SEMIANNUAL REPORT
APRIL 30,
1999
(LOGO) (R)
Victory Funds
<PAGE>
TABLE OF CONTENTS
Key Asset Management Inc. (KAM), a subsidiary of KeyCorp, is the
investment adviser to The Victory Funds. The Victory Funds are sponsored and
distributed by BISYS Fund Services, which is not affiliated with KeyCorp or
its subsidiaries. KAM receives fees for its services from The Victory Funds.
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus of the Victory Funds.
NOT FDIC INSURED Shares of the Victory Funds are not deposits or other
obligations of, or guaranteed by, any KeyCorp bank, Key Asset Management
Inc., or their affiliates, and are subject to investment risks, including
possible loss of the principal amount invested.
Year 2000 Issues. Like all mutual funds, the Funds could be adversely
affected if the computer systems used by its service providers, including
shareholder servicing agents, are unable to recognize dates after 1999. The
risk of such a computer failure may be greater as it relates to investments
in foreign countries. The Funds' service providers have been actively
updating their systems to be able to process Year 2000 data. There can be no
assurance, however, that these steps will be adequate to avoid a temporary
service disruption or other adverse impact on the Funds. In addition, an
issuer's failure to process accurately Year 2000 data may cause that issuer's
securities to decline in value or delay the payment of interest to a Fund.
Shareholder Letter 3
Investment Review and Outlook 4
Financial Statements
Victory Money Market Funds
U.S. Government Obligations Fund
Schedule of Investments 5
Statements of Assets and Liabilities 15
Statements of Operations 16
Statements of Changes in Net Assets 17
Financial Highlights 18
Prime Obligations Fund
Schedule of Investments 7
Statements of Assets and Liabilities 15
Statements of Operations 16
Statements of Changes in Net Assets 17
Financial Highlights 19
Financial Reserves Fund
Schedule of Investments 11
Statements of Assets and Liabilities 15
Statements of Operations 16
Statements of Changes in Net Assets 17
Financial Highlights 20
Tax-Free Money Market Fund
Schedule of Investments 21
Statements of Assets and Liabilities 36
Statements of Operations 37
Statements of Changes in Net Assets 38
Financial Highlights 39
Ohio Municipal Money Market Fund
Schedule of Investments 28
Statements of Assets and Liabilities 36
Statements of Operations 37
Statements of Changes in Net Assets 38
Financial Highlights 40
Victory Taxable Fixed Income Funds
Limited Term Income Fund
Schedule of Investments 41
Statements of Assets and Liabilities 53
Statements of Operations 54
Statements of Changes in Net Assets 55
Financial Highlights 57
(LOGO) (R)
Victory Funds
Call Victory at:
800-539-FUND (800-539-3863)
Or Call Gradison McDonald at:
800-869-5999 or 513-579-5999
<PAGE>
TABLE OF CONTENTS
(continued)
Intermediate Income Fund
Schedule of Investments 43
Statements of Assets and Liabilities 53
Statements of Operations 54
Statements of Changes in Net Assets 55
Financial Highlights 58
Fund for Income
Schedule of Investments 47
Statements of Assets and Liabilities 53
Statements of Operations 54
Statements of Changes in Net Assets 55
Financial Highlights 59
Government Mortgage Fund
Schedule of Investments 48
Statements of Assets and Liabilities 53
Statements of Operations 54
Statements of Changes in Net Assets 56
Financial Highlights 60
Investment Quality Bond Fund
Schedule of Investments 49
Statements of Assets and Liabilities 53
Statements of Operations 54
Statements of Changes in Net Assets 56
Financial Highlights 61
Victory Municipal Fixed Income Funds
National Municipal Bond Fund
Schedule of Investments 62
Statements of Assets and Liabilities 76
Statements of Operations 77
Statements of Changes in Net Assets 78
Financial Highlights 79-80
New York Tax-Free Fund
Schedule of Investments 66
Statements of Assets and Liabilities 76
Statements of Operations 77
Statements of Changes in Net Assets 78
Financial Highlights 81-82
Ohio Municipal Bond Fund
Schedule of Investments 68
Statements of Assets and Liabilities 76
Statements of Operations 77
Statements of Changes in Net Assets 78
Financial Highlights 83
Victory Specialty Funds
Balanced Fund
Schedule of Investments 84
Statements of Assets and Liabilities 100
Statements of Operations 101
Statements of Changes in Net Assets 102
Financial Highlights 103
Convertible Securities Fund
Schedule of Investments 94
Statements of Assets and Liabilities 100
Statements of Operations 101
Statements of Changes in Net Assets 102
Financial Highlights 104
Real Estate Investment Fund
Schedule of Investments 99
Statements of Assets and Liabilities 100
Statements of Operations 101
Statements of Changes in Net Assets 102
Financial Highlights 105
Victory Equity Funds
Value Fund
Schedule of Investments 106
Statements of Assets and Liabilities 125
Statements of Operations 126
Statements of Changes in Net Assets 127
Financial Highlights 129
Statements of Cash Flows 160
Lakefront Fund
Schedule of Investments 109
Statements of Assets and Liabilities 125
Statements of Operations 126
Statements of Changes in Net Assets 127
Financial Highlights 130
Diversified Stock Fund
Schedule of Investments 111
Statements of Assets and Liabilities 125
Statements of Operations 126
Statements of Changes in Net Assets 127
Financial Highlights 131-132
Statements of Cash Flows 160
Stock Index Fund
Schedule of Investments 114
Statements of Assets and Liabilities 125
Statements of Operations 126
Statements of Changes in Net Assets 128
Financial Highlights 133
Growth Fund
Schedule of Investments 123
Statements of Assets and Liabilities 125
Statements of Operations 126
Statements of Changes in Net Assets 128
Financial Highlights 134
Established Value Fund
Schedule of Investments 135
Statements of Assets and Liabilities 151
Statements of Operations 152
Statements of Changes in Net Assets 153
Financial Highlights 155
Special Value Fund
Schedule of Investments 137
Statements of Assets and Liabilities 151
Statements of Operations 152
Statements of Changes in Net Assets 153
Financial Highlights 156
Statements of Cash Flows 160
Ohio Regional Stock Fund
Schedule of Investments 140
Statements of Assets and Liabilities 151
Statements of Operations 152
Statements of Changes in Net Assets 153
Financial Highlights 157
Small Company Opportunity Fund
Schedule of Investments 142
Statements of Assets and Liabilities 151
Statements of Operations 152
Statements of Changes in Net Assets 154
Financial Highlights 158
International Growth Fund
Schedule of Investments 145
Statements of Assets and Liabilities 151
Statements of Operations 152
Statements of Changes in Net Assets 154
Financial Highlights 159
Notes 161
<PAGE>
Letter to our Shareholders
On behalf of the Victory Funds, thank you for your continued confidence in
Victory. If you are new to the Victory Funds, welcome! We are pleased to
present the Victory Funds Semi-Annual Report for the period ended April 30,
1999. We hope you find this report useful, easy to read, and a valuable tool
provided by the Victory Funds. But, before you delve into the report, we
would like to share some highlights from this past fiscal year and some brief
economic commentary.
Since our last report, KeyCorp completed its acquisition of McDonald
Investments, Inc. and its related dealer, McDonald & Company Securities, a
full-service investment banking and securities brokerage firm. Soon after
that acquisition, the Gradison Funds, the proprietary mutual fund offering of
McDonald-Gradison Investments, Inc., were merged into the Victory Funds. The
combined assets of the Victory Funds, advised by Key Asset Management, an
affiliate of KeyCorp, are now over $18 billion dollars, spread across 32
distinct funds giving the Victory Funds the ability to serve an even wider
variety of investors. We have every hope that these recent additions and
structural changes will serve to enhance the Victory Funds' ability to meet
your specific investment objectives.
Currently, Key Asset Management reports the domestic economy is in great
shape. Unemployment is low, and real income growth is high. News from Asia
seems to be getting better, a prerequisite for global acceleration. Consumer
confidence is high, and investor sentiment is almost as buoyant. Cash flows
into equities are strong. The Dow Jones recently hit 10,000, and the S&P 500
spent much of the Funds' second fiscal quarter in record territory, too.
We encourage our shareholders to take the opportunity to further diversify
their holdings among the broad investment options of the expanded Victory
Fund complex. As you may know, diversification can be a powerful tool in
helping investors manage risk and achieving one's investment objectives,
through good and bad economic periods.
Again, thank you for choosing the Victory Funds to help you realize your
investment goals and, as always, we welcome your comments on this report.
/s/ Leigh A. Wilson
Leigh A. Wilson
President
The Victory Funds
Dow Jones Industrial Average: A price weighted average of thirty blue-chip
stocks that are generally the leaders in their industry and are noted on the
New York Stock Exchange.
The Standard & Poor's 500 Stock Index (S&P 500) is a broad-based unmanaged
index that represents the general performance of domestically traded common
stocks of mid- to large-size companies.
<PAGE>
Investment Review and Outlook
Irrational Anxiety?
The domestic economy is in great shape. Unemployment is low, and real income
growth is high. News from Asia seems to be getting better, a prerequisite for
global acceleration. Consumer confidence is high, and investor sentiment is
almost as giddy. In a matter of a few weeks, the Dow sliced through 10,000
and 11,000, and the S&P 500 spent much of the first half of 1999 in record
territory, too.
With so much going so well, it is easy to see why some Wall Street pundits
are predicting that equities will continue to soar. Faced with such good
fortune, I should be doing celebratory cartwheels. Yet I cannot shake this
uneasy feeling that not all is well with the stock market.
Perhaps it is concern that the confluence of near-ideal conditions that got
us where we are is unsustainable, and that the market's foundation is not as
stable as it may appear at first glance. Perhaps it is the recognition that
equity returns over the past four years have been extraordinary, and the
historical tendency of those returns to revert to the mean implies some
leaner years ahead. Perhaps it is the nagging thought that valuation does
matter, especially in the face of rising interest rates, and that the handful
of blue chip stocks that have lifted the Dow and the S&P look expensive by
most conventional measures. Or perhaps it's a little bit of each.
Let me be clear: although I am a little nervous about the near-term prospects
for stocks, it is nothing that a 10%-15% correction might not cure. I am not
overcome with a sense of impending doom. Strategically speaking, I see no
reason to abandon equities. While many of the market's leaders are trading at
multiples that no value investor in good standing could abide, a few are
still reasonably priced relative to their anticipated earnings trajectories.
Moreover, the shares of many economically sensitive companies are relatively
inexpensive, and a substantial number of small and mid-capitalization issues
sport price/earnings multiples that resemble shoe sizes instead of golf
scores.
Nonetheless, I find myself leaning towards a more conservative portfolio
posture. Given their relatively high real yields, bonds appeal to me more
than usual, despite the whiff of inflation emanating from the oil patch and
the Federal Reserve's adoption of a bias towards tightening monetary policy.
Within the equity market, I think the market rotation towards value stocks
still has a long way to run. I am even tempted to let cash reserves build a
little, as a means to offset the heightened volatility that seems likely to
persist for the balance of the year.
/s/ Charles G. Crane
Charles G. Crane, Chief Market Strategist
Key Asset Management
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
U.S. Government Obligations Fund April 30, 1999
(Amounts in Thousands) (Unaudited)
Principal Amortized
Security Description Amount Cost
Repurchase Agreements (74.1%)
Financial Services (74.1%):
Barclays de Zoete Wedd
Securities, Inc.,
4.88%, 5/3/99,
(Collateralized by $90,341
U.S. Treasury Notes,
6.00%, 8/15/99,
market value-- $91,801) $ 90,000 $ 90,000
Bear Stearns Co., Inc.,
4.90%, 4/30/99,
(Collateralized by
$1,725,131 various U.S.
Government Securities,
0.00%-8.75%,
7/29/99-11/15/27,
market value-- $551,674) 540,000 540,000
Deutsche Morgan Grenfell,
4.87%, 5/3/99,
(Collateralized by $90,800
U.S. Treasury Notes,
5.125%, 8/31/00,
market value-- $91,801) 90,000 90,000
Donaldson-Lufkin Jenrette
Securities Corp.,
4.88%, 5/3/99,
(Collateralized by
$1,527,100 various
U.S. Government Securities,
0.00%, 8/15/09-11/15/21,
market value-- $559,987) 549,007 549,007
Goldman Sachs Group L.P.,
4.90%, 5/3/99,
(Collateralized by $100,111
U.S. Treasury Notes,
5.375%, 7/31/00,
market value-- $102,001) 100,000 100,000
Greenwich Capital Markets, Inc.,
4.88%, 5/3/99,
(Collateralized by
$115,449 various U.S.
Government Securities,
7.25%-8.75%,
5/15/16-5/15/17,
market value $91,801) 90,000 90,000
Lehman Brothers, Inc.,
4.90%, 5/3/99,
(Collateralized by $99,555
U.S.Treasury Notes,
5.625%, 12/31/99,
market value-- $102,003) $100,000 $ 100,000
Morgan Stanley,
4.87%, 5/3/99,
(Collateralized by
$91,326 various U.S.
Government Securities,
3.375%-7.875%,
5/31/99-1/15/09,
market value-- $92,778) 90,000 90,000
Total Repurchase Agreements
(Amortized Cost $1,649,007) 1,649,007
U.S. Treasury Notes (26.9%)
6.25%, 5/31/99(b) 50,000 50,028
6.00%, 6/30/99(b) 100,000 100,144
5.88%, 8/31/99 100,000 100,249
5.75%, 9/30/99 100,000 100,426
5.63%, 12/31/99 100,000 100,579
7.75%, 1/31/00 25,000 25,543
5.50%, 2/29/00 20,000 20,109
5.50%, 3/31/00 100,000 100,637
Total U.S. Treasury Notes
(Amortized Cost $597,715) 597,715
<PAGE>
Securities Purchased With Cash Collateral (7.1%)
Repurchase Agreements (7.1%):
Credit Suisse First Boston,
5.10%, 5/3/99
(Collateralized by $44,409
U.S. T-Bond,
7.25%, 8/15/22
market value-- $53,311) $ 52,000 $ 52,000
Morgan Stanley Dean Witter,
5.04%, 5/3/99
(Collateralized by $114,619
various U.S. T-Bonds,
0.00%, 2/15/08-2/15/17,
market value-- $55,407) 55,000 55,000
Lehman Brothers, Inc.,
5.08%, 5/3/99
(Collateralized by
$53,875 EFG,
0.00%, 12/15/32,
market value-- $53,690) 52,125 52,125
Total Securities Purchased
With Cash Collateral (Cost $159,125) 159,125
Total Investments
(Amortized Cost $2,405,847) (a)-- 108.1% 2,405,847
Liabilities in excess of other assets -- (8.1%) (180,382)
TOTAL NET ASSETS -- 100.0% $2,225,465
(a) Cost and value for federal income tax and financial reporting
purposes are the same.
(b) All or a portion of this security was loaned as of April 30,1999.
See notes to financial statements.
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Prime Obligations Fund April 30, 1999
(Amounts in Thousands) (Unaudited)
Principal Amortized
Security Description Amount Cost
Bankers Acceptances (1.5%)
Bank of Hawaii,
4.90%, 6/9/99 $ 4,628 $ 4,604
Bank of Hawaii,
4.80%, 7/23/99 5,000 4,945
Toronto Dominion Bank, Ltd.,
4.80%, 5/17/99 15,000 14,968
Total Bankers Acceptances
(Amortized Cost $24,517) 24,517
Certificates of Deposit (7.3%)
Bayerische Landesbank NY,
5.12%, 3/21/00 7,000 6,987
Chase New York,
5.73%, 5/11/99 10,000 10,001
Rabobank,
5.11%, 2/18/00 10,000 9,998
Rabobank,
5.14%, 3/27/00 5,000 4,999
Royal Bank of Canada,
5.70%, 6/23/99 6,000 6,000
Royal Bank of Canada,
4.97%, 2/3/00 5,000 4,989
Societe Generale,
4.85%*, 5/1/99** 5,000 5,000
Societe Generale,
5.00%*, 5/1/99** 25,000 24,998
Societe Generale,
4.99%*, 5/1/99** 10,000 9,998
Societe Generale,
5.29%, 3/3/00 6,000 5,996
Toronto Dominion Bank, Ltd.,
4.84%, 6/15/99 20,000 20,000
UBS,
5.29%, 3/1/00 10,000 9,999
Total Certificates of Deposit
(Amortized Cost $118,965) 118,965
Commercial Paper (53.2%)
Abbey National N.A.,
4.82%, 7/8/99 65,000 64,408
ABN AMRO North American
Finance, Inc.,
4.83%, 5/19/99 20,000 19,952
Asset Securitization Capital Corp.,
4.80%, 6/1/99 30,000 29,876
Baker Hughes, Inc.,
4.85%, 6/28/99 20,000 19,844
Brown Forman,
4.80%, 6/11/99 $20,000 $ 19,891
Coca-Cola,
4.80%, 5/26/99 10,000 9,967
Delaware Funding Corp.,
4.81%, 5/20/99 20,000 19,949
Delaware Funding Corp.,
4.83%, 6/8/99 20,000 19,898
Edison Asset Securities,
4.84%, 5/19/99 26,000 25,937
Edison Asset Securities,
4.82%, 6/1/99 10,000 9,958
Edison Asset Securities,
4.85%, 7/12/99 30,000 29,709
Fleet Funding Corp.,
4.86%, 5/10/99 15,368 15,349
Fleet Funding Corp.,
4.82%, 5/20/99 17,270 17,226
Fleet Funding Corp.,
4.82%, 5/26/99 17,177 17,120
Fuji Photo Co., Ltd.,
4.82%, 6/8/99 15,000 14,924
General Electric Capital Corp.,
4.83%, 5/11/99 7,067 7,058
General Electric Capital Corp.,
4.80%, 5/18/99 5,000 4,989
General Electric Capital Corp.,
4.77%, 6/7/99 5,000 4,975
General Electric Capital Corp.,
4.80%, 6/10/99 12,500 12,433
Goldman Sachs Group,
4.95%, 5/28/99 20,000 19,926
Great Lakes Chemical,
4.83%, 5/10/99 10,000 9,988
Great Lakes Chemical,
4.84%, 5/28/99 10,000 9,964
Great Lakes Chemical,
4.83%, 6/25/99 10,000 9,926
Iowa Student Loan
Liquidity Corp.,
4.86%, 5/6/99 16,586 16,575
Iowa Student Loan
Liquidity Corp.,
4.84%, 5/27/99 14,571 14,520
Matson Navigation,
4.80%, 5/03/99 10,000 9,997
Matson Navigation,
4.86%, 6/9/99 8,000 7,958
McGraw Hill,
4.83%, 5/4/99 5,100 5,098
<PAGE>
McGraw Hill,
4.85%, 5/26/99 $ 4,900 $ 4,883
McGraw-Hill,
4.83%, 7/28/99 11,000 10,870
Mont Blanc Capital Corp.,
4.87%, 5/24/99 50,000 49,844
Mont Blanc Capital Corp.,
4.83%, 6/1/99 15,000 14,938
Monte Rosa,
4.83%, 6/1/99 20,000 19,917
Morgan Stanley Group,
4.83%, 7/7/99 50,000 49,551
Nalco Chemical,
4.80%, 5/6/99 4,000 3,997
Redwood Receivables Corp.,
4.84%, 5/25/99 13,465 13,422
Redwood Receivables Corp.,
4.82%, 5/27/99 15,000 14,948
Redwood Receivables Corp.,
4.83%, 6/1/99 13,356 13,300
Redwood Receivables Corp.,
4.80%, 6/7/99 28,347 28,207
Reed Elsevier, Inc.,
4.81%, 6/8/99 15,000 14,924
Reed Elsevier, Inc.,
4.80%, 7/16/99 24,750 24,499
Salomon Smith Barney,
4.96%, 6/1/99 10,000 9,957
Salomon Smith Barney,
4.81%, 6/7/99 25,000 24,876
Sigma Financial Corp.,
4.88%, 9/13/99 10,000 9,817
Sino Chemical,
4.84%, 5/12/99,
LOC ABN AMBRO 12,000 11,982
Southwest Student Services Corp.,
4.82%, 5/17/99,
LOC Dresdner 5,250 5,239
Texas Agricultural
Finance Authority,
4.85%, 6/18/99 10,000 9,935
Transamerica Finance,
4.87%, 5/4/99 10,106 10,102
UBS Finance,
4.90%, 11/22/99 20,000 19,442
Walt Disney Co.,
4.84%, 9/17/99 22,580 22,159
Xerox Corp.,
4.77%, 5/18/99 17,990 17,949
Total Commercial Paper
(Amortized Cost $872,173) 872,173
Corporate Bonds (30.1%)
American General
Financial Corp.,
7.13%, 12/1/99 $ 8,915 $ 9,013
Associates Corp., N.A.,
6.75%, 6/28/99 4,500 4,506
Associates Corp., N.A.,
5.25%, 3/30/00 5,000 4,999
Beneficial Corp.,
8.35%, 12/16/99 3,000 3,060
Beta Finance,
5.03%*, 5/4/99** 10,000 10,000
Beta Finance,
5.26%*, 5/4/99** 10,000 10,000
CIT Group Holding,
5.88%, 12/9/99, MTN 5,000 5,023
Dell Tin Fiber LLC,
5.00%*, 5/5/99**,
LOC 1st Chicago 10,000 10,000
Diageo Capital PLC,
7.00%, 6/15/99 7,713 7,723
Dome Corp.,
4.98%*, 5/5/99**,
LOC Societe Generale 2,720 2,720
Ford Motor Credit Corp.,
7.75%, 10/1/99 16,800 16,984
Ford Motor Credit Corp.,
7.50%, 11/19/99 5,000 5,066
General American
Life Insurance,
5.14%*, 5/3/99** 45,000 45,000
General American
Life Insurance,
5.14%*, 5/3/99** 10,000 10,000
General Motor
Acceptance Corp.,
6.70%, 7/2/99, MTN 5,000 5,008
Goldman Sachs Group,
5.36%*, 5/3/99** 10,000 10,000
John Deere Capital Corp.,
6.30%, 6/1/99 8,965 8,969
Lehman Brothers Holding, Inc.,
4.98%*, 5/23/99**, MTN 40,000 40,000
Liberty Lighthouse US Capital,
5.04%*, 5/1/99**, MTN 15,000 14,997
Merrill Lynch,
5.13%*, 5/1/99** 10,000 10,001
Merrill Lynch,
5.11%*, 5/1/99, MTN 10,000 10,000
<PAGE>
Merrill Lynch,
5.10%*, 5/1/99**, MTN $10,000 $ 9,999
Merrill Lynch,
5.14%*, 5/1/99**, MTN 10,000 10,003
Miami Valley,
4.88%*, 5/6/99**,
LOC National City Bank, MTN 315 315
Morgan Guaranty Trust Co.,
4.86%*, 5/27/99** 25,000 24,996
Morgan Stanley Dean Witter,
6.82%, 12/15/99, MTN 9,000 9,096
Morgan Stanley Dean Witter,
5.10%*, 5/15/99**, MTN 8,000 8,000
Nations Bank Note,
5.00%, 1/5/00 20,000 19,997
Norwest Financial, Inc.,
7.25%, 3/15/00 10,148 10,323
Philip Morris,
7.13%, 12/1/99 5,000 5,056
Richfield Technology Associates,
5.02%*, 5/6/99**,
LOC Star Bank 4,500 4,500
RKS LLC Health Care,
5.00%*, 5/5/99**,
LOC AmSouth Bank 9,500 9,500
Salomon Smith Barney,
6.25%, 10/1/99 15,900 15,965
Salomon Smith Barney,
6.50%, 3/1/00 9,000 9,101
Sea River Maritime, Inc.,
4.90%*, 5/3/99**,
Guaranteed by Exxon Corp. 13,600 13,600
SGS Tool,
4.88%*, 5/6/99**,
LOC National City 120 120
Sharp Electronics,
5.00%*, 5/6/99**,
LOC Fifth Third Bank 3,865 3,865
Sigma Financial, Inc.,
5.01%*, 5/25/99** 5,000 5,002
Sigma Financial, Inc.,
5.08%*, 5/4/99** 10,000 10,000
Southwestern Ohio Steel,
5.02%*, 5/6/99**,
LOC Star Bank 4,480 4,480
Tell-Schipper Properties, Inc.,
4.96%*, 5/6/99,
LOC Bank One 1,120 1,120
Transamerica Finance Corp.,
5.25%*, 7/22/99**, MTN $35,000 $ 35,000
Transamerica Finance Corp.,
5.05%*, 5/11/99** 7,000 7,000
Transamerica Financial Corp.,
7.70%, 3/16/00 4,000 4,083
USL Capital Corp.,
5.30%, 6/8/99** 5,000 5,010
USL Capital Corp.,
7.54%, 12/22/99 5,000 5,076
Xerox Credit,
5.32%, 3/31/00 18,000 17,993
Total Corporate Bonds
(Amortized Cost $492,269) 492,269
Time Deposits (2.1%)
Huntington Grand Cayman,
5.00%, 5/3/99 35,000 35,000
Total Time Deposits (Amortized Cost $35,000) 35,000
Municipal Bonds (0.6%)
Minnesota (0.1%):
Cloquet Industrial Facilities
Revenue, Potlach Corp.,
5.00%*, 5/5/99**,
LOC Credit Suisse 2,400 2,400
Ohio (0.5%):
Cuyahoga County EDR,
Gateway Arena Project,
Series B,
4.89%*, 5/5/99**,
LOC Canadian Imperial
Bank of Commerce 7,200 7,200
Total Municipal Bonds (Amortized Cost $9,600) 9,600
U.S. Government Agencies (1.8%)
Federal Home Loan Bank (1.8%):
4.77%, 6/30/99 20,000 19,841
5.00%, 1/5/00,
Callable 7/5/99 @ 100 (b) 10,000 10,000
29,841
Total U.S. Government Agencies
(Amortized Cost $29,841) 29,841
<PAGE>
Repurchase Agreements (2.5%)
Paine Weber,
4.90%, 5/3/99,
(Collateralized by $43,470,
U.S. Treasury Bill,
0.00%, 10/28/99,
market value-- $42,501) $41,667 $ 41,667
Total Repurchase Agreements
(Amortized Cost $41,667) 41,667
Securities Purchased With Cash Collateral (1.9%)
Short Term Securities (0.9%):
General American Funding
Agreement, 5.10%, 3/29/00 11,838 11,838
AIM Short Term Prime Money
Market Fund 1,565 1,565
AIM Liquid Assets Money
Market Fund 2,184 2,184
15,587
Repurchase Agreements (1.0%):
Morgan Stanley Dean Witter,
5.04%, 5/3/99
(Collateralized by $5,800
Dean Witter, 6.88%, 4/3/01,
Ford Motor, 5.75%, 2/4/23,
GMAC, 5.85%, 1/9/14,
market value-- $5,798) 5,800 5,800
Nations Bank, 5.04%, 5/3/99
(Collateralized by $5,081
TransAmerica Corp., 5.93%,
3/25/02, Star Bank, 6.63%,
12/15/06, Bank of America,
5.75%, 3/1/04,
market value-- $5,150) 5,000 5,000
Goldman Sachs Group L.P.,
(Collateralized by $5,539
Atlantic Richfield Co.,
5.55%, 4/15/03,
Atlantic Richfield Co.,
5.90%, 4/15/09,
Bank of America Corp.,
9.50%, 6/1/04,
Sony Corp., 6.13%, 3/4/03,
market value-- $5,671) $ 5,000 $ 5,000
15,800
Total Securities Purchased
With Cash Collateral (Cost $31,387) 31,387
Total Investments
(Amortized Cost $1,655,419) (a)-- 101.0% 1,655,419
Other assets in excess of liabilities -- (1.0)% (17,283)
TOTAL NET ASSETS -- 100.0% $1,638,136
(a) Cost and value for federal income tax and
financial reporting purposes are the same.
(b) All or a portion of this security was loaned as
of April 30, 1999.
* Variable rate securities having liquidity agreements.
The interest rate, which will change periodically,
is based upon an index of market interest rates.
The rate reflected on the Schedule of Portfolio
Investments is the rate in effect at April 30, 1999.
The date reflects the next rate change date.
** Put and demand features exist allowing the Fund to require repurchase of
the investment within variable time periods less than one year.
EDR -- Economic Development Revenue
LOC -- Letter of Credit
MTN -- Medium Term Note
See notes to financial statements.
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Financial Reserves Fund April 30, 1999
(Amounts in Thousands) (Unaudited)
Principal Amortized
Security Description Amount Cost
Bankers Acceptances (0.8%)
Bank of Hawaii,
4.90%, 5/3/99 $ 4,000 $ 3,999
Bank of Hawaii,
4.95%, 6/21/99 3,000 2,979
Total Bankers Acceptances
(Amortized Cost $6,978) 6,978
Certificates of Deposit (7.1%)
Bayerische Landesbank NY,
5.12%, 3/21/00 5,000 4,991
Chase New York,
5.73%, 5/11/99 5,000 5,001
Deutschbank,
9.28%, 5/31/99 1,200 1,204
Rabobank,
5.11%, 2/18/00 5,000 4,999
Royal Bank of Canada,
5.70%, 6/23/99 4,000 4,000
Societe Generale,
5.00%*, 5/1/99** 20,000 19,999
Toronto Dominion Bank, Ltd.,
4.84%, 6/15/99 10,000 10,000
Toronto Dominion Bank, Ltd.,
5.66%, 8/3/99 5,000 5,006
UBS,
5.29%, 3/1/00 5,000 4,999
Total Certificates of Deposit
(Amortized Cost $60,199) 60,199
Commercial Paper (30.2%)
Abbey National N.A.,
4.82%, 7/8/99 27,350 27,101
ABN AMRO North
American Finance, Inc.,
4.83%, 5/19/99 10,000 9,976
Baker Hughes, Inc.,
4.85%, 6/28/99 10,000 9,922
Coca-Cola,
4.83%, 5/25/99 6,800 6,778
Delaware Funding Corp.,
4.83%, 6/8/99 11,551 11,491
Diageo Capital PLC,
4.80%, 7/12/99 12,000 11,885
Edison Asset Securities,
4.84%, 5/19/99 $ 7,000 $ 6,983
Edison Asset Securities,
4.85%, 7/12/99 15,000 14,854
Fleet Funding Corp.,
4.80%, 6/1/99 18,933 18,855
Fuji Photo Co., Ltd.,
4.82%, 6/8/99 10,000 9,949
Goldman Sachs Group,
4.95%, 5/28/99 10,000 9,963
Iowa Student Services,
4.83%, 5/13/99 10,525 10,508
Louis Dreyfus,
4.84%, 5/10/99 7,500 7,491
Matson Navigation,
4.84%, 5/5/99 10,000 9,995
Matson Navigation,
4.80%, 7/12/99 5,000 4,952
Mont Blanc Capital Corp.,
4.87%, 5/24/99 10,000 9,969
Nalco Chemical Corp.,
5.01%, 5/12/99 5,000 4,992
Nalco Chemical Corp.,
4.83%, 7/21/99 8,000 7,913
Redwood Receivables Corp.,
4.83%, 6/1/99 9,673 9,633
Reed Elsevier, Inc.,
4.81%, 6/8/99 10,000 9,949
SBS Communications,
4.80%, 5/25/99 10,495 10,461
Sigma Financial Corp.,
4.88%, 9/13/99 5,000 4,909
Southwest Student
Services Corp.,
4.86%, 5/3/99 5,450 5,449
Southwest Student
Services Corp.,
4.83%, 5/10/99 4,675 4,669
Transamerica Finance Corp.,
4.80%, 7/28/99 8,200 8,104
UBS Finance,
4.90%, 11/22/99 10,000 9,721
Total Commercial Paper
(Amortized Cost $256,472) 256,472
<PAGE>
Corporate Bonds (47.1%)
4-L Co. of Carmel,
5.00%*, 5/5/99**,
LOC NDB Bank $ 2,500 $ 2,500
Abbey National Treasury,
5.72%, 6/11/99, MTN 3,000 3,002
Associates Corp., N.A.,
6.75%, 6/28/99 3,000 3,004
Associates Corp., N.A.,
6.63%, 7/15/99 2,000 2,006
Associates Corp., N.A.,
6.13%, 11/12/99, MTN 2,800 2,814
Austin Printing Co.,
4.88%*, 5/6/99**,
LOC Bank One 1,605 1,605
Automated Packaging System,
4.88%*, 5/6/99**,
LOC National City Bank 2,630 2,630
AVCO Financial Services,
7.25%, 7/15/99, MTN 2,000 2,008
AVCO Financial Services,
8.50%, 10/15/99, MTN 2,000 2,031
Bee Holdings, Inc.,
4.88%*, 5/6/99**,
LOC National City Bank 1,770 1,770
Beta Finance,
5.03%*, 5/4/99** 10,000 10,000
Beta Finance,
5.26%*, 5/4/99** 5,000 5,000
Buckeye Corrugated,
4.88%*, 5/6/99**,
LOC National City Bank 2,775 2,775
CIT Group Holding,
6.25%, 9/30/99, MTN 1,550 1,557
CIT Group Holding,
5.88%, 12/9/99, MTN 4,200 4,219
Dell Tin Fiber LLC,
5.00%*, 5/5/99**,
LOC 1st Chicago 8,000 8,000
Diageo Capital PLC,
7.00%, 6/15/99 3,375 3,382
Ford Motor Credit Corp.,
7.90%, 5/17/99, MTN 3,500 3,503
Ford Motor Credit Corp.,
7.75%, 10/1/99 2,000 2,022
Galileo Corp.,
5.00%*, 5/5/99**,
LOC LaSalle Bank 11,000 11,000
General American Life Insurance,
5.14%*, 5/1/99** $40,000 $ 40,000
General Motors Acceptance Corp.,
8.63%, 6/15/99 2,000 2,009
General Motors Acceptance Corp.,
7.38%, 9/9/99, MTN 2,000 2,016
General Motors Acceptance Corp.,
6.15%, 9/20/99, MTN 1,500 1,506
General Motors Acceptance Corp.,
8.00%, 10/1/99, MTN 3,500 3,539
General Motors Acceptance Corp.,
8.40%, 10/15/99, MTN 3,199 3,246
General Motors Acceptance Corp.,
5.11%, 12/13/99, MTN 6,500 6,496
Goldman Sachs Group,
5.36%*, 5/3/99** 5,000 5,000
Goldman Sachs Group, Inc.,
5.05%*, 7/14/99** 5,000 5,000
Goldman Sachs Group, Inc.,
6.88%, 9/15/99 4,850 4,880
Grand Metro Financial,
6.50%, 9/15/99 10,800 10,851
Huntington National Bank,
6.13%, 8/11/99 4,000 4,011
Ivex Of Delaware (Kama Project),
5.00%*, 5/6/99**,
LOC Societe Generale 6,500 6,500
John Deere Capital Corp.,
6.30%, 6/1/99 1,500 1,501
L.E. Pope Building Co., Inc.,
4.95%*, 5/6/99**,
LOC First Union Bank 8,000 8,000
Legendary Properties,
4.88%*, 5/6/99**,
LOC National City Bank 1,400 1,400
Lehman Brothers Holding, Inc.,
4.98%*, 5/23/99**, MTN 22,000 22,000
Liberty Lighthouse US Capital,
5.04%*, 5/1/99**, MTN 10,000 9,999
Merrill Lynch,
5.13%*, 5/1/99** 5,000 5,000
Merrill Lynch,
6.38%, 6/14/99, MTN 5,000 5,004
Merrill Lynch,
5.11%*, 5/1/99, MTN 10,000 10,000
Merrill Lynch,
5.10%*, 5/1/99**, MTN 5,000 5,000
Merrill Lynch,
5.14%*, 5/1/99**, MTN 5,000 5,001
<PAGE>
Merrill Lynch,
8.25%, 11/15/99 $ 2,000 $ 2,033
Merrill Lynch,
6.38%, 12/15/99 1,250 1,258
Merrill Lynch,
5.40%*, 5/17/99**, MTN 5,000 5,017
Morgan Guaranty Trust Co.,
4.86%*, 5/27/99** 15,000 14,998
Morgan Stanley Dean Witter,
6.82%, 12/15/99, MTN 5,000 5,053
Morgan Stanley Dean Witter,
6.82%, 12/15/99, MTN 10,000 10,107
Morgan Stanley Dean Witter,
5.10%*, 5/15/99**, MTN 15,000 15,000
Nations Bank Note,
5.00%, 1/5/00 10,000 9,999
Salomon Smith Barney,
10.13%, 6/1/99, MTN 3,600 3,615
Salomon Smith Barney,
6.25%, 10/1/99 6,500 6,526
Sea River Maritime, Inc.,
4.90%*, 5/3/99**,
Guaranteed by Exxon Corp. 22,600 22,600
SGS Tool Co.,
4.88%*, 5/6/99**,
LOC National City Bank 1,180 1,180
Shelbourne Realty,
4.88%*, 5/6/99**,
LOC Star Bank 6,740 6,740
Sigma Financial, Inc.,
5.08%*, 5/4/99** 5,000 5,000
Transamerica Finance Corp.,
5.25%*, 7/22/99**, MTN 30,000 29,999
Transamerica Finance Corp.,
5.05%*, 5/11/99** 5,000 5,000
USL Capital Corp.,
8.13%, 2/15/00 5,000 5,115
Wachovia,
5.00%, 9/1/99 2,500 2,500
Xerox Credit,
5.32%, 3/31/00 5,000 4,998
Zanetos Partnership Project,
4.88%*, 5/6/99**,
LOC National City Bank 2,120 2,120
Total Corporate Bonds
(Amortized Cost $401,645) 401,645
Municipal Bonds (0.7%)
Kentucky (0.7%):
Maruga, Series 1999b,
5.07%*, 5/6/99**,
LOC First Star, Series 1999b $ 1,365 $ 1,365
Warren County Industrial
Development Authority,
4.95%*, 5/6/99**,
LOC National City Bank 5,000 5,000
6,365
Total Municipal Bonds
(Amortized Cost $6,365) 6,365
Repurchase Agreements (8.0%)
Lehman Brothers, Inc.,
4.90%, 5/3/99,
(Collateralized by $23,575
U.S.Treasury Bond,
6.125%, 11/15/27,
market value-- $25,504) 25,000 25,000
Paine Weber,
4.90%, 5/3/99,
(Collateralized by $44,945
U.S. Treasury Bill,
0.00%, 10/28/99,
market value-- $43,943) 42,688 42,688
Total Repurchase Agreements
(Amortized Cost $67,688) 67,688
U.S. Government Agencies (5.9%)
Federal Home Loan Bank (1.8%):
4.77%, 6/30/99 (b) 10,000 9,921
5.00%, 1/5/00,
Callable 7/5/99 @ 100 (b) 5,000 5,000
14,921
Federal National Mortgage
Assoc. (4.1%):
4.64%*, 5/4/99** (b) 15,000 15,000
4.59%*, 5/4/99** (b) 20,000 20,000
35,000
Total U.S. Government Agencies
(Amortized Cost $49,921) 49,921
<PAGE>
Securities Purchased With Cash Collateral (6.1%)
Short Term Securities (1.4%):
General American Funding
Agreement, 5.10%, 3/29/00 $ 8,715 $ 8,715
AIM Short Term Prime Money
Market Fund 1,152 1,152
AIM Liquid Assets Money
Market Fund 1,608 1,608
11,475
Repurchase Agreements (4.7%):
Merrill Lynch,
4.97%, 5/3/99
(Collateralized by $10,500
Hylsa SA de CV,
0.00%, 5/28/99
market value-- $10,461) 10,000 10,000
Morgan Stanley Dean Witter,
5.04%, 5/3/99
(Collateralized by $11,720
Ford Motor,
5.75%, 2/4/23,
Citizen Utilities,
7.00%, 11/25/01,
market value-- $11,914) 10,000 10,000
Nations Bank,
5.04%, 5/3/99
(Collateralized by $9,576
Bank of America,
5.75%, 3/1/04,
Associates Corp.,
7.63%, 4/27/05,
Bank of America, 7.13%,
5/12/05,
market value-- $10,300) 10,000 10,000
Goldman Sachs Group L.P.,
5.04%, 5/3/99
(Collateralized by $11,893
Atlantic Richfield Co.,
5.55%, 4/15/03,
Computer Sciences Corp.,
6.25%, 3/15/09,
CIT Capital Trust I,
7.70%, 2/15/27,
General Electric
Capital Corp., 2.84%, 5/1/45,
market value-- $11,700) $10,000 $ 10,000
40,000
Total Securities Purchased
With Cash Collateral (Cost $51,475) 51,475
Total Investments
(Amortized Cost $900,743) (a)-- 105.9% 900,743
Liabilities in excess of other assets -- (5.9)% (50,129)
TOTAL NET ASSETS -- 100.0% $850,614
(a) Cost and value for federal income tax and financial reporting purposes
are the same.
(b) All or a portion of this security was loaned as of April 30, 1999.
* Variable rate securities having liquidity agreements. The interest rate,
which will change periodically, is based upon an index of market interest
rates. The rate reflected on the Schedule of Portfolio Investments is the
rate in effect at April 30, 1999. The date reflects the next rate change
date.
** Put and demand features exist allowing the Fund to require the repurchase
of the investment within variable time periods less than one year.
LOC -- Letter of Credit
MTN -- Medium Term Note
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
THE VICTORY PORTFOLIOS April 30, 1999
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
U.S. Government Prime Financial
Obligations Obligations Reserves
Fund Fund Fund
<S> <C> <C> <C>
ASSETS:
Investments, at amortized cost $ 597,715 $1,597,952 $793,055
Repurchase agreements, at cost 1,808,132 57,467 107,688
Total 2,405,847 1,655,419 900,743
Cash -- 1 --
Interest receivable 7,833 5,993 4,832
Receivable for capital shares issued -- 3 --
Receivable from brokers for investments sold -- 15,275 --
Prepaid expenses and other assets 113 126 33
Total Assets 2,413,793 1,676,817 905,608
LIABILITIES:
Dividends payable 7,892 6,046 3,093
Payable to brokers for investments purchased 20,109 -- --
Payable for capital shares redeemed -- 279 --
Payable for return of collateral received 159,125 31,387 51,475
Accrued expenses and other payables:
Investment advisory fees 661 500 355
Administration fees 27 20 12
Custodian fees 34 29 17
Accounting fees 1 1 7
Transfer agent fees 19 12 8
Shareholder service fees -- 350 --
Shareholder service fees -- Select Shares 345 -- --
Other 115 57 27
Total Liabilities 188,328 38,681 54,994
NET ASSETS:
Capital 2,225,464 1,638,129 850,613
Undistributed (distributions in excess of) net investment income -- 16 --
Accumulated undistributed net realized gains
(losses) from investment transactions 1 (9) 1
Net Assets $2,225,465 $1,638,136 $850,614
Net Assets
Investor Shares $ 487,298 -- --
Select Shares 1,738,167 -- --
Total $2,225,465 -- --
Outstanding units of beneficial interest (shares)
Investor Shares 487,270 -- --
Select Shares 1,738,251 -- --
Total 2,225,521 1,638,128 850,505
Net asset value
Offering and redemption price per share -- $ 1.00 $ 1.00
Offering and redemption price per share-- Investor Shares $ 1.00 -- --
Offering and redemption price per share-- Select Shares $ 1.00 -- --
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statements of Operations
THE VICTORY PORTFOLIOS For the Six Months Ended April 30, 1999
(Amounts in Thousands) (Unaudited)
U.S. Government Prime Financial
Obligations Obligations Reserves
Fund Fund Fund
<S> <C> <C> <C>
Investment Income:
Interest income $53,407 $40,865 $21,776
Securities lending 71 1 1
Total Income 53,478 40,866 21,777
Expenses:
Investment advisory fees 3,795 2,757 2,104
Administration fees 1,188 892 525
Shareholder service fees -- 1,969 --
Shareholder service fees -- Select Shares 2,058 -- --
Accounting fees 50 48 47
Custodian fees 215 155 87
Legal and audit fees 119 83 46
Trustees' fees and expenses 29 19 11
Transfer agent fees 58 49 20
Registration and filing fees 85 113 10
Printing fees 110 140 22
Other 49 14 9
Total Expenses 7,756 6,239 2,881
Net Investment Income 45,722 34,627 18,897
Realized Gains (losses) from Investments:
Net realized gains (losses) from investment transactions -- (9) 7
Change in net assets resulting from operations $45,722 $34,618 $18,904
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE VICTORY PORTFOLIOS Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
U.S. Government Prime Financial
Obligations Fund Obligations Fund Reserves Fund
Six Six Six
Months Year Months Year Months Year
Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, April 30, October 31,
1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 45,722 $ 94,996 $ 34,627 $ 51,295 $ 18,897 $ 38,928
Net realized gains (losses) from
investment transactions -- 22 (9) 16 7 8
Change in net assets resulting
from operations 45,722 95,018 34,618 51,311 18,904 38,936
Distributions to Shareholders:
From net investment income -- -- (34,627) (51,295) (18,897) (38,928)
Investor Shares (11,511) (25,238) -- -- -- --
Select Shares (34,211) (69,758) -- -- -- --
From net realized gains from
investment transactions -- -- -- (14) -- --
Change in net assets from
distributions to shareholders (45,722) (94,996) (34,627) (51,309) (18,897) (38,928)
Capital Transactions:
Proceeds from shares issued 2,066,891 4,231,821 1,826,834 3,531,074 904,596 1,578,862
Dividends reinvested 28,935 57,598 32,956 46,726 1,471 2,429
Cost of shares redeemed (2,043,385) (3,808,025) (1,600,358) (2,935,538) (840,980) (1,596,421)
Change in net assets from
capital transactions 52,441 481,394 259,432 642,262 65,087 (15,130)
Change in net assets 52,441 481,416 259,423 642,264 65,094 (15,122)
Net Assets:
Beginning of period 2,173,024 1,691,608 1,378,713 736,449 785,520 800,642
End of period $2,225,465 $2,173,024 $ 1,638,136 $1,378,713 $850,614 $ 785,520
Share Transactions:
Issued 2,066,891 4,231,821 1,826,834 3,531,074 904,596 1,578,862
Reinvested 28,935 57,598 32,956 46,726 1,471 2,429
Redeemed (2,043,385) (3,808,025) (1,600,358) (2,935,538) (840,980) (1,596,421)
Change in shares 52,441 481,394 259,432 642,262 65,087 (15,130)
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE VICTORY PORTFOLIOS Financial Highlights
U.S. Government Obligations Fund
Investor Select
Shares Shares
Six Six
Months Year Period Months Year Year
Ended Ended Ended Ended Ended Ended
April 30, October 31, October 31, April 30, October 31, October 31,
1999 1998 1997<F2> 1999 1998 1997<F2>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Investment Activities
Net investment income 0.022 0.050 0.041 0.021 0.048 0.047
Distributions
Net investment income (0.022) (0.050) (0.041) (0.021) (0.048) (0.047)
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total Return 2.21%<F4> 5.12% 4.19%<F4> 2.08%<F4> 4.86% 4.75%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $487,298 $571,104 $456,133 $1,738,167 $1,601,920 $1,235,475
Ratio of expenses to
average net assets 0.52%(d) 0.52% 0.56%<F5> 0.78%<F5> 0.77% 0.74%
Ratio of net investment income
to average net assets 4.41%(d) 5.03% 4.95%<F5> 4.16%<F5> 4.78% 4.75%
Ratio of expenses to
average net assets<F1> <F6> <F6> <F6> <F6> <F6> <F6>
Ratio of net investment income
to average net assets<F1> <F6> <F6> <F6> <F6> <F6> <F6>
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
<F2> Effective January 8, 1997, the Fund designated the existing shares as
Select Shares and commenced offering Investor Shares.
<F3> Effective June 5, 1995, the Victory U.S. Treasury Money Market Portfolio merged into
the U.S. Government Obligations Fund. Financial highlights for the periods prior to June 5, 1995
represent the U.S. Government Obligations Fund.
<F4> Not annualized.
<F5> Annualized.
<F6> There were no voluntary fee reductions during the period.
</FN>
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
THE VICTORY PORTFOLIOS Financial Highlights
U.S. Government Obligations Fund
Year Ended October 31,
1996 1995<F3> 1994
<S> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 1.000 $ 1.000 $ 1.000
Investment Activities
Net investment income 0.049 0.052 0.032
Distributions
Net investment income (0.049) (0.052) (0.032)
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000
Total Return 4.96% 5.38% 3.30%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $1,357,817 $964,929 $412,048
Ratio of expenses to
average net assets 0.61% 0.58% 0.63%
Ratio of net investment income
to average net assets 4.84% 5.28% 3.20%
Ratio of expenses to
average net assets<F1> <F6> 0.60% 0.80%
Ratio of net investment income
to average net assets<F1> <F6> 5.26% 3.03%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
<F2> Effective January 8, 1997, the Fund designated the existing shares as
Select Shares and commenced offering Investor Shares.
<F3> Effective June 5, 1995, the Victory U.S. Treasury Money Market Portfolio merged into
the U.S. Government Obligations Fund. Financial highlights for the periods prior to June 5, 1995
represent the U.S. Government Obligations Fund.
<F4> Not annualized.
<F5> Annualized.
<F6> There were no voluntary fee reductions during the period.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Prime Obligations Fund
Six
Months
Ended
April 30, Year Ended October 31,
1999 1998 1997 1996 1995 1994<F2>
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Investment Activities
Net investment income 0.022 0.049 0.048 0.047 0.051 0.035
Net realized losses from
investment transactions -- -- -- -- -- (0.003)
Total from Investment Activities 0.022 0.049 0.048 0.047 0.051 0.032
Distributions
Net investment income (0.022) (0.049) (0.048) (0.047) (0.051) (0.035)
Capital transactions -- -- -- -- -- 0.003<F2>
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total Return 2.20%<F3> 4.98% 4.89% 4.81% 5.26% 3.57%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $1,638,136 $1,378,713 $736,449 $496,019 $456,266 $782,303
Ratio of expenses to
average net assets 0.79%<F4> 0.80% 0.85% 0.87% 0.74% 0.62%
Ratio of net investment income to
average net assets 4.40%<F4> 4.89% 4.79% 4.72% 5.09% 3.52%
Ratio of expenses to
average net assets<F1> <F5> <F5> <F5> <F5> <F5> 0.79%
Ratio of net investment income to
average net assets<F1> <F5> <F5> <F5> <F5> <F5> 3.35%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
<F2> During 1994, KeyCorp made a capital contribution of approximately
$2,506,000 for losses realized from the disposition of certain securities.
<F3> Not annualized.
<F4> Annualized.
<F5> There were no voluntary fee reductions during the period.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
The Victory Portfolios Financial Highlights
Financial Reserves Fund
Six
Months
Ended
April 30, Year Ended October 31,
1999 1998 1997 1996 1995<F2> 1994
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Investment Activities
Net investment income 0.022 0.050 0.049 0.049 0.054 0.035
Distributions
Net investment income (0.022) (0.050) (0.049) (0.049) (0.054) (0.035)
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total Return 2.25%<F3> 5.10% 5.04% 5.00% 5.50% 3.57%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $850,614 $785,520 $800,642 $767,990 $762,870 $433,266
Ratio of expenses to average net assets 0.68%<F4> 0.67% 0.67% 0.67% 0.60% 0.57%
Ratio of net investment income
to average net assets 4.49%<F4> 5.01% 4.94% 4.89% 5.40% 3.48%
Ratio of expenses to average net assets<F1> <F5> 0.68% 0.71% 0.75% 0.76% 0.73%
Ratio of net investment income
to average net assets<F1> <F5> 5.00% 4.90% 4.81% 5.24% 3.32%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
<F2> Effective June 5, 1995, the Victory Financial Reserves Portfolio became the Financial
Reserves Fund.
<F3> Not annualized.
<F4> Annualized.
<F5> There were no voluntary fee reductions during the period.
