee 165,944
Transfer agent and custodian 54,814
Distribution expense 109,167
Accounting services 9,675
Auditing fees 1,350
Legal fees 2,500
Reports and notices to shareholders 2,500
Registration and filing fees 13,159
Directors' fees and expenses 2,403
Other 6,552
------------
Total Expenses 368,064
Expense Reimbursement (126,695)
Expense Offset (2,964)
------------
Net Expenses 238,405
------------
Net Investment Income 2,102,472
------------
Realized and Unrealized Loss on Investments
Net realized loss on sales of investments (597,186)
Net change in unrealized appreciation (depreciation) (550,558)
Net Realized and Unrealized Loss on Investments (1,147,744)
------------
Net Increase in Net Assets from Operations $ 954,728
============
See Notes to Financial Statements.
73
<PAGE>
Sentinel Short Maturity Government Fund
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/00 11/30/99
(Unaudited)
----------- -----------
Increase in Net Assets from Operations
Net investment income $ 2,102,472 $ 4,537,952
Net realized loss on sales of investments (597,186) (1,641,388)
Net change in unrealized appreciation (depreciation) (550,558) (662,462)
----------- -----------
Net increase in net assets from operations 954,728 2,234,102
----------- -----------
Distributions to Shareholders
From net investment income (2,089,876) (4,461,517)
From realized gain on sale of investments -- --
----------- -----------
Total distributions to shareholders (2,089,876) (4,461,517)
----------- -----------
From Capital Share Transactions
Net proceeds from sales of shares 12,856,615 40,165,752
Net asset value of shares in reinvestment
of dividends and distributions 1,799,701 3,837,267
----------- -----------
14,656,316 44,003,019
Less: Payments for shares reacquired (24,326,708) (42,474,063)
----------- -----------
Increase (decrease) in net assets from capital
share transactions (9,670,392) 1,528,956
----------- -----------
Total Decrease in Net Assets for period (10,805,540) (698,459)
Net Assets: Beginning of period 67,647,478 68,345,937
----------- -----------
Net Assets: End of period $56,841,938 $67,647,478
=========== ===========
Undistributed Net Investment Income
at End of Period $ 3,311 $ 10,351
=========== ===========
See Notes to Financial Statements
74
<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
Ended Eight
5/31/00 (B) Year Ended Year Ended Year Ended Year Ended Months Ended
Class A Shares (Unaudited) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95(A)
----------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 9.58 $ 9.88 $ 9.82 $ 9.81 $ 9.84 $ 9.64
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.32 0.60 0.57 0.56 0.57 0.40
Net realized and unrealized gain (loss) on
investments (0.17) (0.30) 0.06 0.01 (0.03) 0.20
----------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 0.15 0.30 0.63 0.57 0.54 0.60
----------- ---------- ---------- ---------- ---------- ----------
Less Distributions
Dividends from net investment income 0.32 0.60 0.57 0.56 0.57 0.40
Distributions from realized gains on
investments -- -- -- -- -- --
----------- ---------- ---------- ---------- ---------- ----------
Total Distributions 0.32 0.60 0.57 0.56 0.57 0.40
----------- ---------- ---------- ---------- ---------- ----------
Net asset value at end of period $ 9.41 $ 9.58 $ 9.88 $ 9.82 $ 9.81 $ 9.84
=========== ========== ========== ========== ========== ==========
Total Return (%) * 1.6 ++ 3.2 6.6 6.0 5.6 6.3 ++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.76 + 0.76 0.82 1.00 1.00 1.00 +
Ratio of expenses to average net assets before
expense reductions (%) ** 1.18 + 1.11 1.12 1.18 1.20 1.38 +
Ratio of net investment income to average net
assets (%) 6.74 + 6.28 6.04 6.20 6.09 6.07 +
Ratio of net investment income to average net assets
before voluntary expense reimbursements (%) 6.33 + 5.94 5.76 6.14 5.93 5.76
Portfolio turnover rate (%) 38 ++ 203 229 61 120 58
Net assets at end of period (000 omitted) $ 56,842 $ 67,647 $ 68,346 $ 45,044 $ 36,474 $ 28,417
</TABLE>
(A) Commenced operations March 27, 1995.