</FN>
</TABLE>
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Tax-Free Money Market Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Amortized
Security Description Amount Cost
Municipal Bonds (99.7%)
Alabama (1.3%):
Montgomery,
4.05%*, 5/5/99**,
AMBAC, SPA Mellon Bank N.A. $ 5,400 $ 5,400
Montgomery,
4.05%*, 5/5/99**,
AMBAC, SPA Mellon Bank N.A. 2,000 2,000
Montgomery,
4.05%*, 5/5/99**,
AMBAC, SPA Mellon Bank N.A. 1,635 1,635
9,035
Alaska (0.4%):
North Slope Boro,
Capital Appreciation,
Series A, GO, 0.00%,
6/30/99, MBIA 2,550 2,535
Arizona (1.0%):
Maricopa County El Paso,
3.95%*, 5/5/99**,
LOC Barclays 4,900 4,900
Pima County,
Industrial Development
Authority, IDR, Brush
Wellman Inc. Project,
4.15%*, 5/6/99**,
LOC National City Bank 1,500 1,500
State Transportation Board,
Excise Tax Revenue,
Maricopa County,
5.00%, 7/1/99, AMBAC 500 501
6,901
Arkansas (1.5%):
Pine Bluff Industrial,
4.05%*, 5/6/99**,
LOC Chase Manhattan 4,900 4,900
State Development
Finance Authority, Potlatch
Corp. Project, Series A,
4.15%*, 5/5/99**,
LOC Credit Suisse First Boston 5,050 5,050
9,950
California (0.6%):
Higher Education,
Student Loan Revenue,
3.80%, 6/1/01 **,
LOC National Westminster 4,000 4,000
Colorado (2.2%):
Arapahoe Water & Sanitation,
3.40%*, 12/1/20**,
LOC Banque Nationale De Paris 6,120 6,120
Arvada IDR,
Sundstrand Corp. Project,
4.10%*, 5/6/99**,
LOC Union Bank of Switzerland $ 1,000 $ 1,000
Housing Finance Authority,
4.05%*, 5/5/99**, FNMA 2,900 2,900
Housing Finance Authority,
4.05%*, 5/5/99**, FNMA 2,675 2,675
Housing Finance Authority,
4.05%*, 5/5/99**, FNMA 2,060 2,060
14,755
Delaware (2.3%):
State Economic Development,
4.10%*, 5/5/99**,
Guaranteed by
Philip Morris Cos., Inc. 3,300 3,300
State Economic Development, IDR,
4.05%*, 5/5/99**,
LOC Canadian Imperial Bank 12,400 12,400
15,700
District of Columbia (0.1%):
District of Columbia,
4.10%*, 5/6/99**,
LOC Bank One Columbus 1,000 1,000
Florida (3.8%):
Brevard County
Multifamily Housing,
4.05%*, 5/6/99**,
LOC Harris Bank 1,700 1,700
Broward County,
4.15%*, 5/6/99**,
LOC PNC Bank 7,100 7,100
Capital Projects Finance Authority,
Revenue,
4.05%*, 5/5/99**,
FSA, SPA Credit
Suisse First Boston 16,600 16,600
Tallahassee Utility,
Revenue, Series B,
6.90%, 10/1/14,
prerefunded 10/1/99 @ 102 590 610
26,010
Georgia (0.7%):
State Municipal Electric Authority,
4.00%*, 5/5/99**,
LOC Credit Suisse 4,000 4,000
State Tollway, Revenue,
6.25%, 7/1/99,
Escrowed to Maturity 1,000 1,005
5,005
<PAGE>
Illinois (15.8%):
Addison IDR,
4.20%*, 5/6/99**,
LOC American National
Bank & Trust AMT $ 1,100 $ 1,100
Chicago O'Hare International
Airport, Revenue,
4.30%*, 5/1/99**,
LOC Credit Suisse 4,400 4,400
Chicago, Special Facility,
4.10%*, 5/5/99**,
LOC First National
Bank of Chicago 9,300 9,300
Development Financial Authority,
4.00%*, 5/4/99**,
LOC Morgan
Guaranty Trust AMT 6,400 6,400
Development Financial Authority,
4.00%*, 5/4/99**
LOC Morgan Guaranty
Trust AMT 11,300 11,300
Development Financial
Authority, LaSalle Project,
4.00%*, 5/5/99**,
LOC American National
Bank & Trust 5,900 5,900
Development Financial Authority,
Catherine Cook School Project,
4.05%*, 5/5/99**,
LOC Harris Bank & Trust 2,525 2,525
Development Financial Authority,
Museum Contemporary
Arts Project,
4.00%*, 5/5/99**,
LOC NBD Bank 21,200 21,200
East St. Louis,
4.10%*, 5/6/99**,
LOC Nationsbank 4,150 4,150
Education & Facility
Development,
4.00%*, 5/5/99**,
LOC American National
Bank & Trust 5,400 5,400
Educational Facilities, University
Pooled Funding Program,
4.00%*, 5/5/99**,
FGIC, SPA First National
Bank of Chicago 9,230 9,230
Galesburg, Knox College,
4.10%*, 5/6/99**,
LOC La Salle National Bank 5,000 5,000
Hanover Park IDR,
Spectra-Tech, Inc. Project,
4.25%*, 5/6/99**,
LOC Harris Trust $ 1,685 $ 1,685
Health Authority, Revolving Fund,
4.00%*, 5/5/99**,
LOC First National Bank
of Chicago 3,000 3,000
Health Authority,
Bensenville Home Society,
3.90%*, 5/5/99**,
LOC American National
Bank & Trust 1,075 1,075
Health Authority, Revenue,
4.05%*, 5/5/99**,
LOC Comerica Bank 3,000 3,000
Lombard,
4.20%*, 5/6/99**,
LOC American National
Bank & Trust AMT 1,830 1,830
Mundelein,
4.00%*, 5/5/99**,
LOC Northern Trust Co. 5,000 5,000
Savanna IDR,
4.10%*, 5/5/99**,
LOC First National Bank
of Chicago 1,000 1,000
State Development Financial
Authority, EDR, CPL/Downers
Grove Partnership,
4.40%*, 5/4/99**,
LOC LaSalle National Bank 4,400 4,400
106,895
Indiana (8.4%):
Auburn Economic Development,
3.20%*, 5/1/99**,
LOC NBD Bank 2,000 2,000
Elkhart, EDR,
3.60%*, 5/1/99**,
LOC Bank One 700 700
Financing Authority Health
Facility Revenue,
Baptist Homes of Indiana,
4.05%*, 5/6/99**,
LOC Bank One 5,055 5,055
Fort Wayne Economic Development,
4.10%*, 5/5/99**,
LOC Societe Generale 3,000 3,000
Greenfield Economic Development,
4.15%*, 5/6/99**,
LOC Bank One 975 975
Greenwood Health,
4.15%*, 5/6/99**,
LOC Bank One Wisconsin 985 985
<PAGE>
Indianapolis, EDR,
White Arts, Inc. Project,
4.10%*, 5/6/99**,
LOC Fifth Third Bank $ 4,300 $ 4,300
Mooresville, Kendrick Memorial
Hospital Project,
4.06%*, 5/6/99**,
LOC Huntington Bank 2,350 2,350
Noblesville, Rivers Edge
Apartments Project,
4.05%*, 5/6/99**,
LOC Bank One 2,995 2,995
Orleans Industry Economic
Development,
4.15%*, 5/6/99**,
LOC Bank One 4,900 4,900
Plymouth, EDR,
4.12%*, 5/6/99**,
LOC Star Bank 5,500 5,500
Richmond Friends,
4.05%*, 5/6/99**,
LOC Bank One 3,000 3,000
Seymour Spaceguard,
4.20%*, 5/5/99**,
LOC NBD Bank AMT 1,000 1,000
State, General Purpose,
3.50%, 1/19/00 10,000 10,019
State Development
Financial Authority,
EDR, Dura-Crete Project,
4.15%*, 5/6/99**,
LOC Bank One AMT 3,695 3,695
State Education Wesleyan,
4.05%*, 5/5/99**,
LOC NBD Bank 2,500 2,500
State Municipal Power Supply,
3.90%*, 5/5/99**,
LOC Toronto Dominion 3,000 3,000
Wakarusa, EDR,
MMM-Invest Inc. Project,
4.05%*, 5/6/99**,
LOC Bank One 795 795
56,769
Iowa (1.6%):
City of Urbandale,
3.55%*, 5/1/99**,
Guaranteed by Principle
Mutual Life Insurance Co. 4,325 4,325
Financial Authority,
Sauer-Sundstrand Co. Project,
4.05%*, 5/5/99**,
LOC Bayerische Vereinsbank 4,000 4,000
Higher Education,
4.15%*, 5/6/99**,
LOC Norwest $ 2,830 $ 2,830
11,155
Kansas (0.8%):
Fairway, IDR,
J.C. Nichols Co., Inc.,
3.55%*, 5/1/99**,
Guaranteed by Principle
Mutual Life Insurance Co. 2,300 2,300
Wanego,
4.10%*, 5/5/99**,
LOC Credit Suisse 3,300 3,300
5,600
Kentucky (5.1%):
Boone County,
Industrial Building Revenue,
Multi-Color Corp. Project,
3.15%*, 5/6/99**,
LOC PNC Bank 2,975 2,975
Carroll County, IDR,
Kentucky Ladder Co. Project,
4.30%*, 5/5/99**,
LOC Bankers Trust Co. 5,000 5,000
Covington Industrial,
4.07%*, 5/6/99**,
LOC Star Bank 3,695 3,695
Dayton Industrial
Building Revenue,
Woodcraft Manufacturing
Co., Inc. Project,
4.30%*, 5/6/99**,
LOC Fifth Third Bank 630 630
Economic Development,
4.10%*, 5/6/99**,
LOC Star Bank 7,440 7,440
Jefferson County,
Industrial Building Revenue,
Hamilton Printing,
Inc. Project,
4.10%*, 5/6/99**,
LOC Fifth Third Bank AMT 4,500 4,500
Mayfield Multi-City Lease Revenue,
4.10%*, 5/5/99**,
LOC PNC Bank 10,600 10,600
34,840
Louisiana (0.6%):
Public Facilities, Revenue,
Franciscan Missionaries,
4.50%, 7/1/99, FSA 4,415 4,420
<PAGE>
Maine (4.0%):
Educational Loan Marketing Corp.,
3.95%*, 5/5/99**,
AMBAC, SPA Credit Suisse
First Boston $13,800 $ 13,800
Health & Higher Education,
4.05%*, 5/5/99**,
AMBAC, SPA Mellon Bank N.A. 5,300 5,300
Health & Higher Education,
4.05%*, 5/5/99**,
AMBAC, SPA Mellon Bank N.A. 1,600 1,600
State, General Purpose,
3.50%, 6/23/99 6,500 6,505
27,205
Maryland (0.1%):
Harford County,
4.15%*, 5/6/99**,
LOC Harris Trust & Savings Bank 750 750
Michigan (4.1%):
Detroit City School District, GO,
4.50%, 7/1/99 2,500 2,504
Detroit Economic Opera,
4.00%*, 5/5/99**,
LOC NBD Bank 8,000 8,000
Jackson Public School, GO,
3.30%, 8/25/99,
LOC U.S. Trust Bank 1,750 1,752
Municipal Bond Authority, Revenue,
6.10%, 5/15/99 250 250
Plainwell Community School District,
3.85%, 8/21/99 3,100 3,100
State Micron,
4.20%*, 5/5/99**,
LOC NBD Bank AMT 1,000 1,000
State Strategic,
Agape Plastics Inc. Project,
4.20%*, 5/5/99**,
LOC NBD Bank AMT 1,900 1,900
State Strategic, Fleet
Engineers Inc. Project,
4.15%*, 5/6/99**,
LOC Comerica 1,800 1,800
State Strategic,
Merrill Group Project,
4.15%*, 5/6/99**,
LOC Comerica 4,000 4,000
State Strategic,
Thermal Transfer Inc. Project,
4.15%*, 5/6/99**,
LOC Comerica 3,760 3,760
28,066
Minnesota (0.1%):
Hubbard County
Solid Waste Disposal,
4.20%*, 5/5/99**,
LOC Credit Suisse $ 1,000 $ 1,000
Missouri (1.2%):
Kansas City IDR,
Multifamily Housing Revenue,
J.C. Nichols Co. Project,
3.55%*, 5/1/99**,
Guaranteed by Principle
Mutual Life Insurance Co. 3,600 3,600
St. Louis County Industrial
Development Authority,
Friendship Village, Series B,
4.00%*, 5/5/99**,
LOC LaSalle National Bank 4,725 4,725
8,325
Nevada (0.6%):
Reno, EDR,
Dunsirn Industries Project,
4.20%*, 5/6/99**,
LOC FirstStar Bank 4,100 4,100
New Hampshire (1.0%):
Higher Education,
4.05%*, 5/5/99**,
AMBAC, LOC Mellon Bank 5,300 5,300
Higher Education,
4.05%*, 5/5/99**,
AMBAC, SPA Mellon Bank N.A. 1,500 1,500
6,800
New Mexico (0.1%):
Albuquerque, IDR,
CVI Laser Corp. Project,
4.15%*, 5/6/99**,
LOC Nationsbank AMT 1,000 1,000
North Dakota (0.3%):
Burleigh County Health,
5.00%, 5/1/00, MBIA 2,060 2,094
Ohio (4.6%):
Cuyahoga County,
4.00%*, 5/5/99**, AMBAC 14,200 14,200
Cuyahoga County Hospital,
3.95%*, 5/5/99**,
LOC Morgan Guaranty 8,000 8,000
Lebanon, GO, BAN,
3.95%, 5/27/99 500 500
Monroe, BAN,
4.05%, 6/30/99 600 600
Monroe, BAN,
4.05%, 6/30/99 400 400
<PAGE>
State Air Quality,
4.40%*, 5/1/99**,
LOC JP Morgan & Co. $ 5,450 $ 5,450
Wilkes County Industrial &
Pollution Control Authority,
4.10%*, 5/6/99**,
LOC Nationsbank 2,200 2,200
31,350
Oklahoma (0.7%):
County Finance Authority, IDR,
Hutto-Carbon Office Project,
3.60%*, 5/15/99**, FGIC 1,650 1,650
County Finance Authority, IDR,
Perrine Office Project,
3.60%*, 5/15/99**, FGIC 3,170 3,170
4,820
Oregon (0.1%):
Tualatin Valley, Water Revenue,
4.50%, 6/1/99, FSA 400 400
Pennsylvania (6.4%):
Apollo Ridge School District, TRAN,
4.09%, 6/30/99 1,500 1,501
Erie County Hospital Authority,
Mercy Terrace Project,
4.05%*, 5/6/99**,
LOC PNC Capital Markets 2,245 2,245
Quakertown General Authority,
3.55%*, 5/4/99**,
LOC PNC Bank 5,400 5,400
Sayre Health Care Facility,
4.00%*, 5/5/99**, AMBAC,
LOC Mellon Bank N.A. 5,000 5,000
Sayre Health Care Facility,
4.00%*, 5/5/99**, AMBAC,
LOC Mellon Bank N.A. 4,800 4,800
Sayre Health Care Facility,
4.00%*, 5/5/99**, AMBAC,
LOC Mellon Bank N.A. 14,800 14,800
Sayre Health Care Facility,
4.00%*, 5/5/99**, AMBAC,
LOC Mellon Bank N.A. 6,800 6,800
Somerset County Community
Hospital Project,
3.05%*, 5/1/99**,
LOC PNC Bank 1,800 1,800
State Higher Education,
3.10%, 11/1/17**,
LOC PNC Bank 1,350 1,350
43,696
Rhode Island (0.1%):
State,
5.50%, 8/1/99 1,000 1,006
South Carolina (0.5%):
Cherokee County,
4.05%*, 5/5/99**,
LOC Nationsbank AMT $ 2,700 $ 2,700
State Public Service, Revenue,
6.30%, 7/1/99 1,000 1,006
3,706
Tennessee (3.6%):
Memphis,
4.15%*, 5/5/99** 4,000 4,000
Montgomery County,
4.00%*, 5/6/99**,
LOC Nationsbank 5,260 5,260
Montgomery County Public
Building Authority,
4.00%*, 5/6/99**,
LOC Nationsbank 15,000 15,000
24,260
Texas (3.5%):
Brazos River Authority,
4.05%*, 5/5/99**,
MBIA, SPA Bank of New York 7,200 7,200
Grapevine Industrial
Development Corp.,
Trencor-Jetco, Inc.,
4.10%*, 5/5/99**,
LOC First National
Bank of Chicago 6,000 6,000
State,
8.30%, 12/1/99 10,275 10,592
23,792
Vermont (1.4%):
Education & Health Buildings,
4.05%*, 5/5/99**, AMBAC,
LOC Mellon Bank N.A. 4,000 4,000
Education & Health Buildings,
4.05%*, 5/5/99**, AMBAC,
LOC Mellon Bank N.A. 5,800 5,800
9,800
Virginia (4.0%):
Colonial Heights,
Philip Morris Cos. Project,
4.10%*, 5/5/99** 2,600 2,600
Henrico City Hermitage,
4.00%*, 5/6/99**,
LOC Nationsbank 12,100 12,100
Lynchburg Industrial Development
Authority Hospital,
4.05%*, 5/5/99**, AMBAC,
LOC Mellon Bank N.A. 4,600 4,600
<PAGE>
Lynchburg Industrial Development
Authority Hospital,
4.05%*, 5/5/99**, AMBAC,
LOC Mellon Bank N.A. $ 1,000 $ 1,000
Richmond,
Philip Morris Cos. Project,
4.10%*, 5/5/99** 1,700 1,700
Waynesboro,
Residential Care Facility,
4.20%*, 5/1/99**,
LOC First Union Bank 5,000 5,000
27,000
Washington (1.6%):
King County, GO, Series C,
4.00%, 6/1/99 4,110 4,111
State Public Power,
3.00%, 7/1/18**, MBIA, SPA
First Boston Credit Suisse 7,000 7,000
11,111
West Virginia (1.3%):
Marshall County Industrial, IDR,
4.10%*, 5/5/99**,
LOC Harris Trust 3,300 3,300
State Hospital Finance Authority,
4.05%*, 5/5/99**, AMBAC,
LOC Mellon Bank N.A. 5,700 5,700
9,000
Wisconsin (13.9%):
Anitgo Plaspack,
4.15%*, 5/5/99**,
LOC FirstStar Bank AMT 2,100 2,100
Antigo School District, TRAN,
3.53%, 10/29/99 4,100 4,101
Appleton, IDR, Pensar Corp. Project,
4.15%*, 5/6/99**,
LOC Bank One AMT 520 520
Caledonia Industrial Development,
4.15%*, 5/6/99**,
LOC Bank One 3,000 3,000
Crandon School District, TRAN,
3.81%, 10/5/99 1,270 1,270
Cudahy School District, TRAN,
3.63%, 7/9/99 2,130 2,130
DC Everest Area
School District, TRAN,
3.93%, 8/26/99 2,500 2,500
East Troy School District, TRAN,
3.69%, 10/22/99 2,400 2,400
Edgerton School District, TRAN,
3.50%, 10/29/99 3,500 3,500
Evansville, Stoughton Trailers, Inc.,
4.15%*, 5/6/99**,
LOC Bank One $ 5,980 $ 5,981
Fitchburg,
4.15%*, 5/6/99**,
LOC Bank One 2,200 2,200
Fredonia, IDR, Capital
Stampings Corp. Project,
4.15%*, 5/6/99**,
LOC Bank One 2,540 2,540
Freedom School District, TRAN,
3.65%, 10/29/99 1,600 1,600
Grafton School District, TRAN,
3.60%, 6/30/99 1,650 1,650
Greendale School District, TRAN,
3.60%, 9/24/99 5,500 5,501
Kenosha IDR,
Metalmen Building LLC Project,
4.15%*, 5/6/99**,
LOC Bank One AMT 3,450 3,450
Lake Mills School District, TRAN,
3.93%, 9/1/99 2,300 2,300
Marinette School District, TRAN,
3.53%, 5/12/99 1,500 1,500
Monroe School District, BAN,
3.55%, 12/10/99,
Callable 8/10/99 @ 100 8,500 8,508
Mukwonago School District, TRAN,
3.98%, 8/27/99 2,800 2,802
New Richmond School
District, TRAN,
3.56%, 11/1/99 825 825
Oconomowoc School District, TRAN,
3.60%, 9/28/99 7,000 7,003
Oshkosh IDR, Oshkosh
Architectural Project,
4.20%*, 5/6/99**,
LOC Norwest Bank AMT 805 805
Palmyra Eagle School
District, TRAN,
3.73%, 10/4/99 2,100 2,102
Rock State Disposal,
4.15%*, 5/6/99**,
LOC Bank One Wisconsin AMT 1,200 1,200
Seymour Community School, TRAN,
3.75%, 10/4/99 3,250 3,251
Sheboygan Falls School
District, TRAN,
3.72%, 10/1/99 1,000 1,000
Slinger School District, TRAN,
3.59%, 9/28/99 2,800 2,800
<PAGE>
Sparta Area School District,
3.25%, 3/1/00,
Callable 8/3/99 @ $ 5,000 $ 5,003
State Health & Educational Facilities,
Cedar Crest, Inc. Project,
4.05%*, 5/6/99**,
LOC Bank One 2,000 2,000
Valders School District, TRAN,
3.75%, 9/24/99 1,700 1,700
Waukesha Industrial Development,
4.15%*, 5/6/99**,
LOC Bank One Wisconsin 4,000 4,000
Whitewater Maclean,
4.05%*, 5/5/99**,
LOC Bank of America 1,900 1,900
Winneconne Community School
District, TRAN,
3.75%, 10/25/99 1,080 1,081
94,223
Wyoming (0.3%):
Sweetwater County,
4.25%*, 5/1/99**,
LOC Deustchebank 1,900 1,900
Total Municipal Bonds
(Amortized Cost $679,974) 679,974
Investment Companies (0.0%)
Federated Tax-Free
Money Market Fund 42,175 $ 42
Total Investment Companies
(Amortized Cost $42) 42
Total Investments
(Amortized Cost $680,016) (a)-- 99.7% 680,016
Other assets in excess of liabilities -- 0.3% 2,108
TOTAL NET ASSETS -- 100.0% $682,124
(a) Cost and value for federal income tax and financial reporting purposes
are the same.
* Variable rate securities having liquidity sources through bank letters of
credit or other credit and/or liquidity agreements. The interest rate,
which will change periodically, is based upon bank prime rates or an index
of market interest rates. The rate reflected on the Schedule of Portfolio
Investments is the rate in effect at April 30, 1999. The date reflects the
next rate change date.
** Put and demand features exist allowing the Fund to require the repurchase
of the investment within variable time periods less than one year.
AMBAC -- AMBAC Indemnity Corp.
AMT -- Alternative Minimum Tax
BAN -- Bond Anticipation Notes
EDR -- Economic Development Revenue
FGIC -- Insured by Financial Guaranty Insurance Corp.
FNMA -- Federal National Mortgage Assoc.
FSA -- Insured by Financial Security Assurance
GNMA -- Insured by Government National Mortgage Assoc.
GO -- General Obligation
IDR -- Industrial Development Revenue
LOC -- Letter of Credit
SPA -- Standby Purchase Agreement
See notes to financial statements.
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Ohio Municipal Money Market Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Amortized
Security Description Amount Cost
Municipal Bonds (99.5%)
Ohio (99.5%):
Adena Local School District,
BAN, 3.59%, 9/16/99 $ 1,278 $ 1,281
Akron Bath Copley Township Hospital,
Visiting Nurse Services Inc.
Project, 4.00%*, 5/6/99**,
LOC National City Bank 535 535
Akron Special Assessment,
3.12%, 12/17/99 1,920 1,920
Ashland County, BAN,
3.32%, 12/17/99 6,500 6,509
Ashland County, GO,
4.00%, 8/5/99 500 500
Ashtabula County Medical Center
Project, Revenue Bond,
4.05%*, 5/6/99**, LOC Bank One 3,050 3,050
Auglaize County, G.A. Wintzer & Son
Co. Project, 4.15%*, 5/6/99**,
LOC Bank One AMT 2,225 2,225
Avon, GO,
4.10%, 7/1/99 1,040 1,041
Barberton, BAN,
3.45%, 4/20/00 2,645 2,651
Beavercreek,
4.20%, 5/7/99 450 450
Bedford Heights, IDR, Olympic Steel
Inc. Project, 4.10%*, 5/5/99**,
LOC National City Bank 1,200 1,200
Bellaire City School District,
3.70%, 8/19/99 4,038 4,045
Belmont County, BAN,
3.51%, 11/23/99 1,850 1,853
Belmont County, GO,
3.86%, 9/9/99 1,000 1,001
Bluffton,
3.40%, 12/1/99 1,795 1,798
Bowling Green, IDR,
Lamson & Sessions Project,
4.05%*, 5/6/99**, LOC
General Electric Capital Corp. 2,200 2,200
Bowling Green, IDR,
Lamson & Sessions Project,
4.12%*, 5/6/99**, LOC
Mid American National Bank 1,580 1,580
Broadview Heights, BAN,
3.45%, 8/1/99 2,300 2,301
Brooklyn Heights, IDR,
4.15%*, 5/6/99**,
LOC Bank One AMT 270 270
Brooklyn, IDR, Clinton Road Project,
Series B, 3.60%*, 5/3/99**,
LOC Bank One $ 535 $ 535
Brunswick City School District,
BAN, 3.57%, 7/8/99 4,950 4,955
Butler County, Hospital Facilities
Revenue, 4.00%*, 5/6/99**,
LOC Fifth Third Bank 1,050 1,050
Canton, GO,
3.50%, 7/15/99 1,525 1,525
Centerville Health Care Revenue,
Bethany Lutheran,
4.05%*, 5/5/99**, LOC PNC Bank 4,450 4,450
Cincinnati & Hamilton County Port
Authority EDR, Bethesda One Ltd.,
3.75%, 8/1/15**, LOC Bank One 1,025 1,025
Cincinnati & Hamilton IDR,
4th Star Ltd. Partnership Project,
3.40%*, 5/3/99**, LOC PNC Bank 6,750 6,750
Cincinnati City School District,
5.50%, 12/1/99 1,000 1,013
Clark County,
4.10%, 5/12/99 1,405 1,405
Clermont County Hospital Facilities
Revenue, 7.50%, 9/1/19,
AMBAC, Prerefunded 9/1/99 @ 102 1,300 1,345
Cleveland Airport Improvement,
Series D, 3.95%*, 5/5/99**,
LOC Toronto Dominion Bank AMT 1,500 1,500
Cleveland Heights, GO,
3.88%, 8/26/99 2,771 2,773
Cleveland Income Tax Revenue,
3.95%*, 5/6/99**, LOC Toronto
Dominion 20,000 20,000
Cleveland State University,
3.80%, 8/16/99 2,125 2,130
Clinton County,
4.05%*,5/5/99**,
LOC Fifth Third Bank 27,000 27,000
Clinton County,
3.56%, 12/15/99 2,250 2,256
Clinton County, Airport Facilities
Revenue, 4.00%*, 5/6/99**,
LOC Wachovia Bank 6,800 6,800
Columbiana County, IDR,
C & S Land Co. Project, 4.15%*,
5/6/99**, LOC Bank One AMT 3,150 3,150
Columbus,
6.75%, 7/1/99** 1,000 1,006
Columbus Sewer Revenue,
3.90%*, 5/6/99** 9,100 9,100
<PAGE>
Coshocton County,
4.05%*, 5/6/99**, LOC Bank One $ 3,275 $ 3,275
Crestline Village, BAN,
3.60%, 4/6/00 1,236 1,239
Cuyahoga County Hospital,
3.95%*, 5/5/99**,
LOC Morgan Guaranty 13,300 13,300
Cuyahoga County Hospital,
4.00%*, 5/5/99** 12,500 12,500
Cuyahoga County, Cleveland Clinic,
4.30%*, 5/6/99**,
SPA Bank of America 11,400 11,400
Cuyahoga County, Cleveland Clinic,
Series A, 4.00%*, 5/5/99**,
SPA Chase Manhattan Bank 33,765 33,765
Cuyahoga County, EDR, Crestmont-
Cleveland Partnership Project,
3.95%*, 5/3/99**, LOC Bank One 470 470
Cuyahoga County, GO, Series D,
4.00%, 5/12/99 1,000 1,000
Cuyahoga County, Hospital Revenue
Bond, Cleveland Clinic,
4.00%*, 5/5/99**,
SPA Bank of America 7,450 7,450
Cuyahoga County, IDR, Allen Group
Project, 4.10%*, 5/5/99**,
LOC Dresdner Bank AG AMT 2,700 2,700
Cuyahoga County, IDR, Decorp Project,
4.05%*, 5/6/99**, LOC Bank One 1,900 1,900
Cuyahoga County, IDR, Interstate Diesel,
4.50%*, 5/5/99**, LOC
Huntington National Bank 305 305
Cuyahoga County, IDR, Landerhaven
Executive Project, 3.83%*, 5/5/99**,
LOC Star Bank 2,095 2,095
Cuyahoga County, IDR, Progressive
Plastics Project, 4.15%*, 5/6/99**,
LOC Bank One AMT 1,390 1,390
Cuyahoga County, IDR, Watt Printing
Co. Project, 4.15%*, 5/6/99**,
LOC Bank One AMT 3,040 3,040
Cuyahoga County, Series A,
4.00%*, 5/5/99**, AMBAC, SPA
Bank of America 1,900 1,900
Cuyahoga Falls City School District,
BAN, 3.88%, 6/14/99 6,500 6,505
Cuyahoga Falls, Hospital Facilities
Revenue, Portage Trail Care Center
Project, 4.20%*, 5/6/99**,
LOC Fifth Third Bank 2,200 2,200
Cuyahoga Falls, Hospital Facilities
Revenue, Portage Trail Care
Center Project, 4.20%*, 5/6/99**,
LOC Provident Bank $ 3,100 $ 3,100
Dayton,
3.65%, 6/15/99 3,100 3,101
Deerfield Township, BAN,
3.35%, 2/3/00 1,250 1,252
Deerfield Township, GO,
4.00%, 6/30/99 1,200 1,201
Deerfield Township, GO,
4.05%, 6/30/99 741 741
Delaware County, GO,
3.85%, 7/27/99 845 845
Dover City, BAN,
3.38%, 4/13/00 1,200 1,202
Dublin City School District,
BAN, 3.74% 12/23/99 1,000 1,004
East Palestine City School District,
BAN, 3.49%, 12/8/99 4,600 4,601
Eastlake,
4.00%, 7/28/99 500 500
Eastlake, IDR, Astro Model
Development Project,
4.15%*, 5/6/99**,
LOC Bank One AMT 3,385 3,385
Eastwood Local School District,
BAN, 3.97%, 5/19/99 2,340 2,341
Edgewood City School District,
BAN, 3.70%, 6/30/99 4,300 4,304
Erie County, GO,
4.25%, 6/1/99 1,000 1,000
Fairborn Economic Development
Revenue, 4.32%*, 5/6/99**,
LOC Star Bank 585 585
Fairborn, BAN,
3.24%, 3/23/00 1,100 1,100
Fairfield City School District,
BAN, 4.30%, 10/29/99 1,950 1,954
Fairfield GO,
4.65%, 7/27/99, AMT 595 596
Fairlawn, BAN,
3.95%, 8/30/99 4,005 4,015
Franklin County Hospital Revenue,
4.10%*, 5/6/99**,
LOC National City Bank 32,500 32,500
Franklin County Hospital Revenue,
U.S. Health Corp., Series C,
4.00%*, 5/6/99**,
LOC Morgan Guaranty Trust 15,545 15,545
<PAGE>
Franklin County Hospital,
Holy Cross Health Systems,
4.00%*, 5/6/99**, SPA
Morgan Guaranty Trust $35,500 $ 35,501
Franklin County, Health System
Revenue, Health Care Facilities --
Wesley Glen, 4.08%*, 5/6/99**,
LOC Fifth Third Bank 2,635 2,635
Franklin County, Health System
Revenue, Health Care Facilities --
Wesley Glen, 4.08%*, 5/6/99**,
LOC Fifth Third Bank 940 940
Franklin County, Hospital Revenue,
Children's Hospital Project,
Series B, 4.15%*, 5/6/99**,
LOC Bank One 8,900 8,900
Franklin County, Hospital Revenue,
National Church Residences
Project, 3.30%*, 5/6/99**,
LOC Fifth Third Bank 1,450 1,450
Franklin County, Hospital Revenue,
U.S. Health Corp., Series A,
4.00%*, 5/6/99**,
LOC Morgan Guaranty 6,000 6,000
Franklin County, IDR, Capitol South
Community Redevelopment,
3.50%*, 5/3/99**,
LOC Huntington National Bank 3,520 3,520
Franklin County, IDR, Jacobson Stores,
3.50%*, 5/3/99**, LOC Bank One 6,800 6,800
Franklin County, IDR, Media Inc.
Project, 3.40%*, 9/1/99**,
LOC Society National Bank 1,770 1,770
Geauga County, Health Care Facilities,
Heather Hill Inc. Project, Series B,
4.06%*, 5/6/99**, LOC Bank One 10,025 10,025
Geauga County, IDR, Gold Key
Processing Project, 4.05%*, 5/5/99**,
LOC Fifth Third Bank AMT 1,200 1,200
Georgetown Village School District,
BAN, 3.60%, 12/1/99 1,050 1,051
Granville GO,
4.11%, 5/18/99 500 500
Greene County, GO, Series D,
3.90%, 6/3/99 16,296 16,298
Greene County, Health Care,
Friends Health Care Association,
4.11%*, 5/6/99**, LOC Bank One 3,885 3,885
Greenview Local School District,
BAN, 3.84%, 6/10/99 9,350 9,357
Grove City, IDR,
Cross Country Inns Inc.,
4.05%*, 5/6/99**, LOC Bank One $ 1,525 $ 1,525
Hamilton County,
3.90%*, 5/5/99**, LOC
Credit Suisse First Boston, MBIA 12,600 12,600
Hamilton County,
3.95%*, 5/5/99**,
LOC Fifth Third Bank 650 650
Hamilton County,
4.05%*, 5/6/99**, LOC Bank One 3,500 3,500
Hamilton County Hospital,
3.95%*, 5/6/99**, LOC PNC Bank 3,800 3,800
Hamilton County Hospital Revenue,
Health Alliance, Series B,
3.90%*, 5/5/99**, LOC
Credit Suisse First Boston, MBIA 8,100 8,100
Hamilton County, EDR, Cincinnati
Performing Arts, 4.00%*, 5/6/99**,
LOC Fifth Third Bank 1,300 1,300
Hamilton County,
Hospital Facilities Revenue,
Beechwood Home Project,
4.02%*, 5/6/99**, LOC Star Bank 4,000 4,000
Hamilton County,
Multifamily Revenue,
Forest Ridge Apartment Project,
4.10%*, 5/6/99**, LOC PNC Bank 9,900 9,900
Hamilton County,
Multifamily Revenue,
Pleasant Run Apartments Project,
4.10%*, 5/6/99**,
LOC PNC Bank AMT 1,700 1,700
Highland Heights, BAN,
3.25%, 11/18/99, 1,500 1,502
Highland Heights, BAN,
3.375%, 3/16/00, 2,430 2,434
Highland Heights, BAN,
3.125%, 10/11/99 1,736 1,737
Huron County, IDR,
American Baler Project,
4.15%*, 5/6/99**,
LOC Bank One AMT 1,850 1,850
Jackson County, GO,
3.62%, 10/14/99 1,000 1,001
Lake County,
4.00%, 5/27/99 1,000 1,000
Lake County, EDR,
Lake County YMCA Project,
4.05%*, 5/6/99**, LOC Bank One 3,000 3,000
<PAGE>
Licking County, IDR, Sunfield Inc.
Project, 4.15%*, 5/6/99**,
LOC Bank One AMT $ 1,310 $ 1,310
Lisbon School District,
4.00%, 9/2/99 1,400 1,401
Lorain County, EDR, Crestmont-
Cleveland Partnership Project,
3.40%, 10/15/99**, LOC Bank One 1,040 1,040
Lorain County, IDR, French Creek
Partners, 4.15%*, 5/6/99**,
LOC Bank One 900 900
Loveland City School District,
BAN, 4.0%, 7/15/99 19,000 19,037
Loveland City School District,
BAN, 3.87%, 6/15/99 9,600 9,608
Lucas County, EDR, Maumee Valley
Country Day School Project,
4.12%*, 5/6/99**, LOC
Mid American National Bank
& Trust AMT 3,900 3,900
Lucas County, Health Facilities
Revenue, Lutheran Homes
Society Project, 3.95%*, 5/6/99**,
LOC Bank One 10,400 10,400
Lucas County, Hospital Revenue,
Sunshine Children's Home Project,
4.00%*, 5/6/99**,
LOC National City Bank 400 400
Lucas County, Hospital Revenue,
Sunshine Children's Home Project,
4.00%*, 5/6/99**,
LOC National City Bank 350 350
Lucas County, IDR, Bunting Bearings
Corp. Project, 4.15%*, 5/6/99**,
LOC National City Bank 1,590 1,590
Mahoning County, Healthcare Facilities
Revenue, Copeland Oaks Project,
4.05%*, 5/6/99**, LOC Bank One 3,185 3,185
Mahoning County, IDR, Tru-Cut Die
Corp. Project, Series B,
4.05%*, 5/6/99*, LOC Bank One 90 90
Mansfield, GO,
3.79%, 9/30/99 1,200 1,201
Marion County,
Hospital Improvement Revenue,
Pooled Leasing Program,
4.05%*, 5/6/99**, LOC Bank One 2,660 2,660
Marion County,
Hospital Improvement Revenue,
Pooled Leasing Program,
4.05%*, 5/6/99**, LOC Bank One 2,870 2,870
Marion County,
Hospital Improvement Revenue,
Pooled Leasing Program,
4.05%*, 5/6/99**, LOC Bank One $ 130 $ 130
Marion County,
Hospital Improvement Revenue,
Pooled Leasing Program,
4.05%*, 5/6/99**, LOC Bank One 305 305
Marion County,
Hospital Improvement Revenue,
Pooled Leasing Program,
4.05%*, 5/6/99**, LOC Bank One 1,005 1,005
Marysville, BAN,
3.685%, 6/30/99 2,900 2,903
Maumee,
4.15%, 7/15/99 900 900
Maysville Local School District,
BAN, 3.60%, 9/23/99 4,332 4,341
Medina County,
3.97%, 9/1/99 445 445
Medina County, IDR,
Partners in Plastic Project,
4.20%*, 5/6/99**,
LOC Bank One AMT 995 995
Monroe,
4.16%, 9/2/99 700 701
Monroe,
4.04%, 6/30/99 900 900
Monroe,
4.20%, 6/17/99 738 738
Monroe Corridor 75,
4.05%*, 5/6/99**,
LOC Bank of Montreal 2,000 2,000
Montgomery County, Healthcare
Facilities Revenue, Greater
Dayton Area -- MRI Project,
4.05%*, 5/5/99**, LOC KeyBank 490 490
Montgomery County, IDR, Citywide
Development Corp. Project,
4.15%*, 5/6/99**,
LOC Bank One AMT 2,275 2,275
Montgomery County, IDR, Town
Centers Ltd. Partner Project,
3.95%*, 11/15/99**,
LOC National City Bank 1,685 1,685
Montgomery, IDR,
Bethesda Two Ltd.,
4.50%*, 5/6/99**,
LOC Huntington National Bank 2,725 2,725
Morrow County, GO,
3.91%, 9/8/99 3,600 3,604
<PAGE>
Muskingum County,
4.00%*, 5/6/99**,
LOC Huntington National Bank $ 1,070 $ 1,070
Northwood, GO,
4.63%, 7/29/99 1,010 1,012
Orange City School District, BAN,
3.46%, 8/18/99 2,200 2,202
Orange County School District, BAN,
3.44%, 8/18/99 11,100 11,114
Orrville, IDR, Contours Inc. Project,
4.15%*, 5/5/99**,
LOC National City Bank 100 100
Orrville, IDR,
Contours-Lessee Project,
4.15%*, 5/5/99**,
LOC National City Bank 100 100
Ottawa Hills,
3.88%, 5/12/99 4,500 4,500
Perrysburg,
4.50%, 8/19/99 2,030 2,034
Perrysburg, BAN,
3.82%, 7/15/99 9,000 9,015
Perrysburg, BAN,
4.25%, 11/18/99 3,100 3,110
Pickerington, GO,
4.18%, 7/16/99 400 400
Pike County,
Hospital Facilities Revenue,
Bristol Village Project,
4.20%*, 5/6/99**,
LOC Fifth Third Bank 3,180 3,180
Pike County, Hospital Facilities,
Bristol Village Project,
4.20%*, 5/6/99**,
LOC Fifth Third Bank 1,300 1,300
Reading IDR,
General Tool Co. Project,
4.10%*, 5/6/99**,
LOC Provident Bank,
Bank of Montreal 4,585 4,585
Richland County, BAN,
3.69%, 12/2/99 945 947
Richland County, GO,
4.17%, 6/10/99 1,485 1,486
Richland County, IDR,
Mansfield Motel Partnership,
4.15%*, 5/6/99**,
LOC Huntington National Bank 3,050 3,050
Rickenbacker,
Port Authority Revenue,
4.05%*, 5/6/99**, LOC Bank One 3,000 3,000
Salem Hospital Revenue,
Community Hospital Project,
4.05%*, 5/5/99**, LOC PNC Bank $ 3,200 $ 3,200
Scioto County Hospital Revenue,
4.05%*, 5/5/99**,
LOC Mellon Bank, AMBAC 1,265 1,265
Scioto County Hospital Revenue,
4.05%*, 5/5/99**,
LOC Mellon Bank, AMBAC 1,700 1,700
Scioto County, VHA Center Inc.
Capital Assets, Series C,
4.05%*, 5/5/99**,
LOC Mellon Bank, AMBAC 3,900 3,900
Seneca County, Hospital Facilities
Revenue, St. Francis Home Inc.
Project, 3.95%*, 5/6/99**,
LOC National City Bank 2,000 2,000
Seven Hills, BAN,
3.45%, 10/28/99 1,150 1,152
South Euclid, BAN,
3.32%, 4/6/00 1,000 1,001
South-Western City School District,
BAN, 3.50%, 9/15/99 8,500 8,512
Southwest Licking Local School
District, BAN, 3.75%, 6/15/99 5,000 5,004
Southwest Local School District,
BAN, 3.83%, 6/17/99 5,000 5,004
Southwest Local School District,
BAN, 3.73%, 7/20/99 4,250 4,256
Stark County,
Health Care Facilities Revenue,
St. Joseph Hospice Project,
4.05%*, 5/6/99**, LOC Bank One 2,135 2,135
State Air Quality
Development Authority Revenue,
JMG Funding Ltd. Partnership,
4.00%*, 5/5/99**,
LOC Societe Generale 5,100 5,100
State Air Quality
Development Authority Revenue,
Pollution Control,
Cleveland Electric,
3.10%, 7/12/99, FGIC 7,000 7,000
State Air Quality Timken,
4.00%*, 5/5/99**,
LOC NBD Bank 3,000 3,000
State Air Quality, Series B,
4.40%*, 5/3/99**, LOC Morgan 10,000 10,000
State Building Authority,
Administrative Building Fund,
Series A, 4.75%, 10/1/99 1,000 1,005
<PAGE>
State Building Authority,
State Correctional Facilities,
Series A, 5.10%, 10/1/99 $ 1,000 $ 1,007
State Economic Development,
YMCA, 4.05%*, 5/6/99**,
LOC Bank One 4,560 4,560
State Environmental Improvement
Revenue, Newark Group
Industries Inc. Project,
4.10%*, 5/6/99**,
LOC Chase Manhattan Bank AMT 9,455 9,455
State Environmental Improvement
Revenue, Newark Group
Industries Inc. Project,
3.40%*, 5/3/99**,
LOC Chase Manhattan Bank 1,000 1,000
State Higher Education,
4.05%*, 5/6/99**,
LOC Fifth Third Bank 11,355 11,355
State Higher Education,
4.05%, 5/6/99**,
LOC Fifth Third Bank 2,635 2,635
State Higher Education Facilities
Commission Revenue, Higher
Education -- Mount Vernon
Nazarene, 4.00%*, 5/6/99**,
LOC National City Bank 900 900
State Higher Education Facilities
Commission Revenue, Kenyon
College, 4.05%*, 5/5/99**,
SPA First National Bank Chicago 7,700 7,700
State Higher Education Facilities
Commission Revenue, Kenyon
College Project, 4.05%*, 5/5/99**,
SPA First National Bank Chicago 6,000 6,000
State Higher Education Facilities
Commission Revenue,
Wilmington College Project,
4.05%*, 5/6/99**,
LOC Fifth Third Bank 2,755 2,755
State Housing Finance Agency,
Multifamily Housing Revenue,
Hunters Glen Project,
4.10%*, 5/3/99**,
LOC PNC Bank AMT 7,340 7,340
State IDR, Atlas Technicast Ltd.
Project, 4.15%*, 5/6/99**,
LOC Bank One 2,265 2,265
State IDR, Best Atlas Ltd. Project,
4.15%*, 5/6/99**, LOC Bank One 2,265 2,265
State IDR, Cincinnati Riverfront,
4.05%*, 5/6/99**, LOC PNC Bank 440 440
State Public Facilities,
5.10%, 12/01/99, MBIA $ 3,185 $ 3,221
State Public Facilities,
4.50%, 11/1/99 2,500 2,517
State Public Facilities,
5.63%, 12/1/99 1,500 1,520
State Public Facilities Commission,
Higher Education Capital Facilities,
Series II-A, 5.20%, 5/1/99**,
AMBAC 2,000 2,000
State Water,
3.15%, 7/8/99**,
LOC First National Bank Chicago 32,000 32,000
State Water,
3.15%, 7/8/99,
LOC First National Bank Chicago 4,655 4,655
State Water Development Authority,
4.25%, 6/1/99 675 675
State Water Development Authority,
Cleveland Electric, Series B,
4.00%*, 5/5/99**,
LOC First National Bank Chicago 18,200 18,200
State Water Development Authority,
PA Power Co. Project,
4.05%*, 5/5/99**,
LOC First National Bank Chicago 5,800 5,800
State Water Development Authority,
Philip Morris Co. Inc. Project,
4.05%*, 5/5/99** 15,000 15,000
State Water Development Authority,
Timken Co. Project,
4.05%*, 5/5/99**,
LOC Wachovia Bank 3,300 3,300
State Water Development Authority,
Timken Co. Project,
4.00%*, 5/5/99**,
LOC Wachovia Bank 8,000 8,000
Streetsboro,
3.60%, 10/7/99 4,540 4,543
Student Loan Funding Corp.,
Cincinnati Student Loan Revenue,
4.00%*, 5/5/99**,
SPA Bank of America 17,900 17,900
Student Loan Funding Corp.,
Cincinnati Student Loan Revenue,
4.72%*, 5/5/99**,
SPA Bank of America 25,000 25,000
Summit County,
3.40%*, 9/01/99**,
LOC National City Bank 405 405
<PAGE>
Summit County Forest,
4.05%, 5/5/99**,
LOC Fifth Third Bank AMT $ 1,050 $ 1,050
Summit County, IDR,
4.15%*, 5/6/99**,
LOC Bank One AMT 3,000 3,000
Summit County, IDR, Delco Corp.
Project, 4.15%*, 5/6/99**,
LOC National City Bank 1,635 1,635
Summit County, IDR, Fiocca Inc.
Project, 4.05%*, 5/6/99**,
LOC Fifth Third Bank 2,285 2,285
Summit County, IDR, Forest
Manufacturing Co. Project,
4.15%*, 5/6/99**, LOC Bank One 440 440
Summit County, IDR, Forest
Manufacturing Co. Project,
4.10%*, 5/6/99**,
LOC Fifth Third Bank 300 300
Summit County, IDR,
GO-JO Industries Inc, Project,
4.05%*, 5/6/99**,
LOC Bank One 2,180 2,180
Summit County, IDR,
Raymond W. King Jr. Project,
4.15%*, 5/6/99**,
LOC Bank One 865 865
Summit County, IDR,
SSP Fittings Corp.
Project, 4.05%*, 5/6/99**,
LOC Bank One 1,530 1,530
Summit County, IDR, Texler Inc.
Project, 3.55%*, 5/3/99**,
LOC Bank One 555 555
Summit County, IDR,
Triscari Project,
3.35%*, 9/1/99**,
LOC Bank One 315 315
Sycamore School District, BAN,
3.85%, 7/28/99 4,500 4,509
Tallmadge, GO,
3.85%, 6/23/99 1,600 1,600
Tiffin, GO,
4.00%, 7/8/99 1,800 1,801
Toledo City School District, BAN,
3.50%, 1/28/00 2,126 2,130
Toledo Lucas County,
4.05%*, 5/6/99**, LOC PNC Bank 2,800 2,800
Toledo, IDR, Lucas County Port
Authority, Frostbite Brands Inc.
Project, 4.15%*, 5/6/99**,
LOC Old Kent Bank & Trust 1,975 1,975
Tri County North Local
School District,
4.20%, 7/22/99 $ 1,500 $ 1,501
Troy, EDR, L & CP Corp. Project,
3.20%*, 6/1/99**,
LOC Societe Generale 1,725 1,725
Trumbull County Health Care
Facilities Revenue,
4.00%*, 5/6/99** 2,750 2,750
Trumbull County, IDR, Eliwood
Engineered Casting,
4.20%*, 5/6/99**,
LOC Mellon Bank 7,000 7,000
Trumbull County, IDR,
McDonald Steel Corp Project,
4.15%*, 5/6/99**,
LOC PNC Bank 300 300
Union County, GO,
4.01%, 6/17/99 1,850 1,851
Vermilion, IDR,
Landover Properties Ltd.,
4.00%*, 5/6/99**, LOC Bank One 1,340 1,340
Wadsworth City
School District, BAN,
3.47%, 8/10/99 2,500 2,503
Warren County,
4.00%*, 5/6/99**,
LOC Fifth Third Bank 400 400
Warren County,
Health Care Facilities Revenue,
OtterbeinHomes, Series B,
3.90%*, 5/6/99**,
LOC Fifth Third Bank 17,600 17,600
Wauseon,
4.62%, 5/20/99 385 385
Wayne County,
Health Care Facilities Revenue,
West View Manor Project,
4.11%*, 5/6/99**,
LOC Fifth Third Bank 4,940 4,940
West Clermont, BAN,
3.70%, 4/27/00 1,300 1,306
Westerville,
3.10%, 12/1/99 1,010 1,010
Westerville, EDR,
American Ceramic Society,
4.35%*, 5/6/99**,
LOC BancOhio National Bank 2,025 2,025
Westlake, IDR,
Logan Westlake Project,
4.05%*, 5/6/99**,
LOC Fifth Third Bank 1,640 1,640
<PAGE>
Williams County,
4.63%, 5/13/99 $ 410 $ 410
Williams County, IDR,
Letts Industries
Inc. Project, 4.15%*, 5/6/99**,
LOC NBD Bank 3,325 3,325
Wood County,
4.12%*, 5/6/99**,
LOC Mid American National Bank 4,600 4,600
Wood County, EDR, Cast Masters Inc.
Acquisition, 4.30%*, 5/6/99**,
LOC Mid American National
Bank & Trust 2,375 2,375
Wood County, EDR, Precision
Aggregate II, 4.17%*, 5/6/99**,
LOC Mid American National
Bank & Trust 2,420 2,420
Wood County, IDR, Aluminite Ohio Inc.
Project, 4.17%*, 5/6/99** 1,750 1,750
Wooster, IDR, Allen Group Inc.,
4.25%*, 5/5/99**, LOC NBD Bank 800 800
Youngstown City School District,
5.35%, 6/15/99 1,000 1,003
998,780
Total Municipal Bonds
(Amortized Cost $998,780) 998,780
Investment Companies (0.1%)
Federated Ohio Municipal Cash
Trust Fund 1,033,634 $ 1,034
Total Investment Companies
(Amortized Cost $1,034) 1,034
Total Investments
(Amortized Cost $999,814) (a)-- 99.6% 999,814
Other assets in excess of liabilities -- 0.4% 4,086
TOTAL NET ASSETS -- 100.0% $1,003,900
(a) Cost and value for federal income tax and financial
reporting purposes are the same.
* Variable rate securities having liquidity agreements. The interest rate,
which will change periodically, is based upon an index of market interest
rates. The rate reflected on the Schedule of Portfolio Investments is the
rate in effect at April 30, 1999.
** Put and demand features exist allowing the Fund to require the repurchase
of the investment within variable time periods less than one year.
AMBAC -- Insured by American Municipal Bond Assurance Corp.
AMT -- Alternative Minimum Tax Payer
BAN -- Bond Anticipation Note
EDR -- Economic Development Revenue
FGIC -- Insured by Financial Guaranty Insurance Corp.
FNMA -- Insured by Federal National Mortgage Assoc.
FSA -- Insured by Financial Security Assurance
GNMA -- Insured by Government National Mortgage Assoc.
GO -- General Obligation
IDR -- Industrial Development Revenue
LOC -- Letter of Credit
MBIA -- Municipal Bond Insurance Association
SPA -- Standby Purchase Agreement
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
THE VICTORY PORTFOLIOS April 30, 1999
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
Ohio
Tax-Free Municipal
Money Money
Market Market
Fund Fund
<S> <C> <C>
ASSETS:
Investments, at amortized cost $680,016 $ 999,814
Interest and dividends receivable 3,957 6,813
Prepaid expenses and other assets 26 43
Total Assets 683,999 1,006,670
LIABILITIES:
Dividends payable 1,516 2,155
Accrued expenses and other payables:
Investment advisory fees 211 347
Administration fees 10 13
Custodian fees 13 16
Accounting fees 1 1
Transfer agent fees 5 6
Shareholder service fees 96 195
Other 23 37
Total Liabilities 1,875 2,770
NET ASSETS:
Capital 682,155 1,003,900
Undistributed net investment income -- 5
Accumulated undistributed net realized gains (losses) from investment transactions (31) (5)
Net Assets $682,124 $1,003,900
Outstanding units of beneficial interest (shares) 682,153 1,003,896
Net asset value
Offering and redemption price per share $ 1.00 $ 1.00
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statements of Operations
THE VICTORY PORTFOLIOS For the Six Months Ended April 30, 1999
(Amounts in Thousands) (Unaudited)
Ohio
Tax-Free Municipal
Money Market Money Market
Fund Fund
<S> <C> <C>
Investment Income:
Interest income $ 9,983 $15,567
Dividend income 229 116
Total Income 10,212 15,683
Expenses:
Investment advisory fees 1,125 2,474
Administration fees 421 599
Shareholder service fees 803 1,237
Accounting fees 45 47
Custodian fees 68 96
Legal and audit fees 34 52
Trustees' fees and expenses 8 12
Transfer agent fees 17 20
Registration and filing fees 16 21
Printing fees 26 39
Other 6 9
Total Expenses 2,569 4,606
Expenses voluntarily reduced -- (559)
Net Expenses 2,569 4,047
Net Investment Income 7,643 11,636
Realized Gains from Investments:
Net realized gains (losses) from investment transactions (27) (5)
Change in net assets resulting from operations $ 7,616 $11,631
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE VICTORY PORTFOLIOS Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
Tax-Free Ohio Municipal
Money Market Fund Money Market
Six Six
Months Year Months Year
Ended Ended Ended Ended
April 30, October 31, April 30, October 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 7,643 $ 15,305 $ 11,636 $ 20,499
Net realized gains (losses) from investment transactions (27) (4) (5) 5
Change in net assets resulting from operations 7,616 15,301 11,631 20,504
Distributions to Shareholders:
From net investment income (7,643) (15,305) (11,636) (20,499)
Change in net assets from distributions to shareholders (7,643) (15,305) (11,636) (20,499)
Capital Transactions:
Proceeds from shares issued 978,328 1,226,221 1,047,441 1,429,349
Dividends reinvested 4,989 8,862 8,750 16,522
Cost of shares redeemed (766,694) (1,181,775) (803,829) (1,345,311)
Change in net assets from capital transactions 216,623 53,308 252,362 100,560
Change in net assets 216,596 53,304 252,357 100,565
Net Assets:
Beginning of period 465,528 412,224 751,543 650,978
End of period $ 682,124 $ 465,528 $1,003,900 $ 751,543
Share Transactions:
Issued 978,328 1,226,221 1,047,441 1,429,349
Reinvested 4,989 8,862 8,750 16,522
Redeemed (766,694) (1,181,775) (803,829) (1,345,311)
Change in shares 216,623 53,308 252,362 100,560
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
THE VICTORY PORTFOLIOS Financial Highlights
<CAPTION>
Tax-Free Money Market Fund
Six
Months
Ended
April 30, Year Ended October 31,
1999 1998 1997 1996 1995 1994
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Investment Activities
Net investment income 0.012 0.029 0.030 0.030 0.034 0.021
Distributions
Net investment income (0.012) (0.029) (0.030) (0.030) (0.034) (0.021)
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total Return 1.20%<F3> 2.91% 3.07% 3.04% 3.42% 2.17%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $682,124 $465,528 $412,224 $344,796 $307,726 $198,561
Ratio of expenses to
average net assets 0.80%<F4> 0.80% 0.73% 0.78% 0.61% 0.60%
Ratio of net investment income
to average net assets 2.38%<F4> 2.88% 3.03% 2.97% 3.36% 2.14%
Ratio of expenses to
average net assets<F1> <F2> 0.80% 0.74% 0.80% 0.62% 0.79%
Ratio of net investment income
to average net assets<F1> <F2> 2.88% 3.02% 2.95% 3.35% 1.95%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
<F2> There were no voluntary fee reductions during the period.