(B) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
75
<PAGE>
Sentinel U.S.Treasury Money Market Fund
Investment in Securities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
U.S. Treasury Obligations 95.8%
U S Treasury Bill
5.13%, 06/01/00 5,000M $5,000,000
U S Treasury Bill
5.75%, 06/08/00 5,000M 4,994,410
U S Treasury Bill
5.09%, 06/15/00 5,000M 4,990,103
U S Treasury Bill
5.5%, 06/15/00 5,750M 5,737,701
U S Treasury Bill
5.39%, 06/22/00 1,000M 996,856
U S Treasury Bill
5.5%, 06/22/00 5,750M 5,731,552
U S Treasury Bill
5.6%, 06/29/00 5,000M 4,978,222
U S Treasury Bill
5.65%, 06/29/00 2,000M 1,991,211
U S Treasury Bill
5.535%, 07/06/00 6,000M 5,967,713
U S Treasury Bill
5.595%, 07/13/00 7,300M 7,252,349
U S Treasury Bill
5.645%, 07/20/00 3,650M 3,621,955
U S Treasury Bill
5.65%, 07/20/00 6,000M 5,953,858
U S Treasury Bill
5.66%, 07/20/00 2,600M 2,579,970
U S Treasury Note
5.375%, 07/31/00 5,750M 5,743,901
U S Treasury Bill
5.75%, 08/03/00 5,050M 4,999,184
U S Treasury Bill
5.49%, 08/17/00 5,000M 4,941,287
U S Treasury Note
5.685%, 08/24/00 12,000M 11,840,820
U S Treasury Bill
5.79%, 08/24/00 7,350M 7,250,702
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
U S Treasury Bill
5.765%, 08/31/00 7,250M $ 7,144,350
U S Treasury Bill
5.745%, 08/31/00 5,200M 5,124,485
U S Treasury Bill
5.81%, 09/21/00 4,300M 4,222,275
------------
Total U.S. Treasury Obligations
(Amortized Cost $111,062,904)* 111,062,904
------------
Excess of Other Assets
Over Liabilities 4.2% 4,893,534
------------
Net Assets $115,956,438
============
* Also cost for federal income tax purposes.
See Notes to Financial Statements.
76
<PAGE>
Sentinel U.S. Treasury Money Market Fund
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
Investments at value (Cost $111,062,904) $111,062,904
Cash and cash equivalents 212,449
Receivable for fund shares sold 9,228,000
Receivable for interest 103,507
------------
Total Assets 120,606,860
------------
Liabilities
Payable to Custodian Bank -- Line of Credit 2,930,000
Payable for fund shares repurchased 1,177,765
Income dividends payable 491,961
Accrued expenses 2,746
Management fee payable 38,675
Fund service fee payable 9,275
------------
Total Liabilities 4,650,422
------------
Net Assets Applicable to Outstanding Shares $115,956,438
============
Net Asset Value
Class A Shares
$111,757,338 / 111,757,338 shares outstanding $ 1.00
------------
Class B Shares
$4,199,100 / 4,199,100 shares outstanding $ 1.00
------------
Net Assets Represent
Capital stock at par value $ 1,159,564
Paid-in capital 114,796,874
------------
Net Assets $115,956,438
------------
Sentinel U.S. Treasury Money Market Fund
Statement of Operations
For the Six Months Ended May 31, 2000 (Unaudited)
Investment Income
Income:
Interest $ 3,236,395
------------
Expenses
Management advisory fee 236,213
Transfer agent and custodian 130,430
Accounting services 18,235
Auditing fees 2,000
Legal fees 2,600
Reports and notices to shareholders 2,150
Registration and filing fees 20,412
Directors' fees and expenses 4,519
Other 5,253
------------
Total Expenses 421,812
Expense Offset (3,260)
------------
Net Expenses 418,552
------------
Net Investment Income and Net Increase in
Net Assets from Operations $ 2,817,843
============
See Notes to Financial Statements.
77
<PAGE>
Sentinel U.S. Treasury Money Market Fund
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/00 11/30/99
(Unaudited)
------------- ------------
Increase in Net Assets from Operations
Net investment income $ 2,817,843 $ 4,241,486
------------- ------------
Distributions to Shareholders
From net investment income
Class A Shares (2,711,168) (4,062,569)
Class B Shares (106,675) (178,917)
------------- ------------
Total Distributions to Shareholders (2,817,843) (4,241,486)
------------- ------------
From Capital Share Transactions
Net proceeds from sales of shares
Class A Shares 448,615,646 480,251,041
Class B Shares 3,852,049 8,325,140
Net asset value of shares in reinvestment
of dividends and distributions
Class A Shares 1,805,351 2,922,603
Class B Shares 101,012 159,539
------------- ------------
454,374,058 491,658,323
Less: Payments for shares reacquired
Class A Shares (460,547,792) (459,404,553)
Class B Shares (5,131,649) (7,529,315)
------------- ------------
Increase (decrease) in net assets from
capital share transactions (11,305,383) 24,724,455
------------- ------------
Total Increase (Decrease) in Net Assets for period (11,305,383) 24,724,455
Net Assets: Beginning of period 127,261,821 102,537,366
------------- ------------
Net Assets: End of period $ 115,956,438 $127,261,821
============= ============
See Notes to Financial Statements.
78
<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 5/31/00 (B) Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/99 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 $ 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 0.04 0.05
Net realized and unrealized gain (loss) on investments -- -- -- -- -- --
Total from investment operations 0.02 0.04 0.04 0.04 0.04 0.05
----------------- ----------- ---------- ---------- ---------- -----------
Less Distributions
Dividends from net investment income 0.02 0.04 0.04 0.04 0.04 0.05
Distributions from realized gains on investments -- -- -- -- -- --
----------------- ----------- ---------- ---------- ---------- -----------
Total Distributions 0.02 0.04 0.04 0.04 0.04 0.05
----------------- ----------- ---------- ---------- ---------- -----------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
================= =========== ========== ========== ========== ===========
Total Return (%) * 2.4++ 4.1 4.6 4.6 4.6 5.0
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.70+ 0.69 0.72 0.76 0.78 0.81
Ratio of expenses to average net assets before
expense reductions (%) ** 0.70+ 0.70 0.73 0.77 0.78 0.82
Ratio of net investment income to average net assets (%) 4.78+ 4.01 4.47 4.46 4.38 4.83
Net assets at end of period (000 omitted) $ 111,757 $ 121,884 $ 98,115 $ 85,911 $ 80,804 $ 80,664
</TABLE>
(A) Commenced operations April 1, 1996.
(B) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
79
<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 Months
Ended 5/31/00 (B) Year Ended Year Ended Year Ended Ended
Class B Shares (Unaudited) 11/30/99 (B) 11/30/98 (B) 11/30/97 (B) 11/30/96 (A)(B)
---------------- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------- ------------ ------------ ------------ --------------
Income from Investment Operations
Net investment income 0.02 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 0.05 0.03
---------------- ------------ ------------ ------------ --------------
Less Distributions
Dividends from net investment income 0.02 0.04 0.04 0.05 0.03
Distributions from realized gains on investments -- -- -- -- --
---------------- ------------ ------------ ------------ --------------
Total Distributions 0.02 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
================ ============ ============ ============ ==============
Total Return (%) * 2.3 ++ 3.8 4.5 4.7 3.0++
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.96 + 0.92 0.77 0.73 .76+
Ratio of expenses to average net assets before
expense reductions (%) ** 0.97 + 0.93 0.78 0.73 .77+
Ratio of net investment income to average net assets (%) 4.50 + 3.79 4.42 4.50 4.40+
Net assets at end of period (000 omitted) $ 4,199 $ 5,378 $ 4,422 $ 3,434 $ 3,160
</TABLE>
(A) Commenced operations April 1, 1996. (B) Per share data calculated utilizing
average daily shares outstanding.
+ 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 the earning credits as described in Notes (2) and (1) H.
See Notes to Financial Statements.
80
<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 fourteen separate series - Sentinel Flex Cap
Opportunity Fund, Sentinel Small Company Fund, Sentinel Mid Cap Growth Fund,
Sentinel Growth Index 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 Flex Cap Opportunity,
Sentinel Small Company, Sentinel Mid Cap Growth, Sentinel Growth Index, 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. Also in addition, a third class of shares
called Class C shares are offered for Sentinel Flex Cap Opportunity, Sentinel
Mid Cap Growth, Sentinel Growth Index, Sentinel Common Stock, Sentinel Balanced,
Sentinel High Yield Bond and Sentinel World. Sentinel Balanced Fund also offers
Class D shares. On December 9, 1999 the Board of Directors approved a new fund
called Sentinel Flex Cap Opportunity Fund which commenced operations on February
25, 2000.
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, 2000 as follows:
Accumulated Accumulated undistributed
undistributed net net realized gain (loss)
investment on investments and foreign
Fund income (loss) currency transactions
------------------------------ ------------------ -----------------------------
World......................... ($305,487) $305,487
Balanced...................... (3,585) 3,585
Bond.......................... (3,693) 3,693
Government Sec. .............. (7,620) 7,620
Short Maturity Gov"t. ........ (19,635) 19,635
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
81
<PAGE>
paid on the securities. The Funds are compensated by the 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. Line of Credit: The Funds have obtained access to an unsecured line of credit
of up to $30,000,000 from the custodian bank for temporary borrowing purposes.
Borrowings under this arrangement bear interest at the current overnight Federal
Funds rate plus an additional 50 basis points. This arrangement commenced on
Dec. 30, 1999.
I. 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 advisory agreement
applicable to al Funds other than the High Yield, the Growth Index Fund and the
Flex Cap Opportunity Fund, the Company will pay to the Advisor a monthly fee
determined as follows: (1) With respect to Sentinel Small
82
<PAGE>
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 on the average daily net assets of the Fund. (3) 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. (4) 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. Under a separate advisory agreement with the High Yield
Fund, the Advisor receives from the High Yield Fund a fee based on the average
daily value of the net assets of the High Yield Fund in accordance with the
following schedule: 0.75% per annum on the first $100 million of average daily
net assets of the High Yield Fund; 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. Under a separate advisory
agreement with the Growth Index Fund, the Advisor receives for the Growth Index
Fund a fee based on the average daily value of the net assets of the Growth
Index Fund equal to 0.30% per annum on such average daily net assets. Under a
separate advisory agreement with the Flex Cap Opportunity Fund, the Advisor
receives from the Flex Cap Opportunity Fund a fee based on the average daily
value of the net assets of the Flex Cap Opportunity Fund equal to 0.90% per
annum on such average daily net assets.
With respect to Sentinel World Fund, SAC has entered into a sub-advisory
agreement with INVESCO Global Asset Management (N.A.), Inc. 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 Fund"s 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.
With respect to Sentinel Flex Cap Opportunity Fund, SAC has entered into a
sub-advisory with Fred Alger & Company, Inc. to provide the Advisor with a
continuous investment program consistent with the Flex Cap Opportunity Fund"s
stated investment objective and policies. Under this agreement, the Advisor pays
a fee to Alger equal to 0.50% per annum of the average daily net assets of the
Flex Cap Opportunity Fund.