<F3> Not annualized.
<F4> Annualized.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE VICTORY PORTFOLIOS Financial Highlights
Ohio Municipal Money Market Fund
Six Two
Months Months
Ended Ended Year
April 30, Year Ended October 31, October 31, Ended August31,
1999 1998 1997 1996 1995 1995<F2> 1994
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Investment Activities
Net investment income 0.012 0.029 0.030 0.030 0.006 0.033 0.021
Distributions
Net investment income (0.012) (0.029) (0.030) (0.030) (0.006) (0.033) (0.021)
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total Return 1.19%<F3> 2.94% 3.01% 3.11% 0.55%<F3> 3.33% 2.10%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $1,003,900 $751,543 $650,978 $561,131 $510,632 $502,453 $318,132
Ratio of expenses to
average net assets 0.82%<F4> 0.80% 0.75% 0.67% 0.64%<F4> 0.63% 0.65%
Ratio of net investment income
to average net assets 2.35%<F4> 2.90% 2.97% 3.03% 3.31%<F4> 3.33% 2.08%
Ratio of expenses to
average net assets<F1> 0.93%<F4> 0.94% 0.94% 0.97% 0.92%<F4> 0.94% 0.76%
Ratio of net investment income
to average net assets<F1> 2.24%<F4> 2.76% 2.78% 2.73% 3.03%<F4> 3.02% 1.97%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
<F2> Effective June 5, 1995, the Victory Ohio Municipal Money Market Portfolio
became the Ohio Municipal Money Market Fund.
<F3> Not annualized.
<F4> Annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Limited Term Income Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Principal Market
Security Description Amount Value
Asset Backed Securities (27.3%)
American Express Master Trust,
5.38%, 9/15/00 $ 2,000 $ 1,997
American Housing Trust, Series VIII,
Class K, 9.00%, 1/25/21, CMO 1,061 1,105
Caterpillar Financial Asset Trust,
Series 1997-A, Class A3,
6.45%, 5/25/03 2,686 2,720
Chase Manhattan Marine Owner
Trust, 6.14%, 1/17/05 2,101 2,107
Equicredit Home Equity Loan Trust,
Series 1996-1, Class A3,
6.19%, 12/15/10 1,000 989
Fleetwood Credit Corp Grantor Trust,
Series 1994-B, Class A,
6.75%, 3/15/10, CMO 2,690 2,728
Fleetwood Credit Corp., Class A,
6.64%, 9/15/12 1,211 1,239
GE Capital Mortgage Services, Inc.,
Series 1994-1, Class A8,
6.50%, 1/25/24 1,500 1,461
MBNA Master Credit Card Trust,
Series 1997-F, Class A,
6.60%, 11/15/04 2,000 2,072
Peco Energy, Series 1999-A,
Class A4, 5.80%, 3/1/07 270 269
Premier Auto Trust, Series 1998-4,
Class A3, 5.69%, 6/8/02 3,000 3,010
Premier Auto Trust, Series 1998-5,
Class A3, 5.07%, 7/8/02 270 267
Residential Accredit Loans, Inc.,
6.75%, 02/25/27, 1997-Qs1
Class A10 230 232
Resolution Trust Corp.,
8.20%, 11/25/21, CMO 330 330
Salomon Brothers Mortgage
Securities VII, Series 1998-AQ1,
Class A3, 6.56%, 6/25/28 305 307
The Money Store Home Equity Trust,
Series 1998A, Class AF3,
6.13%, 9/15/16 750 741
Total Asset Backed Securities (Cost $21,585) 21,574
Commercial Paper (3.3%)
Associates Corp., N.A.,
4.95%, 5/3/99 2,586 2,586
Total Commercial Paper (Cost $2,586) 2,586
Corporate Bonds (27.1%)
Automobiles (4.0%):
Ford Motor Credit Corp.,
6.85%, 8/15/00 $ 3,000 $ 3,047
General Motors Acceptance Corp.,
6.75%, 2/7/02 100 102
3,149
Beverages (1.9%):
J Seagram & Sons,
5.79%, 4/15/01 1,500 1,501
Brokerage Services (1.9%):
Merrill Lynch & Co., Inc.,
6.50%, 4/1/01 (b) 1,500 1,519
Financial Services (12.4%):
American General Finance,
5.80%, 3/15/02 1,500 1,496
Associates Corp. N.A.,
6.00%, 6/15/00 3,000 3,016
Associates Corp., N.A.,
6.88%, 2/1/03 3,000 3,085
CIT Group Holdings,
5.50%, 2/15/04 695 677
Citigroup Inc.,
5.80%, 3/15/04 (b) 420 416
Lehman Brothers Holdings, Inc.,
6.13%, 2/1/01 500 499
Lehman Brothers Holdings, Inc.,
6.63%, 04/01/04 240 240
Norwest Financial, Inc.,
5.50%, 3/19/01 300 299
9,728
Industrial Goods & Services (2.5%):
Burlington Resources, Inc.,
7.15%, 5/1/99 2,000 2,000
Retail (2.5%):
Dayton Hudson Co.,
5.95%, 6/15/10 2,000 2,003
Telecommunications (1.9%):
MCI Communications Corp.,
6.13%, 4/15/02 1,500 1,506
Total Corporate Bonds (Cost $21,457) 21,406
<PAGE>
U.S. Government Agencies (1.8%)
Federal National Mortgage
Assoc. (1.3%):
5.13%, 2/13/04 (b) $ 1,000 $ 979
U.S. Government Loan Trust (0.5%):
U.S. Government Loan Trust --
Israel, 8.5%, 4/1/06 Series 1-B 371 406
Total U.S. Government Agencies (Cost $1,394) 1,385
U.S. Government Mortgage Backed (13.8%)
Federal Home Loan Mortgage
Corp. (6.6%):
6.00%, 1/1/29-2/1/29 83 81
6.50%, 1/15/22-4/1/29 1,256 1,243
7.00%, 9/1/25-11/1/28 369 375
7.50%, 4/1/14-3/1/29 1,225 1,267
8.00%, 10/1/28-1/1/29 67 69
8.50%, 7/1/21-1/1/29 803 849
9.50%, 12/1/01 1,287 1,352
5,236
Federal National Mortgage
Assoc. (5.9%):
6.00%, 4/1/14-5/1/29 354 346
6.50%, 2/1/11-4/1/29 1,192 1,176
7.00%, 9/25/23-4/1/29 1,178 1,196
7.50%, 6/1/28-10/1/28 154 160
8.00%, 7/1/28 13 14
8.50%, 11/1/17 505 530
9.00%, 3/1/25 844 890
10.00%, 6/17/27 338 365
4,677
Government National Mortgage
Assoc. (1.3%):
7.00%, 12/15/22-4/15/29 980 992
8.50%, 2/15/29 14 15
1,007
Total U.S. Government Mortgage Backed
(Cost $10,953) 10,920
U.S. Treasury Obligations (26.1%)
U.S. Treasury Notes (26.1%):
5.88%, 8/31/99 (b) $ 4,611 $ 4,628
4.63%, 11/30/00 (b) 12,985 12,898
6.38%, 8/15/02 (b) 2,335 2,412
4.75%, 2/15/04 (b) 665 652
Total U.S. Treasury Obligations (Cost $20,635) 20,590
Securities Purchased With Cash Collateral (13.8%)
Short Term Securities (3.6%):
General American Funding
Agreement, 5.10%, 5/6/99 1,399 1,399
AIM Short Term Prime
Money Market Fund 615 615
AIM Liquid Assets
Money Market Fund 858 858
2,872
Repurchase Agreements (10.2%):
Morgan Stanley Dean Witter,
5.04%, 5/3/99 (Collateralized by
$4,300 AssociatesCorp. N.A.,
5.85%, 1/1/15,
market value -- $4,394) 4,000 4,000
Goldman Sachs Group L.P.,
5.08%, 5/3/99 (Collateralized by
$5,742 ProLogis Trust,
6.70%, 4/15/04,
Federated Department
Stores, Inc., 6.90%, 4/1/29,
International Paper Co.,
6.88%, 4/15/29,
market value -- $5,699) 4,000 4,000
8,000
Total Securities Purchased
With Cash Collateral (Cost $10,872) 10,872
Total Investments (Cost $89,483) (a) -- 113.2% 89,333
Liabilities in excess of other assets -- (13.2%) (10,411)
TOTAL NET ASSETS -- 100.0% $78,922
(a) Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 151
Unrealized depreciation (301)
Net unrealized depreciation $(150)
(b) All or a portion of this security was loaned as of April 30, 1999.
CMO -- Collateralized Mortgage Obligations
See notes to financial statements.
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Intermediate Income Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Principal Market
Security Description Amount Value
Asset Backed Securities (17.1%)
American Express
Credit Account Master Trust,
Series 1997-1, Class A,
6.40%, 4/15/05 $ 400 $ 402
Citibank Credit Card Master Trust,
Series 1999-1, Class A,
5.50%, 2/15/06 1,600 1,580
Copelco,
6.47%, 4/20/05 3,550 3,601
Discover,
Series 1999-1, Class A,
5.30%, 8/15/04 1,140 1,126
Discover Card Master Trust,
Series 1999-2, Class A,
5.90%, 10/15/04 2,200 2,219
First Union Commercial
Mortgage Trust,
Series 1999-C1, Class A2,
6.07%, 10/15/08 1,070 1,051
First USA Credit Card Master Trust,
Series 1998-9, Class A,
5.28%, 9/18/06, CMO 1,050 1,037
Ford Credit Auto Owner Trust,
Series 1998-A, Class A3,
5.65%, 10/15/01 4,190 4,197
GE Capital Mortgage Services, Inc.,
Series 1998-13, Class A3,
6.75%, 8/25/28 2,518 2,511
Green Tree Financial Corp.,
Series 1999-2, Class A3,
6.08%, 12/1/30 2,260 2,246
MBNA Master Credit Card Trust,
Series 1998-D, Class A,
5.80%, 12/15/05 2,000 2,006
Morgan Stanley Capital,
Series 1999-WF1, Class A2,
6.21%, 9/15/08 1,040 1,031
Nationsbank
Credit Card Master Trust,
Series 1995-1, Class A,
6.45%, 4/15/03 5,215 5,316
Peco Energy,
Series 1999-A, Class A4,
5.80%, 3/1/07 860 858
Premier Auto Trust,
Series 1997-1, Class A4,
6.35%, 4/6/02 3,300 3,347
Residential Accredit Loans, Inc.,
Series 1998-QS7, Class CB2,
6.75%, 7/25/28, CMO 5,551 5,560
Salomon Brothers
Mortgage Securities VII,
Series 1998-AQ1, Class A3,
6.56%, 6/25/28 $ 3,446 $ 3,472
Toyota Auto Receivables
Guarantor Trust,
Series 1997-A, Class A,
6.45%, 4/15/02, CMO 552 555
Total Asset Backed Securities (Cost $42,071) 42,115
Commercial Paper (1.8%)
Associates Corp., N.A.,
4.95%, 5/3/99 4,336 4,336
Total Commercial Paper (Cost $4,336) 4,336
Corporate Bonds (44.5%)
Automobiles (0.4%):
Ford Motor Co.,
9.00%, 9/15/01 1,000 1,068
Beverages (4.5%):
Coca-Cola Amatil Limited,
6.50%, 9/4/03 1,700 1,638
Coca-Cola Enterprises, Inc.,
6.63%, 9/30/02 5,775 5,843
J Seagram & Sons,
5.79%, 4/15/01 360 360
J Seagram & Sons,
6.63%, 12/15/05 3,280 3,264
11,105
Broadcasting/Cable (1.0%):
Time Warner Inc.,
7.75%, 6/15/05 2,190 2,341
Brokerage Services (0.8%):
Lehman Brothers Holdings,
6.00%, 2/26/01 505 503
Salomon Smith Barney Holdings,
6.13%, 1/15/03 1,400 1,402
1,905
Commercial Services (0.3%):
Comdisco, Inc., 5.95%, 4/30/02 805 805
Data Processing
& Reproduction (0.4%):
Cendant Corp., 7.75%, 12/1/03 1,010 1,039
Electronic & Electrical --
General (2.2%):
Motorola, Inc., 5.80%, 10/15/08 985 959
Sony Corp., 6.13%, 3/4/03 3,850 3,869
Westinghouse, 6.88%, 9/1/03 625 629
5,457
<PAGE>
Electronics (1.8%):
Hitachi Credit Corp.,
5.88%, 12/28/00 $ 4,460 $ 4,427
Energy (3.3%):
KN Energy, Inc.,
6.45%, 3/1/03 370 373
KN Energy, Inc.,
6.65%, 3/1/05 2,000 2,025
Phillips Petroleum Co.,
6.38%, 3/30/09 1,305 1,302
Texaco Capital Corp.,
5.50%, 1/15/09 535 507
Union Oil Of California,
7.20%, 5/15/05 2,230 2,272
Valero Energy Corp.,
7.38%, 3/15/06 1,560 1,572
8,051
Entertainment (0.5%):
Viacom, Inc.,
7.75%, 6/1/05 1,065 1,129
Financial Services (8.5%):
American General Finance,
5.80%, 3/15/02 565 564
Amerus Life Holdings, Inc.,
6.95%, 6/15/05 2,700 2,564
Associates Corp., N.A.,
6.25%, 11/1/08 1,000 989
AT&T Capital Corp.,
7.50%, 11/15/00 2,300 2,354
Capital One Bank COF,
6.15%, 6/1/01 505 501
Citibank Credit Card,
Series 1998-9, Class A,
5.30%, 1/9/06 3,200 3,110
Citigroup Inc.,
5.80%, 3/15/04 (c) 1,300 1,289
EOP Operating LP,
6.75%, 2/15/08 (b) 1,430 1,403
First Union Corp.,
6.63%, 7/15/05 1,640 1,658
Household Finance Company,
6.00%, 5/1/04 1,005 999
Household Finance Company,
5.88%, 2/1/09 1,020 972
Norwest Financial, Inc.,
5.50%, 3/19/01 930 927
Oasis Residential,
7.00%, 11/15/03 1,635 1,590
Simon Debartolo,
6.75%, 6/15/05 1,005 980
Spieker Props,
6.90%, 1/15/04 $ 890 $ 880
20,780
Industrial Goods & Services (3.2%):
John Deere Capital Corp.,
5.85%, 1/15/01 1,450 1,454
Monsanto Co.,
5.75%, 12/1/05 1,670 1,635
Oakwood Homes,
7.88%, 3/1/04 1,040 1,040
Pohang Iron & Steel, Inc.,
7.50%, 8/1/02 765 762
USX Corp.,
7.20%, 2/15/04 3,055 3,096
7,987
Insurance (1.9%):
Liberty Mutual,
8.20%, 5/4/07 (b)(c) 630 684
Metropolitan Life Insurance Co.,
6.30%, 11/1/03 (b) 1,500 1,483
Prudential Insurance,
7.65%, 7/1/07 (c) 2,300 2,453
4,620
Manufacturing --
Miscellaneous (0.8%):
Tyco International Group,
6.13%, 6/15/01 2,000 2,008
Oil & Gas Exploration,
Production & Services (0.3%):
Noble Drilling,
6.95%, 3/15/09 815 843
Paper Products (0.3%):
Abitibi Consolidated, Inc.,
6.95%, 4/1/08 770 756
Retail (3.7%):
Dayton Hudson Co.,
6.80%, 10/1/01 5,000 5,107
Dayton Hudson Co.,
5.95%, 6/15/10 1,975 1,977
Federated Department Stores, Inc.,
6.13%, 9/1/11 1,700 1,698
J.C. Penny & Co.,
7.60%, 4/1/07 345 362
9,144
Telecommunications (6.5%):
360 Communications Co.,
7.50%, 3/1/06 2,345 2,500
Airtouch Communications,
7.50%, 7/15/06 1,620 1,727
GTE Corp.,
6.36%, 4/15/06 1,590 1,602
<PAGE>
MCI WorldCom, Inc.,
7.55%, 4/1/04 $ 1,725 $ 1,822
Sprint Capital Corp.,
6.13%, 11/15/08 1,750 1,687
Telecommunications, Inc.,
8.25%, 1/15/03 6,300 6,772
16,110
Tobacco & Tobacco Products (0.4%):
Philip Morris Cos., Inc.,
7.00%, 7/15/05 1,070 1,094
Utilities -- Electric (3.1%):
Commonwealth Edison
Rate Reduction, Class A6,
5.63%, 6/25/09 3,200 3,098
D.R. Investments,
7.10%, 5/15/02 2,750 2,781
Korea Electric Power,
6.38%, 12/1/03 1,810 1,733
7,612
Utilities -- Natural Gas (0.6%):
Williams Cos., Inc., 6.20%, 8/1/02 1,465 1,441
Total Corporate Bonds (Cost $110,367)109,722
U.S. Government Agencies (9.3%)
Federal Farm Credit Bank (2.4%):
5.75%, 9/1/05 3,440 3,448
5.25%, 12/28/05 (c) 2,640 2,575
6,023
Federal Home Loan Bank (1.3%):
5.79%, 4/27/09 (c) 3,230 3,177
Federal National Mortgage
Assoc. (5.0%):
6.01%, 7/17/03 (c) 3,420 3,420
5.13%, 2/13/04 (c) 3,718 3,640
7.12%, 7/3/06 (c) 2,730 2,942
6.50%, 4/29/09 (c) 2,300 2,298
12,300
Small Business Administration (0.6%):
6.15%, 4/1/19 1,450 1,448
Total U.S. Government Agencies (Cost $23,186) 22,948
U.S. Government Mortgage Backed (9.9%)
Federal Home Loan Mortgage
Corp. (4.7%):
6.00%, 2/1/11-2/1/29 $ 1,118 $ 1,169
6.50%, 1/15/22-4/1/29 2,892 2,865
7.00%, 7/1/28-11/1/28 1,683 1,708
7.50%, 4/1/14-3/1/29 2,796 2,885
8.00%, 10/1/28-1/1/29 309 321
8.50%, 7/1/21-1/1/29 2,474 2,615
11,563
Federal National Mortgage
Assoc. (4.3%):
6.00%, 11/1/13-5/1/29 1,596 1,555
6.50%, 7/1/13-4/1/29 3,347 3,323
7.00%, 1/1/28-4/1/29 1,078 1,092
7.50%, 7/25/18-10/1/28 568 580
8.00%, 7/1/28 68 71
8.50%, 11/1/17-11/1/18 2,806 2,942
10.00%, 6/17/27 888 959
10,522
Government National Mortgage
Assoc. (0.9%):
6.00%, 11/1/13 141 139
7.00%, 12/15/22-10/15/28 1,905 1,933
8.50%, 9/15/28-10/15/28 145 153
2,225
Total U.S. Government Mortgage Backed
(Cost $24,423) 24,310
U.S. Treasury Obligations (16.5%)
U.S. Treasury Notes (16.5%):
5.88%, 8/31/99 (c) 1,997 2,004
4.63%, 11/30/00 (c) 11,500 11,422
6.38%, 8/15/02 (c) 9,248 9,555
4.75%, 2/15/04 (c) 7,755 7,600
6.13%, 8/15/07 (c) 8,000 8,356
4.50%, 11/15/08 (c) 1,849 1,766
Total U.S. Treasury Obligations (Cost $40,930) 40,703
<PAGE>
Securities Purchased With Cash Collateral (22.8%)
Short Term Securities (10.6%):
General American Funding
Agreement, 5.10%, 3/29/00 $12,791 $ 12,791
AIM Short Term Prime
Money Market Fund 5,619 5,619
AIM Liquid Assets
Money Market Fund 7,845 7,845
26,255
Repurchase Agreements (12.2%):
Merrill Lynch,
4.97%, 5/3/99 (Collateralized by
$10,500 Alabama Power Co., CP,
5/27/99 market value -- $10,462) 10,000 10,000
Goldman Sachs Group L.P.,
5.08%, 5/3/99 (Collateralized by
$11,673 MCI WorldCom, Inc.,
6.95%, 8/15/28,
Rite Aid Corp.,
7.13%, 1/15/07,
Meritor Automotive, Inc.,
6.80%, 2/15/09
International Paper Co.,
6.88%, 4/15/29,
market value -- $11,897) 10,000 10,000
Morgan Stanley Dean Witter,
5.04%, 5/3/99 (Collateralized by
$10,005 Southwestern Electric,
7.00%, 9/1/07, Province de Quebec,
7.00%, 1/30/07, Morgan Stanley Group,
8.88%, 10/15/01,
market value -- $10,679) $10,000 $ 10,000
30,000
Total Securities Purchased
With Cash Collateral (Cost $56,255) 56,255
Total Investments (Cost $301,568) (a) -- 121.9% 300,389
Liabilities in excess of other assets -- (21.9%) (54,021)
TOTAL NET ASSETS -- 100.0% $246,398
(a) Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 932
Unrealized depreciation (2,111)
Net unrealized depreciation $ (1,179)
(b) 144a security which is restricted as to resale to institutional investors.
(c) All or a portion of this security was loaned as of April 30, 1999.
CMO -- Collateralized Mortgage Obligation
See notes to financial statements.
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Fund for Income April 30, 1999
(Amounts in Thousands) (Unaudited)
Principal Market
Security Description Amount Value
U.S. Government Mortgage Backed (80.5%)
Government National Mortgage
Assoc. (80.5%):
6.50%, 3/15/13-11/15/28 $23,786 $ 23,779
6.55%, 11/15/13 555 557
6.63%, 1/15/27 2,982 2,999
6.75%, 10/20/07 3,000 3,000
7.00%, 7/16/13-11/15/28 40,555 41,162
7.50%, 9/15/10-3/15/28 36,489 37,523
7.99%, 8/16/99 161 161
8.00%, 7/15/02-3/16/28 18,747 19,543
8.25%, 11/15/26 1,490 1,565
8.50%, 6/20/16-2/20/29 9,403 9,849
8.75%, 4/15/22 2,551 2,824
9.00%, 10/15/09-8/15/25 6,406 6,787
9.50%, 10/15/02-6/15/21 2,227 2,390
10.00%, 5/15/12-8/15/25 1,679 1,833
10.25%, 6/15/19 12 13
10.50%, 2/15/16 13 15
Total U.S. Government Mortgage
Backed (Cost $154,204) 154,000
U.S. Treasury Obligations (18.5%)
U.S. Treasury Bills (0.9%):
4.15%, 5/6/99 $ 1,721 $ 1,720
U.S. Treasury Bonds (12.0%):
7.63%, 2/15/07 11,000 11,606
8.75%, 11/15/08 10,000 11,286
22,892
U.S. Treasury Notes (5.6%):
6.38%, 1/15/00 2,500 2,525
7.75%, 2/15/01 2,000 2,090
7.88%, 11/15/04 5,500 6,162
10,777
Total U.S. Treasury Obligations (Cost $35,240) 35,389
Total Investments (Cost $189,444) (a) -- 99.0% 189,389
Other assets in excess of liabilities -- 1.0% 1,884
TOTAL NET ASSETS -- 100.0% $191,273
(a) Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 1,502
Unrealized depreciation (1,557)
Net unrealized depreciation $ (55)
See notes to financial statements.
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Government Mortgage Fund April 30, 1999
(Amounts in Thousands) (Unaudited)
Principal Market
Security Description Amount Value
Discount Note (1.0%)
Federal National
Mortgage Assoc. (1.0%):
4.82%, 5/3/99 $ 1,061 $ 1,061
Total Discount Note (Cost $1,061) 1,061
U.S. Government Agencies (3.7%)
Federal Home Loan Bank (3.7%):
5.68%, 12/3/07 3,825 3,867
Total U.S. Government Agencies (Cost $3,822) 3,867
U.S. Government Mortgage Backed (94.6%)
Federal Home Loan Mortgage
Corp. (37.2%):
6.00%, 1/1/29-2/1/29 2,771 2,688
6.50%, 1/15/22-4/1/29 11,897 11,803
7.00%, 9/1/25-11/1/28 11,278 11,443
7.50%, 4/1/14-3/1/29 10,512 10,830
8.00%, 10/1/28-1/1/29 348 363
8.50%, 5/1/17-1/1/29 1,173 1,239
9.50%, 8/1/19-12/1/22 340 361
12.00%, 10/1/10 4 5
38,732
Federal National Mortgage
Assoc. (41.9%):
5.50%, 11/1/13 1 1
6.00%, 7/1/13-5/1/29 10,696 10,427
6.50%, 4/1/12-4/1/29 20,405 20,293
7.00%, 3/1/23-4/1/29 5,993 6,081
7.50%, 6/1/27-10/1/28 1,930 1,984
8.00%, 7/1/2/-9/1/28 1,812 1,882
8.50%, 11/1/17 805 845
9.25%, 3/25/18 382 398
9.50%, 1/1/19 7 7
10.00%, 5/1/13-6/17/27 1,367 1,476
12.00%, 8/1/13 7 8
13.00%, 12/1/12 33 37
43,439
Government National Mortgage
Assoc. (15.5%):
6.00%, 11/1/13 $ 161 $ 160
7.00%, 12/15/22-4/15/29 9,205 9,343
8.00%, 3/15/08-2/15/29 2,852 2,970
8.50%, 12/15/19-10/15/28 1,332 1,406
9.00%, 3/15/21-5/15/21 957 1,016
9.50%, 1/15/19-6/15/21 1,143 1,224
16,119
Total U.S. Government Mortgage Backed
(Cost $98,793) 98,290
Total Investments (Cost $103,676) (a) -- 99.3% 103,218
Other assets in excess of liabilities -- 0.7% 777
TOTAL NET ASSETS -- 100.0% $103,995
(a) Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 159
Unrealized depreciation (617)
Net unrealized depreciation $(458)
See notes to financial statements.
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Investment Quality Bond Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Principal Market
Security Description Amount Value
Asset Backed Securities (8.4%)
American Express Credit Account
Master Trust, 6.40%, 4/15/05,
Series 1997-1, Class A $ 740 $ 745
CIT Recreational Vehicle Trust,
5.92%, 3/15/07,
Series 1998-A, Class A2 1,520 1,525
Federal National Mortgage Assoc.,
6.00%, 6/18/25,
Series 1998-36, Class N 2,260 2,172
First Union Commercial Mortgage
Trust, 6.07%, 10/15/08,
Series 1999-C1, Class A2 680 668
First USA Credit Card Master Trust,
6.42%, 3/17/05,
Series 1997-6, Class A 910 926
MBNA Master Credit Card Trust,
5.80%, 12/15/05,
Series 1998-D, Class A 1,400 1,404
Morgan Stanley Capital,
6.21%, 11/15/31,
Series 1999-WF1, Class A2 675 669
Nationsbank Credit Card Master Trust,
6.45%, 4/15/03,
Series 1995-1, Class A 950 968
Peco Energy,
6.05%, 3/1/09,
Series 1999-A, Class A6 730 728
Premier Auto Trust,
5.07%, 7/8/02,
Series 1998-5, Class A3 830 822
Residential Accredit Loans, Inc.,
6.75%, 2/25/27, 1997-QS1
Class A10 730 735
Residential Accredit Loans, Inc.,
6.75%, 7/25/28,
Series 1998-QS7, Class CB2 2,030 2,034
Total Asset Backed Securities (Cost $13,449) 13,396
Collateralized Mortgage Obligations (5.0%)
First USA Credit Card Master Trust,
5.28%, 9/18/06,
Series 1998-9, Class A 670 662
First USA Credit Card Master Trust,
5.09*%, 10/19/06,
Series 1999-1, Class A 1,474 1,474
GE Capital Mortgage Services, Inc.,
6.75%, 8/25/28,
Series 1998-13, Class A3 1,635 1,631
Norwest Asset Securities Corp.,
6.75%, 5/25/28,
Series 1998-10, Class A3 $ 2,540 $ 2,533
Norwest Asset Securities Corp.,
6.75%, 6/25/28,
Series 1998-12, Class A9 1,728 1,692
Total Collateralized Mortgage Obligations
(Cost $7,986) 7,992
Commercial Paper (0.3%)
Associates Corp., N.A.,
4.95%, 5/3/99 517 517
Total Commercial Paper (Cost $517) 517
Corporate Bonds (29.8%)
Automobiles (0.7%):
Ford Motor Co.,
9.00%, 9/15/01 1,000 1,068
Banks (1.2%):
Abbey National PLC,
6.70%, 6/29/49,
Callable 6/15/08 @ 100 1,205 1,177
First Union Corp.,
6.88%, 9/15/05 685 706
1,883
Beverages (0.5%):
J Seagram & Sons,
6.25%, 12/15/01 285 285
J Seagram & Sons,
7.50%, 12/15/18 560 568
853
Building Materials (0.4%):
Oakwood Homes,
7.88%, 3/1/04 675 675
Commercial Services (0.3%):
Comdisco Inc.,
5.95%, 4/30/02,
Call @Make Whole +15bp 525 525
Data Processing &
Reproduction (0.4%):
Cendant Corporation,
7.75%, 12/01/03 655 674
Electronic & Electrical --
General (1.0%):
Motorola, Inc.,
5.80%, 10/15/08 400 390
Motorola, Inc.,
6.50%, 11/15/28 385 366
<PAGE>
Sony Corp.,
6.13%, 3/4/03 $ 500 $ 502
Westinghouse,
6.88%, 9/1/03 405 407
1,665
Energy (1.6%):
KN Energy, Inc.,
6.65%, 3/1/05 490 496
KN Energy, Inc.,
6.45%, 3/1/03 240 242
Texaco Capital Corp.,
5.50%, 1/15/09 340 322
Valero Energy,
7.38%, 3/15/06 985 993
Williams Holding Development,
6.13%, 12/1/03 450 442
2,495
Entertainment (0.5%):
Viacom, Inc.,
7.75%, 6/1/05 675 716
Environmental Control (0.4%):
Waste Management, Inc.,
7.00%, 7/15/28 580 559
Financial Services (4.4%):
American General Finance,
5.80%, 3/15/02 370 369
Capital One Bank Corp.,
6.15%, 6/1/01 330 327
Citigroup, Inc.,
5.80%, 3/15/04 840 833
Farmers Exchange Capital,
7.05%, 7/15/28, (b) 525 488
General Motors Acceptance Corp.,
6.63%, 10/15/05 780 787
Heller Financial,
6.00%, 3/19/04 935 925
Household Finance Co.,
6.00%, 5/1/04 650 646
Household Finance Co.,
5.88%, 2/1/09 680 648
Lehman Brothers Holdings,
6.00%, 2/26/01 330 329
Lehman Brothers Holdings,
6.63%, 4/1/04 615 615
Lumbermans Mutual,
8.30%, 12/1/37, (b) 265 268
Morgan Stanley Dean Witter,
5.63%, 1/20/04 590 578
6,813
Food Processing & Packaging (0.7%):
Nabisco, Inc.,
6.00%, 2/15/01 $ 1,150 $ 1,149
Governments (Foreign) (0.4%):
British Columbia,
5.38%, 10/29/08 640 606
Industrial Goods & Services (2.0%):
Dayton Hudson Co.,
5.88%, 11/1/08, 495 481
Monsanto Corp.,
6.60%, 12/1/28 800 761
Owens Corning,
7.50%, 5/1/05 560 569
Tyco International Group,
7.00%, 6/15/28 410 406
USX Corp.,
7.20%, 2/15/04 915 928
3,145
Insurance (2.0%):
AON Capital Trust,
8.21%, 1/1/27, (b) 490 533
Liberty Mutual,
8.20%, 5/4/07 (b) (c) 630 684
Metropolitan Life Insurance Co.,
6.30%, 11/1/03 (b) 2,000 1,978
3,195
Oil & Gas Exploration,
Production & Services (2.1%):
Baker Hughes, Inc. (b),
6.00%, 2/15/09 435 418
Baker Hughes, Inc. (b),
6.88%, 1/15/29 615 602
Noble Drilling, Inc.,
7.50%, 3/15/19 595 610
Phillips Petroleum Co.,
6.65%, 3/1/03 1,200 1,227
Phillips Petroleum Co.,
6.38%, 3/30/09 490 489
3,346
Oil & Gas Transmission (0.3%):
Occidental Petroleum,
8.45%, 2/15/29 490 527
Oil-Integrated Companies (0.5%):
Unocal Corp.,
7.00%, 5/1/28 755 730
Paper Products (0.8%):
Abitibi Consolidated, Inc.,
6.95%, 4/1/08 500 490
Fort James Corp.,
6.63%, 9/15/04 475 480
<PAGE>
International Paper Co.,
7.63%, 1/15/07 $ 335 $ 355
1,325
Publishing (1.9%):
Knight-Ridder,
6.88%, 3/15/29 640 626
Time Warner, Inc.,
7.75%, 6/15/05 2,200 2,352
2,978
Railroads (0.3%):
Union Pacific Co.,
6.63%, 2/1/29 580 547
Real Estate (2.4%):
Cabot Industrial,
7.13%, 5/1/04 475 471
Camden Property Trust,
7.00%, 4/15/04 475 477
EOP Operating LP,
6.75%, 2/15/08 1,700 1,668
Simon Debartolo,
6.75%, 6/15/05 655 639
Spieker Properties,
6.90%, 1/15/04 575 569
3,824
Retail (1.1%):
J.C. Penny & Co.,
7.60%, 4/1/07 675 709
J.C. Penny & Co.,
7.63%, 3/1/97 480 455
Saks, Inc.,
8.25%, 11/15/08 525 567
1,731
Telecommunications (1.7%):
360 Communications Co.,
7.50%, 3/1/06 565 602
AT&T Capital Corp.,
6.88%, 1/16/01, MTN 475 483
GTE Corp.,
6.94%, 4/15/28 360 361
Telecommunications, Inc.,
9.80%, 2/1/12 990 1,277
2,723
Tobacco & Tobacco Products (0.6%):
Philip Morris Cos., Inc.,
7.00%, 7/15/05 895 915
Utilities -- Electric (1.0%):
Commonwealth Edison,
5.44%, 3/25/07 $ 515 $ 502
Korea Electric Power,
6.38%, 12/1/03 1,175 1,125
1,627
Utilities -- Gas (0.6%):
Williams Co.,
6.20%, 8/1/02 1,030 1,013
Total Corporate Bonds (Cost $47,834) 47,307
Securities Purchased When Issued (0.7%)
Federal Home Loan Mortgage
Corp. (0.7%):
7.50%, 15 Year TBA 1,108 1,153
Total Securities Purchased When Issued
(Cost $1,154) 1,153
U.S. Government Agencies (5.7%)
Federal National Mortgage
Assoc. (5.2%):
5.13%, 2/13/04 (c) 125 122
7.12%, 7/3/06 MTN 1,650 1,778
6.50%, 4/29/09 (c) 1,900 1,898
6.16%, 8/7/28 (c) 3,770 3,661
5.96%, 9/11/28 MTN (c) 711 669
8,128
U.S. Government Loan Trust (0.5%):
U.S. Government Loan Trust --
Isreal, 8.50%, 4/1/06 Series 1-B 788 863
Total U.S. Government Agencies (Cost $9,127) 8,991
U.S. Government Mortgage Backed (36.8%)
Federal Home Loan Mortgage
Corp. (13.3%):
6.00%, 1/1/29-2/1/29 1,698 1,648
6.50%, 1/15/22-4/1/29 8,455 8,377
7.00%, 3/1/28-11/1/28 5,457 5,536
7.50%, 9/1/17-3/1/29 3,443 3,537
8.00%, 10/1/28-1/1/29 770 802
8.50%, 7/1/21-1/1/29 1,134 1,194
21,094
<PAGE>
Federal National Mortgage
Assoc. (18.1%):
5.50%, 11/1/13 $ 1 $ 1
6.00%, 4/1/14-4/1/29 5,058 4,939
6.50%, 2/1/11-4/1/29 12,859 12,774
7.00%, 9/25/23-3/1/29 5,346 5,431
7.50%, 6/1/27-10/1/28 2,473 2,541
8.00%, 7/1/28 222 231
8.50%, 11/1/17 1,137 1,193
10.00%, 6/17/27 1,524 1,645
28,755
Government National Mortgage
Assoc. (5.4%):
7.00%, 12/15/22-4/15/29 6,476 6,574
8.50%, 7/15/10-2/15/29 829 876
9.00%, 2/15/17-12/15/19 1,072 1,137
8,587
Total U.S. Government Mortgage Backed
(Cost $58,792) 58,436
U.S. Treasury Obligations (11.8%)
U.S. Treasury Notes (11.8%):
5.88%, 8/31/99 (c) 3,247 3,259
4.63%, 11/30/00 (c) 3,497 3,474
6.38%, 8/15/02 (c) 3,222 3,329
4.75%, 2/15/04-11/15/08 1,342 1,309
0.00%, 8/15/20 (c) 1,600 445
6.13%, 11/15/27 334 346
5.25%, 11/15/28 (c) 7,201 6,658
Total U.S. Treasury Obligations (Cost $19,009) $ 18,820
Securities Purchased With Cash Collateral (13.4%)
Short Term Securities (6.5%):
General American
Funding Agreement,
5.10%, 3/29/00 $ 5,052 $ 5,052
AIM Short Term Prime
Money Market Fund 2,220 2,220
AIM Liquid Assets
Money Market Fund 3,099 3,099
10,371
Repurchase Agreements (6.9%):
Merrill Lynch,
4.97%, 5/3/99
(See Significant Accounting
Policies, Securities Lending
in the Notes to
Financial Statements
for collateral description) 5,000 5,000
Morgan Stanley Dean Witter,
5.04%, 5/3/99 (Collateralized
by $6,600, Texas
Utility 7.17%, 8/1/07,
SB Treasury Co., 9.40%, 6/30/08,
GMAC, 5.50%, 12/15/01,
Conoco, 5.90%, 4/15/04,
market value $6,918) 6,000 6,000
11,000
Total Securities Purchased
With Cash Collateral (Cost $21,371) 21,371
Total Investments (Cost $179,239) (a) -- 111.9% 177,983
Liabilities in excess of other assets -- (11.9%) (18,918)
TOTAL NET ASSETS -- 100.0% $159,065
(a) Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 384
Unrealized depreciation (1,640)
Net unrealized depreciation $(1,256)
(b) 144a security which is restricted as to resale to institutional investors.
(c) All or a portion of this security was loaned as of April 30, 1999.
CMO -- Collateralized Mortgage Obligation
MTN -- Medium Term Note
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
THE VICTORY PORTFOLIOS April 30, 1999
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
Limited
Term Intermediate Government Investment
Income Income Fund For Mortgage Quality
Fund Fund Income Fund Bond Fund
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (Cost $81,483;
$271,568; $189,444; $103,676 & $168,239) $81,333 $270,389 $189,389 $103,218 $166,983
Repurchase agreements at amortized cost 8,000 30,000 -- -- 11,000
Total 89,333 300,389 189,389 103,218 177,983
Cash -- -- 157 -- 505
Interest receivable 812 3,537 1,803 664 1,746
Receivable for capital shares issued -- 11 53 -- 27
Receivable from brokers for investments sold 5,426 6,366 4 2,107 3,612
Prepaid expenses and other assets 14 22 108 18 15
Total Assets 95,585 310,325 191,514 106,007 183,888
LIABILITIES:
Payable to brokers for investments purchased 5,745 7,080 -- 1,943 3,051
Payable for capital shares redeemed 1 416 41 4 270
Payable for return of collateral received 10,872 56,255 -- -- 21,371
Accrued expenses and other payables:
Investment advisory fees 23 100 51 34 66
Administration fees 1 4 30 2 3
Custodian fees 2 7 14 2 2
Accounting fees -- 1 10 -- --
Transfer agent fees 1 4 10 3 15
Shareholder service fees 14 48 -- 21 29
Other 4 12 40 3 16
Total Liabilities 16,663 63,927 241 2,012 24,823
NET ASSETS:
Capital 82,272 248,607 197,057 105,249 172,134
Undistributed net investment income 32 154 36 52 89
Net unrealized appreciation/depreciation
from investments (150) (1,179) (55) (458) (1,256)
Accumulated undistributed net realized gains
(losses) from investment transactions (3,232) (1,184) (5,765) (848) (11,902)
Net Assets $78,922 $246,398 $191,273 $103,995 $159,065
Net Assets
Class A $78,922 $246,398 $ 30,480 $103,995 $159,065
Class G 160,793
Total $78,922 $246,398 $191,273 $103,995 $159,065
Outstanding units of beneficial interest (shares)
Class A 7,993 25,602 2,321 9,507 16,286
Class G 12,250
Total 7,993 25,602 14,571 9,507 16,286
Net asset value
Redemption price per share -- Class A $ 9.87 $ 9.62 $ 13.13 $ 10.94 $ 9.77
Offering and redemption price per share
-- Class G $ 13.13
Maximum sales charge 2.00% 5.75% 2.00% 5.75% 5.75%
Maximum offering price per share
(100%/(100%-maximum sales charge) of
net asset value adjusted to nearest cent)
-- Class A $ 10.07 $ 10.21 $ 13.40 $ 11.61 $ 10.37
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statements of Operations
THE VICTORY PORTFOLIOS For the Six Months Ended April 30, 1999
(Amounts in Thousands) (Unaudited)
Limited
Term Intermediate Fund Government Investment
Income Income For Mortgage Quality
Fund Fund Income<F1> Fund Bond Fund
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest income $ 2,387 $ 7,637 $3,866 $ 3,399 $ 5,105
Securities lending income 3 14 -- -- 14
Total Income 2,390 7,651 3,866 3,399 5,119
Expenses:
Investment advisory fees 189 941 280 261 608
Administration fees 60 188 26 78 122
Shareholder service fees 99 313 -- 128 202
Shareholder service fees -- Class A -- -- 7 -- --
12b-1 fees -- Class G -- -- 133 -- --
Accounting fees 32 49 19 36 46
Custodian fees 25 46 13 32 45
Legal and audit fees 4 13 9 5 9
Trustees' fees and expenses 1 3 5 1 2
Transfer agent fees 5 10 18 6 32
Registration and filing fees 6 10 7 7 10
Printing fees -- -- 3 -- 5
Other 5 15 12 7 10
Total Expenses 426 1,588 532 561 1,091
Expenses voluntarily reduced (53) (344) (38) (60) (203)
Expenses before reimbursement from distributor 373 1,244 494 501 888
Expenses reimbursed by the distributor -- -- (2) -- --
Net Expenses 373 1,244 492 501 888
Net Investment Income 2,017 6,407 3,374 2,898 4,231
Realized/Unrealized Gains (losses) from Investments:
Net realized gains (losses) from investment transactions (440) (1,124) 4 (41) (1,916)
Change in unrealized
appreciation/depreciation from investments (1,025) (4,656) (2,542) (1,225) (1,970)
Net realized/unrealized gains (losses) from investments (1,465) (5,780) (2,538) (1,266) (3,886)
Change in net assets resulting from operations $ 552 $ 627 $ 836 $ 1,632 $ 345
<FN>
<F1> For the period January 1, 1999 through April 30, 1999.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE VICTORY PORTFOLIOS Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
Limited Term Intermediate Fund For
Income Fund Income Fund Income
Six Six Four
Months Year Months Year Months Year
Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, April 30, December 31,
1999 1998 1999 1998 1999<F1> 1998
<S> <C> <C> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 2,017 $ 4,298 $ 6,407 $ 13,440 $ 3,374 $ 9,225
Net realized gains
(losses) from
investment transactions (440) 308 (1,124) 5,545 4 226
Net change in unrealized
appreciation/depreciation
from investments (1,025) 538 (4,656) 690 (2,542) 1,816
Change in net assets resulting
from operations 552 5,144 627 19,675 836 11,267
Distributions to Shareholders:
From net investment income (2,022) (4,292) (6,342) (13,508) -- --
From net investment
income by class:
Class A -- -- -- -- (154) --
Class G -- -- -- -- (3,228) (9,113)
From net realized gains from
investment transactions -- -- (298) -- -- --
Change in net assets from
distributions to shareholders (2,022) (4,292) (6,640) (13,508) (3,382) (9,113)
Capital Transactions:
Proceeds from shares issued 8,229 17,938 30,824 52,810 21,348 52,319
Proceeds from shares issued
in connection with acquisition -- -- -- -- 32,095 --
Dividends reinvested 1,458 3,093 4,834 9,834 2,954 7,552
Cost of shares redeemed (10,638) (22,453) (39,514) (61,385) (22,290) (57,385)
Change in net assets from
capital transactions (951) (1,422) (3,856) 1,259 34,107 2,486
Change in net assets (2,421) (570) (9,869) 7,426 31,561 4,640
Net Assets
Beginning of period 81,343 81,913 256,267 248,841 159,712 155,072
End of period $ 78,922 $ 81,343 $246,398 $256,267 $191,273 $159,712
Share Transactions:
Issued 825 1,797 3,170 5,434 1,616 3,958
Issued in connection
with acquisition -- -- -- -- 2,426 --
Reinvested 147 311 499 1,017 224 572
Redeemed (1,068) (2,256) (4,071) (6,337) (1,689) (4,338)
Change in shares (96) (148) (402) 114 2,577 192
<FN>
<F1> Effective March 26, 1999, the Gradison Government Income Fund merged into
the Victory Fund For Income. Changes in net assets prior to March 26, 1999
represent the Gradison Government Income Fund.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
Government Investment Quality
Mortgage Fund Bond Fund
Six Six
Months Year Months Year
Ended Ended Ended Ended
April 30, October 31, April 30, October 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 2,898 $ 5,895 $ 4,231 $ 9,634
Net realized gains (losses) from investment transactions (41) 1,276 (1,916) 5,801
Net change in unrealized
appreciation/depreciation from investments (1,225) 50 (1,970) (1,619)
Change in net assets resulting from operations 1,632 7,221 345 13,816
Distributions to Shareholders:
From net investment income (2,876) (5,870) (4,186) (9,672)
Change in net assets from distributions to shareholders (2,876) (5,870) (4,186) (9,672)
Capital Transactions:
Proceeds from shares issued 13,984 24,330 29,023 56,066
Dividends reinvested 1,527 2,880 2,897 5,975
Cost of shares redeemed (15,357) (27,237) (38,946) (77,260)
Change in net assets from capital transactions 154 (27) (7,026) (15,219)
Change in net assets (1,090) 1,324 (10,867) (11,075)
Net Assets:
Beginning of period 105,085 103,761 169,932 181,007
End of period $103,995 $105,085 $159,065 $169,932
Share Transactions:
Issued 1,268 2,201 2,931 5,665
Reinvested 139 261 293 604
Redeemed (1,393) (2,466) (3,927) (7,790)
Change in shares 14 (4) (703) (1,521)
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE VICTORY PORTFOLIOS Financial Highlights
Limited Term Income Fund
Six
Months
Ended
April 30, Year Ended October 31,
1999 1998 1997 1996 1995<F2> 1994
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.06 $ 9.94 $ 10.01 $ 10.15 $ 9.88 $ 10.53
Investment Activities
Net investment income 0.25 0.54 0.61 0.63 0.57 0.54
Net realized and unrealized
gains (losses) from investments (0.19) 0.12 (0.07) (0.14) 0.27 (0.61)
Total from Investment Activities 0.06 0.66 0.54 0.49 0.84 (0.07)
Distributions
Net investment income (0.25) (0.54) (0.61) (0.62) (0.57) (0.54)
In excess of net investment income -- -- -- (0.01) -- --
Net realized gains -- -- -- -- -- (0.04)
Total Distributions (0.25) (0.54) (0.61) (0.63) (0.57) (0.58)
Net Asset Value, End of Period $ 9.87 $ 10.06 $ 9.94 $ 10.01 $ 10.15 $ 9.88
Total Return (excludes sales charges) 0.61%<F3> 6.86% 5.57% 4.94% 8.77% (0.66)%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $78,922 $81,343 $81,913 $90,019 $172,002 $79,150
Ratio of expenses to
average net assets 0.94%<F4> 0.87% 0.85% 0.86% 0.78% 0.79%
Ratio of net investment income
to average net assets 5.06%<F4> 5.44% 6.06% 5.90% 5.77% 5.29%
Ratio of expenses to
average net assets<F1> 1.07%<F4> 1.02% 0.87% 0.89% 0.79% 0.97%
Ratio of net investment income
to average net assets<F1> 4.93%<F4> 5.29% 6.04% 5.87% 5.76% 5.10%
Portfolio turnover 126% 177% 139% 221% 97% 41%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been as
indicated.
<F2> Effective June 5, 1995, the Victory Short-Term Government Income
Portfolio merged into the Limited Term Income Fund. Financial highlights
For the periods prior to June 5, 1995 represent the Limited Term Income Fund.
<F3> Not annualized.
<F4> Annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE VICTORY PORTFOLIOS Financial Highlights
Intermediate Income Fund
Six
Months Year Year Year Year December 30,
Ended Ended Ended Ended Ended 1993
April 30, October 31, October 31, October 31, October 31, to October 31,
1999 1998 1997 1996 1995 1994<F2>
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.85 $ 9.61 $ 9.56 $ 9.69 $ 9.25 $ 10.00
Investment Activities
Net investment income 0.24 0.53 0.56 0.56 0.60 0.52
Net realized and unrealized gains
(losses) from investments (0.22) 0.24 0.05 (0.13) 0.44 (0.76)
Total from Investment Activities 0.02 0.77 0.61 0.43 1.04 (0.24)
Distributions
Net investment income (0.24) (0.53) (0.56) (0.56) (0.60) (0.51)
Net realized gains (0.01) -- -- -- -- --
Total Distributions (0.25) (0.53) (0.56) (0.56) (0.60) (0.51)
Net Asset Value, End of Period $ 9.62 $ 9.85 $ 9.61 $ 9.56 $ 9.69 $ 9.25
Total Return (excludes sales charges) 0.27%<F3> 8.30% 6.62% 4.56% 11.65% (2.48)%<F3>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $246,398 $256,267 $248,841 $272,087 $163,281 $112,923
Ratio of expenses to
average net assets 0.99%<F4> 0.96% 0.96% 0.94% 0.82% 0.79%<F4>
Ratio of net investment income
to average net assets 5.11%<F4> 5.48% 5.87% 5.81% 6.32% 6.23%<F4>
Ratio of expenses to
average net assets<F1> 1.27%<F4> 1.24% 1.09% 1.11% 1.06% 1.25%<F4>
Ratio of net investment income
to average net assets<F1> 4.83%<F4> 5.20% 5.74% 5.64% 6.08% 5.77%<F4>
Portfolio turnover 152% 318% 195% 164% 98% 55%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been as
indicated.
<F2> Period from commencement of operations.
<F3> Not annualized.
<F4> Annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE VICTORY PORTFOLIOS Financial Highlights
Fund for Income
Class A
Shares Class G Shares
March 26, January 1, Year Year Year Year Year
1999 to 1999 to Ended Ended Ended Ended Ended
April 30, April 30, December 31, December 31, December 31, December 31, December 31,
1999<F4><F7> 1999<F4> 1998 1997 1996 1995 1994
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 13.14 $ 13.32 $ 13.14 $ 12.88 $ 13.21 $ 12.02 $ 13.37
Investment Activities
Net investment income 0.08 0.27 0.77 0.78 0.78 0.79 0.76
Net realized and
unrealized gains
(losses) on
investments (0.02) (0.19) 0.17 0.26 (0.34) 1.23 (1.25)
Total from
Investment
Activities 0.06 0.08 0.94 1.04 0.44 2.02 (0.49)
Distributions
Net investment income (0.07) (0.27) (0.76) (0.78) (0.77) (0.79) (0.78)
In excess of net
investment income -- -- -- -- -- -- (0.01)
Net realized gains -- -- -- -- -- -- (0.05)
Tax return of capital -- -- -- -- -- (0.04) (0.02)
Total Distributions (0.07) (0.27) (0.76) (0.78) (0.77) (0.83) (0.86)
Net Asset Value,
End of Period $ 13.13 $ 13.13 $ 13.32 $ 13.14 $ 12.88 $ 13.21 $ 12.02
Total Return (excludes
sales charges) 0.43%<F2> 0.60%<F2> 7.37% 8.36% 3.51% 17.20% (3.69)%
Ratios/Supplemental Data:
Net Assets, End of
Period (000) $30,480 $160,793 $159,712 $155,072 $162,874 $185,434 $184,029
Ratio of expenses to
average net assets<F5> 0.89%<F3> 0.89%<F3> 0.89% 0.90% 0.90% 0.92% 0.90%
Ratio of net investment
income to average
net assets<F5> 6.14%<F3> 6.32%<F3> 5.79% 6.04% 6.06% 6.19% 6.03%
Ratio of expenses to
average net assets<F1> 1.12%<F3> 0.94%<F3> 0.90% <F6> <F6> <F6> <F6>
Ratio of net investment
income to average
net assets<F1> 5.91%<F3> 6.27%<F3> 5.78% <F6> <F6> <F6> <F6>
Portfolio turnover<F8> 17% 17% 36% 12% 13% 16% 21%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or
reimbursed. If such voluntary fee reductions and/or reimbursements
had not occurred, the ratios would have been as indicated.
<F2> Not annualized.
<F3> Annualized.
<F4> Effective March 26, 1999, the Gradison Government Income Fund merged
into the Victory Fund For Income. Financial highlights prior to
March 26, 1999 represent the Gradison Government Income Fund.
<F5> Effective March 26, 1999, the Adviser agreed to waive its management
fee or to reimburse expenses, as allowed by law, to the extent
necessary to maintain the net operating expenses of the Class G shares
of the Fund at a maximum of 0.89% until at least April 1, 2001. The
Adviser has also agreed to waive its management fee for Class A shares
to the same extent the fee is waived for Class G shares until at
least April 1, 2001.
<F6> There were no voluntary fee reductions during the period.
<F7> Period from commencement of operations.
<F8> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE VICTORY PORTFOLIOS Financial Highlights
Government Mortgage Fund
Six
Months
Ended
April 30, Year Ended October 31,
1999 1998 1997 1996 1995 1994
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.07 $ 10.93 $ 10.76 $ 10.86 $ 10.33 $ 11.36
Investment Activities
Net investment income 0.30 0.63 0.69 0.70 0.72 0.68
Net realized and unrealized
gains (losses) from investments (0.13) 0.14 0.16 (0.12) 0.62 (1.02)
Total from Investment Activities 0.17 0.77 0.85 0.58 1.34 (0.34)
Distributions
Net investment income (0.30) (0.63) (0.68) (0.67) (0.71) (0.67)
Net realized gains -- -- -- -- -- (0.02)
In excess of net realized gains -- -- -- -- (0.08) --
Tax return of capital -- -- <F3> (0.01) (0.02) --
Total Distributions (0.30) (0.63) (0.68) (0.68) (0.81) (0.69)
Net Asset Value, End of Period $ 10.94 $ 11.07 $ 10.93 $ 10.76 $ 10.86 $ 10.33
Total Return (excludes sales charges) 1.57%<F4> 7.23% 8.22% 5.54% 13.55% (3.01)%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $103,995 $105,085 $103,761 $125,992 $136,103 $148,168
Ratio of expenses to
average net assets 0.96%<F5> 0.88% 0.85% 0.89% 0.77% 0.76%
Ratio of net investment income
to average net assets 5.56%<F5> 5.72% 6.32% 6.46% 6.81% 6.38%
Ratio of expenses to
average net assets<F1> 1.08%<F5> 1.01% <F2> 0.90% 0.79% 0.96%
Ratio of net investment income
to average net assets<F1> 5.44%<F5> 5.59% <F2> 6.45% 6.80% 6.18%
Portfolio turnover 156% 296% 115% 127% 59% 132%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have
been as indicated.
<F2> There were no voluntary fee reductions during the period.
<F3> Amount rounds to less than $0.01.
<F4> Not annualized.
<F5> Annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE VICTORY PORTFOLIOS Financial Highlights
Investment Quality Bond Fund
Six
Months Year Year Year Year December 30,
Ended Ended Ended Ended Ended 1993
April 30, October 31, October 31, October 31, October 31, to October 31,
1999 1998 1997<F6> 1996 1995<F5> 1994(a)
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.00 $ 9.78 $ 9.63 $ 9.76 $ 9.10 $ 10.00
Investment Activities
Net investment income 0.26 0.55 0.57 0.57 0.62 0.53
Net realized and unrealized gains
(losses) from investments (0.23) 0.22 0.14 (0.13) 0.67 (0.92)
Total from Investment Activities 0.03 0.77 0.71 0.44 1.29 (0.39)
Distributions
Net investment income (0.26) (0.55) (0.56) (0.56) (0.62) (0.51)
In excess of net investment income -- -- -- -- (0.01) --
Tax return of capital -- -- -- (0.01) -- --
Total Distributions (0.26) (0.55) (0.56) (0.57) (0.63) (0.51)
Net Asset Value, End of Period $ 9.77 $ 10.00 $ 9.78 $ 9.63 $ 9.76 $ 9.10
Total Return (excludes sales charges) 0.25%<F3> 8.06% 7.67% 4.65% 14.63% (3.92)%<F3>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $159,065 $169,932 $181,007 $150,807 $125,248 $94,685
Ratio of expenses to
average net assets 1.10%<F4> 1.06% 1.04% 1.01% 0.88% 0.79%<F4>
Ratio of net investment income
to average net assets 5.22%<F4> 5.49% 5.90% 5.99% 6.59% 6.33%<F4>
Ratio of expenses to
average net assets<F1> 1.35%(<F4> 1.31% 1.17% 1.14% 1.10% 1.25%<F4>
Ratio of net investment income
to average net assets<F1> 4.97%<F4> 5.24% 5.77% 5.86% 6.37% 5.87%<F4>
Portfolio turnover 226% 492% 249% 182% 160% 90%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have
been as indicated.
<F2> Period from commencement of operations.
<F3> Not annualized.
<F4> Annualized.
<F5> Effective June 5, 1995, the Victory Corporate Bond Portfolio merged into
the Investment Quality Bond Fund. Financial highlights for the periods
prior to June 5, 1995 represent the Investment Quality Bond Fund.
<F6> Effective June 13, 1997, the Victory Government Bond Fund merged into
the Investment Quality Bond Fund. Financial highlights for the periods
prior to June 13, 1997 represent the Investment Quality Bond Fund.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
National Municipal Bond Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Municipal Bonds (97.8%)
Alabama (1.8%):
Scottsboro, Series B,
5.30%, 7/1/06, FSA $ 100 $ 107
Scottsboro, Series B,
5.38%, 7/1/07,
Callable 7/1/06 @ 102, FSA 400 430
State Board of Education,
Bevill State Community College,
4.88%, 9/1/08,
Callable 9/1/07 @ 102, AMBAC 100 103
State Board of Education,
Bevill State Community College,
5.13%, 9/1/11,
Callable 9/1/07 @ 102, AMBAC 250 257
897
Arizona (3.2%):
Maricopa County School
District No. 79, GO,
Litchfield Elementary,
Projects of 1995--Series A,
5.00%, 7/1/03, FGIC 125 130
Maricopa County Unified
School District, No. 95,
Queens Creek, GO, Series A,
5.20%, 7/1/05, AMBAC 125 133
Pima County Industrial
Development Authority,
5.00%, 4/1/04, MBIA 1,000 1,045
Pinal County School
District, Series A, GO,
5.40%, 7/1/07, FGIC 270 291
1,599
Arkansas (2.2%):
Texarkana Public Facilities
Board, Waterworks
Facilities Revenue,
4.90%, 9/1/05, FGIC 570 596
Texarkana Public Facilities
Board, Waterworks
Facilities Revenue,
5.13%, 9/1/09,
Callable 9/1/07 @ 100, FGIC 460 482
1,078
California (1.3%):
Arcata City Hall & Water
Improvements, Certificates
of Participation,
5.30%, 1/1/21,
Callable 1/1/08 @ 102, MBIA 350 356
Golden West Schools
Financing Authority,
0.00%, 2/1/26, MBIA $1,105 $ 272
628
Colorado (4.2%):
State Board of Agriculture,
5.00%, 3/1/11,
Callable 3/1/07 @ 101, AMBAC 500 512
Thornton Sales & Use Tax Revenue,
4.55%, 9/1/07, AMBAC 250 255
Thornton Sales & Use Tax Revenue,
4.60%, 9/1/08, AMBAC 250 255
University of Northern Colorado,
Auxiliary Facilities System,
5.60%, 6/1/24,
Callable 6/1/07 @ 100, MBIA 1,000 1,047
2,069
Connecticut (0.4%):
State, Special Tax Obligation
Revenue Bond, Series B,
6.00%, 9/1/06 200 223
District of Columbia (3.1%):
Georgetown University Revenue,
7.15%, 4/1/21,
Callable 4/1/99 @ 102 1,500 1,535
Florida (12.3%):
Indian Trace Community
Development District,
Water Management Special
Benefit Assessment,
5.00%, 5/1/09,
Callable 5/1/07 @ 101, MBIA 725 760
Indian Trace Community
Development District,
Water Management Special
Benefit Assessment,
5.00%, 5/1/11,
Callable 5/1/07 @ 101, MBIA 1,000 1,030
Lee County Water & Sewer,
Series A, 4.75%, 10/1/16, AMBAC 750 734
Orlando Utilities Commission,
Water & Electric Revenue,
5.80%, 10/1/06 150 166
Port Orange Water & Sewer
Revenue,
4.50%, 10/1/07, AMBAC 1,175 1,196
Port Orange Water & Sewer
Revenue,
4.50%, 10/1/08, AMBAC 1,235 1,255
State Department of
Transportation,
Series A, 4.00%, 7/1/09 1,000 971
6,112
<PAGE>
Georgia (0.5%):
South Fulton Municipal
Regional Jail,
5.20%, 12/1/05, MBIA $ 250 $ 266
Hawaii (3.1%):
Honolulu City and County, GO,
6.00%, 11/1/05, MBIA 5 6
Honolulu City and County, GO,
Series A, 6.00%, 11/1/05, MBIA 1,380 1,535
1,541
Illinois (14.4%):
Chicago Public Building
Commission,
6.05%, 1/1/06,
Callable 1/1/05 @ 100, AMBAC 250 272
Cicero, Series A, GO,
5.35%, 12/1/06, AMBAC 530 566
Health Authority, Revolving Fund,
4.00%*, 5/5/99,
LOC First National Bank
of Chicago 500 500
Northlake, Tax Increment, GO,
5.00%, 12/1/04, MBIA 500 527
State Development
Financial Authority,
4.00*%, 6/1/26 1,500 1,500
State Educational
Facilities Authority,
Shedd Aquarium Society,
4.85%, 7/1/05, AMBAC 250 259
State Health Facilities Authority,
5.55%, 10/1/06, FGIC 1,000 1,077
State Health Facilities Authority,
5.60%, 10/1/07, FGIC 2,310 2,497
7,198
Indiana (0.6%):
Westfield Elementary
School Building Corp.,
5.00%, 7/15/01, AMBAC 280 288
Iowa (1.6%):
Harlon Community
School District,
3.40%, 6/1/00, FSA 250 250
State Finance Authority,
Hospital Facility Revenue,
Trinity Regional
Hospital Project,
5.00%, 7/1/02, FSA 550 569
819
Kansas (1.5%):
Haysville,
Water & Wastewater Utility,
4.60%, 10/1/00, FSA $ 130 $ 132
Wellington Electric
Waterworks & Sewage
Utilities System,
5.20%, 5/1/23,
Callable 5/1/08 @ 100, AMBAC 600 605
737
Michigan (4.7%):
Byron Center, GO,
5.40%, 5/1/07,
Callable 5/1/05 @ 101, MBIA 15 16
Byron Center, GO,
5.40%, 5/1/07, MBIA 240 259
Coopersville School District,
4.75%, 5/1/2019, MBIA 1,000 950
Grosse Ile Township
School District, GO,
6.00%, 5/1/22,
Callable 5/1/07 @ 100, FGIC 250 280
Leslie Public Schools, GO,
5.55%, 5/1/07,
Callable 5/1/05 @ 101, AMBAC 250 272
Municipal Bond Authority,
6.70%, 11/1/06,
Callable 11/1/04 @ 102 225 254
Municipal Bond Authority,
6.80%, 11/1/07,
Callable 11/1/04 @ 102 275 312
2,343
Minnesota (2.1%):
Southern Minnesota Municipal
Power Agency, Series A,
4.70%, 1/1/02,
AMBAC-TCRS,
Pre-refunded ETM 325 334
Southern Minnesota Municipal
Power Agency, Series A,
4.70%, 1/1/02,
AMBAC-TCRS 675 693
1,027
Mississippi (0.8%):
Mississippi Home Corp
Single Family,
4.80%, 6/1/19,
Callable 6/1/09 @ 102 400 398
<PAGE>
Missouri (3.8%):
Clay County Public
Building Authority,
5.45%, 5/15/18,
Callable 5/15/08 @ 100, FSA $ 225 $ 232
Excelsior Springs School
District Building Corp.,
6.50%, 3/1/09,
Callable 3/1/04 @ 100, FSA 500 553
Independence Water Utility,
5.00%, 11/1/16, AMBAC 520 521
West Plains Improvement
Authority, Leasehold Revenue,
5.00%, 5/1/06, MBIA 550 573
1,879
Nebraska (3.4%):
Nebraska Education Financial
Authority, Series A,
3.55%, 9/1/01, AMBAC 1,710 1,708
New Mexico (2.1%):
State Mortgage Finance
Authority, Single Family
Mortgage Program,
Series C-3,
5.95%, 7/1/28,
Callable 1/1/07 @ 102 990 1,033
Ohio (12.8%):
Akron Economic Development,
4.70%, 12/1/07, MBIA 200 206
Akron Economic Development,
4.80%, 12/1/08,
Callable 12/1/07 @ 102, MBIA 700 726
Butler County Transportation
Improvement District,
Series A, GO,
5.00%, 4/1/07, FSA 1,000 1,048
Continental Local School District,
5.00%, 12/1/21,
Callable 12/1/09 @ 101, MBIA 400 396
Dayton Water Systems,
4.05%, 12/1/06, FSA 1,000 994
Delaware County, GO,
3.75%, 12/1/02, MBIA 500 502
Fairfield Local School District,
5.30%, 12/1/18,
Callable 12/1/08 @ 101, FSA 215 221
Fairfield Local School District,
5.25%, 12/1/18,
Callable 12/1/08 @ 101, FSA 400 409
Greene County, GO,
4.40%, 12/1/09, MBIA 200 200
Kent City School District, GO,
5.15%, 12/1/05, FGIC $ 250 $ 265
Kent State University,
5.00%, 5/1/05, MBIA 230 241
Ohio University General Receipts,
4.40%, 12/1/09, FSA 300 299
State Higher Educational
Facilities, John Carroll
University Project,
5.25%, 4/1/07 315 333
State, Special Obligation,
Elementary and
Secondary Facilities,
5.80%, 6/1/03, AMBAC 500 538
6,378
Oklahoma (3.2%):
State Capital
Improvement Authority,
5.00%, 6/1/08, MBIA 1,500 1,578
Oregon (1.8%):
State Energy Project,
GO, Series B,
4.00%, 1/1/00 890 896
Tennessee (1.1%):
Dickson, Electric and
Revenue Utility,
5.00%, 9/1/03, MBIA 500 525
Texas (1.5%):
Conroe Independent
School District, GO,
6.50%, 2/1/04 200 222
Keller Independent
School District, GO,
6.20%, 8/15/04 200 221
State, Series A, GO,
6.00%, 10/1/08 100 113
Ysleta Independent
School District, GO,
5.60%, 8/15/02 200 212
768
Washington (4.8%):
Pierce County School District,
No. 003, Puyallup, GO,
5.50%, 12/1/01, FGIC 605 633
Pierce County School District,
No.320, Sumner, GO,
5.50%, 12/1/02, MBIA 1,000 1,060
Seattle Municipal Light & Power,
6.00%, 7/1/03 200 216
Skagit County School District,
No. 103, Anacortes, GO,
4.75%, 12/1/01, FGIC 200 206
<PAGE>
Spokane County School District,GO,
5.40%, 12/1/07, FGIC $ 250 $ 270
2,385
Wisconsin (4.0%):
Milwaukee Sewer District,
Series A, GO,
6.70%, 10/1/02 200 219
State, Health & Educational
Facilities Authority,
5.20%, 12/15/07, MBIA 1,675 1,767
1,986
Wyoming (1.5%):
Sweetwater County,
Green River, Series B,
4.50%, 3/01/14, FSA 750 746
Total Municipal Bonds (Cost $46,883) 48,640
Investment Companies (2.5%)
Federated Tax-Free Money
Market Fund 1,220 $ 1,220
Total Investment Companies (Cost $1,220) 1,220
Total Investments (Cost $48,103) (a) -- 100.3% 49,860
Liabilities in excess of other assets -- (0.3)% (152)
TOTAL NET ASSETS -- 100.0% $49,708
(a) Cost for federal income tax purposes differs from value by net
unrealized appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $1,785
Unrealized depreciation (28)
Net unrealized appreciation $1,757
* Variable rate securities having liquidity sources through bank letters of
credit or other credit and/or liquidity agreements. The interest rate,
which will change periodically, is based upon bank prime rates or an index
of market interest rates. The rate reflected on the Schedules of Portfolio
Investments is the rate in effect April 30,1999.
AMBAC -- AMBAC Indemnity Corp.
ETM -- Escrowed to Maturity
FGIC -- Financial Guaranty Insurance Co.
FHLMC -- Federal Home Loan Mortgage Corp.
FSA -- Insured by Financial Security Assurance
GO -- General Obligation
LOC -- Letter of Credit
MBIA -- Municipal Bond Insurance Assoc.
TCRS -- Transferable Custodial Receipts
See notes to financial statements.
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
New York Tax-Free Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
New York Municipal Bonds (96.9%)
Metropolitan Transportation
Authority, Series A,
5.25%, 4/1/26,
Callable 4/1/07 @ 101, MBIA $ 750 $ 760
Metropolitan Transportation
Authority, Transportation
Facilities, Series I,
7.00%, 7/1/09, AMBAC 250 300
Monroe-Woodbury Central
School District, GO,
5.70%, 5/15/26,
Callable 5/15/06 @ 102, MBIA 500 526
Monroe-Woodbury Central
School District, GO,
5.70%, 5/15/27,
Callable 5/15/06 @ 102, MBIA 300 316
Nassau County Industrial
Development Agency,
Civic Facilities,
Hofstra University Project,
6.75%, 8/1/11,
Callable 8/1/01 @ 102, AMBAC 250 272
New York City Housing
Development Corp.,
Multi-Unit Mortgage, Series A,
7.30%, 6/1/10,
Callable 6/1/01 @ 102, FHA 700 753
New York City Housing
Development Corp.,
Multi-Unit Mortgage, Series A,
7.35%, 6/1/19,
Callable 6/1/01 @ 102, FHA 675 727
New York City Industrial
Development Agency,
Civic Facilities, USTA
National Tennis Center Project,
6.38%, 11/15/14,
Callable 11/15/04 @ 102, FSA 200 223
New York City Municipal Water
Finance Authority,
6.75%, 6/15/16,
Callable 6/15/01 @ 101, FGIC 325 347
New York City Municipal Water
Finance Authority, Water &
Sewer System Revenue,
6.75%, 6/15/16,
Prerefunded 6/15/01
@ 101, FGIC 325 349
New York City Transit Authority,
Transit Facilities,
Livingston Plaza Project,
7.50%, 1/1/20,
Prerefunded 1/1/00 @ 102, FSA $ 220 $ 230
New York City, Cultural Resources,
Museum of Modern Art,
6.63%, 1/1/11,
Prerefunded 1/1/02
@ 102, AMBAC 680 743
New York City, Series B, GO,
4.40*%, 8/15/18 500 500
New York City, Series B, GO,
7.00%, 10/1/18, Callable 10/1/99
@ 100, FSA, ETM 300 305
New York City, Series C, GO,
7.00%, 2/1/12,
Callable 2/1/99 @ 101.5, FGIC 60 61
North Hempstead,
4.75%, 1/15/23,
Callable 1/15/08 @ 101, FGIC 750 709
Port Authority of New York &
New Jersey, 109th Series,
5.38%, 7/15/27,
Callable 1/15/07 @ 101, FSA 500 517
State Dormitory Authority,
5.75%, 7/1/26,
Callable 7/1/07 @ 102, MBIA 500 538
State Dormitory Authority,
5.00%, 4/1/29,
Callable 4/1/29 @ 101, MBIA 500 487
State Dormitory Authority,
City University, Series 2,
6.75%, 7/1/24,
Prerefunded 7/1/04 @ 102,
MBIA 700 805
State Dormitory Authority,
Ithaca College,
6.50%, 7/1/10,
Callable 7/1/01 @ 102, MBIA 750 811
State Dormitory Authority, Judicial
Facilities Leases, Series B,
7.00%, 4/15/16,
Callable 4/15/01 @ 102, MBIA 225 242
State Dormitory Authority,
Siena College,
5.75%, 7/1/26,
Callable 7/1/07 @ 102, MBIA 250 269
State Dormitory Authority,
St. John's University,
5.70%, 7/1/26,
Callable 7/1/06 @ 102, MBIA 700 745
<PAGE>
State Local Government
Assistance, Series B,
4.88%, 4/1/20,
Callable 4/1/08 @ 101, MBIA $ 500 $ 484
State Medical Care Facilities
Finance Agency,
7.38%, 8/15/19,
Callable 8/15/99 @ 102, MBIA 170 175
State Medical Care Facilities
Finance Agency,
7.38%, 8/15/19,
Prerefunded 8/15/99 @ 102, MBIA 330 340
State Medical Care Facilities
Finance Agency, North
Shore University Hospital,
7.20%, 11/1/20,
Callable 11/1/00 @ 102, MBIA 565 607
State Medical Care Facilities
Finance Agency,
St. Luke's, Series B,
7.45%, 2/15/29,
Prerefunded 2/15/00
@ 102, MBIA 340 358
State Tollway Authority,
Series A,
5.00%, 4/1/18,
Callable 4/1/08 @ 101 500 497
State Tollway Authority,
Series C,
6.00%, 1/1/25,
Callable 1/1/05 @ 102, FGIC 550 613
State Urban Development Corp.,
Correctional Facilities,
Series 1,
7.50%, 1/1/20,
Prerefunded 1/1/00
@ 102, FSA 400 419
State, GO,
6.75%, 8/1/18,
Callable 8/1/01 @ 102, AMBAC 370 402
State, GO,
6.75%, 8/1/19,
Callable 8/1/01 @ 102, AMBAC $ 325 $ 353
Triborough Bridge & Tunnel
Authority, Series T,
7.00%, 1/1/20,
Prerefunded 1/1/01
@ 102, MBIA 900 968
Triborough Bridge & Tunnel
Authority, Special Obligation,
Series B,
6.88%, 1/1/15,
Callable 1/1/01 @ 102, AMBAC 1,000 1,069
Total New York Municipal Bonds (Cost $16,733) 17,820
Investment Companies (1.4%)
Providence of New York Fund 253,233 253
Total Investment Companies (Cost $253) 253
Total Investments (Cost $16,986) (a) -- 98.3% 18,073
Other assets in excess of liabilities -- 1.7% 307
TOTAL NET ASSETS -- 100.0% $18,380
(a) Cost for federal income tax purposes differs from value by net
unrealized appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $1,092
Unrealized depreciation (5)
Net unrealized appreciation $1,087
AMBAC -- AMBAC Indemnity Corp.
FGIC -- Financial Guaranty Insurance Co.
FHA -- Federal Housing Administration
GO -- General Obligation
MBIA -- Municipal Bond Insurance Assoc.
See notes to financial statements.
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Ohio Municipal Bond Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Municipal Bonds (96.0%)
Alternative Minimum Tax
Paper (5.6%):
Cincinnati,
6.30%, 12/1/15,
Callable 6/1/05 @ 101 $1,250 $ 1,375
Franklin County Mortgage,
Briggs/Wedgewood, Series C,
5.35%, 11/20/12,
Callable 11/20/07 @ 103 1,000 1,025
Franklin County Mortgage,
Briggs/Wedgwood, Series C,
5.55%, 11/20/17,
Callable 11/20/07 @ 103 500 515
Gateway EDR,
6.50%, 9/15/14,
Callable 9/15/03 @ 102 2,300 2,399
Ohio State Economic
Development, ABS
Industries Inc. Project,
6.00%, 6/1/04 500 528
Ohio State Economic
Development, Ohio
Enterprise Board Fund,
5.60%, 6/1/02 395 412
Ohio State Economic
Development, Ohio
Enterprise Board Fund,
6.50%, 12/1/09,
Callable 12/1/04 @ 102 815 866
Ohio State Water
Development Authority,
North Star BHP Steel-Cargill,
6.30%, 9/1/20,
Callable 9/1/05 @ 102 1,000 1,087
Student Loan Funding Corp.,
Series A,
5.50%, 12/1/01 3,300 3,366
Total Municipal Bonds 11,573
General Obligations (42.3%)
County, City & Special District (12.8%):
Akron,
4.55%, 12/1/06 200 204
Akron,
4.55%, 12/1/08 300 304
Avon,
6.50%, 12/1/15 335 392
Bath Township,
0.00%, 12/1/07, AMBAC 205 142
Bath Township,
0.00%, 12/1/08, AMBAC $ 205 $ 135
Belmont County,
3.80%, 12/1/03, MBIA 185 185
Butler County,
5.60%, 12/1/09,
Callable 12/1/06 @ 101, AMBAC 355 385
Butler County,
5.65%, 12/1/10,
Callable 12/1/06 @ 101, AMBAC 155 168
Canton,
4.05%, 12/1/05, AMBAC 250 250
Canton,
4.40%, 12/1/09, AMBAC 250 250
Columbus,
5.00%, 6/15/02 5,800 6,033
Columbus,
5.00%, 6/15/02 725 754
Columbus,
5.00%, 6/15/03 3,650 3,827
Crawford County,
0.00%, 12/1/10, AMBAC 300 175
Crawford County,
0.00%, 12/1/13, AMBAC 500 246
Cuyahoga Falls,
5.25%, 12/1/17,
Callable 12/1/07 @ 102, FGIC 500 513
Deerfield Township,
5.13%, 12/1/23,
Callable 12/1/08 @ 101, AMBAC 2,425 2,416
Madison County,
7.00%, 12/1/19,
Callable 12/1/04 @ 102, AMBAC 600 704
Maple Heights,
0.00%, 12/1/07, FSA 500 346
Maple Heights,
0.00%, 12/1/08, FSA 505 333
Maple Heights,
0.00%, 12/1/10, FSA 310 185
Monroe Falls, Series A,
6.95%, 12/1/14,
Callable 12/1/04 @ 101, AMBAC 1,000 1,146
Newark, 0.00%, 12/1/16, FGIC 1,490 617
Summit County, Series A,
6.90%, 8/1/12,
Callable 8/1/01 @ 102, AMBAC 230 258
Summit County, Series A,
6.90%, 8/1/12,
Callable 8/1/01 @ 102, AMBAC 15 16
Summit County, Series A,
6.90%, 8/1/12,
Callable 8/1/01 @ 102, AMBAC 255 278
<PAGE>
Toledo,
5.63%, 12/1/11,
Callable 12/1/06 @ 102, AMBAC $1,000 $ 1,085
Toledo,
5.50%, 12/1/12,
Callable 12/1/07 @ 102, FGIC 1,085 1,163
Westerville,
4.50%, 12/1/18,
Callable 12/1/10 @ 101 1,000 933
Youngstown,
4.20%, 12/1/06, AMBAC 450 450
Youngstown,
5.10%, 12/1/11, AMBAC 2,300 2,411
26,304
Education (20.1%):
Anthony Wayne Local
School District,
5.75%, 12/1/18,
Callable 12/1/05 @ 101, FGIC 1,000 1,058
Avon Local School District,
5.50%, 12/1/04, AMBAC 465 502
Avon Local School District,
5.55%, 12/1/05, AMBAC 250 271
Batavia Local School District,
7.00%, 12/1/14, MBIA 1,500 1,785
Big Walnut Local School District,
0.00%, 12/1/09, AMBAC 250 157
Brecksville-Broadview Heights
City School District,
6.50%, 12/1/16,
Callable 12/1/06 @ 102, FGIC 1,000 1,145
Brunswick City School District,
3.30%, 12/1/99, AMBAC 300 300
Brunswick City School District,
3.60%, 12/1/00, AMBAC 185 185
Brunswick City School District,
3.70%, 12/1/01, AMBAC 200 200
Canal Winchester Local
School District,
4.60%, 12/1/08 FGIC 150 153
Columbiana Exempted
Village School District,
5.15%, 12/1/22,
Callable 12/1/09 @ 101, AMBAC 1,500 1,509
Delaware City School District,
5.75%, 12/1/20,
Callable 12/1/05 @ 101, FGIC 1,000 1,063
Dublin City School District,
0.00%, 12/1/09, MBIA 1,250 775
East Cleveland City School District,
5.00%, 12/1/20,
Callable 12/1/11 @ 101, AMBAC 1,000 991
Fairfield City School District,
7.45%, 12/1/14, FGIC $1,000 $ 1,284
Fort Loramie Local School District,
5.00%, 12/1/26,
Callable 12/1/08 @ 101, FGIC 1,000 978
Fostoria City School District,
4.00%, 12/1/05, MBIA 300 299
Fostoria City School District,
0.00%, 12/1/10 375 223
Franklin City School District,
0.00%, 12/1/12, AMBAC 280 150
Franklin City School District,
0.00%, 12/1/13, AMBAC 280 141
Franklin City School District,
0.00%, 12/1/14, AMBAC 280 133
Graham Local School District,
0.00%, 12/01/11, MBIA 200 113
Graham Local School District,
0.00%, 12/01/12, MBIA 200 107
Hilliard School District, Series A,
5.00%, 12/1/20,
Callable 12/1/06 @ 101, FGIC 1,050 1,036
Indian Lake Local School District,
0.00%, 12/1/11, AMBAC 250 141
Indian Lake Local School District,
0.00%, 12/1/12, AMBAC 250 134
Indian Lake Local School District,
0.00%, 12/1/13, AMBAC 250 126
Indian Lake Local School District,
0.00%, 12/1/14, AMBAC 250 119
Indian Lake Local School District,
0.00%, 12/1/15, AMBAC 250 113
Indian Lake Local School District,
0.00%, 12/1/16, AMBAC 250 107
Indian Lake Local School District,
5.38% 12/1/23,
Callable 12/1/06 @ 101, FGIC 1,050 1,076
Indian Valley Local School District,
7.00%, 12/1/14,
Callable 12/1/05 @ 102, AMBAC 2,500 2,922
Kent City School District,
5.75%, 12/1/21,
Callable 12/1/07 @ 101, FGIC 1,000 1,072
Kettering City School District,
5.25%, 12/1/22,
Callable 12/1/05 @ 101, FGIC 1,000 1,013
Lakeview Local School District,
6.95%, 12/1/19,
Callable 12/1/04 @ 102, AMBAC 1,250 1,463
Lakota Local School District,
0.00%, 12/01/08, FGIC 320 209
<PAGE>
Liberty Benton Local School District,
0.00%, 12/1/15, AMBAC $ 570 $ 257
Liberty Benton Local School District,
0.00%, 12/1/16, AMBAC 285 122
Loveland City School District,
5.20%, 12/1/19,
Callable 12/1/09 @ 101 300 296
Loveland School District,
4.00%, 12/1/06, MBIA 800 791
McComb Local School District,
4.70%, 12/1/06, MBIA 140 145
Mount Vernon City Schools,
7.50%, 12/1/14,
Callable 12/1/04 @ 101, FGIC 500 587
Northwest Local School District,
0.00%, 12/1/13, AMBAC 280 131
Northwest Local School District,
0.00%, 12/1/14, AMBAC 280 131
Norwalk City School,
4.75%, 12/1/20, AMBAC 1,000 957
Oak Hills Local School District,
Series A,
5.70%, 12/1/25,
Callable 12/1/07 @ 101 600 637
Olentangy Local School District,
Series A,
6.25%, 12/1/14,
Callable 12/1/04 @ 102 500 558
Pickerington Local School District,
0.00%, 12/1/12, AMBAC 870 453
Reynoldsburg City School District,
4.80%, 12/1/06, FGIC 235 245
Ridgemont Local School District,
0.00%, 12/1/10, AMBAC 185 110
Ridgemont Local School District,
0.00%, 12/1/11, AMBAC 185 105
Ridgemont Local School District,
0.00%, 12/1/12, AMBAC 185 99
Ridgemont Local School District,
0.00%, 12/1/13, AMBAC 185 93
Ridgemont Local School District,
0.00%, 12/1/14, AMBAC 185 88
Ripley-Union-Lewis,
Local School District,
0.00%, 12/1/06, FGIC 145 105
Ripley-Union-Lewis,
Local School District,
0.00%, 12/1/07, FGIC 245 170
Ripley-Union-Lewis,
Local School District,
0.00%, 12/1/10, FGIC 245 146
Ripley-Union-Lewis,
Local School District,
0.00%, 12/1/11, FGIC $ 245 $ 139
Ripley-Union-Lewis,
Local School District,
0.00%, 12/1/12, FGIC 240 128
Ripley-Union-Lewis,
Local School District,
0.00%, 12/1/13, FGIC 240 121
Ripley-Union-Lewis,
Local School District,
0.00%, 12/1/14, FGIC 235 112
South-Western City School District,
4.75%, 12/1/26,
Callable 12/1/09 @ 100,
AMBAC, Oid 2,000 1,883
Springfield City School District,
0.00%, 12/1/11, AMBAC 1,715 945
Sycamore Community City
School District,
4.75%, 12/1/19, AMBAC 1,000 959
Sycamore Community
School District,
0.00%, 12/1/07 360 247
Twinsburg Local School District,
5.90%, 12/1/21,
Callable 12/1/06 @ 102, FGIC 2,000 2,160
Upper Arlington City
School District,
5.13%, 12/1/19,
Callable 12/1/06 @ 101, MBIA 2,500 2,511
Wadsworth City School District,
4.05%, 12/1/05, FGIC 250 250
Wadsworth City School District,
4.10%, 12/1/06, FGIC 250 249
Wadsworth City School District,
0.00%, 12/1/07, FGIC 555 382
Wadsworth City School District,
4.20%, 12/1/07, FGIC 250 249
Wadsworth City School District,
0.00%, 12/1/08, FGIC 555 363
Wadsworth City School District,
4.30%, 12/1/08, FGIC 400 400
Wadsworth City School District,
4.40%, 12/1/09, FGIC 450 450
Wadsworth City School District,
0.00%, 12/1/11, FGIC 555 306
Wadsworth City School District,
0.00%, 12/1/12, FGIC 575 299
41,432
<PAGE>
Housing (0.8%):
Belmont County Home
Improvements,
3.15%, 12/1/99, MBIA $ 160 $ 160
Belmont County Home
Improvements,
3.70%, 12/1/02, MBIA 175 175
Belmont County Home
Improvements,
3.65%, 12/1/01, MBIA 170 170
Toledo Multifamily Revenue,
5.25%, 12/1/18,
Callable 12/1/08 @ 102, FGIC 1,035 1,048
1,553
Public Facilities (Convention, Sport,
Public Buildings) (4.7%):
Centerville, Capital Facilities,
5.63%, 12/1/26,
Callable 12/1/05 @ 101, MBIA 285 299
Crawford County,
Correctional Facilities,
6.75%, 12/1/19,
Callable 12/1/05 @ 101, AMBAC 1,385 1,607
Hamilton County,
4.90%, 12/1/18,
Callable 12/1/07 @ 101 1,995 2,097
Ohio State,
5.35%, 8/1/12,
Callable 8/1/07 @ 101 1,000 1,059
Puerto Rico Commonwealth,
5.38%, 7/1/21,
Callable 7/1/07 @ 101.5, MBIA 1,850 1,905
Westlake,
5.55%, 12/1/17,
Callable 12/1/08 @ 101 1,500 1,583
Westlake,
5.50%, 12/1/20,
Callable 12/1/08 @ 101 1,000 1,043
9,593
Transportation (0.5%):
Greater Cleveland Regional
Transit Authority, 5.60%, 12/1/11,
Callable 12/1/06 @ 101, FGIC 1,000 1,076
Utility (Sewers, Telephone,
Electric) (3.4%):
Canton, Waterworks System,
5.75%, 12/1/10,
Callable 12/1/05 @ 102, AMBAC 500 544
Delaware County Sewer District,
4.75%, 12/1/24,
Callable 12/1/09 @ 101, MBIA 1,000 947
Greene County Sewer System,
5.25%, 12/1/25 1,250 1,275
Huron County Landfill Issue II,
5.40%, 12/1/07, MBIA $ 285 $ 308
Huron County, Landfill Issue II,
5.60%, 12/1/09,
Callable 12/1/07 @ 102, MBIA 320 351
Lucas County Metropolitan
Sewer & Water District,
5.45%, 12/1/17,
Callable 12/1/07 @ 102 505 531
North Olmstead,
6.20%, 12/01/11, AMBAC 1,000 1,141
Toledo, Sewer Improvements,
6.10%, 12/1/14,
Callable 12/1/04 @ 102, AMBAC 1,000 1,106
Warren County,
6.55%, 12/1/14 725 852
7,055
Total General Obligations 87,013
Revenue Bonds (48.1%)
Education (9.5%):
Franklin County IDR, Columbus
College of Art & Design,
6.00%, 9/1/13,
Callable 9/1/00 @ 102,
LOC Bank One 1,310 1,342
Kent State University, Series A,
5.00%, 5/1/23,
Callable 5/1/08 @ 101, AMBAC 1,000 979
Ohio State Higher Educational
Facilities, Mt. Union College,
5.00%, 10/1/23,
Callable 10/1/08 @ 101, MBIA 2,205 2,159
Ohio State Higher Educational
Facilities, University of Dayton,
5.20%, 12/1/10,
Callable 12/1/07 @ 101, AMBAC 1,000 1,054
Ohio State Higher Educational
Facilities, Xavier University,
5.38%, 5/15/22,
Callable 5/15/07 @ 102, MBIA 2,500 2,569
Ohio State University,
Agricultural Technological
Institute Student Project,
5.05%, 12/1/17,
Callable 12/1/08 @ 101 1,000 989
State Education Loan Revenue,
3.70%, 5/1/01 250 250
State Education Loan, Series A-1,
5.85%, 12/1/19,
Callable 6/1/07 @ 102, AMBAC 2,000 2,083
<PAGE>
State Higher Educational
Facility Revenue, John
Carroll University Project,
5.05%, 4/1/04 $ 150 $ 156
State Higher Educational
Facility Revenue,
Wittenberg University,
3.55%, 6/1/01, AMBAC 340 340
State Higher Educational
Facility Revenue,
Xavier University,
6.00%, 5/15/08,
Callable 5/15/07 @ 102, MBIA 500 561
State Higher Educational
Facility Revenue,
University of Dayton,
5.40%, 12/1/22,
Callable 12/1/07 @ 101, AMBAC 1,000 1,029
State Public Facilities
Commission Revenue,
4.63%, 12/1/02 3,150 3,249
University of Akron,
5.25%, 1/1/22,
Callable 1/1/07 @ 102, AMBAC 1,000 1,016
University of Akron,
General Receipts,
5.00%, 1/1/02, AMBAC 440 454
University of Cincinnati,
General Receipts,
Series AD,
5.10%, 6/1/11,
Callable 6/1/07 @ 101 350 359
University of Cincinnati,
University Center Project,
5.00%, 6/1/09, MBIA 1,000 1,049
19,638
General (0.2%):
Akron, Pension Services,
4.00%, 12/01/05,
AMBAC, Non Callable 200 199
Akron, Pension Services,
4.20%, 12/1/07, AMBAC 200 199
398
Hospitals, Nursing Homes
& Health Care (15.5%):
Athens County Mental Health,
5.90%, 3/1/09,
Callable 3/1/03 @ 102,
LOC National City Bank 545 570
Cuyahoga County
Health Care Facilities,
Benjamin Rose Institute
Project, Series A,
5.30%, 12/1/25,
Callable 12/1/02 @ 101,
LOC Society National Bank $ 500 $ 529
Cuyahoga County Hospital,
Cleveland Clinic,
3.50%, 1/1/01 3,630 3,621
Cuyahoga County Hospital,
Fairview,
6.25%, 8/15/10,
Callable 2/15/03 @ 102 500 544
Cuyahoga County Hospital,
General Hospital
Project, Series A,
5.50%, 8/15/14,
Callable 8/15/04 @ 102, MBIA 1,500 1,582
Cuyahoga County Hospital,
University Hospital
Health, Series A,
5.63%, 1/15/21,
Callable 1/15/06 @ 102, MBIA 1,300 1,357
Franklin County Hospital,
7.00%, 8/1/16,
Callable 8/1/00 @ 102, FHA 615 636
Franklin County Hospital,
Children's Hospital,
4.60%, 5/1/09 300 299
Garfield Heights,
Marymont Hospital,
6.70%, 11/15/15,
Callable 11/15/02 @ 102 1,000 1,115
Hamilton County Hospital
Facilities, Children's Hospital
Medical Center, Series G,
4.75%, 5/15/28,
Callable 11/15/08 @ 100, MBIA 2,000 1,866
Hamilton County Hospital
Facilities, Deaconess Hospital,
7.00%, 1/1/12,
Callable 7/1/02 @ 102 2,150 2,330
Hamilton County, Health
Care Facilities,
5.75%, 10/1/08 755 817
Lake County Hospital,
Improvement Facilities,
6.38%, 8/15/03, AMBAC 1,500 1,586
Lorain County Hospital, Catholic
Healthcare Partners,
5.50%, 9/1/27,
Callable 9/1/07 @ 102, MBIA 530 550
<PAGE>
Lucas County Hospital,
Promedica Healthcare,
5.75%, 11/15/14,
Callable 11/15/06 @ 102, MBIA $2,000 $ 2,154
Lucas County Hospital,
The Toldeo Hospital,
5.00%, 11/15/22,
Callable 11/15/03 @ 102, MBIA 500 487
Lucas County Hospital,
The Toledo Hospital,
5.00%, 11/15/10,
Callable 11/15/03 @ 102, MBIA 1,500 1,525
Lucas-Northgate Housing
Development Corp.,
8.13%, 1/1/25,
Callable 1/1/00 @ 102, MBIA 380 393
Mahoning County Hospital
Facilities, YHA Inc. Project,
Series A,
7.00%, 10/15/14,
Callable 10/15/00 @ 102, MBIA 855 915
Ohio Capital Corporation
For Housing Management,
Kent Gardens,
6.35%, 7/1/15,
Callable 1/1/03 @ 101, MBIA 1,000 1,043
Ohio Capital Corporation
For Housing Management,
Series A,
7.70%, 1/1/25,
Callable 1/1/00 @ 102, MBIA 540 559
Ohio Capital Corporation
For Housing Management,
Springhill Homes, Series C,
6.50%, 7/1/24,
Callable 1/1/03 @ 103, MBIA 920 977
Parma Hospital Improvement,
Parma Community
General Hospital,
5.25%, 11/1/13,
Callable 11/1/08 @ 101 1,000 1,010
Portage County Hospital,
Robinson Memorial,
6.50%, 11/15/03, MBIA 635 704
Portage County Hospital,
Robinson Memorial,
6.50%, 11/15/04, MBIA 675 758
Portage County Hospital,
Robinson Memorial,
6.50%, 11/15/05, MBIA 715 811
Stark County Health Care
Facility, Rose Land Inc. Project,
5.45%, 7/20/33,
Callable 7/20/08 @ 103 $1,000 $ 1,005
Washington County Hospital,
4.25%, 9/1/07, FSA 250 248
Westlake IDR,
6.40%, 8/1/09,
Callable 8/1/99 @ 103 1,755 1,813
31,804
Housing (3.6%):
Cincinnati Elderly Housing
Finance Corp.,
Walnut Towers, Series A,
6.90%, 8/1/25,
Callable 8/1/04 @ 102, FHA 2,020 2,161
Cuyahoga County
Multifamily Revenue,
6.60%, 10/20/30,
Callable 10/20/05 @ 102, GNMA 2,000 2,168
Cuyahoga County
Multifamily Revenue,
Water Street Assoc.,
5.60%, 6/20/08, GNMA 370 389
Cuyahoga County
Multifamily Revenue,
Water Street Assoc.,
6.15%, 12/20/26,
Callable 6/20/08 @ 105, GNMA 850 918
Ohio Capital Corp.,
Housing Management
Revenue, Bucyrus Estate,
5.75%, 7/1/06,
Callable 7/1/05 @ 102, MBIA 210 222
Ohio Housing Finance Agency,
6.15%, 3/1/29,
Callable 9/1/07 @ 102, GNMA 1,485 1,573
7,431
Industrial Development (1.7%):
Broadview Heights IDR,
6.25%, 7/1/13,
Callable 7/1/99 @ 103, FHA 1,075 1,111
Cuyahoga County IDR,
Southwest Association Project,
6.50%, 6/1/16,
Callable 12/1/04 @102, FHA 2,185 2,314
3,425
Public Facilities (Convention, Sport,
Public Buildings) (5.3%):
Hamilton County Sales Tax,
4.75%, 12/1/27,
Callable 12/1/07 @ 101, MBIA 3,000 2,817
<PAGE>
Ohio Building Authority,
6.13%, 10/1/12,
Callable 10/1/03 @ 102 $1,000 $ 1,092
Ohio Building Authority,
4.75%, 10/1/17,
Callable 10/1/08 @ 101 1,000 969
State Building Authority,
Adult Correctional Facilities,
6.00%, 10/1/07,
Callable 10/1/03 @ 102 2,000
2,195
State Building Authority,
Juvenile Correctional Facility,
5.25%, 10/1/16,
Callable 4/1/09 @ 101 1,200 1,238
State Building Authority,
Sports Facilities Building,
5.00%, 10/1/07, FSA 450 473
Toledo, Lucas County
Convention Center Project,
5.50%, 10/1/10,
Callable 10/1/06 @ 102, MBIA 500 538
Toledo-Lucas County
Convention Center Project,
5.70%, 10/1/15,
Callable 10/1/06 @ 102, MBIA 1,500 1,614
10,936
Public Improvements (0.2%):
Deerfield Township,
4.60%, 12/1/07, AMBAC 200 205
State Turnpike, Series B,
4.50%, 2/15/24,
Callable 8/15/08 @ 101, FGIC 200 182
387
Transportation (0.6%):
Cleveland Airport System,
Series C,
5.13%, 1/1/22,
Callable 1/1/08 @ 101, FSA 1,250 1,247
Utility (Sewers, Telephone,
Electric) (11.5%):
Alliance Water Works,
5.00%, 11/15/20,
Callable 11/15/08 @ 101, MBIA 1,500 1,477
Barberton Sewer
System Revenue,
4.50%, 12/1/06 FGIC 250 255
Cleveland Public Power System,
7.00%, 11/15/16,
Callable 11/15/04 @102, MBIA 750 877
Cleveland Public Power
Systems, Series A,
7.00%, 11/15/24,
Prerefunded 11/15/04
@ 102, MBIA $1,985 $ 2,321
Cleveland Water Works,
5.00%, 1/1/17,
Callable 1/1/08 @ 101, FSA 2,000 2,000
Cleveland Waterworks,
5.75%, 1/1/21,
Callable 1/1/06 @ 102, MBIA 10 11
Cleveland Waterworks,
5.75%, 1/1/21,
Prerefunded 1/1/06 @ 102, MBIA 940 1,045
Cuyahoga County Utility
System, Medical Center
Company Project,
5.13%, 2/15/28,
Callable 2/15/08 @102, AMBAC 800 789
Cuyahoga County Utility
System, Medical Center
Company Project, Series B,
5.85%, 8/15/10,
Callable 8/15/05 @ 102, MBIA 1,500 1,620
Dayton Water System,
4.00%, 12/1/05, FSA 2,800 2,791
Dayton Water System,
4.15%, 12/1/07, FSA 2,000 1,987
Green County Sewer System,
5.13%, 12/1/20,
Callable 12/1/08 @ 102, MBIA 750 753
Huber Heights Water Systems,
5.55%, 12/1/10,
Callable 12/1/05 @ 102, MBIA 815 876
Huber Heights Water Systems,
0.00%, 12/1/24, MBIA 1,000 264
Huber Heights Water Systems,
0.00%, 12/1/25, MBIA 1,000 250
Ohio State Water
Development Authority,
5.00%, 12/1/15,
Callable 6/1/08 @ 101, FSA 1,000 1,008
Ohio State Water
Development Authority,
6.40%, 8/15/27,
Callable 8/15/02 @ 102 2,250 2,440
Puerto Rico Electric Power
Authority, Series AA,
5.38%, 7/1/14,
Callable 7/1/07 @ 101.5, MBIA 1,000 1,058
<PAGE>
Southwest Regional Water,
6.00%, 12/1/20,
Callable 12/1/05 @ 101, MBIA $ 500 $ 547
Wapakonetka Sewer System,
4.95%, 12/1/18,
Callable 12/1/08 @ 101, AMBAC 250 250
Wilmington Water,
5.25%, 6/15/29,
Callable 6/15/08 @ 101, AMBAC 1,000 1,019
23,638
Total Revenue Bonds 98,904
Total Municipal Bonds (Cost $188,776) $197,490
Investment Companies (3.3%)
Federated Ohio Municipal
Cash Trust Fund 6,824,078 $ 6,824
Total Investment Companies (Cost $6,824) 6,824
Total Investments (Cost $195,600) (a) -- 99.3% 204,314
Other assets in excess of liabilities -- 0.7% 1,456
TOTAL NET ASSETS -- 100.0% $205,770
(a) Cost for federal income tax purposes differs from value by net
unrealized appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $8,849
Unrealized depreciation (135)
Net unrealized appreciation $8,714
AMBAC -- AMBAC Indemnity Corp.
FGIC -- Insured by Financial Guaranty Insurance Corp.
FNMA -- Federal National Mortgage Assoc.
FSA -- Insured by Financial Security Assurance
GNMA -- Insured by Government National Mortgage Assoc.
MBIA -- Insured by Municipal Bond Insurance Assoc.
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
The Victory Portfolios April 30, 1999
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
National Ohio
Municipal New York Municipal
Bond Tax-Free Bond
Fund Fund Fund
<S> <C> <C> <C>
ASSETS:
Investments, at value (Cost $48,103;
$16,986; & $195,600) $49,860 $18,073 $204,314
Interest and dividends receivable 595 320 3,346
Receivable for capital shares issued 50 -- --
Receivable from brokers for investments sold 246 -- 1,975
Prepaid expenses and other assets 34 12 28
Total Assets 50,785 18,405 209,663
LIABILITIES:
Payable to Custodian -- -- 74
Payable to brokers for investments purchased 960 -- 3,673
Payable for capital shares redeemed 73 -- --
Accrued expenses and other payables:
Investment advisory fees 10 5 67
Administration fees 1 -- 3
Custodian fees 3 1 4
Accounting fees 1 1 1
Transfer agent fees 10 6 7
Shareholder service fees -- -- 17
Shareholder service fees -- Class A 12 6 --
Shareholder service and 12b-1 fees -- Class B 2 3 --
12b-1 fees -- Class G -- -- 25
Other 5 3 22
Total Liabilities 1,077 25 3,893
NET ASSETS:
Capital 47,665 17,210 196,535
Undistributed (distributions in excess of)
net investment income (133) 17 115
Net unrealized appreciation/depreciation
from investments 1,757 1,087 8,714
Accumulated undistributed net realized
gains from investment transactions 419 66 406
Net Assets $49,708 $18,380 $205,770
Net Assets
Class A $46,906 $14,899 $ 83,105
Class B 2,802 3,481 --
Class G -- -- 122,665
Total $49,708 $18,380 $205,770
Outstanding units of beneficial interest (shares)
Class A 4,422 1,177 7,061
Class B 264 275 --
Class G -- -- 10,432
Total 4,686 1,452 17,493
Net asset value
Redemption price per share -- Class A $ 10.61 $ 12.66 $ 11.77
Offering and redemption price per share -- Class G -- -- $ 11.76
Offering price per share -- Class B<F1> $ 10.60 $ 12.67
Maximum sales charge 5.75% 5.75% 5.75%
Maximum offering price per share (100%/(100%-maximum
sales charge) of net asset value adjusted to nearest
cent) -- Class A $ 11.26 $ 13.43 $ 12.49
<FN>
<F1> Redemption price per Class B Share varies based on length of time held.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statements of Operations
The Victory Portfolios For the Six Months Ended April 30, 1999
(Amounts in Thousands) (Unaudited)
National Ohio
Municipal New York Municipal
Bond Tax-Free Bond
Fund Fund Fund
<S> <C> <C> <C>
Investment Income:
Interest income $1,100 $ 546 $2,619
Dividend income 44 8 60
Total Income 1,144 554 2,679
Expenses:
Investment advisory fees 137 53 313
Administration fees 37 15 78
Shareholder service fees -- Class A 56 15 100
Shareholder service fees and 12b-1 fees -- Class B 13 18 --
Shareholder service fees and 12b-1 fees -- Class G -- -- 25
Accounting fees 29 25 27
Custodian fees 8 3 13
Legal and audit fees 3 2 6
Trustees' fees and expenses 1 -- 1
Transfer agent fees 22 12 12
Registration and filing fees 11 4 5
Printing fees 3 1 3
Other 3 3 2
Total Expenses 323 151 585
Expenses voluntarily reduced (111) (33) (113)
Expenses before reimbursement from distributor 212 118 472
Expenses reimbursed by distributor -- (7) --
Net Expenses 212 111 472
Net Investment Income 932 443 2,207
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions 271 68 457
Change in unrealized appreciation/depreciation
from investments (551) (265) 3,423
Net realized/unrealized gains (losses) from investments (280) (197) 3,880
Change in net assets resulting from operations $ 652 $ 246 $6,087
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
National Municipal New York Ohio Municipal
Bond Fund Tax-Free Fund Bond Fund
Six Six Six
Months Year Months Year Months Year
Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, April 30, October 31,
1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 932 $ 2,136 $ 443 $ 972 $ 2,207 $ 3,424
Net realized gains (losses) from
investment transactions 271 1,227 68 (2) 457 1,285
Net change in unrealized appreciation/
depreciation from investments (551) 794 (265) 220 3,423 1,527
Change in net assets resulting
from operations 652 4,157 246 1,190 6,087 6,236
Distributions to Shareholders:
From net investment income -- -- -- -- -- (3,428)
Class A (910) (2,055) (372) (839) (1,730) --
Class B (37) (67) (66) (129) -- --
Class G -- -- -- -- (437) --
From net realized gains from
investment transactions (1,095) -- -- (35) (1,285) (663)
In excess of net realized gains from
investment transactions -- -- -- (2) -- --
Change in net assets from distributions
to shareholders (2,042) (2,122) (438) (1,005) (3,452) (4,091)
Capital Transactions:
Proceeds from shares issued 9,268 17,480 2,582 7,095 14,114 16,324
Proceeds from shares issued
in connection with acquisition -- -- -- -- 118,155 --
Dividends reinvested 1,541 1,668 300 718 1,189 917
Cost of shares redeemed (9,395) (21,492) (5,820) (4,554) (13,027) (14,725)
Change in net assets from
capital transactions 1,414 (2,344) (2,938) 3,259 120,431 2,516
Change in net assets 24 (309) (3,130) 3,444 123,066 4,661
Net Assets:
Beginning of period 49,684 49,993 21,510 18,066 82,704 78,043
End of period $49,708 $ 49,684 $18,380 $21,510 $205,770 $ 82,704
Share Transactions:
Issued 866 1,636 202 557 1,190 1,377
Issued in connection with acquisition -- -- -- -- 10,429 --
Reinvested 145 156 24 57 101 78
Redeemed (877) (1,997) (455) (358) (1,099) (1,243)
Change in shares 134 (205) (229) 256 10,621 212
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
The Victory Portfolios Financial Highlights
(Continued on Next Page)
National Municipal Bond Fund
Class A
Six Six
Months Year Year Year Months Year February 3,
Ended Ended Ended Ended Ended Ended 1994 to
April 30, October 31, October 31, October 31, October 31, April 30, April 30,
1999 1998 1997 1996 1995<F4> 1995<F5> 1994<F6>
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 10.92 $ 10.51 $ 10.16 $ 10.06 $ 9.59 $ 9.64 $ 10.00
Investment Activities
Net investment income 0.21 0.43 0.45 0.44 0.24 0.44 0.08
Net realized and
unrealized gains
(losses) from investments (0.07) 0.41 0.35 0.13 0.46 (0.05) (0.36)
Total from Investment
Activities 0.14 0.84 0.80 0.57 0.70 0.39 (0.28)
Distributions
Net investment income (0.21) (0.43) (0.45) (0.44) (0.23) (0.44) (0.08)
Net realized gains (0.24) -- -- -- -- -- --
In excess of net
realized gains -- -- -- (0.03) -- -- --
Total Distributions (0.45) (0.43) (0.45) (0.47) (0.23) (0.44) (0.08)
Net Asset Value, End of Period $ 10.61 $ 10.92 $ 10.51 $ 10.16 $ 10.06 $ 9.59 $ 9.64
Total Return
(excludes sales charges) 1.31%<F2> 8.15% 8.10% 5.83% 7.39%<F2> 4.21% (2.82)%<F2>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $46,906 $47,296 $47,705 $36,958 $11,964 $5,118 $ 494
Ratio of expenses to
average net assets 0.79%<F3> 0.67% 0.36% 0.29% 0.02%<F3> 0.20% 0.65%<F3>
Ratio of net investment income
(loss) to average net assets 3.81%<F3> 4.02% 4.43% 4.37% 5.11%<F3> 5.01% 3.15%<F3>
Ratio of expenses to
average net assets<F1> 1.23%<F3> 1.22% 1.27% 1.35% 2.57%<F3> 3.95% 26.10%<F3>
Ratio of net investment income
to average net assets<F1> 3.37%<F3> 3.47% 3.52% 3.31% 2.56%<F3> 1.26% (22.30)%<F3>
Portfolio turnover<F6> 57% 152% 154% 143% 72% 52% 13%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or reimbursed. If such voluntary fee reductions
and/or reimbursements had not occurred, the ratios would have been as indicated.