All Funds (except Sentinel U.S. Treasury Money Market Fund) have adopted a
distribution plan applicable to their Class A shares pursuant to Rule 12b-1
under the 1940 Act. These distribution plans are herein referred to as the "A
Plans." Each of the Funds Class B shares (except Sentinel U.S. Treasury Money
Market Fund) has also adopted a distribution plan applicable to its Class B
shares. These plans are herein referred to as the "B Plans." Each of the Funds
Class C shares has also adopted a Class C distribution plan applicable to its
Class C shares referred to as the "C Plans." The Sentinel Balanced Fund Class D
has 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, 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 Flex Cap Opportunity, Sentinel
Small Company, Sentinel Mid Cap 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 Growth Index, 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
83
<PAGE>
each participating Fund. The Flex Cap Opportunity Fund Class A, B and C shares
are not assessed a distribution fee in respect to the seed money shares owned by
National Life Insurance Company. This will result in an overall Rule 12b-1 fee
to these classes to be less than 0.30% and 1.00% respectively, for so long as
National Life maintains its investment in these share classes.
Under the Plan applicable to the Class B shares, the Class B shares of each of
the Flex Cap Opportunity, Common Stock, Balanced, Mid Cap 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 distribution, sales and marketing
expenditures applicable to the Class B shares. The Class B shares of the
Sentinel Growth Index Fund will pay to the Distributor a monthly fee at an
annual rate of up to a total of 0.75% of average daily net assets. 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 Mid Cap Growth, Common Stock, Balanced, World, Growth Index 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.
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 $1,790,216 for the six months
ended May 31, 2000. The Company is advised that the total distribution charges
retained by SFSC on the sale of shares amounted to $75,476 after allowances of
$691,905 to Equity Services, Inc., an affiliate of National Life, $75,877 to
1717 Capital Management Company, an affiliate of Provident Mutual, $95,956 to
Hornor, Townsend & Kent, Inc. and $95,413 to Janney Montgomery Scott, Inc.
("JMS"), affiliates of Penn Mutual, and $755,589 to other investment dealers.
During this same period, SFSC received $8,056 in contingent deferred sales
charges from certain redemptions of Class A shares and $608,065 in contingent
deferred sales charges from redemptions of Class B shares, $5,276 in contingent
deferred sales charges from redemptions of Class C shares and $173 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 $46,675 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.
Until June 15, 2000 each director who was not an employee of the adviser or an
affiliated company was paid an annual fee of $16,000 plus $1,500 for each
meeting of the Board of Directors attended. Effective June 15, 2000 the annual
fee was increased to $18,000 plus $2,100 for each meeting 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, 2000 were
$1,802,200.
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-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, 2000 did not exceed 1.30% of its average daily net
assets, attributable to Class A shares of any Fund.
84
<PAGE>
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. This
arrangement has been in place since March 31, 1997.
For the period March 30, 1999 through March 30, 2000 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 0.76%
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%
Effective March 31, 2000 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 0.75%
Government Securities Fund Class A shares 0.84%
Short Maturity Government Fund Class A shares 0.75%
Tax-Free Income Fund Class A shares 0.77%
With respect to the Sentinel Growth Index Fund, Sentinel Advisors voluntarily
waives advisory fees and other expenses to the extent necessary to limit the
overall expense ratio to 0.65%. Sentinel Advisors currently intends to continue
this fee waiver indefinitely: however, it may change or terminate the fee waiver
at any time after November 30, 2000.
In case of the Bond Fund and Growth Index Fund, the reimbursement of advisory
fees will also benefit the Class B shares of both Bond Fund and Growth Index
Fund and Class C shares with respect to Growth Index which will experience the
same reduced effective advisory fee rate as the Class A shares.
For the six months ended May 31, 2000 the total amount reimbursable to Sentinel
Growth Index Class A was $47,661, Sentinel Growth Index Class B was $33,112,
Sentinel Growth Index Class C was $184, Sentinel Bond Fund Class A was $73,016,
Sentinel Bond Fund Class B $19,014, Sentinel Government Securities Fund Class A
$55,999, Sentinel Short Maturity Government Fund Class A $126,695, Sentinel
Tax-Free Income Fund Class A $85,378 and Sentinel New York Tax-Free Income Fund
Class A $76,500.
(3) Investment Transactions:
Purchases and sales of investment securities (excluding short-term obligations)
for the six months ended May 31, 2000 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>
Flex Cap Opportunity...... $ 61,768,345 $ -- $10,861,517 $ --
Small Company............. 56,139,148 -- 68,464,438 --
Mid Cap Growth............ 330,708,147 -- 264,589,945 --
World..................... 35,754,454 -- 42,565,529 --
Growth Index.............. 66,117,655 -- 9,015,762 --
Common Stock.............. 419,394,399 -- 659,527,386 --
Balanced.................. 83,939,385 131,726,189 138,155,901 142,129,983
High Yield................ 39,468,471 -- 47,898,053 --
Bond...................... 26,888,212 51,278,056 39,834,529 51,056,974
Tax-Free.................. 1,517,075 -- 16,531,268 --
N.Y. Tax-Free............. 391,037 -- 216,640 --
Government................ -- 70,877,693 -- 76,632,779
Short Maturity............ -- 23,128,520 -- 31,509,136
</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, 1999 as follows:
$2,140,898, $538,825, $1,051,666 and $3,189,185 (expiring in 2001, 2002, 2004
and 2007, respectively) for a total of $6,920,574 for the Sentinel Bond Fund,
$2,952,501 and $4,754,868 (expiring in 2004 and 2007) for a total of $7,707,369
for the Sentinel Government Securities Fund,$1,490,419 and $4,543,183(expiring
in 2006 and 2007) for a total of $6,033,602 for the Sentinel High Yield Bond
Fund, $278,001, $619,379, $142,166, $83,225, $166,838 and $1,566,785 (expiring
in 2000, 2001, 2002, 2004, 2005 and 2007, respectively) for a total of
$2,856,394 for the Sentinel Short Maturity Government Fund, $310,229 (Expiring
in 2007) for the Sentinel New York Tax-Free Fund, and $668,431 (Expiring in
2007) for the Sentinel Tax-Free Income Fund. 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. During the year ended November 30, 1999 the Sentinel World Fund utilized
$1,283,934of capital loss carryforward.