<F2> Not annualized.
<F3> Annualized.
<F4> Effective June 5, 1995, the Victory National Municipal Bond Portfolio became the National Municipal Bond Fund.
<F5> Effective September 26, 1994, the Fund designated the existing shares as Class A Shares and commenced offering
Class B Shares.
<F6> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes
of shares issued.
<F7> Period from commencement of operations.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
The Victory Portfolios Financial Highlights--continued
National Municipal Bond Fund
Class B
Six
Months Year Year Year Year September 26,
Ended Ended Ended Ended Ended 1994 to
April 30, October 31, October 31, October 31, October 31, April 30,
1999 1998 1997 1996 1995<F5> 1994<F6>
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $10.91 $10.51 $10.16 $10.07 $ 9.59 $ 9.53
Investment Activities
Net investment income 0.13 0.31 0.33 0.35 0.20 0.28
Net realized and
unrealized gains
(losses) from investments (0.06) 0.40 0.34 0.13 0.47 0.05
Total from
Investment Activities 0.07 0.71 0.67 0.48 0.67 0.33
Distributions
Net investment income (0.14) (0.31) (0.32) (0.35) (0.19) (0.27)
In excess of net
investment income -- -- -- (0.01) -- --
In excess of net
realized gains -- -- -- (0.03) -- --
Total Distributions (0.38) (0.31) (0.32) (0.39) (0.19) (0.27)
Net Asset Value, End of Period $10.60 $10.91 $10.51 $10.16 $10.07 $ 9.59
Total Return
(excludes sales charges) 0.71%<F3> 6.88% 6.74% 4.85% 6.99%<F3> 3.54%<F3>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $2,802 $2,388 $2,288 $1,808 $ 456 $ 147
Ratio of expenses to
average net assets 2.01%<F4> 1.81% 1.60% 1.20% 0.96%<F4> (0.05)%<F4>
Ratio of net investment income
(loss) to average net assets 2.58%<F4> 2.88% 3.18% 3.50% 4.15%<F4> 4.35%<F4>
Ratio of expenses to
average net assets<F1> 2.46%<F4> 2.34% 2.62% 2.17% 3.67%<F4> 2.63%<F4>
Ratio of net investment income
to average net assets<F1> 2.13%<F4> 2.35% 2.16% 2.53% 1.44%<F4> 1.67%<F4>
Portfolio turnover<F2> 57% 152% 154% 143% 72% 52%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been as indicated.
<F2> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of
shares issued.
<F3> Not annualized.
<F4> Annualized.
<F5> Effective June 5, 1995, the Victory National Municipal Bond Portfolio became the National Municipal Bond Fund.
<F6> Effective September 26, 1994, the Fund designated the existing shares as Class A Shares and commenced offering
Class B Shares.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
The Victory Portfolios Financial Highlights
(Continued on Next Page)
New York Tax-Free Fund
Class A
Six
Months Year Year Year Year January 1, Year
Ended Ended Ended Ended Ended 1994 to Ended
April 30, October 31, October 31, October 31, October 31, October 31, December 31,
1999 1998 1997 1996 1995<F4> 1994<F5> 1994
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 12.80 $ 12.68 $ 12.73 $ 12.85 $ 12.39 $ 13.54 $ 12.76
Investment Activities
Net investment income 0.31 0.61 0.68 0.68 0.87 0.57 0.70
Net realized and
unrealized gains
(losses) from investments (0.15) 0.14 0.03 (0.11) 0.42 (1.15) 0.84
Total from
Investment Activities 0.16 0.75 0.71 0.57 1.29 (0.58) 1.54
Distributions
Net investment income (0.30) (0.61) (0.72) (0.68) (0.83) (0.57) (0.70)
Net realized gains -- (0.02) (0.04) (0.01) -- -- (0.06)
Total Distributions (0.30) (0.63) (0.76) (0.69) (0.83) (0.57) (0.76)
Net Asset Value,
End of Period $ 12.66 $ 12.80 $ 12.68 $ 12.73 $ 12.85 $ 12.39 $ 13.54
Total Return
(excludes sales charges) 1.28%<F2> 6.12% 5.77% 4.53% 10.82% (4.31)%<F2> 12.34%
Ratios/Supplemental Data:
Net Assets,
End of Period (000) $14,899 $18,073 $15,335 $13,754 $15,374 $17,840 $28,530
Ratio of expenses to
average net assets 0.95%<F3> 0.94% 0.94% 0.93% 1.16% 0.91%<F3> 0.87%
Ratio of net investment
income to average net assets 4.75%<F3> 4.85% 5.32% 5.25% 5.50% 5.33%<F3> 5.28%
Ratio of expenses to
average net assets<F1> 1.29%<F3> 1.35% 1.49% 1.58% 1.96% 1.25%<F3> 0.96%
Ratio of net investment
income to average net assets<F1> 4.41%<F3> 4.44% 4.77% 4.60% 4.70% 4.99%<F3> 5.19%
Portfolio turnover<F6> 5% 38% 11% 0% 18% 18% 12%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been as indicated.
<F2> Not annualized.
<F3> Annualized.
<F4> Effective June 5, 1995, the Victory New York Tax-Free Portfolio became the New York Tax-Free Fund.
<F5> Effective September 26, 1994, the Fund designated the existing shares as Class A Shares and commenced offering
Class B Shares.
<F6> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes
of shares issued.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
The Victory Portfolios Financial Highlights--continued
New York Tax-Free Fund
Class B
Six
Months Year Year Year Year September 26,
Ended Ended Ended Ended Ended 1994 to
April 30, October 31, October 31, October 31, October 31, October 31,
1999 1998 1997 1996 1995<F4> 1994<F5>
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $12.80 $12.69 $12.74 $12.86 $12.39 $12.62
Investment Activities
Net investment income 0.24 0.49 0.57 0.57 0.85 0.07
Net realized and
unrealized gains
(losses) from investments (0.13) 0.12 0.03 (0.10) 0.36 (0.23)
Total from
Investment Activities 0.11 0.61 0.60 0.47 1.21 (0.16)
Distributions
Net investment income (0.24) (0.48) (0.56) (0.57) (0.74) (0.07)
In excess of net
investment income -- -- (0.05) (0.01) -- --
Net realized gains -- (0.02) (0.04) (0.01) -- --
Total Distributions (0.24) (0.50) (0.65) (0.59) (0.74) (0.07)
Net Asset Value, End of Period $12.67 $12.80 $12.69 $12.74 $12.86 $12.39
Total Return
(excludes sales charges) 0.83%<F2> 4.96% 4.88% 3.72% 10.18% (1.25)%<F2>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $3,481 $3,437 $2,731 $2,515 $1,953 <F6>
Ratio of expenses to
average net assets 2.01%<F3> 1.99% 1.82% 1.65% 2.02% 0.52%<F3>
Ratio of net investment income
to average net assets 3.70%<F3> 3.81% 4.46% 4.52% 5.94% 5.94%<F3>
Ratio of expenses to
average net assets<F1> 2.35%<F3> 2.36% 2.68% 2.34% 2.25% 0.86%<F3>
Ratio of net investment income
to average net assets<F1> 3.36%<F3> 3.43% 3.60% 3.83% 5.71% 5.60%<F3>
Portfolio turnover<F7> 5% 38% 11% 0% 18% 18%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been as indicated.
<F2> Not annualized.
<F3> Annualized.
<F4> Effective June 5, 1995, the Victory New York Tax-Free Portfolio became the New York Tax-Free Fund.
<F5> Effective September 26, 1994, the Fund designated the existing shares as Class A Shares and commenced offering
Class B Shares.
<F6> Amount is less than $1,000.
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes
of shares issued.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
The Victory Portfolios Financial Highlights
Ohio Municipal Bond Fund
Class G
Class A Shares Shares
Six March 26,
Months Year Year Year Year Year 1999
Ended Ended Ended Ended Ended Ended through
April 30, October 31, October 31, October 31, October 31, October 31, April 30,
1999 1998 1997 1996 1995 1994 1999<F4><F5>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 12.04 $ 11.72 $ 11.43 $ 11.32 $ 10.33 $ 11.52 $ 11.79
Investment Activities
Net investment income 0.25 0.51 0.53 0.54 0.52 0.49 0.04
Net realized and
unrealized gains
(losses) from investments (0.09) 0.42 0.29 0.11 1.00 (0.94) (0.03)
Total from
Investment Activities 0.16 0.93 0.82 0.65 1.52 (0.45) 0.01
Distributions
Net investment income (0.25) (0.51) (0.53) (0.54) (0.52) (0.49) (0.04)
In excess of net
investment income -- -- -- -- (0.01) -- --
Net realized gains (0.18) (0.10) -- -- -- (0.25) --
Total Distributions (0.43) (0.61) (0.53) (0.54) (0.53) (0.74) (0.04)
Net Asset Value,
End of Period $ 11.77 $ 12.04 $ 11.72 $ 11.43 $ 11.32 $ 10.33 $ 11.76
Total Return
(excludes sales charges) 1.36%<F2> 8.18% 7.37% 5.87% 15.03% (4.08)% (0.17)%<F2>
Ratios/Supplemental Data:
Net Assets,
End of Period (000) $83,105 $82,704 $78,043 $73,463 $60,031 $57,704 $122,665
Ratio of expenses to
average net assets<F6> 0.92%<F3> 0.91% 0.89% 0.89% 0.66% 0.51% 0.87%<F3>
Ratio of net investment
income to average net
assets<F6> 4.20%<F3> 4.31% 4.60% 4.72% 4.78% 4.58% 4.22%<F3>
Ratio of expenses to
average net assets<F1> 1.14%<F3> 1.13% 0.99% 1.05% 0.94% 1.09% 1.07%<F3>
Ratio of net investment income
to average net assets<F1> 3.98%<F3> 4.09% 4.50% 4.56% 4.49% 4.01% 4.02%<F3>
Portfolio turnover<F4> 51% 95% 74% 81% 125% 53% 51%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred, the ratios
would have been as indicated.
<F2> Not annualized.
<F3> Annualized.
<F4> Period from commencement of operations.
<F5> Effective March 26, 1999, the Gradison Ohio Tax-Free Fund merged into the Victory Ohio Municipal Bond Fund.
<F6> On March 26, 1999, the adviser agreed to waive its management fee or to reimburse expenses, as allowed by law,
to the extent necessary to maintain the net operating expenses of the Class G shares of the Fund at a maximum of
0.91% until at least April 1, 2001. The Adviser has also agreed to waive its management fee for Class A shares
to the same extent the fee is waived for Class G shares until at least April 1, 2001.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Schedules of Investments
Balanced Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (4.0%)
Associates Corp., N.A.,
4.95%, 5/3/99 $ 18,810 $ 18,810
Total Commercial Paper (Cost $18,810) 18,810
Common Stocks (55.9%)
Aerospace/Defense (0.6%):
AlliedSignal, Inc. 41,400 2,433
Boeing Co. 10,000 406
2,839
Aluminum (0.6%):
Alcoa, Inc. (d) 43,400 2,702
Automobiles (1.3%):
DaimlerChrysler AG (b) 19,328 1,898
Ford Motor Co. 14,041 898
General Motors Corp. 35,000 3,112
5,908
Banks (4.3%):
Bank of America Corp. 54,090 3,894
First Union Corp. (d) 86,700 4,801
Mellon Bank Corp. 69,000 5,128
U.S. Bancorp (d) 30,000 1,112
Wells Fargo & Co. 120,000 5,182
20,117
Beverages (0.6%):
Anheuser-Busch Cos., Inc. 20,000 1,463
PepsiCo, Inc. 40,000 1,477
2,940
Chemicals -- General (0.8%):
Air Products & Chemicals, Inc. (d) 56,000 2,632
E.I. du Pont de Nemours & Co. 15,000 1,059
3,691
Computers & Peripherals (3.7%):
Cisco Systems, Inc. (d) (b) 35,500 4,049
Hewlett-Packard Co. 52,800 4,165
International Business
Machines Corp. 43,000 8,995
17,209
Conglomerates (1.6%):
General Electric Co. 46,300 4,885
Textron, Inc. 28,800 2,653
7,538
Containers (0.6%):
Newell Rubbermaid, Inc. 44,600 2,116
Sonoco Products Co. 33,000 852
2,968
Cosmetics & Related (0.7%):
Avon Products, Inc. (d) 59,200 $ 3,215
Diversified (0.3%):
Berkshire Hathaway, Inc. (b) 619 1,529
Electrical Equipment (0.7%):
Emerson Electric Co. 53,200 3,431
Electronic & Electrical -- General (0.7%):
Motorola, Inc. (d) 41,000 3,285
Entertainment (1.0%):
The Walt Disney Co. (d) 14,000 445
Viacom, Inc., Class B (b) 107,400 4,389
4,834
Environmental Control (0.6%):
Waste Management, Inc. 50,025 2,826
Financial & Insurance (0.7%):
Lincoln National Corp. 32,000 3,074
Financial Services (2.7%):
Fannie Mae 78,200 5,548
Franklin Resources, Inc. 65,000 2,600
Transamerica Corp. 63,178 4,501
12,649
Food Processing & Packaging (1.0%):
ConAgra, Inc. 98,000 2,437
Sara Lee Corp. 106,000 2,359
4,796
Food Products (0.4%):
General Mills, Inc. 23,000 1,682
Forest Products --
Lumber & Paper (0.4%):
Bowater, Inc. (d) 9,000 483
Mead Corp. 28,000 1,170
1,653
Health Care (0.5%):
Columbia/HCA Healthcare Corp. 97,500 2,407
Industrial Goods & Services (0.3%):
Parker Hannifin Corp. 30,000 1,408
Insurance (0.3%):
Everest Reinsurance Holdings, Inc. 40,500 1,228
Insurance -- Multi-Line (1.1%):
Allstate Corp. 147,884 5,379
Medical Supplies (0.5%):
Biomet, Inc. 13,000 533
Medtronic, Inc. 28,000 2,014
2,547
Metals & Mining (0.1%):
Kennametal, Inc. (d) 22,000 584
<PAGE>
Oil & Gas Exploration,
Production & Services (1.5%):
Anadarko Petroleum Corp. 20,000 $ 759
Enron Corp. 67,600 5,087
USX -- Marathon Group 40,000 1,250
7,096
Oil-Integrated Companies (5.5%):
Amerada Hess Corp. 22,000 1,254
Atlantic Richfield Co. 8,000 672
Chevron Corp. 67,001 6,683
Mobil Corp. 51,400 5,384
Phillips Petroleum Co. (d) 44,600 2,258
Royal Dutch Petroleum Co.,
New York Shares 5,800 340
Texaco, Inc. (d) 119,000 7,468
Unocal Corp. 51,000 2,120
26,179
Oilfield Services & Equipment (1.2%):
Baker Hughes, Inc. 84,600 2,527
Schlumberger, Ltd. 47,000 3,003
5,530
Paint, Varnishes, Enamels (0.2%):
Sherwin-Williams Co. 26,400 822
Pharmaceuticals (4.4%):
Abbott Laboratories 85,000 4,117
American Home Products Corp. 76,800 4,685
Bristol-Myers Squibb Co. 66,000 4,195
McKesson HBOC, Inc. 22,000 770
Pfizer, Inc. 62,200 7,157
20,924
Publishing (0.9%):
Time Warner, Inc. (d) 61,000 4,270
Railroads (0.8%):
Union Pacific Corp. 61,000 3,660
Retail (1.7%):
Dayton Hudson Corp. 91,800 6,179
Wal-Mart Stores, Inc. (d) 37,600 1,730
7,909
Retail -- Department Stores (0.7%):
J. C. Penney Co., Inc. 16,000 730
May Department Stores Co. 61,500 2,448
3,178
Retail -- Drug Stores (0.8%):
Walgreen Co. 139,200 3,741
Retail -- Specialty Stores (0.8%):
AutoZone, Inc. (d) (b) 30,000 $ 900
Lowe's Cos., Inc. 56,000 2,954
3,854
Semiconductors (1.8%):
Altera Corp. (b) 19,000 1,373
Intel Corp. 96,800 5,923
LSI Logic Corp. (d) (b) 40,000 1,360
8,656
Software & Computer
Services (1.7%):
Microsoft Corp. (b) 54,000 4,391
Oracle Corp. (d) (b) 126,625 3,427
7,818
Steel (0.1%):
USX -- U.S. Steel Group, Inc. 17,100 517
Telecommunications (2.1%):
ALLTEL Corp. (d) 51,000 3,439
MCI Worldcom, Inc. (d) 79,292 6,502
9,941
Telecommunications --
Services & Equipment (0.4%):
Lucent Technologies, Inc. (d) 32,704 1,966
Tobacco & Tobacco Products (0.3%):
Philip Morris Cos., Inc. 38,000 1,332
Utilities -- Electric (1.7%):
Consolidated Edison Co.
of New York, Inc. 37,400 1,699
Duke Energy Corp. 50,000 2,801
FirstEnergy Corp. 15,000 445
PacifiCorp 80,000 1,335
Texas Utilities Co. 47,000 1,868
8,148
Utilities --
Telecommunications (3.2%):
Ameritech Corp. 98,000 6,707
AT&T Corp. (d) 78,177 3,948
GTE Corp. 65,500 4,384
15,039
Total Common Stocks (Cost $161,628) 263,019
<PAGE>
Foreign Common Stocks (4.5%)
Australia (0.2%):
Banks (0.0%):
National Australia Bank Ltd. 7,155 $ 140
Leisure -- Recreation,
Gaming (0.1%):
Aristocrat Leisure Ltd. 35,000 225
Media (0.0%):
News Corp. Ltd. 5,000 42
Publishing (0.1%):
Publishing & Broadcasting Ltd. 32,000 215
Telecommunications (0.0%):
Telstra Corp. Ltd. ADR 1,150 124
Total Australia 746
Brazil (0.0%):
Food Distributors, Supermarkets
& Wholesalers (0.0%):
Companhia Brasileira de Distribuicao
Grupo Pao de Acucar 1,500 26
Telecommunications (0.0%):
Telecomunicacoes Brasileiras,
Telebras-SA, ADR 400 37
Utilities --
Telecommunications (0.0%):
Telecomunicacoes Brasileiras
S/A-Telebras ADR 400 0
Total Brazil 63
Britain (0.9%):
Aerospace/Defense (0.0%):
British Aerospace PLC 16,035 120
Banks (0.1%):
HSBC Holdings PLC 4,000 149
Lloyds TSB Group PLC 22,300 359
508
Food Distributors, Supermarkets
& Wholesalers (0.0%):
Compass Group PLC 15,400 156
Newspapers (0.0%):
Person PLC 7,000 149
Oil & Gas Exploration,
Production & Services (0.2%):
British Petroleum Co. PLC 28,266 536
Pharmaceuticals (0.3%):
Glaxo Wellcome PLC 15,500 458
SmithKline Beecham PLC 36,000 475
933
Retail (0.1%):
Kingfisher PLC 19,000 285
Telecommunication Services (0.0%):
Energis PLC (b) 3,900 $ 105
Telecommunications (0.1%):
Vodafone Group PLC 28,000 513
Utilities --
Telecommunications (0.1%):
British Telecommunications PLC 31,238 525
Total Britain 3,830
Canada (0.1%):
Diversified (0.1%):
Bombardier Inc., Class B 10,900 169
Oil & Gas Exploration,
Production & Services (0.0%):
Suncor Energy, Inc. 4,000 160
Telecommunications (0.0%):
Northern Telecom Ltd. 1,100 75
Total Canada 404
Finland (0.1%):
Banks (0.0%):
Merita Ltd., Class A 17,097 102
Telecommunications (0.1%):
Nokia OYJ, Class A 4,374 338
Total Finland 440
France (0.6%):
Automobiles (0.0%):
PSA Peugeot Citroen 633 105
Valeo SA 1,100 93
198
Banks (0.0%):
Banque Nationale de Paris 1,573 131
Computer Services (0.0%):
Cap Gemini SA 749 115
Cosmetics & Related (0.1%):
L'OREAL 440 282
Diversified (0.2%):
Vivendi 1,690 396
Electronic & Electrical --
General (0.0%):
Rexel 1,300 108
Electronic Components/
Instruments (0.0%):
Legrand SA 500 120
Insurance (0.1%):
AXA SA 1,880 243
Oil-Integrated Companies (0.1%):
Total SA, Class B 1,950 267
Retail -- Department Stores (0.1%):
Pinault-Printemps-Redoute SA 1,700 282
<PAGE>
Semiconductors (0.0%):
ST Microelectronics N.V. 2,200 $ 229
Total France 2,371
Germany (0.2%):
Automobiles (0.1%):
DaimlerChrysler AG (b) 3,408 337
Banks (0.0%):
Dresdner Bank AG 3,100 134
Chemicals -- General (0.0%):
BASF AG 1,900 83
Insurance (0.1%):
Allianz AG 750 239
Retail (0.0%):
Douglas Holding AG 3,400 157
Douglas Holding AG-New 270 12
169
Software & Computer
Services (0.0%):
Systeme, Anwendungen,
Produkte In Der Datenver 300 96
Total Germany 1,058
Greece (0.0%):
Banks (0.0%):
National Bank of Greece 1,380 95
Utilities --
Telecommunications (0.0%):
Hellenic Telecommunications
Organization SA 3,244 75
Total Greece 170
Hong Kong (0.1%):
Appliances & Household
Products (0.0%):
Guangdong Kelon Electric Holdings 112,000 101
Financial Services (0.0%):
Guoco Group Ltd. 43,000 113
Newspapers (0.0%):
South China Morning Post
(Holdings) Ltd. 64,000 39
Real Estate (0.1%):
Hutchison Whampoa Ltd. 10,000 90
Sun Hung Kai Properties Ltd. 8,000 70
160
Telecommunications (0.0%):
Hong Kong Telecom Ltd. 49,000 132
Total Hong Kong 545
Hungary (0.0%):
Oil-Integrated Companies (0.0%):
MOL Magyar Olaj-es Gazipari Rt. (c) 1,000 22
Telecommunications (0.0%):
Magyar Tavkozlesi Rt ADR (b) 6,400 $ 180
Total Hungary 202
India (0.0%):
Tobacco & Tobacco Products (0.0%):
ITC Ltd. GDR 2,300 65
Total India 65
Ireland (0.1%):
Banks (0.0%):
Allied Irish Banks PLC 21,000 339
Building Materials (0.1%):
CRH PLC 12,000 236
Total Ireland 575
Italy (0.3%):
Banks (0.1%):
Banca Commeriale Italiana 25,000 206
San Paolo-IMI SpA 19,405 292
498
Insurance -- Multi-Line (0.0%):
Assicurazioni Generali 6,000 234
Oil & Gas Exploration,
Production & Services (0.0%):
ENI SpA 15,181 100
Utilities -- Telecommunications (0.2%):
Telecom Italia Mobile SpA 55,000 327
Telecom Italia SpA 44,883 242
569
Total Italy 1,401
Japan (1.0%):
Beverages (0.0%):
Kirin Brewery Co. Ltd. 7,000 79
Business Services (0.0%):
Secom & Co. Ltd. 1,000 98
Computers & Peripherals (0.1%):
Canon, Inc. 6,000 147
Fujitsu Ltd. 11,000 188
335
Construction (0.0%):
Sekisui House Ltd. 20,000 224
Cosmetics & Related (0.1%):
Kao Corp. 12,000 305
Electronic & Electrical --
General (0.1%):
Fanuc 1,000 44
Matsushita Electric Industrial Co. Ltd. 4,000 76
Murata Mfg. Co. Ltd. 2,000 114
<PAGE>
Sharp Corp. 16,000 $ 188
422
Financial Services (0.1%):
Takefuji Corp. 4,000 332
Insurance (0.0%):
Tokio Marine & Fire Insurance Co. 16,000 186
Medical Equipment
& Supplies (0.1%):
Terumo Corp. 13,000 283
Pharmaceuticals (0.1%):
Sankyo Co. Ltd. 9,000 189
Takeda Chemical Industries 4,000 174
363
Photography (0.0%):
Fuji Photo Film 2,000 76
Retail (0.1%):
Ito-Yokado Co. Ltd. 2,000 123
Marui Co. Ltd. 11,000 182
Seven-Eleven Japan 2,000 171
476
Software & Computer
Services (0.1%):
NTT Data Corp. 44 348
Utilities -- Electric (0.0%):
Tokyo Electric Power 5,000 107
Utilities -- Telecommunications (0.2%):
Nippon Telephone & Telegraph 21 228
NTT Mobile Communication Network, Inc. 7 410
638
Total Japan 4,272
Malaysia (0.0%):
Automobiles (0.0%):
Oriental Holdings Berhad 42,000 71
Total Malaysia 71
Mexico (0.0%):
Financial Services (0.0%):
Grupo Financiero Banamex Accival
SA de CV, Class B 26,000 66
Retail (0.0%):
Controladora Comercial Mexicana
SA de CV 52,000 55
Total Mexico 121
Netherlands (0.2%):
Banks (0.1%):
ING Groep N.V. 4,797 296
Insurance (0.1%):
Aegon N.V. 3,015 289
Oil-Integrated Companies (0.0%):
Royal Dutch Petroleum Co. 2,000 $ 117
Software & Computer
Services (0.0%):
CMG PLC 7,500 207
Total Netherlands 909
New Zealand (0.0%):
Newspapers (0.0%):
Independent Newspapers Ltd. 11,300 48
Telecommunications (0.0%):
Telecom Corp. of New Zealand Ltd. 8,000 42
Total New Zealand 90
Norway (0.0%):
Banks (0.0%):
Den Norske Bank ASA 22,000 80
Total Norway 80
Philippines (0.0%):
Banks (0.0%):
Bank of Philippine Islands 19,000 60
Total Philippines 60
Portugal (0.0%):
Banks (0.0%):
Banco Commercial Portugues SA 3,000 85
Utilities --
Telecommunications (0.0%):
Portugal Telecom SA 1,800 75
Total Portugal 160
Singapore (0.0%):
Transportation (0.0%):
Keppel Corp. Ltd. 15,000 43
Total Singapore 43
South Africa (0.0%):
Computers & Peripherals (0.0%):
Datatec Ltd. 3,500 57
Metals & Mining (0.0%):
Gold Fields of South Africa Ltd. 24,000 46
Total South Africa 103
South Korea (0.0%):
Electrical Equipment (0.0%):
Samsung Electronics ADR 2,100 81
Total South Korea 81
Spain (0.2%):
Banks (0.1%):
Banco Santander SA 10,200 221
Corporation Bancaria de Espana SA 9,000 212
433
Utilities -- Electric (0.0%):
Endesa SA 7,000 156
<PAGE>
Utilities -- Telecommunications (0.1%):
Telefonica de Espana 5,980 $ 281
Total Spain 870
Sweden (0.0%):
Telecommunications --
Equipment (0.0%):
Telefonaktiebolaget LM Ericsson,
Class B 8,800 232
Total Sweden 232
Switzerland (0.4%):
Banks (0.1%):
UBS AG, Registered 945 322
Business Services (0.0%):
Adecco SA (b) 340 172
Insurance (0.1%):
Baloise Holding Ltd., Registered 150 123
Zurich Allied AG 584 377
500
Pharmaceuticals (0.2%):
Novartis AG, Registered 186 273
Roche Holding AG 48 565
838
Total Switzerland 1,832
Taiwan (0.1%):
Software & Computer
Services (0.0%):
Asustek Computer, Inc. GDR (b) 7,900 107
Transportation (0.1%):
Evergreen Marine GDR 4,800 71
Evergreen Marine GDR (c) (b) 4,800 71
142
Total Taiwan 249
Turkey (0.0%):
Banks (0.0%):
Yapi ve Kredi Bankasi AS GDR 2,792 68
Total Turkey 68
Total Foreign Common Stocks (Cost $17,332) 21,111
Preferred Stocks (0.0%)
Germany (0.0%):
Automobiles (0.0%):
Volkswagen AG 1,900 80
Consumer Products (0.0%):
Gardena Holding AG 3,888 74
Total Preferred Stocks (Cost $143) 154
Asset Backed Securities (4.6%)
American Express Credit Account
Master Trust, 6.40%, 4/15/05,
Series 1997-1, Class A $ 680 $ 684
CIT Recreational Vehicle Trust,
5.92%, 3/15/07,
Series 1998-A, Class A2 1,420 1,425
Commonwealth Edison,
5.44%, 3/25/07,
Series 1998-1, Class A5 515 502
Federal National Mortgage Assoc.,
6.00%, 6/18/25,
Series 1998-36, Class N 2,063 1,984
First Union Commercial Mtge. Trust,
6.07%, 10/15/08,
Series 1999-C1, Class A2 680 668
First USA Credit Card Master Trust,
6.42%, 3/17/05,
Series 1997-6, Class A 860 875
First USA Credit Card Master Trust,
5.28%, 9/18/06,
Series 1998-9, Class A 670 662
First USA Credit Card Master Trust,
5.08%*, 10/19/06,
Series 1999-1, Class A 1,463 1,463
GE Capital Mortgage Services, Inc.,
6.75%, 8/25/28,
Series 1998-13, Class A3 1,718 1,713
MBNA Master Credit Card Trust,
5.80%, 12/15/05,
Series 1998-D, Class A 1,400 1,404
Morgan Stanley Capital Corp.,
6.21%, 11/15/31,
Series 1999-WF1, Class A2 670 664
Nationsbank Credit Card Master Trust,
6.45%, 4/15/03,
Series 1995-1, Class A 910 928
Norwest Asset Securities Corp.,
6.75%, 5/25/28,
Series 1998-10, Class A3 2,700 2,693
Norwest Asset Securities Corp.,
6.75%, 6/25/28,
Series 1998-12, Class A9 1,814 1,776
Peco Energy, 6.05%, 3/1/09,
Series 1999-A, Class A6 780 778
Premier Auto Trust,
5.07%, 7/8/02,
Series 1998-5, Class A3 800 792
Residential Accredit Loans, Inc.,
6.75%, 2/25/27,
1997-QS1 Class A10 700 705
<PAGE>
Residential Accredit Loans, Inc.,
6.75%, 7/25/28,
Series 1998-QS7, Class CB2 $ 1,890 $ 1,893
Total Asset Backed Securities (Cost $21,664) 21,609
Convertible Bonds (0.0%)
Banks (0.0%):
Mitsubishi Bank International Finance
Bermuda, 3.00%, 11/30/02 114 125
Total Convertible Bonds (Cost $134) 125
Corporate Bonds (9.9%)
Automobiles (0.2%):
Ford Motor Co.,
9.00%, 9/15/01 100 107
General Motors Corp.,
6.63%, 10/15/05 780 787
894
Banks (0.1%):
First Union Corp.,
6.88%, 9/15/05 635 654
Beverages (0.2%):
Seagram Co. Ltd.,
6.25%, 12/15/01 300 300
Seagram Co. Ltd.,
7.50%, 12/15/18 525 533
833
Business Services (0.3%):
Cendant Corp.,
7.75%, 12/1/03 650 668
Comdisco, Inc.,
5.95%, 4/30/02 555 555
1,223
Commercial Banking (0.2%):
Abbey National PLC,
6.70%, 6/29/49,
Callable 6/15/08 @100 805 787
Diversified (0.1%):
Tyco International Ltd.,
7.00%, 6/15/28 410 406
Electronic & Electrical --
General (0.7%):
Motorola, Inc.,
6.50%, 11/15/28 365 347
Sony Corp.,
6.13%, 3/4/03 2,800 2,814
3,161
Energy (0.2%):
KN Energy, Inc.,
6.45%, 3/1/2003 $ 240 $ 242
KN Energy, Inc.,
6.65%, 3/1/05 485 491
733
Entertainment (0.3%):
CBS Corp.,
6.88%, 9/1/03 400 403
Viacom, Inc.,
7.75%, 6/1/05 1,075 1,139
1,542
Environmental Control (0.1%):
USA Waste Services,
7.00%, 7/15/28 575 554
Financial Services (1.1%):
Capital One Financial Corp.,
6.15%, 6/1/01 345 342
Citigroup, Inc.,
5.80%, 3/15/04 (d) 895 887
Farmers Exchange Capital,
7.05%, 7/15/28 455 423
Heller Financial, Inc.,
6.00%, 3/19/04 (d) 970 960
Household International, Inc.,
6.00%, 5/1/04 680 676
Household International, Inc.,
5.88%, 2/1/09 640 610
Lehman Brothers Holdings, Inc.,
6.00%, 2/26/01 345 344
Lehman Brothers Holdings, Inc.,
6.63%, 4/1/04 615 615
Morgan Stanley Dean Witter & Co.,
5.63%, 1/20/04 580 568
5,425
Food Processing & Packaging (0.2%):
Nabisco, Inc.,
6.00%, 2/15/01 925 924
Industrial Goods & Services (0.4%):
Monsanto Co.,
6.60%, 12/1/28 800 761
Motorola, Inc.,
5.80%, 10/15/08 415 404
Owens Corning,
7.50%, 5/1/05 550 559
1,724
Insurance (0.8%):
American General Finance,
5.80%, 3/15/02 390 389
<PAGE>
Aon Capital Trust A,
8.21%, 1/1/27,
Guaranteed by Aon Corp. (c) $ 485 $ 527
Liberty Mutual,
8.20%, 5/4/07 (c) (d) 780 847
Lumbermens Mutual,
8.30%, 12/1/37 (c) 230 233
Metropolitan Life Insurance Co.,
6.30%, 11/1/03 (c) 1,800 1,780
3,776
Manufactured Housing (0.1%):
Oakwood Homes Corp.,
7.88%, 3/1/04 670 670
Media (0.4%):
Time Warner, Inc.,
7.75%, 6/15/05 1,750 1,870
Oil & Gas Exploration,
Production & Services (1.1%):
Baker Hughes, Inc.,
6.00%, 2/15/09 460 442
Baker Hughes, Inc.,
6.88%, 1/15/29 (d) 615 602
Noble Drilling Corp.,
7.50%, 3/15/19 625 641
Occidental Petroleum Corp.,
8.45%, 2/15/29 485 522
USX Corp.,
7.20%, 2/15/04 760 770
Valero Energy Corp.,
7.38%, 3/15/06 1,005 1,013
Williams Cos.,
6.20%, 8/1/02 1,020 1,003
Williams Cos., Inc.,
6.13%, 12/1/03 450 442
5,435
Oil-Integrated Companies (0.5%):
Phillips Petroleum Co.,
6.65%, 3/1/03 800 818
Phillips Petroleum Co.,
6.38%, 3/30/09 485 484
Texaco Capital Corp.,
5.50%, 1/15/09 335 317
Unocal Corp.,
7.00%, 5/1/28 690 667
2,286
Paper Products (0.3%):
Abitibi-Consolidated, Inc.,
6.95%, 4/1/08 525 515
Fort James Corp.,
6.63%, 9/15/04 $ 500 $ 505
International Paper Co.,
7.63%, 1/15/07 350 371
1,391
Publishing (0.1%):
Knight Ridder,
6.88%, 3/15/29 680 666
Railroads (0.1%):
Union Pacific Corp.,
6.63%, 2/1/29 580 547
Real Estate (1.0%):
Cabot Industrial Trust,
7.13%, 5/1/04 500 496
Camden Property Trust,
7.00%, 4/15/04 505 508
EOP Operating LP,
6.75%, 2/15/08 2,460 2,413
Simon Property Group, Inc.,
6.75%, 6/15/05 690 673
Spieker Properties, Inc.,
6.90%, 1/15/04 610 603
4,693
Retail (0.4%):
Dayton Hudson Corp.,
5.88%, 11/1/08 460 447
J.C. Penney & Co., Inc.,
7.63%, 9/1/97 420 398
J.C. Penny & Co., Inc.,
7.60%, 4/1/07 300 315
Saks, Inc.,
8.25%, 11/15/08 555 600
1,760
Telecommunications (0.6%):
360 Communications Co.,
7.50%, 3/1/06 740 789
AT&T Capital Corp.,
6.88%, 1/16/01 495 503
GTE Corp.,
6.94%, 4/15/28 355 356
Telecommunications, Inc.,
9.80%, 2/1/12 920 1,187
2,835
Tobacco & Tobacco Products (0.2%):
Phillip Morris Cos, Inc.,
7.00%, 7/15/05 860 879
Utilities -- Electric (0.2%):
Korea Electric Power,
6.34%, 12/1/03 1,175 1,125
<PAGE>
Utilities --
Telecommunications (0.0%):
Bell Atlantic Financial Service,
5.75%, 4/1/03,
Callable 4/1/01 @102.3 (c) $ 102 $ 110
Total Corporate Bonds (Cost $47,372) 46,903
Rights & Warrants (0.0%)
Greece (0.0%):
National Bank of Greece,
Expire 5/28/99 3 9
Total Greece 9
Spain (0.0%):
Telecommunications (0.0%):
Telefonica SA, Expire 5/20/99 6 6
Total Spain 6
Total Rights & Warrants (Cost $0) 15
Foreign Government Bonds (0.1%)
Canada (0.1%):
British Columbia,
5.38%, 10/29/08 650 616
Total Foreign Government Bonds (Cost $647) 616
U.S. Government Agencies (2.1%)
Federal National Mortgage
Assoc. (1.9%):
5.13%, 2/13/04 (d) 649 635
7.12%, 7/3/06 1,740 1,875
6.50%, 4/26/09 (d) 1,920 1,918
6.16%, 8/7/28 (d) 3,980 3,865
5.96%, 9/11/28 (d) 745 701
8,994
U.S. Government Loan Trust (0.2%):
U.S. Government Loan Trust --
Isreal, 8.5%, 4/1/06 Series 1-B 788 863
Total U.S. Government Agencies (Cost $9,994) 9,857
U.S. Government Mortgage Backed (13.0%)
Federal Home Loan Mortgage
Corp. (4.7%):
6.00%, 1/1/29-2/1/29 $ 1,695 $ 1,645
6.50%, 1/15/22-4/1/29 8,840 8,755
7.00%, 7/1/28-11/1/28 5,582 5,938
7.50%, 4/1/14-11/1/28 5,195 5,358
8.00%, 10/1/28-1/1/29 758 789
8.50%, 7/1/21-1/1/29 1,313 1,383
23,868
Federal National Mortgage
Assoc. (6.2%):
6.00%, 11/1/13-4/1/29 5,052 4,939
6.50%, 7/1/13-3/1/29 13,142 13,051
7.00%, 9/25/23-3/1/29 5,968 6,067
7.50%, 6/1/27-10/1/28 2,297 2,362
8.00%, 7/1/28 222 231
8.50%, 11/1/17 1,011 1,061
10.00%, 6/17/27 1,402 1,513
29,224
Government National Mortgage
Assoc. (1.8%):
7.00%, 12/15/22-4/15/29 6,734 6,832
8.50%, 9/15/28-2/15/29 1,015 1,072
9.00%, 11/15/16-9/15/19 327 347
9.50%, 7/15/09 107 115
8,366
Total U.S. Government Mortgage Backed
(Cost $61,851) 61,458
<PAGE>
U.S. Treasury Securities (5.5%)
U.S. Treasury Notes (5.5%):
5.88%, 8/31/99 (d) $ 6,184 $ 6,207
4.63%, 11/30/00 (d) 8,828 8,768
6.38%, 8/15/02 (d) 897 927
4.75%, 2/15/04 (d) 1,173 1,150
4.50%, 11/15/08 756 722
0.00%, 8/15/20 (d) 2,700 751
6.13%, 11/15/27 (d) 350 362
5.25%, 11/15/28 (d) 7,074 6,541
5.25%, 2/15/29 (d) 609 572
26,000
Total U.S. Treasury Securities (Cost $26,166) 26,000
Securities Purchased With Cash Collateral (11.7%)
Short Term Securities (5.5%):
General American Funding
Agreement, 5.10%, 3/29/00 12,680 12,680
AIM Short Term Prime
Money Market Fund 5,570 5,570
AIM Liquid Assets
Money Market Fund 7,777 7,777
26,027
Repurchase Agreements (6.2%):
Merrill Lynch, 4.97%, 5/3/99
(Collateralized by $10,532
Hylsa SA de CV, CP, 5/28/99,
USA Group, CP, 5/28/99,
Proctor and Gamble, CP, 5/28/99,
market value $10,493) 10,000 10,000
Morgan Stanley Dean Witter,
5.04%, 5/3/99 (Collateralized by
$12,250 Dean Witter Discover,
6.88%, 3/3/01, Southwestern
Electric, 7.00%, 9/7/01,
Aflac, Inc., 6.50%, 4/9/15,
Reed Elsevier Capstar, 7.00%,
5/5/15, market value $12,600) 12,000 12,000
Goldman Sachs Group L.P., 5.04%,
5/3/99 (See Significant Accounting
Policies, Securities Lending
In the Notes to Financial Statements
for collateral description) $ 7,000 $ 7,000
29,000
Total Securities Purchased
With Cash Collateral (Cost $54,609) 55,027
Total Investments (Cost $420,767) (a) -- 111.3% 524,704
Liabilities in excess
of other assets -- (11.3%) (53,279)
TOTAL NET ASSETS -- 100.0% $471,425
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands): Unrealized
appreciation $109,349 Unrealized depreciation (5,412) Net unrealized
appreciation $103,937
(b) Non-income producing securities.
(c) 144a security which is restricted as to resale to institutional investors.
(d) All or a portion of this security was loaned as of April 30, 1999.
* Variable rate securities having liquidity sources through bank letters
of credit or other credit and/or liquidity agreements. The interest
rate, which will change periodically, is based upon bank prime rates or
an index of market interest rates. The rate reflected on the Schedule of
Portfolio Investments is the rate in effect at April 30, 1999.
ADR -- American Depository Receipt
CMO -- Collateralized Mortgage Obligation
GDR -- Global Depository Receipt See notes to financial statements. The
Victory Portfolios Schedules of Investments Convertible Securities
Fund April 30, 1999 (Amounts in Thousands, Except Shares) (Unaudited)
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Convertible Securities Fund April 30, 1999
(Amounts in Thousands, except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (0.8%)
Associates Corp., N.A.,
4.95%, 5/3/99 $ 700 $ 700
Total Commercial Paper (Cost $700) 700
Common Stocks (1.5%)
Banks (1.5%):
Mercantile Bancorp, Inc. 20,000 1,140
Southwest Bancorp of Texas 14,000 236
Total Common Stocks (Cost $1,072) 1,376
Convertible Bonds (46.6%)
Biotechnology (1.1%):
Sepracor, Inc.,
7.00%, 12/15/05,
Callable 12/20/01 @ 104 1,000 975
Broadcasting & Publishing (1.1%):
Scholastic Corp., Subordinated,
5.00%, 8/15/05,
Callable 11/16/98 @ 100 (c) 1,000 953
Commercial Services (3.1%):
CUC International Inc.,
Subordinated Notes,
3.00%, 2/15/02,
Callable 2/15/00 @ 101.2 1,000 946
International Technology Corp.,
Subordinated Debentures,
8.00%, 10/1/06,
Continuously Callable @ 100 762 678
Ogden Corp., Euro-Dollar
Subordinated Notes,
5.75%, 10/20/02 1,300 1,209
2,833
Computers & Peripherals (1.0%):
HMT Technology Corp.,
Subordinated Notes,
5.75%, 1/15/04,
Callable 1/20/00 @ 103.29 (e) 1,500 548
HMT Technology Corp.,
Subordinated Notes,
5.75%, 1/15/04,
Callable 1/20/00 @ 103.29 (c) 250 91
Quadramed Corp.,
5.25%, 5/1/05,
Callable 5/4/01 @ 103 500 280
919
Electronic & Electrical --
General (0.9%):
Lam Research Corp.,
Subordinated Notes,
5.00%, 9/1/02 $ 250 $ 214
Lam Research Corp.,
Subordinated Notes,
5.00%, 9/1/02 (c) 750 641
855
Electronic Components/
Instruments (2.8%):
Atmel SA,
3.25%, 06/01/02,
Guaranteed by Atmel Corp., (c) 750 665
Cymer Inc.,
Subordinated Notes,
3.50%, 08/06/04,
Callable 8/9/00 @ 106.372 1,000 823
VLSI Technology, Inc.,
Subordinated Notes,
8.25%, 10/1/05,
Callable 10/3/99 @ 102.48 1,000 992
2,480
Electronics (0.4%):
LSI Logic Corp., 4.25%, 3/15/04 (c) 280 363
Financial Services (0.6%):
Bell Atlantic Financial,
4.25%, 9/15/05,
Callable 9/15/02 @ 104.242 (c) 500 551
Health Care (1.0%):
Quantum Health
Resources, Inc.,
Subordinated Debentures,
4.75%, 10/1/00,
Callable 10/1/99 @ 100.68 1,017 920
Health Care -- Animal (1.3%):
Veterinary Centers Of America,
Subordinated Debentures,
5.25%, 5/1/06,
Callable 5/16/99 @ 103 1,585 1,179
Hotels & Motels (1.1%):
Hilton Hotels Corp.,
Subordinated Notes,
5.00%, 5/15/06,
Callable 5/15/99 @ 102.86 (e) 1,000 970
Insurance (0.0%):
First Central Financial Corp.,
Subordinated Debentures,
9.00%, 8/1/00,
Callable 11/16/98 @ 100.63 (d) 76 0
<PAGE>
Internet Service Provider (0.6%):
Mindspring, Convertible
Subortinated Notes,
5.00%, 4/15/06,
Callable 10/2/99 @ 100.81 $ 500 $ 532
Leisure -- Recreation,
Gaming (0.6%):
Family Golf Centers,
Subordinated Notes,
5.75%, 10/15/04,
Callable 10/15/00 @102.875 (e) 1,000 570
Manufacturing -- Machinery (2.5%):
MascoTech, Inc.,
Subordinated Debentures,
4.50%, 12/15/03,
Callable 12/15/98 @ 102 1,750 1,415
Thermo Fibertek Inc.,
4.50%, 7/15/04,
Callable 7/15/00 @ 100,
Gauaranteed by
Thermo Electron (c) 1,000 824
2,239
Medical Equipment
& Supplies (1.2%):
Thermo Instruments System,
4.50%, 10/15/03,
Callable 10/15/99 @ 100 (c) 350 307
ThermoTrex Corp.,
3.25%, 11/1/07,
Callable 11/1/00 @ 100,
Guaranteed by
Thermo Electron 1,220 805
1,112
Medical -- Biotechnology (2.1%):
Centocor Inc.,
Subordinated Debentures,
4.75%, 2/15/05,
Callable 2/21/01 @ 102.714 500 532
Chiron Corp.,
Subordinated Notes,
1.90% , 11/17/00,
Callable 11/17/98 @ 95.08 500 478
Genzyme Corp.,
Subordinated Notes,
5.25%, 6/1/05,
Callable 6/10/[email protected] (c) 750 877
1,887
Medical -- Hospital Services (1.4%):
Medical Care International,
Subordinated Debentures,
6.75%, 10/1/06,
Callable 10/1/01 @ 100 1,500 1,271
Oil & Gas Exploration, Production &
Services (1.9%):
Lomak Petroleum, Inc.,
Subordinated Debentures,
6.00%, 2/1/07,
Callable 2/1/00 @ 104 (c) $ 750 $ 347
Nabors Industrial Inc.,
Subordinated Notes,
5.00%, 5/15/06,
Callable 5/15/99 @ 103.5 (e) 750 884
SEACOR SMIT, Inc.,
Subordinated Notes,
5.375%, 11/15/06,
Callable 11/24/99 @ 103.58 500 500
1,731
Oil -- Domestic (2.4%):
Kerr-Mcgee Corp.,
7.50%, 5/15/14,
Callable 5/15/99 @ 100 1,000 996
Pennzenergy Co.,
4.90%, 8/15/08,
Callable 8/15/00 @ 104 1,100 1,172
2,168
Oilfield Services & Equipment (1.3%):
Diamond Offshore Drilling, Inc.,
Subordinated Notes,
3.75%, 2/15/07,
Callable 2/22/01 @ 102.08 (e) 900 968
Loews Corp.,
Subordinated Notes,
3.13%, 9/15/07,
Callable 9/15/02 @ 101.56,
Convertible into
Shares of Diamond
Offshore Drilling, Inc. 200 171
1,139
Pharmaceuticals (3.2%):
ALZA Corp.,
Subordinated Debentures,
5.00%, 5/1/06,
Callable 5/1/01 @ 102.14 1,100 1,198
Atrix Labs, Inc.,
Subordinated Notes,
7.00%, 12/1/04,
Callable 12/5/00 @ 103 (c) 500 405
Cetus Corp.,
Subordinated Debentures,
5.25%, 5/21/02,
Continuously Callable @ 100 300 299
Dura Pharmaceuticals,
3.50%, 7/15/02,
Callable 7/15/00 @ 101.4 1,050 769
<PAGE>
Omnicare Inc.,
5.00%, 12/1/07,
Callable 12/6/00 @ 103.5 $ 250 $ 229
2,900
Precision Instruments
& Related (3.0%):
Thermo Instruments,
4.00%, 1/15/05,
Callable 1/15/01 @ 100 3,300 2,661
Primary Metal & Mineral
Production (1.3%):
Homestake Mining Co.,
Subordinated Debenture,
5.50%, 6/23/00,
Continuously Callable @ 100 (c) 1,250 1,175
Real Estate (1.3%):
Avatar Holdings,
Subordinated Notes,
7.00%, 4/1/05,
Callable 4/6/01 @ 104 1,250 1,139
Real Estate Investment Trusts (3.2%):
Health Care Property Investors, Inc.,
Subordinated Notes,
6.00%, 11/8/00,
Callable 11/15/98 @ 100 (c) 950 933
HRPT Properties,
7.50%, 10/1/03,
Callable 10/1/99 @ 100 (e) 315 304
Macerich Co.,
Subordinated Notes,
7.25%, 12/15/02,
Callable 6/15/02 @ 100 (c) 500 464
Meditrust,
Debentures,
7.50%, 3/1/01,
Callable @ Par (e) 1,240 1,194
2,895
Retail (0.9%):
Amazon.Com,
4.75, 2/1/09,
Callable 2/6/02 @ 103.325 650 821
Retail -- Specialty Stores (1.5%):
Corporate Express, Inc.,
4.50%, 7/1/00,
Callable 7/1/99 @ 101.13 750 671
Michaels Stores, Inc.,
Subordinated Notes,
6.75%, 1/15/03,
Callable 1/15/99 @ 102.62 500 476
The Sports Authority, Inc.,
Subordinated Notes,
5.25%, 9/15/01,
Callable 9/15/99 @ 102.10 (c) (e) 300 230
1,377
Semiconductors (0.5%):
Level One Communications,
Convertible Subordinated Notes,
4.00%, 9/1/04,
Callable 9/7/00 @ 102.29 $ 210 $ 420
Software & Computer
Services (0.9%):
Arbor Software,
4.50%, 3/15/05,
Callable 3/20/01 @ 102.57 500 335
Doubleclick,
Convertible Subordinated Notes,
4.75%, 3/15/06,
Callable 3/15/03 @ 102.036 250 443
778
Telecommunications --
Equipment (0.3%):
Northern Telecom Ltd.,
Subordinated Debentures,
5.25%, 5/15/03,
Callable 5/15/99 @ 102.1 (c) 250 269
Transportation Services (1.0%):
Offshore Logistics,
Subordinated Notes,
6.00%, 12/15/03,
Callable 12/15/99 @ 103.43 1,000 885
Waste Management (1.1%):
Waste Management Technologies,
Subordinated Notes,
2.00%, 1/24/05,
Callable 3/15/00 @ 84.303 300 336
Waste Management,
Convertible Subordinated Notes,
4.00%, 2/1/02,
Callable 2/1/00 @ 101.6 500 683
1,019
Total Convertible Bonds (Cost $44,433) 41,986
Convertible Preferred Stock (48.0%)
Banks (4.1%):
Jefferson-Pilot Corp.,
7.25% 26,900 3,228
Matewan Bancshares, Inc.,
7.50%, Series A,
Callable 3/15/00 @ $26.125 15,000 465
3,693
Broadcasting/Cable (4.8%):
Adelphia Communications,
5.50%, Series D,
Callable 5/15/02 @ $200 2,500 511
CSC Holdings, Inc.,
8.50%, Series I,
Callable 11/1/99 @ $25.70 23,000 2,660
<PAGE>
Houston Industries, Inc.,
7.00% 10,000 $ 1,180
4,351
Cosmetics & Related (1.2%):
Estee Lauder,
6.25% 11,500 1,116
Drugs (0.3%):
Mckesson Financing Trust,
5.00%,
Callable 3/4/00 @ $51.75 5,000 266
Food Processing & Packaging (1.2%):
Ralston Purina Co., 7.00% 23,000 1,070
Food Products (1.0%):
Suzia Foods Corp.,
5.50%, 4/1/28,
Callable 4/1/01 @ $51.72 (c) 25,000 925
Household Goods -- Appliances,
Furnishings & Electronics (2.2%):
Newell Financial Trust I,
5.25%,
Callable 12/1/01 @ $51.58 4,500 255
Newell Financial Trust I,
5.25%,
Callable 12/1/01 @ $51.58 (c) 30,000 1,699
1,954
Insurance (4.1%):
American Bankers Insurance,
$3.125, Series B,
Callable 8/7/00 @ $51.88 9,000 945
Conseco Finance Trust IV,
7.00%, 2/16/01,
Series F (e) 38,000 1,597
Lincoln National Corp.,
7.75% 29,800 790
St. Paul Capital Corp.,
6.00% 7,000 389
3,721
Machinery & Engineering (1.5%):
Federal Mogul Financial Trust,
7.00%,
Callable 12/6/00 @ $52.45 (e) 25,000 1,369
Manufacturing -- Machinery (1.1%):
Case Corp., $4.50,
Callable 7/1/99 @ $51.29 (e) 12,000 965
Oil & Gas Exploration,
Production & Services (2.8%):
Belco Oil & Gas Corp.,
6.50% (e) 23,000 420
Weatherford International Inc.,
5.00%, 11/1/27,
Callable 11/4/00 @ $51.75 24,000 858
Western Gas Resources, Inc.,
$2.625,
Callable 2/16/99 @ $51.313 40,000 $ 1,265
2,543
Oil-Integrated Companies (2.7%):
Unocal Corp.,
6.25%,
Callable 9/3/00 @ $50.00 (e) 41,200 2,405
Paper and Forest Products (2.6%):
International Paper Co.,
5.25%,
Callable 6/30/99 @ $50.00,
Guaranteed by
International Paper Co. 45,000 2,357
Real Estate (2.1%):
Equity Office,
5.25%, Series B,
Callable 2/15/03 @ $51.167 22,700 931
Equity Residential Properties,
$2.15, Series J 32,500 930
1,861
Real Estate Investment Trusts (3.4%):
Camden Property Trust,
$2.25, Series A,
Callable 4/30/01 @ $32.464 20,000 506
Felcor Lodging Trust, Inc.,
$1.95,
Callable 4/30/01 @ $25 28,000 623
Rouse Co.,
$3.00, Series B 20,000 795
Vornado Realty Trust,
6.50%, Series A 20,000 1,100
3,024
Restaurants (1.1%):
Wendys Financing I,
5.00%, 9/15/26
Series A 17,900 1,034
Retail (0.6%):
K-Mart Financing,
7.75%,
Callable 6/17/99 @ $52.713 10,000 562
Steel (2.7%):
TXI Capital Trust I,
5.50%, 6/2/28,
Callable 6/5/01 @ 50 25,000 894
USX Capital Trust I,
6.75%,
Callable 4/1/99 @ $51.30 (e) 25,000 1,173
Worthington Industries,
7.25% 30,000 323
2,390
<PAGE>
Telecommunications (3.3%):
Mediaone Group, Inc.,
6.25% 28,600 $ 2,291
TCI Pacific
Communications, Inc.,
5.00%,
Callable 8/15/01 @ $102.5 2,000 639
2,930
Transportation Services (4.2%):
CNF Trust I, Series A,
5.00%,
Callable 6/1/00 @ $51.5625 17,900 1,092
Union Pacific Capital,
6.25%,
Callable 4/10/01 @ $51.56 (e) 35,000 1,893
Union Pacific Capital,
6.25%,
Callable 4/10/01 @ $51.56 (c) 15,000 812
3,797
Utilities -- Electric (1.0%):
Citizens Utilities Trust,
5.00%,
Callable 2/1/99 @ $50.00,
Guaranteed by
Citizens Utility Co. 20,000 900
Total Convertible Preferred Stock
(Cost $39,378) 43,233
Corporate Bonds (1.4%)
Financial Services (0.9%):
Bank Plus Corp., Senior Notes,
12.00%, 7/18/07,
Callable 11/15/05 @ 110 $ 1,000 820
Insurance (0.5%):
National Reinsurance Corp.,
Senior Notes,
8.85%, 1/15/05 400 446
Total Corporate Bonds (Cost $1,510) 1,266
Preferred Stocks (1.4%)
Banks (1.4%):
California Federal
Preferred Capital,
9.13%, Series A,
Callable 12/31/02 @ $26.14 20,000 $ 535
Chevy Chase Savings Bank,
13.00%,
Callable 5/1/03 @ $27.25 25,000 750
Total Preferred Stocks (Cost $1,184) 1,285
Securities Purchased With Cash Collateral (12.4%)
Short Term Securities (12.4%):
General American Funding
Agreement, 5.10%, 3/29/00 $ 5,440 5,440
AIM Short Term Prime
Money Market Fund 2,390 2,390
AIM Liquid Assets
Money Market Fund 3,336 3,336
Total Securities Purchased
With Cash Collateral (Cost $11,166) 11,166
Total Investments (Cost $99,443) (a) -- 112.1% 101,012
Liabilities in excess
of other assets -- (12.1%) (10,861)
TOTAL NET ASSETS -- 100.0% $ 90,151
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 8,181
Unrealized depreciation (6,612)
Net unrealized appreciation $ 1,569
(b) Non-income producing securities.
(c) 144a security which is restricted as to resale to institutional
investors. (d) Security has defaulted on interest payments.
(e) All or a portion of this security was loaned as of April 30, 1999.
TRACES -- Trust Automatic Common Exchange Shares.
See notes to financial statements.
<PAGE>
The Victory Portfolios Schedules of Investments
Real Estate Investment Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Common Stocks (79.7%)
Real Estate Investment Trusts (79.7%):
Apartments (7.9%):
Avalonbay Communities, Inc. 37,366 $ 1,308
Diversified (20.0%):
Captec Net Lease Realty, Inc. 13,000 170
First Union Real Estate
Equity & Mortgage
Investments 11,000 45
General Growth Properties, Inc. 19,000 699
Simon Property Group, Inc. 27,000 775
The Macerich Co. 10,000 256
TrizecHahn Corp. 21,100 448
Vornado Realty Trust 23,000 898
3,291
Health Care (0.2%):
Meditrust Cos. 3,000 37
Industrial Development (0.3%):
Public Storage, Inc. 2,000 56
Investment Management (3.3%):
Security Capital Group Inc.,
Class B (b) 36,000 545
Office (33.1%):
Boston Properties, Inc. 23,000 835
Brandywine Realty Trust 35,000 661
Cornerstone Properties, Inc. 60,000 978
Cousins Properties, Inc. 7,000 243
Equity Office Properties Trust 42,000 1,157
Mack-Cali Realty Corp. 28,000 866
Spieker Properties, Inc. 18,000 707
5,447
Office Property (1.2%):
SL Green Realty Corp. 10,000 199
Residential (12.7%):
Apartment Investment &
Management Co., Class A 7,350 294
Camden Property Trust 9,000 243
Charles E. Smith Residential
Realty, Inc. 6,000 195
Equity Residential Properties Trust 21,000 971
Manufactured Home
Communities, Inc. 15,000 380
2,083
Retail (1.0%):
Westfield America, Inc. 10,000 158
Total Common Stocks (Cost $13,476) 13,124
Convertible Stock (0.8%)
Food Products (0.8%):
Apartment Investment &
Management Co. 5,000 $ 128
Total Convertible Stock (Cost $125) 128
Discount Note (19.3%)
Federal National Mortgage
Assoc. (19.3%):
4.82%, 5/3/99 $3,177,000 3,176
Total Discount Note (Cost $3,176) 3,176
Rights & Warrants (0.0%)
Real Estate Investment Trusts (0.0%):
Diversified (0.0%):
First Union Real Estate
Investments (b) 3,000 0
Total Rights & Warrants (Cost $0) 0
Total Investments (Cost $16,777) (a) -- 99.8% 16,428
Other assets in excess
of liabilities -- 0.2% 32 TOTAL NET ASSETS -- 100.0% $16,460
(a) Cost for federal income tax purposes differs from value by net
unrealized depreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 330
Unrealized depreciation (679)
Net unrealized depreciation $(349)
(b) Non-income producing securities.
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
The Victory Portfolios April 30, 1999
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
Convertible Real Estate
Balanced Securities Investment
Fund Fund Fund
<S> <C> <C> <C>
ASSETS:
Investments, at value (Cost $391,767;
$99,443 & $16,777) $495,704 $101,012 $16,428
Repurchase agreements at amortized cost 29,000 -- --
Total 524,704 101,012 16,428
Cash -- 3 --
Interest and dividends receivable 2,150 876 25
Receivable for capital shares issued 148 39 --
Receivable from brokers for investments sold 4,728 245 208
Reclaims receivable 27 -- --
Prepaid expenses and other assets 45 23 22
Total Assets 531,802 102,198 16,683
LIABILITIES:
Payable for capital shares redeemed 25 50 --
Payable to brokers for investments purchased 4,878 734 195
Payable for return of collateral received 55,027 11,166 --
Payable for organization costs -- -- 5
Accrued expenses and other payables:
Investment advisory fees 294 55 13
Administration fees 7 13 --
Custodian fees 14 3 3
Accounting fees -- 1 1
Transfer agent fees 14 10 3
Shareholder service fees -- 11 1
Shareholder service fees-Class A 89 -- --
Shareholder service and 12b-1 fees-Class B 8 -- --
Other 21 4 2
Total Liabilities 60,377 12,047 223
NET ASSETS:
Capital 348,023 79,185 17,997
Undistributed (distributions in excess of)
net investment income (93) 446 195
Net unrealized appreciation/depreciation
from investments 103,480 1,569 (349)
Net unrealized appreciation/depreciation
from translation of assets
and liabilities in foreign currencies 457 -- --
Accumulated undistributed net realized
gains (losses) from investment transactions 19,558 8,951 (1,383)
Net Assets $471,425 $ 90,151 $16,460
Net Assets
Class A $461,710
Class B 9,715
Total $471,425
Outstanding units of beneficial
interest (shares)
Class A 30,255
Class B 636
Total 30,891 6,769 1,534
Net asset value
Redemption price per share $ 13.32 $ 10.73
Redemption price per share -- Class A $ 15.26
Offering price per share -- Class B<F1> $ 15.27
Maximum sales charge 5.75% 5.75% 5.75%
Maximum offering price per share
(100%/(100%-maximum sales
charge) of net asset value adjusted
to nearest cent) $ 14.13 $ 11.38
Maximum offering price per share
(100%/(100%-maximum sales
charge) of net asset value adjusted
to nearest cent) -- Class A $ 16.19
<FN>
<F1> Redemption price per Class B Share varies based on length of time held.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statements of Operations
The Victory Portfolios For the Six Months Ended April 30, 1999
(Amounts in Thousands) (Unaudited)
Real
Convertible Estate
Balanced Securities Investment
Fund Fund Fund
<S> <C> <C> <C>
Investment Income:
Interest income $ 5,337 $ 1,578 $ 59
Dividend income 2,072 1,474 448
Securities Lending 18 2 --
Foreign tax withholding (17) -- --
Total Income 7,410 3,054 507
Expenses:
Investment advisory fees 2,232 372 78
Administration fees 312 74 12
Shareholder service fees -- 72 17
Shareholder service fees -- Class A 547 -- --
Shareholder service fees and 12b-1
fees -- Class B 39 -- --
Accounting fees 78 23 19
Custodian fees 84 18 6
Legal and audit fees 24 6 2
Amortization of organization fees -- -- 2
Trustees' fees and expenses 6 1 --
Transfer agent fees 33 20 6
Registration and filing fees 19 15 9
Printing fees 2 4 --
Other 26 7 --
Total Expenses 3,402 612 151
Expenses voluntarily reduced (533) -- (63)
Net Expenses 2,869 612 88
Net Investment Income 4,541 2,442 419
Realized/Unrealized Gains (Losses)
from Investments and Foreign Currencies:
Net realized gains (losses) from
investment transactions 19,986 9,082 (814)
Net realized gains (losses) from foreign
currency transactions (151) -- --
Change in unrealized
appreciation/depreciation from investments 25,208 (72) 1,613
Change in unrealized
appreciation/depreciation from translation
of assets and liabilities in foreign
currencies (4) -- --
Net realized/unrealized gains
(losses) from investments
and foreign currencies 45,039 9,010 799
Change in net assets resulting
from operations $49,580 $11,452 $1,218
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
Balanced Convertible Real Estate
Fund Securities Fund<F1> Investment Fund
Six Six Eleven Six
Months Year Months Months Year Months Year
Ended Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, November 30, April 30, October 31,
1999 1998 1999 1998 1997 1999 1997<F2>
<S> <C> <C> <C> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 4,541 $ 10,001 $ 2,442 $ 4,875 $ 3,727 $ 419 $ 623
Net realized gains
(losses) from
investment transactions 19,986 27,200 9,082 111 8,742 (814) (570)
Net realized gains
(losses) from
foreign currency
transactions (151) (430) -- -- -- -- --
Net change in unrealized
appreciation/depreciation
from investments 25,208 13,754 (72) (9,683) (1,161) 1,613 (2,456)
Change in unrealized
appreciation/depreciation
from translation of
assets and liabilities
in foreign currencies (4) 644 -- -- -- -- --
Change in net assets resulting
from operations 49,580 51,169 11,452 (4,697) 11,308 1,218 (2,403)
Distributions to Shareholders:
From net investment income -- -- (2,766) (4,602) (3,806) (370) (496)
Class A (4,702) (10,007) -- -- -- -- --
Class B (44) (62) -- -- -- -- --
In excess of net
investment income. -- (2) -- -- -- -- --
From net realized
gains from
investment transactions (26,725) (18,646) (213) (8,444) (3,737) -- --
In excess of net
realized gains from
investment transactions -- -- -- -- -- -- (20)
Change in net assets from
distributions to shareholders (31,471) (28,717) (2,979) (13,046) (7,543) (370) (516)
Capital Transactions:
Proceeds from shares
issued 31,926 95,975 13,143 62,226 46,957 3,269 17,894
Dividends reinvested 28,827 25,917 2,187 9,691 6,277 125 132
Cost of shares redeemed (32,520) (65,485) (41,721) (51,087) (33,495) (4,406) (2,859)
Change in net assets from
capital transactions 28,233 56,407 (26,391) 20,830 19,739 (1,012) 15,167
Change in net assets 46,342 78,859 (17,918) 3,087 23,504 (164) 12,248
Net Assets:
Beginning of period 425,083 346,224 $108,069 104,982 81,478 16,624 4,376
End of period $471,425 $425,083 90,151 $108,069 $104,982 $16,460 $16,624
Share Transactions:
Issued 2,137 6,733 1,030 4,619 3,386 323 1,505
Reinvested 1,971 1,898 174 742 478 13 12
Redeemed (2,188) (4,629) (3,277) (3,844) (2,551) (433) (249)
Change in shares 1,920 4,002 (2,073) 1,517 1,313 (97) 1,268
<FN>
<F1> Effective March 23, 1998, the SBSF Convertible Securities Fund became the
Victory Convertible Securities Fund. Changes in net assets prior to March 23,
1998 represent the SBSF Convertible Securities Fund.
<F2> The Real Estate Investment Fund commenced operations on April 30, 1997.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
The Victory Portfolios Financial Highlights
Balanced Fund
Class A
Six
Months Year Year Year
Ended Ended Ended Ended
April 30, October 31, October 31, October 31,
1999 1998 1997 1996<F5>
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 14.67 $ 13.87 $ 12.33 $ 11.01
Investment Activities
Net investment income 0.15 0.37 0.36 0.36
Net realized and unrealized
gains (losses) from
investments and
foreign currencies 1.52 1.54 1.90 1.39
Total from
Investment Activities 1.67 1.91 2.26 1.75
Distributions
Net investment income (0.16) (0.37) (0.35) (0.36)
In excess of net
investment income -- -- -- --
Net realized gains (0.92) (0.74) (0.37) (0.07)
Total Distributions (1.08) (1.11) (0.72) (0.43)
Net Asset Value,
End of Period $ 15.26 $ 14.67 $ 13.87 $ 12.33
Total Return
(excludes sales charges) 11.75%<F3> 14.55% 19.02% 16.27%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $461,710 $418,807 $342,933 $273,553
Ratio of expenses to
average net assets 1.27%<F4> 1.27% 1.25% 1.27%
Ratio of net investment
income to average net
assets 2.05%<F4> 2.54% 2.69% 3.14%
Ratio of expenses to
average net assets<F1> 1.50%<F4> 1.50% 1.36% 1.43%
Ratio of net investment
income to average
net assets<F1> 1.82%<F4> 2.31% 2.58% 2.98%
Portfolio turnover<F7> 99% 231% 109% 80%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or reimbursed. If such
voluntary fee reductions and/or reimbursements had not occurred, the ratios
would have been as indicated.
<F2> Period from commencement of operations.
<F3> Not annualized.
<F4> Annualized.
<F5> Effective March 1, 1996, the Fund designated the existing shares as Class
A Shares and commenced offering Class B Shares. (e) Represents total return
for the Fund for the period November 1, 1995 through February 29, 1996 plus
total return for Class B Shares for the period March 1, 1996 through October
31, 1996. The total return for the Class B Shares for the period from
March 1, 1996 through October 31, 1996 was 8.72%.
<F6> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
</FN>
</TABLE>
<TABLE>
<CAPTION>
The Victory Portfolios Financial Highlights
Balanced Fund
Class B
Six March 1,
Months Year Year 1996 Year December 30,
Ended Ended Ended through Ended 1993 to
April 30, October 31, October 31, October 31, October 31, October 31,
1999 1998 1997 1996<F5> 1996 1994<F2>
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $14.68 $13.88 $12.34 $11.51 $ 9.62 $ 10.00
Investment Activities
Net investment income 0.07 0.21 0.19 0.14 0.41 0.33
Net realized and unrealized
gains (losses) from
investments and
foreign currencies 1.52 1.54 1.89 0.85 1.40 (0.39)
Total from
Investment Activities 1.59 1.75 2.08 0.99 1.81 (0.06)
Distributions
Net investment income (0.08) (0.21) (0.17) (0.14) (0.41) (0.32)
In excess of net
investment income -- -- -- (0.02) (0.01) --
Net realized gains (0.92) (0.74) (0.37) -- -- --
Total Distributions (1.00) (0.95) (0.54) (0.16) (0.42) (0.32)
Net Asset Value,
End of Period $15.27 $14.68 $13.88 $12.34 $ 11.01 $ 9.62
Total Return
(excludes sales charges) 11.17%<F3> 13.27% 17.43% 15.73%<F6> 19.24% (0.57)%<F3>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $9,715 $6,276 $3,291 $1,432 $201,073 $127,285
Ratio of expenses to
average net assets 2.34%<F4> 2.43% 2.56% 2.46%<F4> 0.98% 0.87%<F4>
Ratio of net investment
income to average net
assets 0.98%<F4> 1.36% 1.36% 1.78%<F4> 4.05% 3.97%<F4>
Ratio of expenses to
average net assets<F1> 2.58%<F4> 2.67% 2.95% 2.67%<F4> 1.36% 1.49%<F4>
Ratio of net investment
income to average
net assets<F1> 0.74%<F4> 1.12% 0.97% 1.57%<F4> 3.67% 3.35%<F4>
Portfolio turnover<F7> 99% 231% 109% 80% 69% 118%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or reimbursed. If such
voluntary fee reductions and/or reimbursements had not occurred, the ratios
would have been as indicated.
<F2> Period from commencement of operations.
<F3> Not annualized.
<F4> Annualized.
<F5> Effective March 1, 1996, the Fund designated the existing shares as Class
A Shares and commenced offering Class B Shares. (e) Represents total return
for the Fund for the period November 1, 1995 through February 29, 1996 plus
total return for Class B Shares for the period March 1, 1996 through October
31, 1996. The total return for the Class B Shares for the period from
March 1, 1996 through October 31, 1996 was 8.72%.
<F6> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
The Victory Portfolios Financial Highlights
Convertible Securities Fund
Six Eleven
Months Months
Ended Ended
April 30, October 31, Fiscal Year Ended November 30,
1999 1998<F2> 1997 1996 1995 1994 1993
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 12.22 $ 14.33 $ 13.55 $ 12.16 $ 11.05 $ 12.48 $ 10.98
Investment Activities
Net investment income 0.33 0.58 0.62 0.65 0.60 0.61 0.57
Net realized and unrealized gains
(losses) from investments 1.15 (1.08) 1.43 1.68 1.50 (1.12) 1.79
Total from Investment Activities 1.48 (0.50) 2.05 2.33 2.10 (0.51) 2.36
Distributions
Net investment income (0.35) (0.54) (0.65) (0.62) (0.61) (0.61) (0.57)
Net realized gains (0.03) (1.07) (0.62) (0.32) (0.38) (0.31) (0.29)
Total Distributions (0.38) (1.61) (1.27) (0.94) (0.99) (0.92) (0.86)
Net Asset Value, End of Period $ 13.32 $ 12.22 $ 14.33 $ 13.55 $ 12.16 $ 11.05 $ 12.48
Total Return (excludes sales charges) 12.30%<F3> (3.69)%<F3> 16.26% 20.28% 20.43% (4.36)% 22.42%
Ratios/Supplementary Data:
Net Assets at end of period (000) $90,151 $108,069 $104,982 $81,478 $68,212 $58,845 $64,537
Ratio of expenses to
average net assets 1.24%<F4> 1.20%<F4> 1.34% 1.31% 1.31% 1.30% 1.24%
Ratio of net investment income
to average net assets 4.93%<F4> 4.60%<F4> 4.75% 5.17% 5.36% 5.20% 4.75%
Ratio of expenses to
average net assets<F1> <F5> <F5> <F5> <F5> <F5> <F5> <F5>
Ratio of net investment income
to average net assets<F1> <F5> <F5> <F5> <F5> <F5> <F5> <F5>
Portfolio Turnover 29% 77% 77% 40% 52% 49% 30%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or expense reimbursements had not
occurred, the ratios would have been as indicated.
<F2> Effective March 23, 1998, the SBSF Convertible Securities Fund became the Victory
Convertible Securities Fund. Financial highlights prior to March 23, 1998
represent the SBSF Convertible Securities Fund.
<F3> Not annualized.
<F4> Annualized.
<F5> There were no waivers during the period.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
The Victory Portfolios Financial Highlights
Real Estate Investment Fund
Six
Months Year Period
Ended Ended Ended
April 30, October 31, October 31,
1999 1998 1997<F2>
(Unaudited)
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.19 $ 12.07 $10.00
Investment Activities
Net investment income 0.28 0.50 0.23
Net realized and unrealized gains
(losses) from investments 0.50 (1.90) 2.01
Total from Investment Activities 0.78 (1.40) 2.24
Distributions
Net investment income (0.24) (0.44) (0.17)
Net realized gains -- (0.04) --
Total Distributions (0.24) (0.48) (0.17)
Net Asset Value, End of Period $ 10.73 $ 10.19 $12.07
Total Return (excludes sales charges) 7.74%<F3> (11.91)% 22.42%<F3>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $16,460 $16,624 $4,376
Ratio of expenses to
average net assets 1.13%<F4> 0.83% 0.00%<F4>
Ratio of net investment income
to average net assets 5.36%<F4> 4.95% 5.11%<F4>
Ratio of expenses to
average net assets<F1> 1.93%<F4> 1.95% 2.93%<F4>
Ratio of net investment income
to average net assets<F1> 4.56%<F4> 3.83% 2.18%<F4>
Portfolio turnover 13% 53% 21%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred,
the ratios would have been as indicated.
<F2> The Real Estate Investment Fund commenced operations on April 30, 1997.
<F3> Not annualized.
<F4> Annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Schedules of Investments
Value Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (1.6%)
Associates Corp., N.A.,
4.95%, 5/3/99 $ 9,616 $ 9,616
Total Commercial Paper (Cost $9,616) 9,616
Common Stocks (98.7%)
Aerospace/Defense (2.1%):
AlliedSignal, Inc. 103,840 6,101
Boeing Co. 164,000 6,662
12,763
Aluminum (1.5%):
Alcoa, Inc. 149,500 9,306
Automobiles (1.6%):
DaimlerChrysler AG 46,845 4,600
General Motors Corp. 60,000 5,336
9,936
Banks (7.6%):
Bank of America Corp. 165,174 11,893
First Union Corp. 228,200 12,636
Mellon Bank Corp. 159,200 11,831
Wells Fargo & Co. (c) 222,000 9,588
45,948
Beverages (0.7%):
Anheuser-Busch Co., Inc. 61,866 4,524
Chemicals -- General (1.9%):
Air Products & Chemicals, Inc. 134,000 6,297
E.I. Du Pont de Nemours Co. 52,300 3,694
RPM, Inc. 104,000 1,463
11,454
Computers & Peripherals (4.5%):
Compaq Computer Corp. 94,300 2,104
Hewlett-Packard Co. 81,800 6,452
International Business
Machines Corp. 90,200 18,869
27,425
Conglomerates (0.7%):
Textron, Inc. 48,400 4,459
Containers (1.3%):
Newell Rubbermaid, Inc. (c) 132,600 6,290
Sonoco Products Co. 71,500 1,846
8,136
Cosmetics & Related (1.6%):
Avon Products, Inc. 177,500 9,640
Electrical Equipment (2.9%):
Emerson Electric Co. 87,400 $ 5,637
General Electric Co. 112,700 11,890
17,527
Electronic & Electrical --
General (2.3%):
Cisco Systems, Inc. (b) (c) 69,450 7,922
Motorola, Inc. 73,800 5,913
13,835
Entertainment (1.3%):
Hasbro, Inc. 238,800 8,149
Environmental Control (1.0%):
Waste Management, Inc. 106,450 6,014
Financial Services (4.1%):
Fannie Mae 215,000 15,251
Franklin Resources, Inc. 182,300 7,292
Household International, Inc. 53,500 2,692
25,235
Food Processing
& Packaging (3.1%):
ConAgra, Inc. 278,600 6,930
General Mills, Inc. 72,000 5,265
Sara Lee Corp. 312,700 6,958
19,153
Forest Products --
Lumber & Paper (1.0%):
Bowater, Inc. (c) 36,000 1,931
Mead Corp. 93,000 3,888
5,819
Health Care (1.1%):
Columbia/HCA Healthcare Corp. 278,800 6,883
Insurance -- Multi-Line (5.7%):
Allstate Corp. 399,300 14,525
Everest Reinsurance Holdings, Inc. 100,069 3,033
Lincoln National Corp. 81,300 7,810
Transamerica Corp. 137,396 9,789
35,157
Insurance -- Property, Casualty,
Health (0.3%):
American General Corp. 28,900 2,139
Manufacturing --
Capital Goods (0.6%):
Parker-Hannifin Corp. 78,700 3,694
Medical Supplies (0.8%):
Medtronic, Inc. 71,400 5,136
Metals -- Fabrication (0.8%):
Kennametal, Inc. 184,709 4,906
Newspapers (1.9%):
Gannett Co., Inc. 160,148 11,340
<PAGE>
Oil & Gas Exploration,
Production & Services (1.9%):
Anadarko Petroleum Corp. 118,715 $ 4,504
USX -- Marathon Group 228,000 7,125
11,629
Oil-Integrated Companies (7.1%):
Amerada Hess Corp. 76,001 4,332
Chevron Corp. (c) 131,950 13,162
Mobil Corp. 70,900 7,427
Texaco, Inc. (c) 194,900 12,230
Unocal Corp. 139,000 5,777
42,928
Oilfield Services & Equipment (1.0%):
Baker Hughes, Inc. 89,050 2,660
Schlumberger Ltd. 57,300 3,660
6,320
Pharmaceuticals (6.6%):
Abbott Laboratories 157,100 7,610
American Home Products Corp. 127,900 7,802
Bristol-Myers Squibb Co. 113,200 7,195
McKesson HBOC, Inc. 53,100 1,859
Merck & Co., Inc. 24,000 1,686
Pfizer, Inc. 123,000 14,152
40,304
Radio & Television (1.7%):
Cox Communications, Inc.,
Class A (b) (c) 22,400 1,778
Viacom, Inc., Class B (b) 214,600 8,772
10,550
Railroads (1.3%):
Union Pacific Corp. 130,100 7,806
Retail (2.4%):
Dayton Hudson Corp. 220,000 14,809
Retail -- Department Stores (0.8%):
May Department Stores Co. 126,300 5,028
Retail -- Drug Stores (1.0%):
Walgreen Co. 220,000 5,913
Retail -- Specialty Stores (1.7%):
AutoZone, Inc. (b) (c) 122,200 3,666
Lowe's Cos., Inc. 132,200 6,974
10,640
Semiconductors (3.2%):
Altera Corp. (b) 38,400 $ 2,774
Intel Corp. 209,800 12,838
LSI Logic Corp. (b) 110,600 3,760
19,372
Software & Computer
Services (4.4%):
Automatic Data Processing, Inc. 44,000 1,958
Electronic Data Systems Corp. 55,700 2,994
First Data Corp. 77,600 3,293
Microsoft Corp. (b) 123,000 10,001
Oracle Corp. (b) 325,200 8,801
27,047
Steel (0.4%):
USX -- U.S. Steel Group, Inc. 73,500 2,223
Telecommunications --
Equipment (0.6%):
Lucent Technologies, Inc. (c) 63,900 3,842
Tobacco & Tobacco Products (0.7%):
Philip Morris Cos., Inc. 123,850 4,342
Utilities -- Electric (3.0%):
Duke Energy Corp. 107,000 5,992
FirstEnergy Corp. 113,000 3,355
PacifiCorp 260,200 4,342
Texas Utilities Co. 119,600 4,754
18,443
Utilities -- Gas (1.1%):
Enron Corp. 92,800 6,983
Utilities --
Telecommunications (9.4%):
ALLTEL Corp. (c) 143,900 9,704
Ameritech Corp. 263,250 18,017
AT&T Corp. (c) 54,600 2,757
Bell Atlantic Corp. (c) 96,200 5,544
GTE Corp. 95,100 6,366
MCI Worldcom, Inc. (b) (c) 178,892 14,669
57,057
Total Common Stocks (Cost $382,518) $603,814
<PAGE>
Securities Purchased With Cash Collateral (9.0%)
Short Term Securities (4.1%):
General American Funding
Agreement, 5.10%, 3/29/00 $ 12,262 $ 12,262
AIM Short Term Prime
Money Market Fund 5,387 5,387
AIM Liquid Assets
Money Market Fund 7,521 7,521
25,170
Repurchase Agreements (4.9%):
Merrill Lynch, 4.97%, 5/3/99
(See Significant Accounting
Policies, Securities Lending in
the Notes to Financial Statements
for collateral description) 10,000 10,000
Prudential Bache Corp,
5.05%, 5/3/99
(Collateralized by $10,314
U.S. T-Bill, 0.00%, 7/29/99,
market value $10,201) 10,000 10,000
Morgan Stanley Dean Witter,
5.04%, 5/3/99
(Collateralized by $12,650
Ultramar Corp., 8.25%, 7/1/99,
Hawaiian Telephone Co.,
7.00%, 2/1/06,
Enron, 6.75%, 8/1/09,
market value $13,097) 10,000 10,000
30,000
Total Securities Purchased
With Cash Collateral (Cost $55,170) 55,170
Total Investments (Cost $447,304) (a) -- 109.3% 668,600
Liabilities in excess of other assets -- (9.3%) (57,150)
TOTAL NET ASSETS -- 100.0% $611,450
(a) Cost for federal income tax purposes differs from value
by net unrealized appreciation of securities as
follows (amounts in thousands):
Unrealized appreciation $233,410
Unrealized depreciation (12,114)
Net unrealized appreciation $221,296
(b) Non-income producing securities.
(c) All or a portion of this security was loaned as of April 30, 1999.
See notes to financial statements.
<PAGE>
The Victory Portfolios Schedules of Investments
Lakefront Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Market
Security Description Shares Value
Common Stocks (99.1%)
Aerospace/Defense (3.8%):
Boeing Co. 346 $ 14
United Technologies Corp. 255 37
51
Airlines (0.9%):
Delta Air Lines, Inc. 190 12
Apparel (0.7%):
Reebok International Ltd. (b) 474 9
Automobiles (2.4%):
Ford Motor Co. 258 16
General Motors Corp. 175 16
32
Banks (7.3%):
Chase Manhattan Corp. 570 47
Golden State Bancorp, Inc. (b) 860 21
Mellon Bank Corp. 160 12
National City Corp. 250 18
98
Beverages (1.8%):
PepsiCo, Inc. 640 24
Brokerage Services (1.7%):
Paine Webber Group, Inc. 500 23
Building Materials (0.6%):
Armstrong World Industries, Inc. 145 8
Computers & Peripherals (10.1%):
Diebold, Inc. 695 17
Hewlett-Packard Co. 408 32
International Business Machines Corp. 240 49
Sun Microsystems, Inc. (b) 600 36
134
Cosmetics & Related (5.2%):
Avon Products, Inc. 720 39
Colgate-Palmolive Co. 291 30
69
Diversified (0.7%):
Tyco International Ltd. 108 9
Electronic & Electrical --
General (5.2%):
General Electric Co. 150 16
Johnson Controls, Inc. 212 15
Texas Instruments, Inc. 380 39
70
Entertainment (1.6%):
Walt Disney Co. 660 21
Financial Services (7.4%):
American Express Co. 286 $ 37
Associates First Capital Corp. 296 13
Citigroup, Inc. 639 49
99
Health Care (2.2%):
C.R. Bard, Inc. 441 22
Tenet Healthcare Corp. (b) 350 8
30
Heavy Machinery (3.6%):
Caterpillar Tractor, Inc. 300 19
Cummins Engine Co., Inc. 205 11
Deere & Co. 407 18
48
Insurance -- Multi-Line (2.7%):
Allstate Corp. 610 22
CIGNA Corp. 160 14
36
Medical Supplies (1.9%):
Becton Dickinson & Co. 690 26
Medical -- Biotechnology (1.6%):
Amgen, Inc. (b) 350 22
Metals (1.7%):
Reynolds Metal Co. 365 23
Oil & Gas Exploration,
Production & Services (1.6%):
Texaco, Inc. 353 22
Oil-Integrated Companies (1.9%):
Mobil Corp. 250 26
Oilfield Services & Equipment (1.2%):
Schlumberger Ltd. 255 16
Packaging (1.2%):
Crown Cork & Seal Co., Inc. 490 16
Pharmaceuticals (11.1%):
American Home Products Corp. 350 21
Bristol-Myers Squibb Co. 520 33
Merck & Co., Inc. 330 23
Pharmacia & Upjohn Co. 605 34
Schering-Plough Corp. 752 36
147
Retail (2.7%):
Kmart Corp. (b) 2,410 36
Rubber & Rubber Products (0.8%):
M.A. Hanna Co. 683 11
Semiconductors (4.2%):
Intel Corp. 600 37
Rockwell International Corp. 370 19
56
<PAGE>
Software & Computer
Services (1.0%):
Computer Associates
International, Inc. 317 $ 14
Utilities -- Electric (3.8%):
American Electric Power Co. 270 11
Duke Energy Corp. 300 17
Texas Utilities Co. 570 23
51
Utilities -- Natural Gas (3.2%):
Williams Cos., Inc. 910 43
Utilities --
Telecommunications (3.3%):
AT&T Corp. 450 22
Cincinnati Bell, Inc. 335 8
GTE Corp. 210 14
44
Total Common Stocks (Cost $1,015) 1,326
Investment Companies (0.5%)
AIM Treasury Money Market Fund 7,456 $ 7
Total Investment Companies (Cost $7) 7
Total Investments (Cost $1,022) (a) -- 99.6% 1,333
Other assets in excess
of liabilities -- 0.4% 6
TOTAL NET ASSETS -- 100.0% $1,339
(a) Cost for federal income tax purposes differs from value by
net unrealized appreciation of securities as follows
(amounts in thousands):
Unrealized appreciation $372
Unrealized depreciation (61)
Net unrealized appreciation $311
(b) Non-income producing securities.
See notes to financial statements.
<PAGE>
The Victory Portfolios Schedules of Investments
Diversified Stock Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (1.6%)
Associates Corp., N.A.,
4.95%, 5/3/99 $ 19,591 $ 19,591
Total Commercial Paper (Cost $19,591) 19,591
Common Stocks (98.2%)
Aerospace/Defense (2.8%):
AlliedSignal, Inc. 153,200 9,001
Boeing Co. 440,000 17,875
Lockheed Martin Corp. 165,000 7,105
33,981
Aluminum (1.8%):
Alcoa Inc. (c) 350,000 21,788
Automobiles (2.6%):
DaimlerChrysler AG 170,000 16,692
General Motors Corp. 175,000 15,564
32,256
Banks (2.7%):
Bank of America Corp. 70,000 5,040
First Union Corp. 100,000 5,538
J.P. Morgan & Co., Inc. (c) 15,000 2,021
Mellon Bank Corp. 189,000 14,045
Wells Fargo & Co. 155,200 6,703
33,347
Beverages (0.1%):
Coca-Cola Co. 25,000 1,700
Broadcasting/Cable (1.0%):
AT&T Corp. -- Liberty Media,
Class A 194,849 12,446
Chemicals -- General (1.0%):
Nalco Chemical Co. 208,600 7,627
RPM, Inc. 362,187 5,093
12,720
Computers & Peripherals (7.0%):
Altera Corp. (b) 302,500 21,855
Compaq Computer Corp. 600,000 13,388
Diebold, Inc. (c) 400,000 9,625
Electronic Data Systems Corp. 185,000 9,944
Hewlett-Packard Co. 150,000 11,831
International Business
Machines Corp. 80,200 16,776
Seagate Technology, Inc. (b) 50,000 1,394
84,813
Conglomerates (2.4%):
Berkshire Hathaway, Inc., Class B 4,202 10,379
Canadian Pacific, Ltd. 618,600 $ 13,995
Corning, Inc. (c) 90,000 5,153
29,527
Consumer Products (0.2%):
Procter & Gamble Co. 20,000 1,876
Containers (2.0%):
Newell Rubbermaid, Inc. 520,000 24,668
Cosmetics & Related (1.0%):
Avon Products, Inc. (c) 230,000 12,492
Diversified (1.2%):
Tyco International Ltd. (c) 182,441 14,823
Electronic & Electrical --
General (4.1%):
Emerson Electric Co. 100,000 6,450
General Electric Co. 15,000 1,583
Motorola, Inc. 235,000 18,829
Texas Instruments, Inc. 115,000 11,744
Thomas & Betts Corp. (c) 120,000 5,040
Vishay Intertechnology, Inc. (b)(c) 374,015 6,522
50,168
Entertainment (1.2%):
Walt Disney Co. (c) 470,000 14,923
Financial Services (3.5%):
Citigroup, Inc. 395,000 29,724
Franklin Resources, Inc. 325,000 13,000
42,724
Food Processing
& Packaging (2.9%):
Kellogg Co. (c) 260,000 9,620
Quaker Oats Co. (c) 212,300 13,707
Ralston Purina Co. (c) 377,580 11,516
34,843
Forest Products --
Lumber & Paper (3.7%)
Bowater, Inc. (c) 383,400 20,560
International Paper Co. (c) 468,400 24,971
45,531
Health Care (1.5%):
Columbia HCA Healthcare Corp. 663,000 16,367
Tenet Healthcare Corp. (b) 100,000 2,363
18,730
Heavy Machinery (2.1%):
Deere & Co. 275,000 11,825
Ingersoll Rand Co. (c) 200,000 13,838
25,663
Hotels & Motels (0.4%):
Mirage Resorts, Inc. (b)(c) 225,000 5,048
<PAGE>
Insurance (1.5%):
Progressive Corp. (c) 130,400 $ 18,712
Insurance -- Multi-Line (3.4%):
American International Group, Inc. 247,037 29,012
Lincoln National Corp. 131,500 12,632
41,644
Insurance -- Property, Casualty,
Health (1.6%):
American General Corp. 30,000 2,220
Everest Reinsurance Holdings, Inc. 228,500 6,926
UNUM Corp. (c) 193,000 10,543
19,689
Manufacturing --
Capital Goods (0.1%):
Parker Hannifin Corp. 20,000 939
Manufacturing --
Miscellaneous (1.2%):
Pall Corp. 25,000 461
Thermo Electron Corp. (b) 908,300 14,590
15,051
Media (2.1%):
News Corp. ADR (c) 776,900 25,346
Medical Supplies (1.0%):
Biomet, Inc. 294,967 12,094
Metals (0.8%):
Reynolds Metal Co. 153,600 9,581
Metals -- Fabrication (1.1%):
Kennametal, Inc. 512,000 13,600
Office Equipment & Supplies
(Non-Computer Related) (0.3%):
Pitney Bowes, Inc. 50,000 3,497
Oil & Gas Exploration,
Production & Services (6.2%):
Anadarko Petroleum Corp. 134,696 5,110
Helmerich & Payne, Inc. 141,000 3,631
Noble Affiliates, Inc. 339,200 10,876
Texaco, Inc. 556,000 34,888
USX -- Marathon Group 660,000 20,624
75,129
Oil-Integrated Companies (2.8%):
Atlantic Richfield Co. 95,800 8,041
Exxon Corp. 30,000 2,492
Mobil Corp. 30,000 3,143
Unocal Corp. 480,000 19,950
33,626
Oilfield Services & Equipment (1.9%):
Baker Hughes, Inc. 330,000 $ 9,858
Halliburton Co. (c) 100,600 4,288
Schlumberger Ltd. 140,000 8,943
23,089
Packaging (0.7%):
Crown Cork & Seal Co., Inc. (c) 255,000 8,288
Pharmaceuticals (8.0%):
Abbott Laboratories 400,000 19,375
American Home Products Corp. 351,000 21,410
Bristol-Myers Squibb Co. 40,000 2,543
McKesson HBOC, Inc. 353,000 12,355
Merck & Co., Inc. 105,000 7,376
Pfizer, Inc. 115,000 13,232
SmithKline Beecham PLC ADR (c) 305,000 20,035
96,326
Radio & Television (4.7%):
CBS Corp. (c) 500,000 22,781
Chancellor Media Corp. (b)(c) 265,000 14,542
Comcast Corp.,
Class A Special Shares 295,000 19,378
56,701
Railroads (0.5%):
Union Pacific Corp. 96,778 5,807
Retail (1.5%):
AutoZone, Inc. (b)(c) 315,000 9,450
OfficeMax, Inc. (b) 847,000 8,576
18,026
Semiconductors (2.8%):
Applied Materials, Inc. (b) 125,600 6,735
Intel Corp. 440,000 26,923
33,658
Software & Computer
Services (2.9%):
Computer Associates
International, Inc. (c) 250,000 10,672
First Data Corp. 18,000 764
Networks Associates, Inc. (b)(c) 575,000 7,619
Oracle Systems Corp. (b) 600,000 16,237
35,292
Utilities -- Electric (0.0%):
CINergy Corp. (c) 11,700 349
Utilities -- Natural Gas (3.0%):
Enron Corp. 480,700 36,173
<PAGE>
Utilities -- Telecommunications (4.9%):
AT&T Corp. (c) 647,151 $ 32,680
MCI Worldcom, Inc. (b) 327,804 26,880
59,560
Total Common Stocks (Cost $959,142) 1,196,244
Securities Purchased With Cash Collateral (17.0%)
Short Term Securities (2.2%):
General American Funding
Agreement, 5.10%, 3/29/00 $ 12,675 12,675
AIM Short Term Prime
Money Market Fund 5,568 5,568
AIM Liquid Assets
Money Market Fund 9,200 9,200
27,443
Repurchase Agreements (14.8%):
Merrill Lynch,
4.97%, 5/3/99 (Collateralized by
$21,076 Toyota, CP, 5/27/99,
Grainger, Inc.,
CP, 5/26/99, Barton Capital,
CP, 5/26/99,
market value -- $21,001) 20,000 20,000
Prudential Bache Corp.,
5.09%, 5/3/99 (Collateralized by
$15,457 U.S. T-Bill, 0.00%, 7/29/99,
Societe Generale, CP, 5/20/99,
market value -- $15,397) 15,000 15,000
Prudential Bache Corp.,
5.05%, 5/3/99
(Collateralized by $10,314
U.S. T-Bill, 0.00%, 7/29/99,
market value -- $10,201) 10,000 10,000
Morgan Stanley Dean Witter,
5.04%, 5/3/99
(See Significant Accounting
Policies, Securities Lending
In the Notes to Financial
Statements for collateral
description) 40,000 40,000
Nations Bank,
5.08%, 5/3/99
(See Significant Accounting
Policies, Securities Lending
In the Notes to Financial
Statements for collateral
description) $ 45,000 $ 45,000
Salomon Corp.,
5.04%, 5/3/99
(See Significant Accounting
Policies, Securities Lending
In the Notes to Financial
Statements for collateral
description) 40,000 40,000
Goldman Sachs Group L.P.,
5.04%, 5/3/99
(Collateralized by $11,294
Federated Department
Stores, Inc., 6.30%, 4/1/09,
International Paper Co.,
6.88%, 4/15/29, ProLogis Trust,
7.10%, 4/15/08, Rite Aid Corp.,
7.13%, 1/15/07,
market value -- $11,420) 10,000 10,000
180,000
Total Securities Purchased
With Cash Collateral (Cost $207,443) 207,443
Total Investments (Cost$1,186,176) (a) -- 116.8% 1,423,278
Liabilities in excess of other assets --
(16.8%) (204,920)
TOTAL NET ASSETS -- 100.0% $1,218,358
(a Cost for federal income tax purposes differs from value by
net unrealized appreciation of securities as follows
(amounts in thousands):
Unrealized appreciation $276,272
Unrealized depreciation (39,170)
Net unrealized appreciation $237,102
(b) Non-income producing securities.
(c) All or a portion of this security was loaned as of April 30, 1999.
ADR -- American Depository Receipts
See notes to financial statements.