(4) Fund Shares:
At May 31, 2000, 2 billion shares of one cent par value were authorized. There
are 1.40 billion shares allocated to the various Funds as Class A shares, 300
million shares allocated to the various Funds as Class B shares, 100 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:
85
<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 5/31/00
Flex Cap Opportunity - A*....... 4,263,136 -- 117,676 4,145,460
Flex Cap Opportunity - B*....... 1,877,349 -- 47,920 1,829,429
Flex Cap Opportunity - C*....... 620,716 -- 2,347 618,369
Small Company - A............... 5,826,238 2,435,445 6,311,233 1,950,450
Small Company- B................ 469,456 380,519 261,424 588,551
Mid Cap Growth - A.............. 4,960,158 507,250 3,010,298 2,457,110
Mid Cap Growth - B.............. 910,623 60,731 115,883 855,471
Mid Cap Growth - C**............ 18,236 -- 1,229 17,007
World - A....................... 10,808,077 476,760 10,664,149 620,688
World - B....................... 188,371 99,273 149,184 138,460
World - C ...................... 1,073,140 7,342 1,056,918 23,564
Growth Index - A ............... 2,542,695 443 545,819 1,997,319
Growth Index - B ............... 705,739 53 96,962 608,830
Growth Index - C **............. 5,583 -- -- 5,583
Common Stock - A................ 1,860,224 2,585,833 6,454,728 (2,008,671)
Common Stock - B................ 256,013 284,449 829,112 (288,650)
Common Stock - C................ 850,078 13,674 846,048 17,704
Balanced - A.................... 426,144 975,065 3,170,313 (1,769,104)
Balanced - B.................... 169,364 167,128 568,873 (232,381)
Balanced - C.................... 44,429 10,776 58,805 (3,600)
Balanced - D.................... 34,262 3,860 17,589 20,533
High Yield - A.................. 370,541 90,882 766,371 (304,948)
High Yield - B.................. 266,022 112,603 838,235 (459,610)
High Yield - C.................. 211,877 11,221 471,688 (248,590)
Bond - A........................ 3,136,677 292,744 4,768,162 (1,338,741)
Bond - B........................ 289,451 78,894 630,246 (261,901)
Tax-Free ....................... 245,888 110,175 1,547,622 (1,191,559)
N.Y. Tax-Free................... 153,106 31,074 143,719 40,461
Government ..................... 295,262 173,485 1,060,154 (591,407)
Short Maturity.................. 1,353,944 190,143 2,564,905 (1,020,818)
U.S. Treasury - A............... 448,615,646 1,805,351 460,547,792 (10,126,795)
U.S. Treasury - B............... 3,852,050 101,011 5,131,649 (1,178,588)
Year Ended 11/30/99
Small Company - A............... 5,233,049 2,130,978 7,895,657 (531,630)
Small Company- B................ 634,395 273,202 510,027 397,570
Mid Cap Growth - A.............. 3,246,286 455,992 2,483,704 1,218,574
Mid Cap Growth - B.............. 626,959 19,933 57,050 589,842
World - A....................... 6,774,413 42,682 7,310,275 (493,180)
World - B....................... 245,101 1,060 135,981 110,180
World - C ...................... 1,418,187 -- 1,387,921 30,266
Growth Index - A ***............ 1,346,378 -- 6,923 1,339,455
Growth Index - B ***............ 402,622 -- 5,384 397,238
Common Stock - A................ 3,309,128 3,002,721 6,604,080 (292,231)
Common Stock - B................ 839,508 268,092 536,317 571,283
Common Stock - C................ 842,171 10,295 802,051 50,415
Balanced - A.................... 1,284,804 1,526,284 3,293,259 (482,171)
Balanced - B.................... 752,994 217,958 533,029 437,923
Balanced - C.................... 104,717 9,150 13,979 99,888
Balanced - D****................ 60,806 481 2,394 58,893
High Yield - A.................. 896,942 189,365 1,202,842 (116,535)
High Yield - B.................. 1,411,047 219,765 887,056 743,756
High Yield - C.................. 555,114 18,999 339,404 234,709
Bond - A........................ 4,688,292 575,751 5,604,592 (340,549)
Bond - B........................ 1,449,960 123,494 666,624 906,830
Tax-Free ....................... 2,917,006 291,859 2,824,305 384,560
N.Y. Tax-Free................... 740,608 53,801 332,482 461,927
Government ..................... 1,419,479 358,250 2,277,378 (499,649)
Short Maturity.................. 4,120,784 396,025 4,372,336 144,473
U.S. Treasury - A............... 480,251,041 2,922,603 459,404,553 23,769,091
U.S. Treasury - B............... 8,325,140 159,539 7,529,315 955,364
</TABLE>
*For the period from February 25, 2000 through May 31, 2000.
**For the period from March 30, 2000 through May 31, 2000.
***For the period from September 13, 1999 through November 30, 1999.
****for the period from January 4, 1999 through November 30, 1999.
5) Post Retirement Benefits:
The Company provides certain health care and life insurance benefits to its
retirees. At May 31, 2000 the projected obligation for such benefits had been
accrued.
86
<PAGE>
Sentinel Pennsylvania Tax-Free Trust
Investment in Securities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Principal Amount Value
(M=$1,000) (Note 1)
--------------------------------------------------------------------------------
Bonds 97.1%
Pennsylvania 90.6%
Allegheny County G/O
5.15%, 10/01/11 (FGIC) 1,000M $ 969,890
Allegheny County Hospital
6.00%, 10/01/03 (FGIC) 1,000M 1,024,650
Armstrong County
Hospital Auth.
6.25%, 06/01/13 (AMBAC) 1,200M 1,246,800
Berks County G/O
7.25%, 11/15/20 (FGIC) 1,000M 1,031,060
Butler PA Area School District
4.75%, 10/01/22 (FGIC) 1,000M 822,970
Delaware Valley PA Regional
Fin. Auth.
5.5%, 08/01/28 (AMBAC) 1,000M 931,070
Grove City PA Hospital Auth.
5.25%, 07/01/12 (ACA) 1,500M 1,393,290
Hazelton PA Area
School District
0.00%, 03/01/25 (FGIC) 1,255M 272,486
Jim Thorpe PA Area
School District
5.30%, 03/15/16 (MBIA) 1,500M 1,433,460
Lehigh County Industrial
Dev. Auth.
6.15%, 08/01/29 (MBIA) 1,000M 1,000,470
Montgomery County Higher
Educ. & Health
8.30%, 06/01/10 500M 510,000
Northampton County G/O
5.125%, 08/15/17 1,000M 905,030
Parkland PA School District
5.375%, 09/01/15 (FGIC) 1,000M 971,060
PA State Turnpike Commn.
Oil Tax Rev.
4.75%, 12/01/27 (AMBAC) 500M 404,690
Pennsylvania Higher
Educ. Facs.
5.625%, 12/01/27 (MBIA) 1,000M 938,310
Pennsylvania Housing
Finance Agency
5.80%, 10/01/29 1,000M 934,670
Pennsylvania State G/O
6.25%, 07/01/11 1,500M 1,601,280
Pennsylvania State
Turnpike Commn.
7.20%, 12/01/17 (FGIC) 1,000M 1,051,240
Pennsylvania Trafford
School Dist.
5.90%, 05/01/11 (MBIA) 1,000M 1,028,660
Philadelphia Parking
Authority Rev.
5.25%, 09/01/29 (FSA) 1,000M 873,890
Philadelphia Regional
Port. Auth.
7.125%, 08/01/10 (MBIA) 250M 250,932
7.15%, 08/01/20 (MBIA) 250M 250,940
Philadelphia Water & Waste
6.25%, 08/01/11 (MBIA) 1,000M 1,063,540
6.25%, 08/01/12 (MBIA) 500M 531,965
Pittsburgh PA Water &
Sewer System Rev.
6.50%, 09/01/13 (FGIC) 1,000M 1,089,120
Pittsburgh Series A 1,000M 1,011,330
5.75%, 09/01/13 (FGIC)
Southeast Delco
School District
0.00%, 02/01/10 (MBIA) 1,000M 580,650
Westmoreland County
Municipal Auth.
0.00%, 08/15/18 (FGIC) 500M 165,795
York County Solid Waste
5.50%, 12/01/14 (FGIC) 1,000M 989,180
------------
25,278,428
------------
Puerto Rico 6.5%
Puerto Rico Commonwealth
Hwy & Transport
5.50%, 07/01/36 1,000M 911,500
Puerto Rico G/O
5.375%, 07/01/25 1,000M 912,220
------------
1,823,720
------------
Total Bonds
(Cost $27,835,048) 27,102,148
------------
Short-Term Investments 1.3%
Blackrock Pennsylvania
Municipal Money
Market Institutional
Class #40 3.82% (a)
(Cost $350,000) 350M 350,000
------------
Total Investments
(Cost $28,185,048)* 27,452,148
Excess of Other Assets
Over Liabilities 1.6% 455,051
------------
Net Assets $27,907,199
============
--------------------------------------------------------------------------------
* Also cost for federal income tax purposes.
At May 31, 2000, net unrealized depreciation for federal income tax
purposes aggregated $732,900 of which $416,373 related to appreciated
securities and $1,149,273 related to depreciated securities.