<PAGE>
The Victory Portfolios Schedules of Investments
Stock Index Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (15.8%)
Associates Corp., N.A.,
4.95%, 5/3/99 $128,725 $128,725
Total Commercial Paper (Cost $128,725) 128,725
Common Stocks (83.4%)
Advertising (0.2%):
Interpublic Group of Cos., Inc. 8,626 669
Omnicom 10,472 759
1,428
Aerospace/Defense (1.2%):
AlliedSignal, Inc. 34,609 2,033
B.F. Goodrich Co. 4,584 182
Boeing Co. 58,268 2,368
General Dynamics Corp. 7,865 553
Lockheed Martin Corp. 24,344 1,048
Northrop Grumman Corp. 4,236 271
Raytheon Co., Class B 20,917 1,469
United Technologies Corp. (d) 14,018 2,031
9,955
Agriculture (0.1%):
Pioneer Hi-Bred International, Inc. 14,875 556
Airlines (0.3%):
AMR Corp. (b) 11,327 790
Delta Air Lines, Inc. 8,799 558
Southwest Airlines Co. 20,880 680
U.S. Airways Group, Inc. (b) 5,430 296
2,324
Aluminum (0.3%):
Alcan Aluminum Ltd. (d) 14,129 449
Alcoa, Inc. 22,790 1,419
Reynolds Metal Co. 3,967 247
2,115
Apparel (0.0%):
Reebok Internnational Ltd. (b)(d) 3,474 66
Russell Corp. 2,225 49
115
Apparel -- Footwear (0.2%):
Liz Claiborne, Inc. 3,975 131
Nike, Inc., Class B 17,554 1,092
VF Corp. 7,444 383
1,606
Automobiles (1.1%):
Ford Motor Co. 75,167 4,806
General Motors Corp. 40,626 $ 3,613
Navistar International Corp. (b) 4,126 216
PACCAR, Inc. 4,809 269
8,904
Automotive Parts (0.2%):
Cummins Engine Co., Inc. 2,579 138
Dana Corp. 10,276 484
Genuine Parts Co. (d) 11,166 335
ITT Industries, Inc. 5,458 196
TRW, Inc. 7,433 312
1,465
Banks (5.5%):
AmSouth Bankcorp 7,415 353
Bank of America Corp. 107,509 7,740
Bank of New York Co. 47,217 1,889
Bank One Corp. 73,044 4,310
Bankers Trust New York Corp. 5,920 533
BB & T Corp. (d) 19,284 770
Chase Manhattan Corp. 52,500 4,344
Comerica, Inc. 9,655 628
First Union Corp. 61,500 3,406
Firstar Corp. 42,864 1,289
Huntington Bancshares, Inc. 13,102 464
J.P. Morgan & Co., Inc. (d) 10,852 1,462
KeyCorp 28,277 875
MBNA Corp. 49,807 1,404
Mellon Bank Corp. 16,209 1,205
Mercantile Bancorporation, Inc. 9,768 557
National City Corp. 20,272 1,455
PNC Bank Corp. (d) 18,677 1,081
Regions Financial Corp. 13,728 518
Republic New York Corp. 6,659 391
SouthTrust Corp. 10,265 409
SunTrust Banks, Inc. 19,909 1,423
Synovus Financial Corp. (d) 16,593 367
U.S. Bancorp (d) 45,271 1,678
Union Planters Corp. 8,540 366
Wachovia Corp. 12,585 1,106
Wells Fargo & Co. 102,126 4,410
44,433
Banks -- Money Centers
Regional (0.5%):
BankBoston Corp. 18,418 902
Fleet Financial Group, Inc. 35,278 1,519
Northern Trust Corp. 6,893 642
<PAGE>
State Street Corp. 9,962 $ 872
Summit Bancorp 10,776 457
4,392
Banks -- Outside Money
Center (0.3%):
Fifth Third Bancorp (d) 16,559 1,188
Providian Financial Corp. 8,790 1,134
2,322
Beverages (2.3%):
Anheuser-Busch Co., Inc. 29,665 2,169
Brown-Forman Corp., Class B 4,228 312
Coca Cola Enterprises, Inc. (d) 24,329 839
Coca-Cola Co. 153,134 10,414
Coors (Adolph) Co. 2,252 120
PepsiCo, Inc 24,787 1,422
18,643
Brokerage Services (1.0%):
Merrill Lynch & Co., Inc. 22,018 1,848
Morgan Stanley, Dean Witter & Co. 35,858 3,557
Schwab (Charles) Corp. 24,887 2,731
8,136
Building Materials (0.1%):
Armstrong World Industries, Inc. 2,464 135
Centex Corp. 3,657 134
Fleetwood Enterprises, Inc. (d) 2,136 53
Kaufman & Broad Home Corp. 2,934 71
Masco Corp. 21,057 618
Owens Corning 3,339 119
Pulte Corp. 2,647 60
1,190
Chemicals -- General (1.6%):
Air Products & Chemicals, Inc. 14,245 670
Dow Chemical Co. 13,740 1,803
E.I. Du Pont de Nemours Co. 69,939 4,938
Eastman Chemical Co. 4,885 272
Englehard Corp. 8,892 171
FMC Corp. (b) 2,036 132
Great Lakes Chemical Corp. 3,637 174
Hercules, Inc. 6,244 236
Mallinckrodt, Inc. 4,391 154
Monsanto Co. 38,890 1,760
Nalco Chemical Co. 4,031 147
PPG Industries, Inc. 10,933 710
Praxair, Inc. 9,793 507
Rohm & Haas Co. (d) 10,411 467
Sigma-Aldrich Corp. (d) 6,246 $ 203
Union Carbide Corp. 8,248 428
W.R. Grace & Co. (b) 4,524 72
12,844
Chemicals -- Specialty (0.0%):
Morton International, Inc. (d) 7,532 304
Commercial Services (0.2%):
Cendant Corp. (b) 51,624 929
Ecolab, Inc. 8,024 337
Paychex Inc. 10,152 518
1,784
Computers & Peripherals (4.4%):
3Com Corp. (b) 22,260 582
Apple Computer, Inc. (b)(d) 8,474 390
Cabletron Systems, Inc. (b) 10,695 101
Compaq Computer Corp. 104,797 2,338
Computer Sciences Corp. 9,837 586
Data General Corp. (b) 3,115 36
Dell Computer Corp. (b)(d) 158,102 6,512
EMC Corp. (b)(d) 31,152 3,394
Gateway, Inc. (b)(d) 9,738 645
Hewlett-Packard Co. 63,052 4,973
International Business
Machines Corp. 57,328 11,992
Seagate Technology, Inc. (b) 15,148 422
Silicon Graphics, Inc. (b) 11,635 148
Sun Microsystems, Inc. (b) 47,866 2,863
Unisys Corp. (b) 16,190 509
35,491
Conglomerates (0.5%):
Corning, Inc. 14,412 825
Crane Co. 4,263 123
Minnesota Mining &
Manufacturing Co. 24,972 2,224
National Service Industries, Inc. 2,552 99
Tenneco, Inc. 10,561 285
Textron, Inc. (d) 9,835 906
4,462
Construction (0.0%):
Fluor Corp. 4,663 155
Foster Wheeler Corp. 2,506 34
189
Consumer Products (1.4%):
American Greetings Corp., Class A 4,361 114
Clorox Co. 7,272 839
Colgate-Palmolive Co. (d) 18,176 1,862
<PAGE>
Fortune Brands, Inc. (d) 10,615 $ 419
Jostens, Inc. 2,175 47
Procter & Gamble Co. 82,481 7,738
11,019
Containers (0.2%):
Ball Corp. (d) 1,897 104
Bemis, Inc. 3,223 113
Crown Cork & Seal, Inc. (d) 7,594 247
Newell Rubbermaid, Inc. (d) 17,436 827
Owens-Illinois, Inc. (b) 9,644 280
Sealed Air Corp. (b)(d) 5,182 315
Tupperware Corp. 3,554 84
1,970
Cosmetics & Related (0.6%):
Alberto Culver Co. 3,542 88
Avon Products, Inc. 16,306 886
Gillette Co. 68,911 3,596
International Flavor & Fragance, Inc. 6,587 260
4,830
Diversified (0.5%):
Tyco International Ltd. 50,687 4,118
Electrical Equipment (2.9%):
Emerson Electric Co. 27,170 1,752
General Electric Co. 203,559 21,476
Johnson Controls, Inc. 5,273 384
Thomas & Betts Corp. (d) 3,493 147
23,759
Electronic & Electrical --
General (2.5%)
Advanced Micro Devices, Inc. (b)(d) 8,985 148
Andrew Corp. (b) 5,146 72
Cisco Systems, Inc. (b)(d) 98,091 11,188
EG&G, Inc. 2,751 86
Harris Corp. 4,927 170
Honeywell, Inc. 7,817 741
KLA-Tencor Corp. (b) 5,455 271
Millipore Corp. 2,708 83
Motorola, Inc. 37,254 2,984
National Semiconductor Corp. (b) 10,376 130
Rockwell International Corp. 11,788 609
Solectron Corp. 15,625 758
Tandy Corp. 6,144 445
Tektronix, Inc. 2,912 71
Texas Instruments, Inc. (d) 24,204 2,471
20,227
Entertainment (0.7%):
Brunswick Corp. 5,708 $ 137
Harrah's Entertainment, Inc. (b) 7,844 173
Hasbro, Inc. 12,190 416
King World Productions, Inc. (b)(d) 4,442 157
Loews Corp. 7,057 516
The Walt Disney Co. (d) 127,707 4,054
5,453
Environmental Control (0.3%):
Waste Management, Inc. 37,181 2,101
Financial & Insurance (0.1%)
MBIA, Inc. 6,177 415
Financial Services (3.7%)
American Express Co. 28,115 3,674
Associates First Capital Corp. 45,224 2,004
Bear Stearns Companies, Inc. 6,918 323
Capital One Financial Corp. 4,073 707
Citigroup, Inc. (d) 140,267 10,556
Countrywide Credit Industries, Inc. 6,944 315
Equifax, Inc. 9,153 329
Fannie Mae 64,364 4,566
Franklin Resources, Inc. (d) 15,706 628
Freddie Mac 42,124 2,643
Golden West Financial Corp. 3,503 351
Household International, Inc. 29,968 1,508
Lehman Brothers Holding, Inc. 7,060 392
SLM Holding Corp. (d) 10,286 439
Washington Mutual, Inc. 36,826 1,514
29,949
Food Distributors (0.6%):
Albertsons, Inc. (d) 15,240 785
American Stores Co. 17,041 538
Great Atlantic & Pacific Tea, Inc. 2,357 72
Kroger Co. (b)(d) 15,904 864
Safeway, Inc. 30,180 1,628
SUPERVALU, Inc. 7,480 156
Sysco Corp. 20,682 614
Winn-Dixie Stores, Inc. 9,220 330
4,987
Food Processing & Packaging (1.5%):
Archer Daniels Midland Co. 36,825 552
Bestfoods 17,739 890
Campbell Soup Co. (d) 27,617 1,132
ConAgra, Inc. 30,373 756
General Mills, Inc. 9,494 694
<PAGE>
H.J. Heinz Co. 22,474 $ 1,049
Hershey Foods Corp. 8,885 468
Kellogg Co. (d) 25,159 931
Quaker Oats Co. 8,457 546
Ralston-Ralston Purina Group (d) 20,398 622
Sara Lee Corp. (d) 56,701 1,262
Unilever N.V. 39,737 2,580
Wm. Wrigley Jr. Co. (d) 7,214 640
12,122
Forest Products --
Lumber & Paper (0.9%):
Boise Cascade Corp. (d) 3,467 140
Champion International Corp. 5,938 325
Fort James Corp. 13,682 520
Georgia Pacific Corp. 5,465 506
International Paper Co. (d) 19,090 1,018
Kimberly-Clark Corp. (d) 33,637 2,061
Louisiana Pacific Corp. 6,746 140
Mead Corp. 6,326 265
Potlatch Corp. 1,786 74
Temple-Inland, Inc. 3,422 236
Union Camp Corp. 4,258 338
Westvaco Corp. 6,275 187
Weyerhauser Co. 12,333 828
Willamette Industries, Inc. 6,888 322
6,960
Funeral Services (0.0%):
Service Corp. International 16,953 352
Health Care (0.2%):
Columbia/HCA Healthcare Corp. 40,099 989
HCR Manor Care, Inc. (b) 6,880 191
Humana, Inc. (b) 10,390 142
1,322
Heavy Machinery (0.4%):
Case Corp. (d) 4,597 159
Caterpillar Tractor, Inc. 22,265 1,433
Deere & Co. 14,805 637
Harnischfeger Industries, Inc. 2,942 29
Ingersoll Rand Co. (d) 10,206 706
McDermott International, Inc. 3,632 105
3,069
Hotels & Motels (0.1%):
Hilton Hotels Corp. 16,187 253
Marriott International, Inc.,
Class A (d) 15,081 631
Mirage Resorts, Inc. (b)(d) 11,173 251
1,135
Household Goods -- Appliances,
Furnishings & Electronics (0.1%):
Maytag Corp. 5,589 $ 383
Whirlpool Corp. (d) 4,722 313
696
Industrial Goods & Services (0.1%):
Dover Corp. (d) 13,850 512
W.W. Grainger, Inc. 5,898 296
808
Insurance (0.1%):
Cincinnati Financial Corp. 10,401 420
Progressive Corp. (d) 4,462 640
1,060
Insurance -- Life (0.1%):
Jefferson Pilot Corp. 6,580 443
Insurance -- Multi-Line (2.3%):
Aetna, Inc. 8,873 778
Allstate Corp. 50,930 1,853
American International Group, Inc. 76,282 8,957
Aon Corp. 10,557 723
CIGNA Corp. 12,818 1,118
Conseco, Inc. 19,900 628
Hartford Financial Services
Group, Inc. 14,491 854
Lincoln National Corp. 6,274 603
Marsh & McLennan Cos., Inc. 15,972 1,223
MGIC Investment Corp. 6,798 330
Provident Companies Inc. 8,401 331
Safeco Corp. 8,457 336
Torchmark Corp. 8,706 298
Transamerica Corp. 7,748 552
18,584
Insurance -- Property, Casualty,
Health (0.3%):
American General Corp. 15,646 1,158
Chubb Corp. 10,115 599
St. Paul Cos., Inc. 14,634 420
UNUM Corp. 8,590 469
2,646
Leisure -- Recreation,
Gaming (0.2%):
Carnival Corp. 36,952 1,524
Machine Tools (0.1%):
Danaher Corp. (d) 8,302 552
Milacron, Inc. 2,367 54
606
<PAGE>
Manufacturing --
Capital Goods (0.2%):
Cooper Industries, Inc. 5,906 $ 286
Illinois Tool Works, Inc. 15,522 1,195
Parker-Hannifin Corp. 6,761 317
1,798
Manufacturing --
Consumer Goods (0.1%)
Eaton Corp. 4,394 403
Mattel, Inc. (d) 17,854 462
865
Manufacturing -- Miscellaneous (0.1%):
Briggs & Stratton Corp. 1,432 94
NACCO Industries, Inc. 476 38
Pall Corp. (d) 7,692 142
Thermo Electron Corp. (b) 9,860 159
433
Media (0.4%):
Media One Group Inc. (b)(d) 37,672 3,073
Medical Services (0.2%):
HEALTHSOUTH Corp. (b) 26,260 353
Tenet Healthcare Corp. (b)(d) 19,220 454
United Healthcare Corp. 11,560 649
1,456
Medical Supplies (0.9%):
Alza Corp., Class A (b)(d) 6,198 208
Bausch & Lomb, Inc. 3,452 259
Baxter International, Inc. 17,733 1,117
Becton Dickinson & Co. 15,468 575
Biomet, Inc. 6,941 285
Boston Scientific Corp. (b)(d) 24,390 1,038
C.R. Bard, Inc. 3,300 162
Guidant Corp. 18,702 1,004
Medtronic, Inc. 36,290 2,610
St. Jude Medical, Inc. (b) 5,228 146
7,404
Medical -- Information
Systems (0.1%):
IMS Health Inc. (d) 19,800 594
Medical -- Wholesale Drug
Distribution (0.1%):
Cardinal Health, Inc. 16,900 1,011
Metals -- Fabrication (0.0%):
Phelps Dodge Corp. 3,567 226
Timken Co. 3,823 85
311
Mining (0.0%):
Asarco, Inc. 2,441 $ 45
Cyprus Amax Minerals Co. 5,649 87
Inco Ltd. 10,308 197
329
Newspapers (0.4%):
Dow Jones & Co., Inc. 5,791 316
Gannett Co., Inc. 17,481 1,237
Knight-Ridder, Inc. (d) 4,829 260
New York Times Co., Class A 11,321 391
Times Mirror Co., Class A 4,509 264
Tribune Co. 7,372 615
3,083
Office Equipment & Supplies
(Non-Computer Related) (0.5%):
Avery Dennison Corp. 7,216 492
Deluxe Corp. 4,997 173
IKON Office Solutions, Inc. (d) 9,135 110
Moore Corp. Ltd. 5,495 55
Pitney Bowes, Inc. 16,924 1,184
Xerox Corp. (d) 40,710 2,392
4,406
Oil & Gas Exploration,
Production & Services (0.6%):
Anadarko Petroleum Corp. 7,469 283
Apache Corp. 6,069 186
Ashland, Inc. 4,620 195
Burlington Resource, Inc. 11,021 508
Coastal Corp. 13,201 505
Columbia Gas System, Inc. 5,158 248
Helmerich & Payne, Inc. 3,099 80
Kerr-McGee Corp. 5,336 226
Occidental Petroleum Corp. 21,472 433
Oneok, Inc. 1,939 54
Rowan Cos., Inc. (b) 5,160 83
Sunoco, Inc. 5,811 208
Union Pacific Resources Group, Inc. 15,580 218
USX -- Marathon Group 19,108 597
Williams Cos., Inc. 26,553 1,255
5,079
Oil-Integrated Companies (4.3%):
Amerada Hess Corp. 5,614 320
Atlantic Richfield Co. 20,251 1,700
Chevron Corp. 40,500 4,040
Exxon Corp. 151,029 12,545
Mobil Corp. 48,408 5,071
<PAGE>
Phillips Petroleum Co. 15,805 $ 800
Royal Dutch Petroleum Co., 133,205 7,817
Texaco, Inc. 33,180 2,082
Unocal Corp. 14,983 623
34,998
Oilfield Services & Equipment (0.5%):
Baker Hughes, Inc. 20,295 606
Halliburton Co. 27,283 1,163
Schlumberger Ltd. (d) 33,886 2,165
3,934
Paint, Varnishes, Enamels (0.0%):
Sherwin-Williams Co. 10,672 332
Pharmaceuticals (7.7%):
Abbott Laboratories 94,275 4,566
Allergan, Inc. 4,062 365
American Home Products Corp. 81,876 4,994
Amgen, Inc. (b) 31,596 1,941
Bristol-Myers Squibb Co. 123,442 7,846
Eli Lilly & Co. 68,314 5,030
Johnson & Johnson, Inc. 83,532 8,144
McKesson HBOC, Inc. 16,338 572
Merck & Co., Inc. 147,979 10,396
Pfizer, Inc. 80,620 9,276
Pharmacia & Upjohn, Inc. 31,537 1,766
Schering-Plough Corp. 91,293 4,411
Warner-Lambert Co. (d) 50,988 3,464
Watson Pharmaceuticals, Inc. (b) 5,895 239
63,010
Photography (0.2%):
Eastman Kodak Co. 20,122 1,502
Polaroid Corp. (d) 2,724 56
1,558
Pollution Control
Services & Equipment (0.0%):
Browning-Ferris Industries, Inc. 9,823 392
Precision Instruments
& Related (0.0%):
Perkin-Elmer Corp. 3,065 331
Primary Metal & Mineral
Production (0.2%):
Barrick Gold Corp. 23,147 467
Battle Mountain Gold Co. 14,267 40
Freeport-McMoRan
Copper & Gold, Inc., Class B 10,276 157
Homestake Mining Co. 16,141 154
Newmont Mining Corp. 10,380 $ 250
Placer Dome, Inc. (d) 15,520 219
1,287
Publishing (0.8%):
Dun & Bradstreet (d) 10,262 377
McGraw-Hill Cos., Inc. 12,218 675
Meredith Corp. 3,220 118
R.R. Donnelley & Sons Co. 8,344 295
Time Warner, Inc. (d) 76,220 5,336
6,801
Radio & Television (0.8%):
CBS Corp. (d) 43,831 1,997
Clear Channel Communications,
Inc. (b) 16,351 1,136
Comcast Corp., Class A
Special Shares 22,970 1,509
Viacom, Inc., Class B (b) 43,182 1,765
6,407
Railroads (0.4%):
Burlington Northern Santa Fe 29,119 1,067
CSX Corp. 13,483 664
Norfolk Southern Corp. 23,538 769
Union Pacific Corp. 15,355 921
3,421
Restaurants (0.6%):
Darden Restaurants, Inc. (d) 8,558 191
McDonald's Corp. (d) 84,056 3,561
Tricon Global Restaurants (b) 9,468 610
Wendy's International, Inc. 7,724 209
4,571
Retail (2.3%):
Costco Cos., Inc. (b)(d) 13,561 1,098
Dayton Hudson Corp. 27,384 1,843
Dollar General Corp. (d) 10,994 385
Fred Meyer, Inc. (b) 9,610 520
K-Mart Corp. (b)(d) 30,598 455
Kohl Corp. (b) 9,819 652
Staples, Inc. (b) 28,635 859
Wal-Mart Stores, Inc. (d) 276,244 12,708
18,520
Retail -- Department Stores (0.5%):
Consolidated Stores Corp. (b)(d) 6,797 234
Dillard's, Inc., Class A (d) 6,630 184
Federated Department
Stores, Inc. (b)(d) 13,026 608
Harcourt General, Inc. (d) 4,371 208
<PAGE>
J.C. Penney Co., Inc. 16,371 $ 747
May Department Stores Co. 21,751 866
Nordstrom, Inc. (d) 8,825 311
Sears, Roebuck & Co. 23,780 1,093
4,251
Retail -- Drug Stores (0.4%):
CVS Corp. 24,188 1,152
Longs Drug Stores Corp. 2,394 82
Rite Aid Corp. 16,035 374
Walgreen Co. 62,018 1,667
3,275
Retail -- Specialty Stores (1.4%):
AutoZone, Inc. (b)(d) 9,318 280
Circuit City Stores, Inc. (d) 6,228 383
Home Depot, Inc. (d) 91,575 5,488
Limited, Inc. 14,058 615
Lowe's Cos., Inc. 22,842 1,205
Pep Boys -- Manny, Moe & Jack (d) 3,256 47
The Gap, Inc. 35,412 2,357
TJX Cos., Inc. 20,076 669
Toys "R" Us, Inc. (b)(d) 15,594 339
11,383
Rubber & Rubber Products (0.1%):
Cooper Tire & Rubber Co. (d) 4,664 102
Goodyear Tire & Rubber Co. (d) 9,677 554
656
Semiconductors (1.8%):
Applied Materials, Inc. (b) 22,939 1,230
Intel Corp. 207,110 12,673
LSI Logic Corp. (b)(d) 8,787 299
Micron Technology, Inc. (b) 15,385 571
14,773
Software & Computer
Services (5.8%):
Adobe Systems, Inc. 3,783 240
America Online, Inc. (b)(d) 63,822 9,111
Ascend Communications, Inc. (b) 13,466 1,301
Autodesk, Inc. 3,675 109
Automatic Data Processing, Inc. 38,269 1,703
BMC Software, Inc. (b)(d) 14,639 630
Ceridian Corp. (b) 8,887 325
Computer Associates International, Inc. 33,467 1,429
Compuware Corp. (b) 22,830 556
Electronic Data Systems Corp. 30,587 1,644
First Data Corp. 27,477 1,166
Microsoft Corp. (b) 313,518 25,493
Novell, Inc. (b) 20,971 $ 467
Oracle Corp. (b) 89,427 2,420
Parametric Technology Corp. (b) 16,610 217
Peoplesoft, Inc. (b)(d) 14,464 198
Shared Medical Systems Corp. 1,637 89
47,098
Steel (0.1%):
Allegheny Teledyne, Inc. 12,178 272
Bethlehem Steel Corp. (b) 8,046 73
Nucor Corp. 5,440 320
USX -- U.S. Steel Group, Inc. 5,487 166
Worthington Industries, Inc. (d) 5,745 79
910
Tax Return Preparation (0.0%):
H&R Block, Inc. 6,064 292
Telecommunications (0.3%):
Frontier Corp. 10,617 586
Nextel Communications (b) 17,845 731
Scientific-Atlanta, Inc. 4,690 149
Sprint Corp. (PCS Group) 27,315 1,157
2,623
Telecommunications -- Equipment (1.4%):
General Instrument Corp. (b) 10,391 379
Lucent Technologies, Inc. (d) 164,204 9,873
Tellabs, Inc. (b) 12,058 1,321
11,573
Textile Manufacturing (0.0%):
Fruit of the Loom Ltd. (b) 4,479 48
Springs Industries, Inc., Class A 1,098 41
89
Tobacco & Tobacco Products (0.8%):
Philip Morris Cos., Inc. 151,243 5,303
RJR Nabisco Holdings Corp. 20,163 519
UST, Inc. 11,543 322
6,144
Tools & Hardware
Manufacturing (0.1%):
Black & Decker Corp. (d) 5,458 310
Snap-on, Inc. 3,624 118
Stanley Works 5,517 168
596
Transportation (0.2%):
FDX Corp. (b) 9,160 1,031
Kansas City Southern
Industries, Inc. (d) 6,780 404
1,435
<PAGE>
Transportation Leasing
& Trucking (0.0%):
Ryder Systems, Inc. 4,412 $ 116
Transportation Services (0.0%):
Laidlaw, Inc. 20,471 129
Utilities -- Electric (1.7%):
Ameren Corporation 8,517 330
American Electric Power Co. (d) 11,878 492
Carolina Power & Light Co. 9,394 379
Central & South West Corp. (d) 13,198 327
CINergy Corp. 9,844 293
Consolidated Edison Co.
of New York, Inc. 14,475 658
Detroit Edison Co. (d) 9,018 368
Dominion Resources, Inc. (d) 12,126 499
Duke Energy Corp. 22,458 1,259
Edison International 21,894 536
Entergy Corp 15,306 478
FirstEnergy Corp. 14,716 437
FPL Group, Inc. 11,213 632
New Century Engergies, Inc. 7,095 248
Niagara Mohawk Holdings, Inc. (b) 11,631 156
Northern States Power Co. 9,471 228
PacifiCorp 18,463 308
Peco Energy Co. 13,908 660
PG&E Corp. 23,741 737
PP&L Resources, Inc. 9,391 262
Public Service Enterprise Group 13,861 554
Raychem Corp. 4,809 127
Reliant Energy, Inc. 17,658 500
Southern Co. 43,281 1,172
Texas Utilities Co. 17,525 697
The AES Corp. (b) 11,193 560
Unicom Corp. 13,481 523
13,420
Utilities -- Electric & Gas (0.1%):
Baltimore Gas & Electric Co. 9,265 261
CMS Energy Corp. 6,440 283
GPU, Inc. 7,943 303
847
Utilities -- Gas (0.3%):
Consolidated Natural Gas Co. 5,953 354
Eastern Enterprises 1,363 49
Enron Corp. 21,755 1,637
NICOR, Inc. 2,931 107
Peoples Energy Corp. 2,158 81
Sempra Energy (d) 14,898 $ 309
Sonat, Inc. (d) 6,830 244
2,781
Utilities -- Telecommunications (7.1%):
AirTouch Communications, Inc. (b) 35,510 3,316
ALLTEL Corp. 17,083 1,152
Ameritech Corp. 68,270 4,672
AT&T Corp. (d) 195,493 9,871
Bell Atlantic Corp. 96,428 5,557
BellSouth Corp. 121,135 5,421
Century Telephone Enterprises, Inc. 8,535 344
GTE Corp. 59,907 4,010
MCI Worldcom, Inc. (b) 113,893 9,339
Nortel Networks Corp. 41,224 2,811
SBC Communications, Inc. 121,509 6,805
Sprint Corp. (FON Group) (d) 27,757 2,847
U. S. West, Inc. 31,258 1,635
57,780
Total Common Stocks (Cost $413,062) 678,388
U.S. Treasury Bills (0.9%)
4.36%, 6/17/99 (c) $ 7,350 7,310
Total U.S. Treasury Bills (Cost $7,308) 7,310
Securities Purchased With Cash Collateral (11.3%)
Short Term Securities (0.9%):
General American
Funding Agreement,
5.10%, 3/29/00 3,448 3,448
AIM Short Term Prime
Money Market Fund 1,515 1,515
AIM Liquid Assets
Money Market Fund 2,114 2,114
7,077
Repurchase Agreements (10.4%):
Nations Bank, 5.08%, 5/3/99
(See Significant Accounting
Policies, Securities Lending in
the Notes to Financial Statements
for collateral description) 25,000 25,000
Goldman Sachs Group L.P.,
5.04%, 5/3/99
(See Significant Accounting
Policies, Securities Lending in
the Notes to Financial Statements
for collateral description) 20,000 20,000
<PAGE>
Merrill Lynch, 4.97%, 5/3/99
(Collateralized by $20,354
Pacific Finance, 0.00%, 5/26/99,
Granger Inc., 0.00%, 5/26/99,
market value $20,882) $ 20,000 $ 20,000
Morgan Stanley Dean Witter,
5.04%, 5/3/99
(Collateralized by $19,000
Southwestern Electric, 7.00%,
7/1/07, Proctor & Gamble Co.,
9.36%, 1/1/21, Republic of Italy,
4.94%, 6/28/01,
market value $20,819) 20,000 20,000
85,000
Total Securities Purchased
With Cash Collateral (Cost $92,077) 92,077
Total Investments (Cost $641,172) (a) -- 111.4% 906,500
Liabilities in excess of other assets -- (11.4%) (93,191)
TOTAL NET ASSETS -- 100.0% $813,309
(a) Cost for federal income tax purposes differs from value by net
unrealized appreciation of securities as follows (amounts in
thousands): Unrealized appreciation $276,906 Unrealized depreciation
(9,165) Net unrealized appreciation $267,741
(b) Non-income producing securities.
(c) Serves as collateral for futures contracts.
(d) All or a portion of this security was loaned as of April 30, 1999.
Number of Market
Contracts Value
Futures Contracts
S&P 500 Index,
face amount $132,239
expiring June 18, 1999 403 $134,652
Total Futures Contracts (Cost $132,239) $134,652
See notes to financial statements.
<PAGE>
The Victory Portfolios Schedules of Investments
Growth Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (1.4%)
Associates Corp., N.A.,
4.95%, 5/3/99 $ 5,001 $ 5,001
Total Commercial Paper (Cost $5,001) 5,001
Common Stocks (96.8%)
Aerospace/Defense (2.7%):
AlliedSignal, Inc. 77,400 4,547
United Technologies Corp. (c) 37,200 5,390
9,937
Banks (4.9%):
Bank of America Corp. (c) 66,100 4,759
Mellon Bank Corp. 74,600 5,544
Wells Fargo & Co. (c) 163,700 7,070
17,373
Beverages (1.9%):
Anheuser-Busch Co., Inc. (c) 39,101 2,859
Coca-Cola Co. 38,500 2,618
PepsiCo, Inc. 41,400 1,529
7,006
Chemicals -- General (2.2%):
Air Products & Chemicals, Inc. 90,200 4,239
E.I. Du Pont de Nemours Co. 54,200 3,828
8,067
Computers & Peripherals (4.5%):
Hewlett-Packard Co. 36,100 2,847
International Business
Machines Corp. 50,300 10,522
Sun Microsystems, Inc. (b) 45,000 2,692
16,061
Conglomerates (1.1%):
Textron, Inc. 45,000 4,146
Consumer Products (2.5%):
Colgate-Palmolive Co. 34,300 3,514
Procter & Gamble Co. 60,300 5,657
9,171
Containers (1.1%):
Newell Rubbermaid, Inc. 84,400 4,004
Cosmetics & Related (1.7%):
Avon Products, Inc. 90,800 4,931
Gillette Co. (c) 25,500 1,331
6,262
Electrical Equipment (5.4%):
Emerson Electric Co. 91,200 5,882
General Electric Co. 127,400 13,441
19,323
Electronic & Electrical -- General (3.9%):
Cisco Systems, Inc. (b) 83,200 $ 9,490
Motorola, Inc. 57,800 4,631
14,121
Entertainment (0.8%):
Hasbro, Inc. 88,200 3,010
Environmental Control (1.0%):
Waste Management, Inc. 63,300 3,576
Financial Services (4.1%):
Citigroup, Inc. (c) 87,200 6,562
Fannie Mae 90,000 6,384
Franklin Resources, Inc. (c) 48,000 1,920
14,866
Food Processing & Packaging (3.2%):
ConAgra, Inc. 162,300 4,037
General Mills, Inc. 67,000 4,899
Sara Lee Corp. 63,000 1,402
Unilever N.V. 21,000 1,364
11,702
Forest Products --
Lumber & Paper (1.1%):
Mead Corp. 94,500 3,951
Insurance -- Multi-Line (3.0%):
American International Group, Inc. 83,000 9,748
Everest Reinsurance Holdings, Inc. 36,200 1,097
10,845
Manufacturing --
Capital Goods (0.5%):
Cooper Industries, Inc. 35,200 1,703
Medical Supplies (1.1%):
Medtronic, Inc. 55,300 3,978
Newspapers (0.8%):
Gannett Co., Inc. 40,800 2,889
Oil & Gas Exploration,
Production & Services (0.4%):
Anadarko Petroleum Corp. 36,200 1,373
Oil-Integrated Companies (3.2%):
Chevron Corp. (c) 17,600 1,756
Conoco, Inc., Class A 113,625 3,082
Mobil Corp. 64,800 6,787
11,625
Oilfield Services & Equipment (1.2%):
Schlumberger Ltd. 69,500 4,439
Pharmaceuticals (13.4%):
Abbott Laboratories 149,300 7,232
American Home Products Corp. 98,200 5,990
Bristol-Myers Squibb Co. 83,400 5,301
Eli Lilly & Co. 47,500 3,497
<PAGE>
Johnson & Johnson, Inc. (c) 72,400 $ 7,059
McKesson HBOC, Inc. 51,200 1,792
Merck & Co., Inc. 53,600 3,765
Pfizer, Inc. 74,000 8,515
Schering-Plough Corp. 104,300 5,039
48,190
Publishing (1.1%):
Time Warner, Inc. (c) 56,800 3,976
Radio & Television (0.9%):
Viacom, Inc., Class B (b) (c) 81,800 3,344
Retail (3.5%):
Dayton Hudson Corp. 91,400 6,152
Wal-Mart Stores, Inc. 143,000 6,578
12,730
Retail -- Drug Stores (1.1%):
Walgreen Co. 149,000 4,004
Retail -- Specialty Stores (2.3%):
AutoZone, Inc. (b) (c) 46,200 1,386
Home Depot, Inc. (c) 117,900 7,067
8,453
Semiconductors (3.4%):
Altera Corp. (b) 32,300 2,334
Applied Materials, Inc. (b) 23,700 1,271
Intel Corp. 144,400 8,835
12,440
Software & Computer
Services (6.5%):
Automatic Data Processing, Inc. (c) 133,100 5,923
Microsoft Corp. (b) 155,400 12,635
Oracle Corp. (b) (c) 168,000 4,547
23,105
Telecommunications -- Equipment (1.7%):
Lucent Technologies, Inc. (c) 100,000 6,013
Tobacco & Tobacco Products (0.9%):
Philip Morris Cos., Inc. 97,500 3,419
Utilities -- Gas (1.3%):
Enron Corp. 62,600 4,711
Utilities --
Telecommunications (8.4%):
AirTouch
Communications, Inc. (b) (c) 27,300 2,549
Ameritech Corp. 75,700 5,181
AT&T Corp. (c) 105,000 5,303
GTE Corp. 58,200 3,896
MCI Worldcom, Inc. (b) 85,300 $ 6,994
SBC Communications, Inc. (c) 111,300 6,233
30,156
Total Common Stocks (Cost $208,809) 349,969
Securities Purchased With Cash Collateral (5.1%)
Short Term Securities (1.0%):
General American Funding
Agreement, 5.10%, 3/29/00 $ 1,665 1,665
AIM Short Term Prime
Money Market Fund 731 731
AIM Liquid Assets
Money Market Fund 1,021 1,021
3,417
Repurchase Agreements (4.1%):
Merrill Lynch,
4.97%, 5/3/99
(See Significant Accounting
Policies, Securities Lending
in the Notes to Financial
Statements for collateral
description) 5,000 5,000
Goldman Sachs Group L.P.,
5.04%, 5/3/99
(Collateralized by $11,002
AT&T Corp., 7.50%, 6/1/06,
GTE Northwest Inc.,
6.30%, 6/1/10,
Heller Financial, Inc.,
6.44%, 10/6/02,
M&I Capital Trust,
7.65%, 12/1/26,
market value -- $11,492) 10,000 10,000
15,000
Total Securities Purchased
With Cash Collateral (Cost $18,417) 18,417
Total Investments (Cost $232,227) (a) -- 103.3% 373,387
Liabilities in excess of other assets -- (3.3%) (11,851)
TOTAL NET ASSETS -- 100.0% $361,536
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $143,848
Unrealized depreciation (2,688)
Net unrealized appreciation $141,160
(b) Non-income producing securities.
(c) All or a portion of this security was loaned as of April 30, 1999.
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
The Victory Portfolios April 30, 1999
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
Diversified Stock
Value Lakefront Stock Index Growth
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (Cost $417,304;
$1,023; $1,006,176; $556,172 & $217,227) $638,600 $1,333 $1,243,278 $821,500 $358,387
Repurchase agreements at amortized cost 30,000 -- 180,000 85,000 15,000
Total 668,600 1,333 1,423,278 906,500 373,387
Cash -- -- 468 4 --
Interest and dividends receivable 594 1 838 562 321
Receivable for capital shares issued 45 -- 484 82 59
Receivable from brokers for investments sold 986 -- 11,301 112 6,577
Prepaid expenses and other assets 21 20 71 31 32
Total Assets 670,246 1,354 1,436,440 907,291 380,376
LIABILITIES:
Payable for capital shares redeemed 22 -- 406 9 51
Payable to brokers for investments purchased 2,983 -- 9,128 384 --
Payable for return of collateral received 55,170 -- 207,443 92,077 18,417
Payable for net variation margin on open
futures contracts -- -- -- 1,112
Payable for organization cost -- 9 -- -- --
Accrued expenses and other payables:
Investment advisory fees 467 1 593 323 272
Administration fees 9 -- 16 -- 6
Custodian fees 10 2 22 39 5
Accounting fees 1 1 4 4 1
Transfer agent fees 6 2 117 14 4
Shareholder service fees 111 -- -- -- 69
Shareholder service fees -- Class A -- -- 204 -- --
Shareholder service and 12b-1 fees -- Class B -- -- 55 -- --
12b-1 fees -- Class G -- -- 34 --
Other 17 -- 60 20 15
Total Liabilities 58,796 15 218,082 93,982 18,840
NET ASSETS:
Capital 351,120 991 862,385 523,750 205,655
Undistributed (distributions in excess of)
net investment income (263) 1 (419) 895 (350)
Net unrealized appreciation/depreciation
from investments 221,296 311 237,102 267,741 141,160
Accumulated undistributed net realized
gains from investment transactions 39,297 36 119,290 20,923 15,071
Net Assets $611,450 $1,339 $1,218,358 $813,309 $361,536
Net Assets
Class A $1,059,591
Class B 70,809
Class G 87,958
Total $1,218,358
Outstanding units of beneficial
interest (shares)
Class A 57,530
Class B 3,919
Class G 4,776
Total 32,140 105 66,225 35,332 15,089
Net asset value
Redemption price per share $ 19.02 $12.71 $ 23.02 $ 23.96
Redemption price per share -- Class A $ 18.42
Offering and redemption price per
share -- Class G $ 18.42
Offering and redemption price per
share -- Class B<F1> $ 18.07
Maximum sales charge 5.75% 5.75% 5.75% 5.75% 5.75%
Maximum offering price per share
(100%/(100%-maximum sales charge)
of net asset value adjusted
to nearest cent) $ 20.18 $13.49 $ 24.42 $ 25.42
Maximum offering price per share
(100%/(100%-maximum sales
charge) of net asset value
adjusted to nearest cent) -- Class A $ 19.54
<FN>
<F1> Redemption price per Class B share varies based on length of time held.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statements of Operations
The Victory Portfolios For the Six Months Ended April 30, 1999
(Amounts in Thousands) (Unaudited)
Diversified Stock
Value Lakefront Stock Index Growth
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest income $ 169 $ -- $ 580 $ 3,152 $ 115
Dividend income 4,141 10 6,984 3,873 1,753
Securities Lending 38 -- 116 8 1
Foreign tax withholding -- -- (39) (3) --
Total Income 4,348 10 7,641 7,030 1,869
Expenses:
Investment advisory fees 2,796 6 3,401 2,180 1,588
Administration fees 380 1 627 467 235
Shareholder service fees 697 1 -- -- 394
Shareholder service fees -- Class A -- -- 1,118 -- --
Shareholder service fees and 12b-1
fees -- Class B -- -- 299 -- --
12b-1 fees -- Class G -- -- 34 -- --
Accounting fees 48 17 79 81 37
Custodian fees 57 1 111 98 37
Legal and audit fees 29 1 65 38 16
Amortization of organization costs -- 3 -- -- --
Trustees' fees and expenses 7 -- 14 9 4
Transfer agent fees 17 4 254 40 18
Registration and filing fees 7 7 23 17 13
Printing fees -- 2 33 2 1
Other 33 -- 60 40 16
Total Expenses 4,071 43 6,118 2,972 2,359
Expenses voluntarily reduced (158) (3) (304) (916) (144)
Expenses before reimbursement
from distributor 3,913 40 5,814 2,056 2,215
Expenses reimbursed by
distributor -- (37) -- -- --
Net Expenses 3,913 3 5,814 2,056 2,215
Net Investment Income (Loss) 435 7 1,827 4,974 (346)
Realized/Unrealized Gains
(Losses) from Investments and
Foreign Currencies:
Net realized gains (losses)
from investment transactions 39,323 37 119,535 34,886 15,084
Change in unrealized
appreciation/depreciation
from investments 67,365 240 110,700 100,234 42,437
Net realized/unrealized gains
(losses) from investments
and foreign currencies 106,688 277 230,235 135,120 57,521
Change in net assets resulting
from operations $107,123 $ 284 $232,062 $140,094 $57,175
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
Value Lakefront Diversified
Fund Fund Stock Fund
Six Six Six
Months Year Months Year Months Year
Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, April 30, October 31,
1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C><C>
From Investment Activities:
Operations:
Net investment income $ 435 $ 2,767 $ 7 $ 14 $ 1,827 $ 5,560
Net realized gains/(losses) from
investment transactions 39,323 86,242 37 145 119,535 198,757
Net change in unrealized
appreciation/depreciation
from investments 67,365 3,941 240 (71) 110,700 (25,092)
Change in net assets resulting
from operations 107,123 92,950 284 88 232,062 179,225
Distributions to Shareholders:
From net investment income (698) (2,951) (7) (15) -- --
Class A -- -- -- -- (2,332) (5,598)
In excess of net investment income -- -- -- -- -- --
From net realized gains from
investment transactions (86,132) (39,042) (145) (21) (198,727) (90,033)
Change in net assets from
distributions to shareholders (86,830) (41,993) (152) (36) (201,059) (95,631)
Capital Transactions:
Proceeds from shares issued 49,749 61,756 55 69 156,349 272,765
Proceeds from shares issued
in connection with acquisition -- -- -- -- 60,016 86,317
Dividends reinvested 80,846 38,868 64 18 167,392 73,238
Cost of shares redeemed (56,751) (106,315) (35) (271) (180,522) (324,262)
Change in net assets from
capital transactions 73,844 (5,691) 84 (184) 203,235 108,058
Change in net assets 94,137 45,266 216 (132) 234,238 191,652
Net Assets:
Beginning of period 517,313 472,047 1,123 1,255 984,120 792,468
End of period $611,450 $ 517,313 $ 1,339 $ 1,123 $1,218,358 $984,120
Share Transactions:
Issued 2,829 3,424 5 6 9,128 16,693
Issued in connection
with acquisition -- -- -- -- 4,456 4,725
Reinvested 5,046 2,383 6 1 10,909 4,406
Redeemed (3,241) (5,953) (3) (21) (10,515) (18,215)
Change in shares 4,634 (146) 8 (14) 13,978 7,609
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Stock Index Growth
Fund Fund
Six Six
Months Year Months Year
Ended Ended Ended Ended
April 30, October 31, April 30, October 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 4,974 $ 10,611 $ (346) $ (281)
Net realized gains/(losses) from
investment transactions 34,886 47,395 15,084 22,291
Net change in unrealized appreciation/
depreciation from investments 100,234 51,833 42,437 31,511
Change in net assets resulting
from operations 140,094 109,839 57,175 53,521
Distributions to Shareholders:
From net investment income (5,123) (10,250) -- --
In excess of net investment income -- -- -- (48)
From net realized gains from
investment transactions (61,389) (27,890) (22,258) (12,887)
Change in net assets from
distributions to shareholders (66,512) (38,140) (22,258) (12,935)
Capital Transactions:
Proceeds from shares issued 103,192 188,176 77,477 72,169
Proceeds from shares issued in
connection with acquisition -- 46,866 -- --
Dividends reinvested 60,681 37,415 18,992 11,125
Cost of shares redeemed (51,293) (182,024) (39,326) (39,937)
Change in net assets from
capital transactions 112,580 90,433 57,143 43,357
Change in net assets 186,162 162,132 92,060 83,943
Net Assets:
Beginning of period 627,147 465,015 269,476 185,533
End of period $813,309 $ 627,147 $361,536 $269,476
Share Transactions:
Issued 4,798 9,549 3,375 3,548
Issued in connection with acquisition -- 2,272 -- --
Reinvested 3,107 2,000 936 635
Redeemed (2,400) (8,801) (1,688) (2,017)
Change in shares 5,505 5,020 2,623 2,166
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Value Fund
Six
Months Year Year Year Year December 3,
Ended Ended Ended Ended Ended 1993 to
April 30, October 31, October 31, October 31, October 31, October 31,
1999 1998 1997 1996 1995<F5> 1994<F2>
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 18.81 $ 17.07 $ 14.18 $ 11.87 $ 10.13 $ 10.00
Investment Activities
Net investment income 0.01 0.09 0.15 0.20 0.27 0.21
Net realized and unrealized
gains (losses) from investments 3.35 3.16 3.57 2.65 1.92 0.11
Total from
Investment Activities 3.36 3.25 3.72 2.85 2.19 0.32
Distributions
Net investment income (0.02) (0.10) (0.16) (0.20) (0.27) (0.19)
In excess of net investment income -- -- -- -- (0.01) --
Net realized gains (3.13) (1.41) (0.67) (0.34) (0.17) --
Total Distributions (3.15) (1.51) (0.83) (0.54) (0.45) (0.19)
Net Asset Value, End of Period $ 19.02 $ 18.81 $ 17.07 $ 14.18 $ 11.87 $ 10.13
Total Return (excludes sales charges) 21.04%<F3> 20.46% 27.24% 24.66% 22.28% 3.27%<F3>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $611,450 $517,313 $472,047 $382,083 $295,871 $188,184
Ratio of expenses to
average net assets 1.40%<F4> 1.34% 1.32% 1.33% 0.99% 0.92%<F4>
Ratio of net investment income to
average net assets 0.15%<F4> 0.54% 0.93% 1.56% 2.55% 2.32%<F4>
Ratio of expenses to average
net assets<F1> 1.45%<F4> 1.46% <F6> 1.35% 1.30% 1.48%<F4>
Ratio of net investment income to
average net assets<F1> 0.10<F4> 0.42% <F6> 1.54% 2.24% 1.76%<F4>
Portfolio turnover 17% 40% 25% 28% 23% 39%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not
occurred, the ratios would have been as indicated.
<F2> Period from commencement of operations.
<F3> Not annualized.
<F4> Annualized.
<F5> Effective June 5, 1995, the Victory Equity Income Portfolio merged into the Value Fund. Financial
highlights for the periods prior to June 5, 1995 represent the Value Fund.
<F6> There were no voluntary fee reductions during the period.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Lakefront Fund
Six March 3,
Months Year 1997
Ended Ended through
April 30, October 31, October 31,
1999 1998 1997<F2>
(Unaudited)
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $11.52 $11.29 $10.00
Investment Activities
Net investment income 0.06 0.13 0.12
Net realized and unrealized gains
(losses) from investments 2.63 0.43 1.27
Total from Investment Activities $ 2.69 $ 0.56 $ 1.39
Distributions
Net investment income (0.06) (0.14) (0.10)
Net realized gains (1.44) (0.19) --
Total Distributions (1.50) (0.33) (0.10)
Net Asset Value, End of Period $12.71 $11.52 $11.29
Total Return (excludes sales charges) 26.26%<F3> 5.05% 13.87%<F3>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $1,339 $1,123 $1,255
Ratio of expenses to average net assets 0.50%<F4> 0.32% 0.00%<F4>
Ratio of net investment income
to average net assets 1.15%<F4> 1.14% 1.67%<F4>
Ratio of expenses to average net assets<F1> 7.14%<F4> 6.45% 7.27%<F4>
Ratio of net investment income
to average net assets<F1> (5.49)%<F4> (4.99)% (5.60)% <F4>
Portfolio turnover 18% 36% 36%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or reimbursed. If such voluntary fee
reductions and/or reimbursements had not occurred, the ratios would have been as indicated.
<F2> Period from commencement of operations.
<F3> Not annualized.
<F4> Annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
The Victory Portfolios Financial Highlights
(Continued on Next Page)
<CAPTION>
Diversified Stock Fund
Class A Shares
Six
Months Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
April 30, October 31, October 31, October 31, October 31, October 31,
1999 1998<F5> 1997 1996<F2> 1995 1994
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 18.85 $ 17.76 $ 15.75 $ 13.62 $ 12.68 $ 13.39
Investment Activities
Net investment income (loss) 0.03 0.11 0.16 0.20 0.27 0.25
Net realized and unrealized
gains (losses) from investments 3.39 3.07 3.84 3.21 2.33 0.64
Total from Investment Activities 3.42 3.18 4.00 3.41 2.60 0.89
Distributions
Net investment income (0.04) (0.11) (0.16) (0.19) (0.27) (0.23)
In excess of net investment income -- -- -- -- (0.01) --
Net realized gains (3.81) (1.98) (1.83) (1.09) (1.38) (1.37)
Total Distributions (3.85) (2.09) (1.99) (1.28) (1.66) (1.60)
Net Asset Value, End of Period $ 18.42 $ 18.85 $ 17.76 $ 15.75 $ 13.62 $ 12.68
Total Return (excludes sales charges) 22.32%<F7> 19.60% 27.96% 27.16% 23.54% 7.39%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $1,059,591 $933,158 $762,270 $571,153 $409,549 $263,227
Ratio of expenses to
average net assets<F8> 1.06%<F3> 1.02% 1.03% 1.05% 0.92% 0.89%
Ratio of net investment income
(loss) to average net assets <F8> 0.41%<F3> 0.64% 0.97% 1.40% 2.11% 2.06%
Ratio of expenses to
average net assets<F1> 1.12%<F3> 1.13% <F4> 1.08% 0.95% 1.10%
Ratio of net investment income
(loss) to average net assets<F1> 0.35%<F3> 0.53% <F4> 1.37% 2.07% 1.86%
Portfolio turnover <F6> 47% 84% 63% 94% 75% 104%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
<F2> Effective March 1, 1996, the Fund designated the existing shares as Class A Shares and
commenced offering Class B Shares.
<F3> Annualized.
<F4> There were no voluntary fee reductions during the period.
<F5> Effective March 16, 1998, the SBSF Fund merged into the Victory Diversified Stock Fund.
Financial highlights for the period prior to March 16, 1998 represent the Victory
Diversified Stock Fund.
<F6> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued.
<F7> Not Annualized.
<F8> On March 26, 1999, the adviser agreed to waive its management fee or to reimburse expenses,
as allowed by law, to the extent necessary to maintain the net operating expenses of the
Class G shares of the Fund at a maximum of 1.44% until at least April 1, 2001. The Adviser
has also agreed to waive its management fee for Class A and Class B shares to
the same extent the fee is waived for Class G shares until at least April 1, 2001.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Financial Highlights -- continued
<TABLE>
<CAPTION>
Diversified Stock Fund
Class G
Class B Shares Shares
Six March 1, March 26,
Months Year Year 1996 1999
Ended Ended Ended through through
April 30, October 31, October 31, October 31, April 30,
1999 1998<F6> 1997 1996<F2> 1999<F8><F9>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 18.60 $ 17.62 $ 15.71 $14.18 $ 17.14
Investment Activities
Net investment income (loss) (0.01) (0.04) (0.06) 0.07 (0.01)
Net realized and unrealized
gains (losses) from investments 3.29 3.00 3.85 1.57 1.29
Total from Investment Activities 3.28 2.96 3.79 1.64 1.28
Distributions
Net investment income -- -- -- (0.07) --
In excess of net investment income -- -- (0.05) (0.04) --
Net realized gains (3.81) (1.98) (1.83) -- --
Total Distributions (3.81) (1.98) (1.88) (0.11) --
Net Asset Value, End of Period $ 18.07 $ 18.60 $ 17.62 $15.71 $ 18.42
Total Return (excludes sales charges) 21.74%<F10> 18.34% 26.48% 26.61%<F3> 0.06%<F10>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $70,809 $50,962 $30,198 $8,228 $87,958
Ratio of expenses to average
net assets <F11> 2.03%<F4> 2.08% 2.19% 2.07%<F4> 1.24%<F4>
Ratio of net investment income
(loss) to average net assets <F11> (0.58)%<F4> (0.42)% (0.29)% 0.11%<F4> (0.32)% <F4>
Ratio of expenses to average
net assets<F1> 2.09%<F4> 2.18% <F5> 2.08%<F4> 1.28%<F4>
Ratio of net investment income
(loss) to average net assets<F1> (0.64)%<F4> (0.52)% <F5> 0.10%<F4> (0.36)%<F4>
Portfolio turnover <F7> 47% 84% 63% 94% 47%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
<F2> Effective March 1, 1996, the Fund designated the existing shares as Class A
Shares and commenced offering Class B Shares.
<F3> Represents total return for the Fund for the period November 1, 1995 through
February 29, 1996 plus total return for Class B Shares for the Period March 1,
1996 through October 31, 1996. The total return for the Class B shares for the
period from March 1, 1996 through October 31, 1996 was 11.62%.
<F4> Annualized.
<F5> There were no voluntary fee reductions during the period.
<F6> Effective March 16, 1998, the SBSF Fund merged into theVictory Diversified Stock
Fund. Financial highlights for the period prior to March 16, 1998 represent the
Victory Diversified Stock Fund.
<F7> Portfolio turnover is calculated on the basis of the Fund as
a whole without distinguishing between the classes of shares issued.
<F8> Period from commencement of operations.
<F9> Effective March 26, 1999, the Gradison Growth and Income Fund merged into the
Victory Diversified Stock Fund.
<F10> Not Annualized.
<F11> On March 26, 1999, the adviser agreed to waive its management fee or to reimburse
expenses, as allowed by law, to the extent necessary to maintain the net operating
expenses of the Class G shares of the Fund at a maximum of 1.44% until at least
April 1, 2001. The Adviser has also agreed to waive its management fee for Class A
and Class B shares to the same extent the fee is waived for Class G shares until at
least April 1, 2001.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Stock Index Fund
Six Months Year Year Year Year December 3,
Ended Ended Ended Ended Ended 1993 to
April 30, October 31, October 31, October 31, October 31, October 31,
1999 1998<F5> 1997 1996 1995 1994<F2>
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $21.03 $ 18.75 $ 14.85 $ 12.50 $ 10.18 $ 10.00
Investment Activities
Net investment income 0.14 0.37 0.29 0.28 0.27 0.20
Net realized and unrealized gains
(losses) from investments 4.03 3.37 4.23 2.58 2.31 0.16
Total from
Investment Activities 4.17 3.74 4.52 2.86 2.58 0.36
Distributions
Net investment income (0.15) (0.36) (0.29) (0.28) (0.26) (0.18)
Net realized gains (2.03) (1.10) (0.33) (0.23) -- --
Total Distributions (2.18) (1.46) (0.62) (0.51) (0.26) (0.18)
Net Asset Value, End of Period $23.02 $ 21.03 $ 18.75 $ 14.85 $ 12.50 $ 10.18
Total Return (excludes sales charges) 21.79%<F3> 20.99% 31.16% 23.38% 25.72% 3.66%<F3>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $813,309 $627,147 $465,015 $277,124 $160,822 $89,686
Ratio of expenses to average
net assets 0.57%<F4> 0.57% 0.56% 0.57% 0.55% 0.58%<F4>
Ratio of net investment income
to average net assets 1.37%<F4> 1.83% 1.74% 2.14% 2.53% 2.35%<F4>
Ratio of expenses to average
net assets<F1> 0.82%<F4> 0.84% 0.86% 0.89% 0.87% 1.10%<F4>
Ratio of net investment income
to average net assets<F1> 1.12%<F4> 1.56% 1.44% 1.82% 2.21% 1.82%<F4>
Portfolio turnover 1% 8% 11% 4% 12% 1%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not
occurred, the ratios would have been as indicated.
<F2> Period from commencement of operations.
<F3> Not annualized.
<F4> Annualized.
<F5> Effective March 16,1998, the Key Stock Index Fund merged into the Victory Stock Index Fund. Financial
highlights for the period prior to March 16, 1998 represent the Victory Stock Index Fund.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Growth Fund
Six
Months Year Year Year Year December 3,
Ended Ended Ended Ended Ended 1993 to
April 30, October 31, October 31, October 31, October 31, October 31,
1999 1998 1997 1996 1995<F5> 1994<F2><F3>
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 21.62 $ 18.01 $ 14.57 $ 12.15 $ 10.23 $ 10.00
Investment Activities
Net investment income (loss) (0.02) (0.03) 0.03 0.08 0.11 0.10
Net realized and unrealized
gains (losses) on investments 4.13 4.88 4.07 2.93 1.97 0.22
Total from Investment Activities 4.11 4.85 4.10 3.01 2.08 0.32
Distributions
Net investment income -- -- (0.04) (0.08) (0.11) (0.09)
Net realized gains (1.77) (1.24) (0.62) (0.51) (0.05) --
Total Distributions (1.77) (1.24) (0.66) (0.59) (0.16) (0.09)
Net Asset Value,
End of Period $ 23.96 $ 21.62 $ 18.01 $ 14.57 $ 12.15 $ 10.23
Total Return (excludes sales charges) 20.48%<F3> 28.59% 29.08% 25.66% 20.54% 3.22%<F4>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $361,536 $269,476 $185,533 $147,753 $108,253 $66,921
Ratio of expenses to average
net assets 1.39%<F4> 1.35% 1.34% 1.33% 1.07% 0.94%<F5>
Ratio of net investment income (loss)
to average net assets (0.22)%<F4> (0.13)% 0.19% 0.64% 1.00% 1.10%<F5>
Ratio of expenses to average
net assets<F1> 1.48%<F4> 1.49% <F7> 1.39% 1.42% 1.51%<F5>
Ratio of net investment income (loss)
to average net assets<F1> (0.31)%<F4> (0.27)% <F7> 0.58% 0.65% 0.52%<F5>
Portfolio turnover 18% 29% 21% 27% 107% 28%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such voluntary fee
reductions had not occurred, the ratios would have been as indicated.
<F2> Period from commencement of operations.
<F3> Effective March 17, 1994, the Society Earnings Momentum Fund merged into
the Growth Fund. Financial highlights for the period prior to March 17, 1994
represent the Growth Fund.
<F4> Not annualized.
<F5> Annualized.
<F6> Effective June 5, 1995, the Victory Equity Portfolio merged into the
Growth Fund. Financial highlights for the periods prior to June 5, 1995
represent the Growth Fund.