(a) Variable rate security that may be tendered back to issuer at par.
The following abbreviations are used in portfolio descriptions:
(ACA) - ACA Financial Guaranty Corp.
(AMBAC) - Guaranteed by American Municipal Bond Association 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.
87
<PAGE>
Sentinel Pennsylvania Tax-Free Trust
Statement of Assets and Liabilities
at May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets
Investments at value (Cost $28,185,048) $27,452,148
Receivable for interest 497,509
Receivable from fund administrator 13,576
-----------
Total Assets 27,963,233
-----------
Liabilities
Payable for fund shares repurchased 10,252
Payable to custodian 9,237
Accrued expenses 8,204
Management fee payable 12,966
Distribution fee payable 11,292
Fund service fee payable 4,083
-----------
Total Liabilities 56,034
-----------
Net Assets Applicable to Outstanding Shares $27,907,199
===========
Net Asset Value and Offering Price Per Share
$27,907,199 / 2,345,741 shares outstanding $ 11.90
Sales Charge -- 4.00% of Offering Price 0.50
-----------
Maximum Offering Price Per Share $ 12.40
===========
Net Assets Represent
No par value shares of beneficial interest;
authorized - unlimited shares
Paid-in-capital $29,021,459
Accumulated distributions in excess of
net investment income (3,209)
Accumulated undistributed net realized loss
on investments (378,151)
Unrealized depreciation of investments (732,900)
-----------
Net Assets $27,907,199
===========
Sentinel Pennsylvania Tax-Free Trust
Statement of Operations
For the Six Months Ended May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income
Income:
Interest $841,345
-----------
Expenses:
Management advisory fee 79,666
Transfer agent and custodian 27,354
Distribution expense 28,967
Accounting services 6,000
Auditing fees 1,750
Legal fees 6,250
Reports and notices to shareholders 2,000
Registration and filing fees 5,500
Directors' fees and expenses 15,003
Other 764
-----------
Total Expenses 173,254
Expense Reimbursement (67,598)
Expense Offset (2,254)
-----------
Net Expenses 103,402
-----------
Net Investment Income 737,943
-----------
Realized and Unrealized Loss on Investments
Net realized loss on sales of investments (281,200)
Net change in unrealized appreciation (depreciation) (326,910)
-----------
Net Realized and Unrealized Loss on Investments (608,110)
-----------
Net Increase in Net Assets from Operations $129,833
===========
See Notes to Financial Statements.
88
<PAGE>
Sentinel Pennsylvania Tax-Free Trust
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/00 11/30/99
(Unaudited)
---------- -----------
Increase (Decrease) in Net Assets from Operations
Net investment income $ 737,943 $ 1,578,831
Net realized loss on sales of investments (281,200) (96,951)
Net change in unrealized appreciation (depreciation) (326,910) (2,535,663)
----------- -----------
Net increase (decrease) in net assets from operations 129,833 (1,053,783)
----------- -----------
Distributions to Shareholders
From net investment income (743,013) (1,577,675)
From realized gain on sale of investments -- (757,025)
----------- -----------
Total distributions to shareholders (743,013) (2,334,700)
----------- -----------
From Capital Share Transactions
Net proceeds from sales of shares 359,159 1,672,187
Net asset value of shares in reinvestment
of dividends and distributions 506,510 1,693,166
----------- -----------
865,669 3,365,353
Less: Payments for shares reacquired (2,975,396) (4,066,876)
----------- -----------
Decrease in net assets from capital share transactions (2,109,727) (701,523)
----------- -----------
Total Decrease in Net Assets for period (2,722,907) (4,090,006)
Net Assets: Beginning of period 30,630,106 34,720,112
----------- -----------
Net Assets: End of period $27,907,199 $30,630,106
=========== ===========
Undistributed (Distributions in Excess of)
Net Investment Income at End of Period $ (3,209) $ 1,861
=========== ===========
See Notes to Financial Statements.
89
<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 5/31/00(A) Year Ended Year Ended Year Ended Year Ended Year Ended
Class A Shares (Unaudited) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
--------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 12.15 $ 13.48 $ 13.34 $ 13.29 $ 13.40 $ 12.29
--------------- ---------- ---------- ---------- ---------- ----------
Income (Loss) from Investment Operations
Net investment income 0.31 0.62 0.63 0.64 0.66 0.66
Net realized and unrealized gain (loss) on investments (0.25) (1.04) 0.26 0.13 (0.03) 1.11
--------------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 0.06 (0.42) 0.89 0.77 0.63 1.77
--------------- ---------- ---------- ---------- ---------- ----------
Less Distributions
Dividends from net investment income 0.31 0.62 0.63 0.64 0.66 0.66
Distributions from realized gains on investments -- 0.29 0.12 0.08 0.08 --
--------------- ---------- ---------- ---------- ---------- ----------
Total Distributions 0.31 0.91 0.75 0.72 0.74 0.66
--------------- ---------- ---------- ---------- ---------- ----------
Net asset value at end of period $ 11.90 $ 12.15 $ 13.48 $ 13.34 $ 13.29 $ 13.40
=============== ========== ========== ========== ========== ==========
Total Return (%) * 0.5 ++ (3.3) 6.9 6.1 5.0 14.8
Ratios/Supplemental Data
Ratio of net expenses to average net assets (%) 0.71 + 0.69 0.77 0.85 0.75 0.97
Ratio of expenses to average net assets before
expense reductions (%) ** 1.20 + 1.32 1.31 1.34 1.37 1.36
Ratio of net investment income to average net assets (%) 5.09 + 4.82 4.65 4.86 5.07 5.14
Ratio of net investment income to average net
assets before voluntary expense reimbursements (%) 4.63 + 4.21 4.14 4.41 4.48 4.78
Portfolio turnover rate (%) 4 ++ 21 50 28 56 80
Net assets at end of period (000 omitted) $27,907 $30,630 $34,720 $34,844 $35,545 $34,975
</TABLE>
(A) Per share data calculated utilizing average daily shares outstanding.
+ 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 the earnings credits as described in Notes (5) and (1) D.
See Notes to Financial Statements.
90
<PAGE>
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, 1999 the
Trust has $96,951 of capital loss carryforwards for federal income tax purposes
which are due to expire in 2007.
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
5/31/00 11/30/99
------- --------
Shares sold..................................... 29,962 130,028
Shares issued to stockholders in reinvestment
of dividends and distributions.................. 42,331 131,757
------- -------
72,293 261,785
Shares redeemed................................. (247,859) (316,992)
------- -------
Net decrease.................................... (175,566) (55,207)
======= =======
(4) Investment Transactions:
Purchases and sales of securities other than short-term securities aggregated
$1,005,600 and $2,275,903, respectively, during the six months ended May 31,
2000.
(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
91
<PAGE>
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 $12,855 for the six months ended May 31, 2000. The Trust is advised
that the total distribution charges retained by SFSC on the sale of shares
amounted to $12 after allowances of $2,950 to Equity Services, Inc., an
affiliate of National Life, $4,186 to 1717 Capital Management Company, an
affiliate of Provident Mutual, $633 to Hornor, Townsend & Kent, Inc. and $3,948
to Janney Montgomery Scott, Inc., affiliates of Penn Mutual, and $1,126 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, 2000 were $24,500.
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 fourteen 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, 2000 did not exceed 1.30% of its 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.
Effective March 30, 2000, SASC has agreed to reimburse the Trust for expenses in
excess of an annual rate of 0.76% of the Trust's average daily net assets. For
the six months ended May 31, 2000, the total amount reimbursable was $67,598.
This arrangement may be terminated at any time after November 30, 2000.
(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. The
Distributor is not reimbursed for any unreimbursed prior years expenses.
92
<PAGE>
Privileges, Plans and Services for Shareholders
Open Account - Unless another distribution option is elected, when an account is
established, all income dividends and 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 ($100 for Growth Index Fund) or more by means
of an automatic checking 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 application is also
available from Sentinel Administrative Service Company, or from your investment
dealer.
Systematic Withdrawal Plan - This plan enables you to receive a check once per
month, 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 State Street Bank. 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 or $5,000 for
Growth Index Fund (the minimum investment required to open a new account) unless
you already have an account in that Fund. Shares being exchanged must have been
in the account a minimum of 15 calendar days (90 days in the case of funds
initially invested in the Sentinel Short Maturity Government Fund and Sentinel
Growth Index Fund or exchanged into such Funds 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.
93
<PAGE>
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.
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 address 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
State Street Bank--Kansas City
Transfer Agent, Shareholder Servicing
Agent and Administrator
Sentinel Administrative Service
Company
95
<PAGE>
A Brief History
[LOGO OF SENTINEL FUNDS]
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 Mid Cap Growth Fund and Sentinel Bond Fund were
organized by National Life Insurance Company in 1969 and merged into the
Sentinel Group in 1978. Five more additions, Sentinel Government Securities
Fund, Sentinel Tax-Free Income Fund, Sentinel High Yield Bond Fund, Sentinel
Growth Index Fund and Sentinel Flex Cap Opportunity Fund were introduced on
September 2, 1986, October 1, 1990, June 23, 1997, September 13, 1999, and
February 29, 2000 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 also
offered Class B shares. Effective May 4, 1998 a third class of shares, Class C
shares were offered on the following Funds, 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 were offered on the Sentinel
Balanced Fund. Effective March 30, 2000 Class C shares were offered on Sentinel
Mid Cap Growth and Sentinel Growth Index Funds.
The fifteen funds in the Sentinel Family of Funds, which includes the fourteen
funds in Sentinel Group Funds, Inc., and the Sentinel Pennsylvania Tax-Free
Trust, now represent net assets of $3.0 billion which are managed on behalf of
approximately 119,800 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.
96
<PAGE>
[LOGO OF SENTINEL FUNDS]
Sentinel Funds
Integrity Since 1934
Sentinel Flex Cap Opportunity Fund
Sentinel Small Company Fund
Sentinel Mid Cap Growth Fund
Sentinel World Fund
Sentinel Growth Index 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
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>
[LOGO OF SENTINEL FUNDS]
Sentinel Funds
Integrity Since 1934
Sentinel Flex Cap Opportunity Fund
Sentinel Small Company Fund
Sentinel Mid Cap Growth Fund
Sentinel World Fund
Sentinel Growth Index 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
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
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