<F7> There were no voluntary fee reductions during the period. See notes to
financial statements.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Schedules of Investments
Established Value Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (1.9%)
Associates Corp., N.A.,
4.95%, 5/3/99 $ 10,131 $ 10,131
Total Commercial Paper (Cost $10,131) 10,131
Common Stocks (98.2%)
Aerospace/Defense (4.3%):
B.F. Goodrich Co. 180,000 7,155
Litton Industries, Inc. (b) 105,000 6,576
Lockheed Martin Corp. 169,232 7,287
Northrop Grumman Corp. 20,000 1,279
22,297
Airlines (1.2%):
Southwest Airlines Co. 200,000 6,513
Apparel (1.3%):
VF Corp. 135,000 6,953
Beverages (1.8%):
Coors (Adolph) Co. 175,000 9,363
Building Materials (3.0%):
Armstrong World Industries, Inc. 100,000 5,475
Centex Corp. 160,000 5,850
Pulte Corp. 200,000 4,525
15,850
Chemicals (2.6%):
Air Products & Chemicals, Inc. 180,000 8,460
Englehard Corp. 255,000 4,893
13,353
Commercial Services (0.8%):
Pittston Brink's Group 156,000 4,115
Computers & Peripherals (5.0%):
Computer Sciences Corp. (b) 115,000 6,850
Sun Microsystems, Inc. (b) 320,000 19,140
25,990
Conglomerates (3.4%):
Crane Co. 210,000 6,077
Textron, Inc. 125,000 11,516
17,593
Consumer Products (1.7%):
Fortune Brands, Inc. 220,000 8,690
Electronic & Electrical --
General (4.9%):
Harris Corp. 180,000 6,221
Honeywell, Inc. 90,000 8,528
Johnson Controls, Inc. 148,000 10,776
25,525
Entertainment (0.9%):
Brunswick Corp. 190,000 $ 4,560
Financial & Insurance (2.6%):
Ambac Financial Group, Inc. 110,000 6,641
MBIA, Inc. 100,000 6,725
13,366
Financial Services (12.6%):
Citigroup, Inc. 225,000 16,931
Fannie Mae 95,000 6,739
Household International, Inc. 450,000 22,640
Providian Financial Corp. 150,000 19,359
65,669
Food Distributors, Supermarkets
& Wholesalers (2.7%):
American Stores Co. 320,000 10,100
SUPERVALU, Inc. 200,000 4,175
14,275
Food Products (0.7%):
Earthgrains Co. 180,000 3,814
Forest Products --
Lumber & Paper (1.4%):
Bowater, Inc. 140,000 7,508
Health Care (1.1%):
WellPoint Health Networks, Inc. (b) 80,000 5,620
Heavy Machinery (2.2%):
Ingersoll Rand Co. 165,000 11,416
Household Goods -- Appliances,
Furnishings & Electronics (2.8%):
Premark International, Inc. 185,000 6,810
Whirlpool Corp. 115,000 7,633
14,443
Insurance -- Multi-Line (5.6%):
CIGNA Corp. 93,000 8,108
Hartford Financial Services Group, Inc. 84,000 4,951
Provident Cos., Inc. 150,000 5,906
Transamerica Corp. 140,000 9,974
28,939
Leisure -- Recreation,
Gaming (1.4%):
Royal Caribbean Cruises Ltd. 200,000 7,388
Machine Tools (1.0%):
Milacron, Inc. 221,000 5,083
Manufacturing --
Capital Goods (2.7%):
Cooper Industries, Inc. 118,000 5,708
Parker Hannifin Corp. 175,950 8,259
13,967
<PAGE>
Manufacturing -- Miscellaneous (1.1%):
Trinity Industries, Inc. 160,000 $ 5,570
Newspapers (1.3%):
Gannett Co., Inc. 97,000 6,869
Oil & Gas Exploration,
Production & Services (5.6%):
Ashland, Inc. 109,000 4,605
Coastal Corp. 290,000 11,092
El Paso Energy Corp. 200,000 7,350
Transocean Offshore, Inc. 210,000 6,234
29,281
Oil Marketing & Refining (1.2%):
Tosco Corp. 238,000 6,367
Publishing (0.9%):
World Color Press, Inc. (b) 185,000 4,729
Restaurants (2.6%):
Brinker International, Inc. (b) 250,000 6,906
Wendy's International, Inc. 254,000 6,874
13,780
Retail (4.5%):
Dayton Hudson Corp. 250,000 16,828
Kmart Corp. (b) 450,000 6,694
23,522
Retail -- Department Stores (1.7%):
Dillard's, Inc. 135,000 3,738
Federated Department Stores, Inc. (b) 110,000 5,135
8,873
Retail -- Specialty Stores (1.4%):
Lowe's Cos., Inc. 140,000 $ 7,385
Staffing (0.7%):
Interim Services, Inc. (b) 218,000 3,788
Telecommunications (4.2%):
QUALCOMM, Inc. (b) 110,000 22,000
Tools & Hardware
Manufacturing (1.4%):
Black & Decker Corp. 125,000 7,094
Transportation (1.4%):
Airborne Freight Corp. 222,000 7,104
Utilities -- Electric (1.1%):
Duke Energy Corp. 105,000 5,880
Utilities -- Telecommunications (1.4%):
SBC Communications, Inc. 130,000 7,280
Total Common Stocks (Cost $307,022) 511,812
Total Investments (Cost $317,153) (a) -- 100.1% 521,943
Liabilities in excess of other assets -- (0.1)% (556)
TOTAL NET ASSETS -- 100.0% $521,387
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $213,825
Unrealized depreciation (9,035)
Net unrealized appreciation $204,790
(b) Non-income producing securities. See notes to financial statements.
<PAGE>
The Victory Portfolios Schedules of Investments
Special Value Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (1.1%)
Associates Corp., N.A.,
4.95%, 5/3/99 $ 2,896 $ 2,896
Total Commercial Paper (Cost $2,896) 2,896
Common Stocks (98.5%)
Aerospace/Defense (2.0%):
Cordant Technologies, Inc. 66,200 3,053
GenCorp, Inc. 109,100 2,523
5,576
Automotive Parts (1.5%):
Dana Corp. 33,800 1,593
Superior Industries
International, Inc. 99,720 2,493
4,086
Banks (6.4%):
First Security Corp. (c) 191,600 3,640
First Tennessee National Corp. 105,900 4,567
Mercantile Bankshares Corp. 81,600 3,019
North Fork Bancorporation, Inc. 115,000 2,588
SouthTrust Corp. 100,301 3,996
17,810
Building Materials (0.5%):
Martin Marietta Materials, Inc. 22,274 1,377
Chemicals -- General (2.7%):
Crompton & Knowles Corp. 72,000 1,458
Nalco Chemical Co. 68,899 2,519
RPM, Inc. 185,575 2,610
WD-40 Co. 25,900 693
7,280
Computers & Peripherals (5.4%):
Altera Corp. (b) 93,300 6,741
Diebold, Inc. 164,102 3,949
Quantum Corp. (b) 231,346 4,135
14,825
Containers (1.5%):
Owens-Illinois, Inc. (b) 106,592 3,092
Sonoco Products Co. 35,000 903
3,995
Electronic & Electrical -- General (3.4%):
Arrow Electronics, Inc. (b) 105,400 1,917
Harris Corp. 38,400 $ 1,327
Vishay Intertechnology, Inc. (b) 356,000 6,208
9,452
Electronics (1.2%):
SCI Systems, Inc. (b) (c) 84,978 3,234
Financial Services (2.4%):
A. G. Edwards, Inc. 54,300 1,901
Heller Financial, Inc. (c) 172,100 4,668
6,569
Food Distributors, Supermarkets
& Wholesalers (0.9%):
Hannaford Brothers Co. 59,200 2,583
Food Processing & Packaging (3.4%):
Interstate Bakeries Corp. (c) 177,499 3,949
McCormick & Co., Inc.
(non-voting shares) 95,900 2,907
Whitman Corp. 149,500 2,448
9,304
Forest Products --
Lumber & Paper (3.3%):
Bowater, Inc. (c) 58,700 3,148
Willamette Industries, Inc. (c) 126,500 5,914
9,062
Health Care (0.7%):
Steris Corp. (b) (c) 110,699 1,965
Hospital & Nursing
Equipment & Supplies (1.4%):
Hillenbrand Industries, Inc. 82,900 3,891
Household Goods -- Appliances,
Furnishings & Electronics (3.4%):
Newell Rubbermaid, Inc. 82,400 3,909
Premark International, Inc. 144,211 5,309
9,218
Insurance (2.5%):
American Financial Group, Inc. 35,840 1,301
Mann Educators Corp. 159,800 3,636
Transatlantic Holdings, Inc. (c) 25,000 1,922
6,859
Insurance -- Multi-Line (1.1%):
Transamerica Corp. 43,198 3,078
Insurance -- Property, Casualty,
Health (1.7%):
Everest Reinsurance Holdings, Inc. 151,300 4,586
Leisure -- Recreation, Gaming (0.7%):
International Game Technology (c) 109,500 1,944
<PAGE>
Manufacturing -- Miscellaneous (2.3%):
Briggs & Stratton Corp. 25,500 $ 1,681
Pentair, Inc. 99,606 4,682
6,363
Medical Services (1.8%):
Quorum Health Group, Inc. (b) 391,100 4,840
Medical Supplies (1.3%):
Biomet, Inc. 87,726 3,597
Metals -- Fabrication (2.0%):
Kennametal, Inc. 205,300 5,453
Office Equipment & Supplies
(Non-Computer Related) (1.4%):
HON INDUSTRIES, Inc. (c) 143,400 3,872
Oil & Gas Exploration,
Production & Services (4.9%):
Anadarko Petroleum Corp. 117,200 4,446
Barrett Resources Corp. (b) 68,099 2,069
BJ Services Co. (b) (c) 120,299 3,218
Nabors Industries, Inc. (b) (c) 63,900 1,314
Transocean Offshore, Inc. 81,418 2,417
13,464
Oil Marketing & Refining (1.2%):
Tosco Corp. (c) 127,999 3,424
Pharmaceuticals (2.4%):
Forest Laboratories, Inc. (b) 52,000 2,314
Mylan Laboratories (c) 182,800 4,147
6,461
Primary Metal & Mineral
Production (0.9%):
Minerals Technologies, Inc. 44,000 2,376
Radio & Television (1.6%):
Capstar Broadcasting Corp.,
Class A (b) 162,200 4,298
Real Estate Investment Trusts (4.1%):
Health Care (0.6%):
Meditrust Cos. 127,800 1,590
Office (2.1%):
Kilroy Realty Corp. 114,100 2,688
Mack-Cali Realty Corp. 94,900 2,936
5,624
Residential (1.4%):
Equity Residential Properties Trust 84,400 3,903
11,117
Retail (4.2%):
AutoZone, Inc. (b) 139,900 $ 4,197
OfficeMax, Inc. (b) 161,081 1,631
Saks, Inc. (b) (c) 197,100 5,580
11,408
Savings & Loans (1.1%):
Charter One Financial, Inc. 92,600 2,894
Semiconductors (1.4%):
LSI Logic Corp. (b) 63,900 2,172
Xilinx, Inc. (b) (c) 33,700 1,538
3,710
Shipbuilding (1.0%):
Newport News Shipbuilding, Inc. (c) 106,300 2,784
Software & Computer Services (0.6%):
Keane, Inc. (b) 28,000 695
Networks Associates, Inc. (b) (c) 74,919 992
1,687
Steel (0.7%):
AK Steel Holding Corp. (c) 69,300 1,802
Tax Return Preparation (1.9%):
H&R Block, Inc. 109,890 5,288
Textile Manufacturing (2.9%):
Shaw Industries, Inc. 115,574 2,095
Warnaco Group, Inc., Class A (c) 222,800 5,946
8,041
Tobacco & Tobacco Products (0.8%):
UST, Inc. 79,400 2,213
Transportation Leasing
& Trucking (3.5%):
CNF Transportation, Inc. 149,113 6,514
GATX Corp. 89,702 3,084
9,598
Utilities -- Electric (8.3%):
CINergy Corp. 145,900 4,350
DPL, Inc. 163,065 2,915
DQE, Inc. (c) 81,300 3,349
Florida Progress Corp. 90,100 3,469
New Century Energies, Inc. 136,600 4,781
SCANA Corp. 172,100 4,044
22,908
Utilities -- Natural Gas (1.3%):
KeySpan Energy (c) 136,750 3,658
<PAGE>
Utilities -- Telecommunications (0.8%):
Century Telephone Enterprises, Inc. 56,880 $ 2,289
Total Common Stocks (Cost $242,942) 270,239
Securities Purchased With Cash Collateral (9.3%)
Short Term Securities (4.6%):
General American Funding
Agreement, 5.10%, 3/29/00 $ 6,163 6,163
AIM Short Term Prime
Money Market Fund 2,707 2,707
AIM Liquid Assets
Money Market Fund 3,780 3,780
12,650
Repurchase Agreements (4.7%):
Prudential Bache Corp.,
5.05%, 5/3/99
(Collateralized by $5,157
U.S. T-Bill, 0.00%, 7/29/99
market value -- $5,100) 5,000 5,000
Goldman Sachs Group L.P.,
5.08%, 5/3/99
(Collateralized by $7,067
Natexis Co., 8.44%, 6/30/08,
ProLogis Trust, 7/10%, 4/15/08,
market value -- $6,920) 5,000 5,000
Morgan Stanley Dean Witter,
5.04%, 5/3/99
(Collateralized by $3,605
Raytheon, 7.00%, 11/1/28,
GMAC, 5.50%, 12/15/01,
market value -- $3,743) $ 3,000 $ 3,000
13,000
Total Securities Purchased
With Cash Collateral (Cost $25,650) 25,650
Total Investments (Cost $271,487) (a) -- 108.9% 298,785
Liabilities in excess of other assets -- (8.9%) (24,566)
TOTAL NET ASSETS -- 100.0% $274,219
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 43,344
Unrealized depreciation (16,046)
Net unrealized appreciation $ 27,298
(b) Non-income producing securities.
(c) All or a portion of this security was loaned as of April 30, 1999.
See notes to financial statements.
<PAGE>
The Victory Portfolios Schedules of Investments
Ohio Regional Stock Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Market
Security Description Shares Value
Common Stocks (100.4%)
Agriculture & Livestock (0.7%):
Andersons, Inc. 20,000 $ 248
Airlines (1.2%):
Comair Holdings, Inc. 19,500 430
Amusement & Recreation
Services (1.4%):
Cedar Fair L.P. 20,000 480
Automotive Parts (2.7%):
Dana Corp. 20,000 943
Banks (13.5%):
BancFirst Ohio Corp. 14,000 369
Belmont Bancorp 500 7
Charter One Financial, Inc. 25,300 791
FirstMerit Corp. 30,000 833
Huntington Bancshares, Inc. 10,000 354
Mahoning National Bancorp 5,100 144
National City Corp. 11,000 789
Park National Corp. 5,000 484
Provident Financial Group, Inc. (c) 18,000 754
Second Bancorp, Inc. 4,470 103
4,628
Building Materials (2.4%):
Holophane Corp. (b) 5,000 129
Owens Corning 20,000 713
842
Chemicals -- General (5.5%):
A. Schulman, Inc. 17,500 306
Ferro Corp. 13,000 360
Lubrizol Corp. (c) 6,000 166
OM Group, Inc. 15,000 546
RPM, Inc. 38,000 534
1,912
Commercial Services (1.9%):
Convergys Corp. (b) 35,000 652
Computers & Peripherals (1.8%):
Diebold, Inc. 25,000 602
Telxon Corp. 3,000 30
632
Conglomerates (3.5%):
Lancaster Colony Corp. 24,000 708
Myers Industries, Inc. 21,780 493
1,201
Consumer Products (1.3%):
American Greetings Corp., Class A 12,000 $ 314
Gibson Greetings, Inc. (b) 19,000 120
434
Electronic & Electrical -- General (0.5%):
Pioneer-Standard Electronics, Inc. 20,000 168
Electronics (1.6%):
Keithley Instruments, Inc. 64,500 536
Engineering, Industrial
Construction (0.4%):
Corrpro Cos., Inc. (b) 12,500 130
Food Distributors (1.6%):
Kroger Co. (b)(c) 10,000 543
Food Processing & Packaging (0.7%):
Chiquita Brands International, Inc. 14,000 140
J.M. Smucker Co., Class A 5,000 108
248
Forest Products --
Lumber & Paper (1.9%):
Mead Corp. 16,000 669
Health Care (4.0%):
Gliatech, Inc. (b) 10,500 239
Invacare Corp. 34,000 786
Omnicare, Inc. 15,000 361
1,386
Insurance (7.1%):
Cincinnati Financial Corp. 9,450 382
Ohio Casualty Corp. (c) 18,000 668
Progressive Corp. 6,000 860
State Auto Financial Corp. 53,000 537
2,447
Machine Tools (3.0%):
Lincoln Electric Holding, Inc. 30,000 619
Milacron, Inc. 17,000 391
Monarch Machine Tool Co. 5,000 39
1,049
Manufacturing --
Capital Goods (8.6%):
Commercial Intertech Corp. 16,000 205
Gorman-Rupp Co. 35,000 543
Gradall Industries, Inc. (b) 10,000 160
Parker-Hannifin Corp. 21,000 985
Robbins & Myers, Inc. 14,000 302
Thor Industries, Inc. 25,000 755
2,950
<PAGE>
Manufacturing -- Miscellaneous (1.5%):
Essef Corp. (b) 27,220 $ 531
Media (3.0%):
Jacor Communications, Inc. (b) 3,000 241
Scripps (E.W.) Co., Class A (c) 16,000 800
1,041
Medical Supplies (0.1%):
STERIS Corp. (b) 2,000 36
Metals -- Fabrication (2.2%):
Amcast Industrial Corp. 15,000 251
Brush Wellman, Inc. 6,000 90
RTI International Metals (b)(c) 10,000 133
Timken Co. 13,000 291
765
Mining (1.0%):
Cleveland-Cliffs, Inc. 5,500 219
Oglebay Norton Co. 6,000 135
354
Oil & Gas Exploration,
Production & Services (3.3%):
USX -- Marathon Group 37,000 1,156
Paint, Varnishes, Enamels (1.8%):
Sherwin-Williams Co. 20,000 623
Real Estate Investment Trusts (1.7%):
Developers Divers Realty 16,000 253
Health Care REIT, Inc. 14,000 329
582
Restaurants (1.5%):
Bob Evans Farms, Inc. 10,000 183
Wendy's International, Inc. (c) 12,000 325
508
Retail -- Specialty Stores (3.5%):
Jo-Ann Stores Inc., Class A (b) 9,000 145
Jo-Ann Stores Inc., Class B (b) 9,000 109
Limited, Inc. (c) 15,000 656
OfficeMax, Inc. (b) 20,000 203
Value City Department Stores, Inc. (b) 10,000 86
1,199
Rubber & Rubber Products (2.6%):
Cooper Tire & Rubber Co. (c) 13,000 285
Goodyear Tire & Rubber Co. (c) 11,000 629
914
Security Services (0.1%):
Kroll-O' Gara Co. (b) 2,000 $ 48
Software & Computer Services (2.2%):
Reynolds & Reynolds Co., Class A 33,000 753
Steel (1.4%):
Cold Metal Products, Inc. (b) 7,000 14
Shiloh Industries, Inc. (b) 25,000 343
Worthington Industries, Inc. 8,000 111
468
Utilities -- Electric (7.0%):
American Electric Power Co. 19,000 787
CINergy Corp. (c) 20,000 596
DPL, Inc. 58,000 1,037
2,420
Utilities -- Telecommunications (2.2%):
Cincinnati Bell, Inc. 33,000 747
Total Common Stocks (Cost $17,896) 34,673
Securities Purchased With Cash Collateral (9.1%)
Short Term Securities (9.1%):
General American Funding
Agreement, 5.10%, 3/29/00 $ 1,531 1,531
AIM Short Term Prime
Money Market Fund 672 672
AIM Liquid Assets
Money Market Fund 939 939
Total Securities Purchased With Cash Collateral (Cost $3,142) 3,142
Total Investments (Cost $21,037) (a) -- 109.5% 37,815
Liabilities in excess of other assets -- (9.5%) (3,274)
TOTAL NET ASSETS -- 100.0% $34,541
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $17,353
Unrealized depreciation (575)
Net unrealized appreciation $16,778
(b) Non-income producing securities.
(c) All or a portion of this security was loaned as of April 30, 1999.
See notes to financial statements.
<PAGE>
The Victory Portfolios Schedule of Investments
Small Company Opportunity Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (4.3%)
Associates Corp., N.A.,
4.95%, 5/3/99 $ 8,490 $ 8,490
Total Commercial Paper (Cost $8,490) 8,490
Common Stocks (95.6%)
Aerospace/Defense (0.2%):
EDO Corp. 54,000 371
Airlines (1.6%):
Comair Holdings, Inc. 147,000 3,243
Apparel (1.8%):
Gildan Activewear, Inc., Class A (b) 100,000 1,344
UniFirst Corp. 124,000 2,162
3,506
Apparel -- Footwear (0.7%):
Timberland Co. (b) 20,000 1,385
Automotive Parts (2.6%):
Borg-Warner Automotive, Inc. 25,000 1,419
Intermet Corp. 80,000 1,180
Wynn's International, Inc. 151,000 2,529
5,128
Banks (8.1%):
Andover Bancorp, Inc. 85,000 2,614
GBC Bancorp (c) 82,000 1,450
HUBCO, Inc. 73,172 2,588
M & T Bank Corp. 4,000 2,236
Mercantile Bankshares Corp. 61,125 2,262
National City Bancorp (b) 60,000 1,245
Vermont Financial Services Corp. 35,000 1,078
Zions Bancorp 40,000 2,667
16,140
Beverages (0.3%):
Hansen Natural Corp. (b) 100,000 538
Brokerage Services (2.2%):
Knight/Trimark Group, Inc. (b) (c) 28,000 4,289
Building Materials (3.0%):
Florida Rock Industries, Inc. 24,000 825
Lone Star Industries, Inc. (c) 20,000 714
Southdown, Inc. 48,000 3,075
Thomas Industries, Inc. 70,000 1,391
6,005
Chemicals (1.9%):
Cambrex Corp. 100,000 2,562
Ferro Corp. 45,000 1,246
3,808
Commercial Services (3.9%):
ABM Industries, Inc. 112,000 $ 3,401
Affiliated Computer
Services, Inc. (b) (c) 70,000 2,678
Convergys Corp. (b) 50,000 931
NCO Group, Inc. (b) 20,000 653
7,663
Computers & Peripherals (3.6%):
BindView Development Corp. (b) 50,000 1,075
Computer Network Technology
Corp. (b) 90,000 1,682
Kronos, Inc. (b) 28,500 969
MTS Systems Corp. 156,000 1,804
National Computer Systems, Inc. 25,000 700
Progress Software Corp. (b) 35,000 796
7,026
Construction & Housing (2.5%):
D.R. Horton, Inc. 82,000 1,584
NCI Building Systems, Inc. (b) 94,000 2,261
Toll Brothers, Inc. (b) 50,000 1,069
4,914
Cosmetics & Related (0.1%):
Stephan Co. 44,000 215
Data Processing/
Management (0.7%):
Data Processing Resources Corp. (b) 115,000 1,452
Distribution/Wholesale (3.3%):
Advanced Marketing Services, Inc. 99,400 1,541
Hughes Supply, Inc. 108,000 2,511
Savoir Technology Group, Inc. (b) (c) 264,000 2,376
6,428
Electronic & Electrical --
General (3.8%):
CTS Corp. 60,500 3,229
Energy Conversion Devices, Inc. (b) 3,900 33
Jabil Circuit, Inc. (b) (c) 23,000 1,071
LSI Industries, Inc. 119,000 2,380
Tweeter Home Entertainment
Group, Inc. (b) 30,000 889
7,602
Electronic Components/
Instruments (3.6%):
C&D Technologies, Inc. 100,000 2,581
Cable Design Technologies Corp. (b) 131,000 1,949
Encore Wire Corp. (b) 39,000 429
Technitrol, Inc. 75,000 2,194
7,153
<PAGE>
Engineering, Industrial
Construction (1.2%):
URS Corp. (b) 106,000 $ 2,445
Entertainment (1.1%):
Anchor Gaming (b) (c) 45,000 2,126
Environmental Control (0.7%):
Met-Pro Corp. 55,000 639
Tetra Tech, Inc. (b) 33,000 799
1,438
Financial Services (4.8%):
AmeriCredit Corp. (b) 155,000 2,566
DVI, Inc. (b) 135,000 1,915
Old Kent Financial Corp. 42,000 1,985
Raymond James Financial, Inc. 80,000 1,725
TCF Financial Corp. (c) 50,000 1,450
9,641
Food Processing & Packaging (0.4%):
Balance Bar Co. (b) 100,000 700
Food Production --
Diversified (1.0%):
Michael Foods, Inc. 83,000 1,899
Health Care (2.6%):
Capital Senior Living Corp. (b) 80,000 790
Renal Care Group, Inc. (b) (c) 22,600 472
Universal Health Services, Inc. (b) (c) 76,000 3,938
5,200
Housing (1.0%):
Lennar Corp. 43,000 1,040
M.D.C. Holdings, Inc. 49,000 962
2,002
Industrial Goods & Services (0.4%):
White Cap Industries, Inc. (b) 65,000 788
Insurance (1.1%):
ARM Financial Group, Inc., Class A 150,000 2,081
Insurance -- Multi-Line (4.1%):
Fremont General Corp. 134,000 2,680
HCC Insurance Holdings, Inc. 127,000 2,683
Protective Life Corp. (c) 69,700 2,731
8,094
Insurance -- Property, Casualty,
Health (0.3%):
Unico American Corp. 50,000 506
Machinery -- Diversified (2.5%):
Cascade Corp. 32,000 428
Esterline Technologies Corp. (b) 125,000 1,766
Gehl Co. (b) 44,000 803
Gleason Corp. 30,000 $ 512
United Dominion Industries Ltd. 62,000 1,480
4,989
Medical Equipment & Supplies (2.0%):
Cooper Cos., Inc. (b) (c) 105,000 1,653
Empi, Inc. (b) 55,000 1,231
West Pharmaceutical Services, Inc. 30,000 992
3,876
Medical Labs & Testing
Services (0.3%):
Pharmaceutical Product
Development, Inc. (c) 20,000 583
Medical Services (0.8%):
HEALTHSOUTH Corp. (b) 60,000 806
Prime Medical Services, Inc. (b) 102,000 733
1,539
Metals -- Fabrication (4.3%):
Mueller Industries, Inc. (b) 105,000 3,307
Quanex Corp. 37,000 946
Reliance Steel & Aluminum Co. 80,000 2,915
TransTechnology Corp. 71,000 1,362
8,530
Mobile Homes (1.1%):
Coachmen Industries, Inc. 112,000 2,114
Oil & Gas Exploration,
Production & Services (2.5%):
Atwood Oceanics, Inc. (b) 69,700 2,431
Eagle Geophysical, Inc. (b) 91,000 523
SEACOR SMIT, Inc. (b) (c) 20,000 1,059
World Fuel Services Corp. 70,000 879
4,892
Paper Products (2.1%):
Mail-Well, Inc. (b) (c) 315,000 4,115
Pharmaceuticals (0.9%):
Alpharma, Inc., Class A (c) 40,000 1,180
Barr Laboratories, Inc. (b) 20,000 601
1,781
Publishing (0.6%):
Merrill Corp. 80,000 1,190
Real Estate (0.4%):
LNR Property Corp. 43,000 844
Real Estate Investment Trusts (0.5%):
National Golf Properties, Inc. 40,000 1,005
Recreational Vehicles (0.8%):
Thor Industries, Inc. (c) 50,000 1,513
<PAGE>
Restaurants (0.5%):
O'Charley's, Inc. (b) 65,000 $ 906
Retail (1.7%)
BJ's Wholesale Club, Inc. (b) 128,000 3,400
Retail -- Drug Stores (0.3%):
Duane Reade, Inc. (b) (c) 20,000 536
Savings & Loans (2.4%):
ITLA Capital Corp. (b) 150,000 2,363
Roslyn Bancorp, Inc. 135,300 2,469
4,832
Services (0.5%):
ServiceMaster Co. 51,150 972
Software & Computer
Services (1.7%):
Acclaim Entertainment, Inc. (b) 105,000 683
Keane, Inc. (b) (c) 75,000 1,860
Visio Corp. (b) 30,000 810
3,353
Staffing (1.0%):
On Assignment, Inc. (b) 20,000 606
Personnel Group of America, Inc. (b) 150,000 1,369
1,975
Telecommunications (1.7%):
International FiberCom, Inc. (b) 140,000 901
InterVoice, Inc. (b) 50,000 498
Vertex Communications Corp. (b) 131,000 2,048
3,447
Textile Manufacturing (0.6%):
Interface, Inc. 160,000 1,130
Tools & Hardware
Manufacturing (1.2%):
Applied Power Inc., Class A 75,000 2,367
Transportation Leasing
& Trucking (2.6%):
Forward Air Corp. (b) 166,000 3,694
USFreightways Corp. (c) 40,000 1,500
5,194
Total Common Stocks (Cost $150,732) 188,869
Securities Purchased With Cash Collateral (10.1%)
Short Term Securities (5.0%):
General American
Funding Agreement,
5.10%, 3/29/00 $ 4,816 $ 4,816
AIM Short Term Prime
Money Market Fund 2,116 2,116
AIM Liquid Assets
Money Market Fund 2,954 2,954
9,886
Repurchase Agreements (5.1%):
Morgan Stanley Dean Witter,
5.04%, 5/3/99
(Collateralized by $10,679
Oglethorpe Power,
6.97%, 6/30/11,
market value $11,082) 10,000 10,000
10,000
Total Securities Purchased
With Cash Collateral (Cost $19,886) 19,886
Total Investments (Cost $179,108) (a) -- 110.0% 217,245
Liabilities in excess of other assets -- (10.0%) (19,736)
TOTAL NET ASSETS -- 100.0% $197,509
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 52,384
Unrealized depreciation (14,247)
Net unrealized appreciation $ 38,137
(b) Non-income producing securities.
(c) All or a portion of this security was loaned as of April 30, 1999.
See notes to financial statements.
<PAGE>
The Victory Portfolios Schedules of Investments
International Growth Fund April 30, 1999
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (0.1%)
United States (0.1%):
Financial Services (0.1%):
Associates Corp.,
4.95%, 5/3/99 $ 206 $ 206
Total Commercial Paper (Cost $206) 206
Common Stocks (95.5%)
Argentina (0.2%):
Oil & Gas Exploration,
Production & Services (0.2%):
YPF SA, ADR 10,000 420
Total Argentina 420
Australia (2.6%):
Banks (0.4%):
National Australia Bank Ltd. 33,220 648
Beverages (0.3%):
Foster's Brewing Group Ltd. 179,550 525
Leisure -- Recreation, Gaming (0.8%):
Aristocrat Leisure Ltd. 225,000 1,442
Publishing (0.8%):
Publishing & Broadcasting Ltd. 193,810 1,305
Utilities --
Telecommunications (0.3%):
Telstra Corp. Ltd., ADR 4,000 432
Total Australia 4,352
Brazil (0.1%):
Food Distributors, Supermarkets
& Wholesalers (0.1%):
Companhia Brasileira de Distribuicao
Grupo Pao de Acucar, ADR 10,000 175
Utilities --
Telecommunications (0.0%):
Telecomunicacoes Brasileriras SA, ADR 6,000 0
Total Brazil 175
Britain (16.1%):
Aerospace/Defense (0.5%):
British Aerospace PLC 104,953 786
Banks (1.5%):
Lloyds TSB Group PLC 160,000 2,577
Catering (0.6%):
Compass Group PLC 102,200 1,033
Newspapers (0.7%):
Pearson PLC 51,600 1,096
Oil & Gas Exploration,
Production & Services (2.1%):
British Petroleum Co. PLC 182,000 3,452
Pharmaceuticals (4.2%):
Glaxo Wellcome PLC 128,000 $ 3,780
SmithKline Beecham PLC 262,067 3,468
7,248
Retail (1.2%):
Kingfisher PLC 130,000 1,949
Telecommunications (2.5%):
Vodafone Group PLC 225,000 4,123
Telecommunications --
Equipment (0.4%):
Energis PLC (b) 25,300 690
Utilities --
Telecommunications (2.4%):
British Telecommunications PLC 245,889 4,129
Total Britain 27,083
Canada (2.4%):
Diversified (0.6%):
Bombadier, Inc., Class B 70,000 1,086
Mining (0.1%):
Franco-Nevada Mining Corp. Ltd. 12,000 232
Oil-Integrated Companies (0.9%):
Suncor Energy, Inc. 36,500 1,460
Telecommunications (0.8%):
Northern Telecom Ltd. 19,000 1,292
Total Canada 4,070
Chile (0.2%):
Chemicals -- Specialty (0.1%):
Sociedad Quimica y Minera
de Chile SA 7,700 284
Utilities -- Electric (0.1%):
Empresa Nacional de Electricidad
SA, ADR 4,800 67
Enersis SA, ADR 1,965 38
105
Total Chile 389
Estonia (0.1%):
Utilities -- Telecommunications (0.1%):
As Eesti Telekom GDR (b) 10,340 218
Total Estonia 218
Finland (1.9%):
Telecommunication Services (0.0%):
Sonera Group Oyj 1,000 20
Telecommunications -- Equipment (1.9%):
Nokia OYJ, Class A 41,460 3,200
Total Finland 3,220
<PAGE>
France (10.4%):
Automobile Parts (0.4%):
Valeo SA 7,200 $ 609
Banks (0.7%):
Banque Nationale de Paris 13,860 1,150
Beverages (0.1%):
LVMH Moet-Hennessy Louis Vuitton 520 140
Computer Services (0.5%):
Cap Gemini SA 5,000 765
Cosmetics & Related (1.2%):
L'OREAL 3,260 2,090
Diversified (1.5%):
Vivendi 11,490 2,689
Electronic & Electrical --
General (1.1%):
Legrand SA 3,680 880
Rexel 12,000 996
1,876
Food Distributors, Supermarkets
& Wholesalers (0.2%):
Carrefour Supermarche SA 470 373
Insurance (1.1%):
AXA SA 13,720 1,774
Machinery & Engineering (0.5%):
Sidel 7,200 868
Oil-Integrated Companies (1.2%):
Total SA, Class B 14,960 2,051
Pharmaceuticals (0.6%):
Synthelabo 5,200 1,065
Retail -- Department Stores (1.2%):
Pinault-Printemps-Redoute SA 11,845 1,967
Telecommunications (0.1%):
Alcatel 1,308 161
Total France 17,578
Germany (5.2%):
Automobiles (2.0%):
DaimlerChrysler AG (b) 27,957 2,764
Volkswagen AG 2,000 142
Volkswagen AG, Preferred (b) 10,800 454
3,360
Banks (0.5%):
Dresdner Bank AG 20,750 896
Chemicals -- General (0.1%):
BASF AG 2,700 118
Insurance (1.2%):
Allianz AG, Registered 6,245 1,992
Manufacturing -- Miscellaneous (0.1%):
Siemens AG 2,120 157
Retail (0.7%):
Douglas Holding AG 22,500 $ 1,036
Douglas Holding AG-New (b) 1,450 67
1,103
Software & Computer Services (0.5%):
SAP AG 1,800 577
SAP AG, Preferred 590 222
799
Utilities -- Electric (0.1%):
Veba AG 4,532 249
Total Germany 8,674
Greece (0.6%):
Banks (0.1%):
Alpha Credit Bank 1,440 103
Ergo Bank SA 1,280 112
215
Building Materials (0.0%):
Titan Cement Co. SA 1,000 77
Commercial Banking (0.4%):
National Bank of Greece SA 7,956 544
Utilities -- Telecommunications (0.1%):
Hellenic Telecommunications
Organization SA 10,000 233
Total Greece 1,069
Hong Kong (2.0%):
Banks (0.4%):
Hang Seng Bank 58,900 697
Diversified (0.1%):
Hutchison Whampoa Ltd. 23,000 206
Financial Services (0.5%):
Guoco Group Ltd. (b) 307,000 810
Gas & Electric Utility (0.1%):
Hong Kong & China Gas 156,000 219
Real Estate (0.3%):
Sun Hung Kai Properties Ltd. 49,000 430
Telecommunications (0.6%):
Hong Kong Telecom Ltd. 349,600 941
Total Hong Kong 3,303
Hungary (0.1%):
Utilities -- Telecommunications (0.1%):
Matav Rt. 37,000 206
Total Hungary 206
India (0.5%):
Automobiles (0.2%):
Tata Engineering & Locomotiv GDR 100,000 328
Tobacco & Tobacco Products (0.3%):
ITC Ltd. GDR 18,400 $ 522
Total India 850
<PAGE>
Ireland (2.3%):
Banks (1.4%):
Allied Irish Banks PLC 144,900 2,343
Building Materials (0.8%):
CRH PLC 69,380 1,365
Financial Services (0.1%):
Irish Life & Permanent PLC 7,119 103
Total Ireland 3,811
Israel (0.2%):
Food Distributors, Supermarkets
& Wholesalers (0.0%):
Blue Square -- Israel Ltd. ADR 333 5
Investment Company (0.1%):
Koor Industries Ltd. 880 95
Retail (0.0%):
Blue Square Chain Investments and
Properties Ltd. (b) 3,800 56
Telecommunications (0.1%):
ECI Telecom Ltd. 2,800 104
Total Israel 260
Italy (7.2%):
Banks (1.0%):
Banca Commerciale Italiana 194,400 1,602
Building Materials (0.0%):
Italcementi SpA 17,200 84
Financial Services (1.4%):
San Paolo-IMI SpA 156,263 2,348
Insurance (1.2%):
Alleanza Assicurazioni SpA 14,850 178
Assicurazioni Generali 46,120 1,798
Istituto Nazionale delle Assicurazioni 38,000 101
2,077
Oil-Integrated Companies (0.4%):
ENI SpA 100,000 659
Utilities -- Telecommunications (3.2%):
Telecom Italia Mobile SpA 440,500 2,627
Telecom Italia SpA 162,410 1,730
Telecom Italia SpA-RNC 184,139 992
5,349
Total Italy 12,119
Japan (19.9%):
Automobiles (0.6%):
Toyota Motor Corp. 36,000 1,022
Banks (0.2%):
Bank of Tokyo-Mitsubishi Ltd. 21,000 310
Brewery (1.4%):
Kirin Brewery Co. Ltd. 205,000 $ 2,319
Chemicals -- General (0.1%):
Sekisui Chemical Co. Ltd. 15,000 100
Computers & Peripherals (1.4%):
Canon, Inc. 47,000 1,150
Fujitsu Ltd. 74,000 1,268
2,418
Construction (0.9%):
Sekisui House Ltd. 140,000 1,568
Cosmetics & Related (0.9%):
Kao Corp. 60,000 1,523
Electronic & Electrical --
General (3.5%):
Fanuc Ltd. 26,200 1,141
Matsushita Electric Industrial Co. Ltd. 66,000 1,255
Murata Manufacturing Co. Ltd. 20,000 1,144
Nippon Electric Glass Co. Ltd. 71,000 940
Sharp Corp. 110,000 1,291
5,771
Financial Services (0.8%):
Takefuji Corp. 17,000 1,410
Insurance (0.7%):
Tokio Marine & Fire Insurance Co. 105,000 1,224
Medical Equipment (1.0%):
Terumo Corp. 78,000 1,699
Pharmaceuticals (1.6%):
Fujisawa Pharmaceutical Co. Ltd. 19,000 312
Sankyo Co. Ltd. 48,000 1,007
Takeda Chemical Industries 30,000 1,305
2,624
Photography (0.7%):
Fuji Photo Film 33,000 1,247
Retail (2.0%):
Aoyamma Trading Co. Ltd. 6,600 184
Ito-Yokado Co. Ltd. 25,000 1,535
Seven-Eleven Japan Co. Ltd. 18,000 1,537
3,256
Rubber -- Tires (0.0%):
Bridgestone Corp. 3,000 80
Security Services (0.5%):
Secom Co. Ltd. 9,000 879
Utilities -- Electric (0.1%):
Tokyo Electric Power 8,400 179
Utilities -- Telecommunications (3.5%):
Nippon Telegraph & Telephone 179 1,950
NTT Data Corp. 182 1,441
<PAGE>
NTT Mobile Communications
Network, Inc. 41 $ 2,403
5,794
Total Japan 33,423
Malaysia (0.3%):
Automobiles (0.3%):
Oriental Holdings Berhad 275,000 466
Total Malaysia 466
Mexico (0.6%):
Conglomerates (0.1%):
ALFA SA de CV, Class A 55,250 218
Financial Services (0.3%):
Grupo Financiero Banamex Accival
SA de CV, Class B (b) 200,000 510
Retail (0.2%):
Controladora Comercial Mexicana
SA de CV 278,500 292
Total Mexico 1,020
Netherlands (5.9%):
Banks (1.2%):
ING Groep N.V. 33,035 2,038
Computers & Peripherals (1.2%):
CMG PLC 55,700 1,535
Equant N.V. (b) 5,600 509
2,044
Consumer Products (0.1%):
Unilever N.V. CVA 1,688 116
Electronic & Electrical --
General (0.9%):
STMicroelectronics N.V. (b) 14,000 1,460
Food Distributors, Supermarkets
& Wholesalers (0.0%):
Koninklijke Ahold N.V. 900 33
Insurance (1.0%):
Aegon N.V. 15,624 1,500
Fortis (NL) 3,000 107
1,607
Newspapers (0.0%):
VNU N.V. 1,510 61
Oil-Integrated Companies (1.5%):
Royal Dutch Petroleum Co. 25,000 1,458
Royal Dutch Petroleum Co. ADR 17,500 1,027
2,485
Telecommunications -- Equipment (0.0%):
Koninklijke KPN N.V. 1,278 53
Total Netherlands 9,897
New Zealand (0.4%):
Newspapers (0.2%):
Independent Newspapers Ltd. 70,400 $ 304
Telecommunications (0.2%):
Telecom Corp. of New Zealand Ltd. 62,000 323
Total New Zealand 627
Philippines (0.2%):
Banks (0.2%):
Bank of Phillippine Islands 115,000 363
Total Philippines 363
Poland (0.4%):
Banks (0.3%):
Bank Handlowy Wronki w
Warszawie (b) 6,520 79
Bank Przemyslowo-Handlowy SA 350 18
Bank Rozwoju Eksportu SA 3,370 75
Bank Slaski SA 1,700 77
Big Bank Gdanski SA 73,900 130
Wielkopolski Bank Kredytowy SA 15,517 85
464
Electronic & Electrical -- General (0.1%):
Electrim Spolka SA 11,400 136
Food Processing & Packaging (0.0%):
Agros Holdings SA 900 6
Retail (0.0%):
Amica Wronki SA (b) 5,300 34
Rubber -- Tires (0.0%):
Debica SA 2,400 30
Stomil Olsztyn SA 2,800 13
43
Software & Computer
Services (0.0%):
Softbank SA 1,430 44
Total Poland 727
Portugal (0.2%):
Banks (0.1%):
Banco Commercial Portugues SA 4,072 116
Building Materials (0.1%):
Cimpor-Cimentos de Portugal, SGPS SA 3,460 95
Food Distributors, Supermarkets
& Wholesalers (0.0%):
Jeronimo Martins, SGPS SA 1,895 62
Retail (0.0%):
Sonae Investimentos SGPS SA 2,040 73
Total Portugal 346
<PAGE>
Singapore (0.4%):
Real Estate (0.2%):
City Developments Ltd. 57,000 $ 380
Shipbuilding (0.2%):
Keppel Corp. 105,000 300
Total Singapore 680
South Africa (0.5%):
Electronic & Electrical --
General (0.3%):
Datatec Ltd. 28,250 456
Metals & Mining (0.2%):
Gold Fields of South Africa Ltd. 190,000 366
Total South Africa 822
South Korea (0.9%):
Banks (0.3%):
Shinhan Bank GDR (b) 22,900 547
Electronic & Electrical --
General (0.6%):
Samsung Electronics GDR 21,904 935
Total South Korea 1,482
Spain (3.7%):
Banks (1.6%):
Banco Bilbao Vizcaya SA 9,900 148
Banco Santander SA 66,004 1,436
Corporacion Bancaria de Espana SA 45,000 1,060
2,644
Utilities -- Electric (0.7%):
Endesa SA 52,490 1,168
Utilities -- Telecommunications (1.4%):
Telefonica de Espana 51,066 2,396
Total Spain 6,208
Sweden (0.9%):
Telecommunications --
Equipment (0.9%):
Telefonaktiebolaget LM Ericsson,
Class B 55,475 1,461
Total Sweden 1,461
Switzerland (7.7%):
Banks (1.5%):
Credit Suisse Group, Registered 944 188
UBS AG, Registered 6,780 2,306
2,494
Chemicals -- Specialty (0.4%):
Clariant AG 1,200 615
Commercial Services (0.8%):
Adecco SA (b) 2,650 1,339
Insurance (1.8%):
Zurich Allied AG 4,578 $ 2,956
Pharmaceuticals (3.2%):
Novartis AG, Registered 1,178 1,728
Roche Holding AG 318 3,747
5,475
Total Switzerland 12,879
Taiwan (0.7%):
Computers & Peripherals (0.4%):
Asustek Computer, Inc. GDR (b) 65,000 680
Transportation -- Marine (0.3%):
Evergreen Marine Corp. GDR 38,200 494
Total Taiwan 1,174
Turkey (0.7%):
Appliances (0.1%):
Arcelik AS 3,540,000 140
Banks (0.5%):
Akbank TAS 2,383,006 76
Turkiye Garanti Bankasi AS (b) 4,446,250 202
Yapi ve Kredi Bankasi AS 16,536,722 397
675
Brewery (0.0%):
Ege Biracilik ve Malt Sanayi SA 687,000 70
Financial Services (0.0%):
Haci Omer Sabanci Holding AS 2,265,000 62
Food Distributors, Supermarkets
& Wholesalers (0.1%):
Migros Turk TAS 73,650 102
Steel (0.0%):
Eregli Demir ve Celik Fabrikalari
TAS (b) 4,255,000 78
Total Turkey 1,127
Total Common Stocks (Cost $132,118) 160,499
Convertible Bonds (1.1%)
Banks (0.6%):
Mitsubishi Bank International
Finance Bermuda,
3.00%, 11/30/02 $ 943 1,033
Financial Services (0.5%):
Bell Atlantic Financial Services,
5.75%, 4/1/03, Convertible into
shares of Telecom New Zealand 750 806
Total Convertible Bonds (Cost $1,693) 1,839
<PAGE>
Rights (0.0%)
Greece (0.0%):
Banks (0.0%):
National Bank of Greece
Rights (b) 7,956 $ 26
Total Greece 26
Spain (0.0%):
Utilities -- Telecommunications (0.0%):
Telefonica de Espana Rights (b) 51,066 47
Total Spain 47
Total Rights (Cost $0) 73
Total Investments (Cost $134,017) (a) -- 96.7% 162,617
Other assets in excess of liabilities -- 3.3% 5,599
TOTAL NET ASSETS -- 100.0% $168,216
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $30,987
Unrealized depreciation (2,387)
Net unrealized appreciation $28,600
(b) Non-income producing securities.
ADR -- American Depository Receipts
GDR -- Global Depository Receipts
At April 30, 1999, the Fund's open forward foreign currency contracts were as
follows:
Unrealized
Delivery Contract Market Appreciation/
Currency Date Value Value Depreciation
Short Contracts:
British Pound 5/7/99 $ 52 $ 52 $(0)
Euro Dollar 5/3/99 55 56 (1)
Hong Kong
Dollar 5/3/99 944 944 (0)
Japanese Yen 5/7/99 1,987 1,985 2
Total Short
Contracts $3,038 $3,037 $ 1
See notes to financial statements.
<PAGE>
Statements of Assets and Liabilities
The Victory Portfolios April 30, 1999
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
<TABLE>
<CAPTION>
Ohio Small
Established Special Regional Company International
Value Value Stock Opportunity Growth
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Cost $317,153; $258,487;
$21,037; $169,108 & $134,017) $521,943 $285,785 $37,815 $207,245 $162,617
Repurchase agreements at
amortized cost -- 13,000 -- 10,000 --
Total 521,943 298,785 37,815 217,245 162,617
Cash -- -- -- -- 13
Foreign currency (cost $83) -- -- -- -- 83
Interest and dividends receivable 154 375 38 68 299
Receivable for capital shares issued 30 4 1 1 9
Receivable from brokers for
investments sold -- 2,227 -- 270 5,274
Reclaims receivble -- -- -- -- 234
Other 353 26 10 55 55
Total Assets 522,480 301,417 37,864 217,639 168,584
LIABILITIES:
Payable to Custodian 398 -- 82 31 --
Payable for capital shares redeemed -- 282 23 -- 86
Payable to brokers for
investments purchased -- 938 32 -- --
Payable for return of
collateral received -- 25,650 3,142 19,886 --
Accrued expenses and other payables:
Investment advisory fees 442 197 19 77 191
Administration fees 8 5 1 18 3
Custodian fees 13 4 1 13 35
Accounting fees 1 1 1 4 4
Transfer agent fees 22 36 11 22 12
Shareholder service
fees -- Class A -- 49 6 4 5
Shareholder service and
12b-1 fees -- Class B -- 1 1 -- --
12b-1 fees -- Class G 187 -- -- 59 14
Other 22 35 4 16 18
Total Liabilities 1,093 27,198 3,323 20,130 368
NET ASSETS:
Capital 291,307 239,164 12,185 168,447 133,211
Undistributed (distributions in
excess of) net investment income (135) 148 1 (118) (491)
Net unrealized appreciation/
depreciation from investments 204,790 27,298 16,778 38,137 25,694
Net unrealized appreciation/
depreciation from translation
of assets and liabilities in
foreign currencies -- -- -- -- 2,878
Accumulated undistributed net
realized gains (losses) from
investment and foreign
currency transactions 25,425 7,609 5,577 (8,957) 6,924
Net Assets $521,387 $274,219 $34,541 $197,509 $168,216
Net Assets
Class A -- $272,551 $33,576 $ 66,408 $133,603
Class B -- 1,668 965 -- 547
Class G $521,387 -- -- 131,101 34,066
Total $521,387 $274,219 $34,541 $197,509 $168,216
Outstanding units of beneficial
interest (shares)
Class A -- 20,218 1,762 2,960 9,210
Class B -- 126 52 -- 39
Class G 14,939 -- -- 5,843 2,349
Total 14,939 20,344 1,814 8,803 11,598
Net asset value
Redemption price per share
Redemption price per
share -- Class A $ 13.48 $ 19.05 $ 22.44 $ 14.51
Offering and redemption price
per share -- Class G $ 34.90 $ 22.43 $ 14.50
Offering and redemption price
per share -- Class B<F1> $ 13.18 $ 18.64 $ 14.00
Maximum sales charge N/A 5.75% 5.75% 5.75% 5.75%
Maximum offering price per share
(100%/(100%-maximum sales charge)
of net asset value adjusted to
nearest cent) -- Class A $ 14.30 $ 20.21 $ 23.81 $ 15.40
<FN>
<F1> Redemption price per Class B share varies based on length of time held.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Statements of Operations
The Victory Portfolios For the Six Months Ended April 30, 1999
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Ohio Small
Established Special Regional Company International
Value Value Stock Opportunity Growth
Fund<F1> Fund Fund Fund<F1> Fund
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest income $ 44 $ 91 $ 3 $ 31 $ 137
Dividend income 154 3,023 424 96 825
Securities Lending -- 33 1 -- --
Foreign tax withholding -- -- -- (1) (69)
Total Income 198 3,147 428 126 893
Expenses:
Investment advisory fees 210 1,540 142 94 779
Administration fees 49 228 28 23 106
Shareholder service fees
-- Class A -- 380 45 13 165
Shareholder service fees
and 12b-1 fees -- Class B -- 9 5 -- 2
12b-1 fees -- Class G 205 -- -- 51 14
Accounting fees 8 44 24 8 34
Custodian fees 7 43 8 5 129
Legal and audit fees 4 17 3 1 8
Trustees' fees and expenses -- 4 1 -- 2
Transfer agent fees 24 69 20 14 47
Registration and filing fees -- 17 7 2 17
Printing fees 3 8 2 1 2
Other 3 21 2 1 7
Total Expenses 513 2,380 287 213 1,312
Expenses voluntarily reduced (29) (154) (19) (31) (53)
Expenses before reimbursement
from distributor 484 2,226 268 182 1,259
Expenses reimbursed by distributor (27) (7) (5) -- (9)
Net Expenses 457 2,219 263 182 1,250
Net Investment Income (259) 928 165 (56) (357)
Realized/Unrealized Gains
(Losses) from Investments
and Foreign Currencies:
Net realized gains (losses)
from investment transactions 243 7,631 5,576 (1,143) 7,501
Net realized (loss) from foreign
currency transactions -- -- -- -- (236)
Net change in unrealized appreciation/
depreciation from investments 53,656 873 (4,248) 16,229 13,005
Change in unrealized appreciation/
depreciation from translation of
assets and liabilities in
foreign currencies -- -- -- -- (26)
Net realized/unrealized gains
(losses) from investments
and foreign currencies: 53,899 8,504 1,328 15,086 20,244
Change in net assets resulting
from operations $53,640 $9,432 $1,493 $15,030 $19,887
<FN>
<F1> For the period April 1, 1999 through April 30, 1999.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Established Special Ohio Regional
Value Fund Value Fund Stock Fund
One Six Six
Month Year Months Year Months Year
Ended Ended Ended Ended Ended Ended
April 30, March 31, April 30, October 31, April 30, October 31,
1999 1999 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income (loss) $ (259) $ 4,759 $ 928 $ 2,335 $ 165 $ 386
Net realized gains/(losses) from
investment transactions 243 41,202 7,631 14,148 5,576 4,989
Net change in unrealized
appreciation/depreciation
from investments 53,656 (54,160) 873 (63,870) (4,248) (6,979)
Change in net assets resulting
from operations 53,640 (8,199) 9,432 (47,387) 1,493 (1,604)
Distributions to Shareholders:
From net investment income
Class A -- -- (1,152) (2,264) (171) (380)
Class G -- (4,946) -- -- -- --
From net realized gains from
investment transactions -- (30,865) (14,036) (31,840) (4,989) (4,773)
Change in net assets from
distributions to shareholders -- (35,811) (15,188) (34,104) (5,160) (5,153)
Capital Transactions:
Proceeds from shares issued 4,434 315,787 28,270 97,620 2,395 9,121
Dividends reinvested -- 34,887 12,701 28,316 3,531 3,575
Cost of shares redeemed (15,671) (394,935) (109,894) (117,227) (10,372) (17,693)
Change in net assets from
capital transactions (11,237) (44,261) (68,923) 8,709 (4,446) (4,997)
Change in net assets 42,403 (88,271) (74,679) (72,782) (8,113) (11,754)
Net Assets:
Beginning of period 478,984 567,255 348,898 421,680 42,654 54,408
End of period $521,387 $ 478,984 $ 274,219 $ 348,898 $ 34,541 $ 42,654
Share Transactions:
Issued 133 10,251 2,075 6,190 130 399
Reinvested -- 1,130 957 1,813 188 163
Redeemed (476) (12,812) (8,266) (7,706) (569) (807)
Change in shares (343) (1,431) (5,234) 297 (251) (245)
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Small Company International
Opportunity Fund Growth Fund
One Six
Month Year Months Year
Ended Ended Ended Ended
April 30, March 31, October 31, October 31,
1999 1999 1998 1998
<S> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income (loss) $ (56) $ 622 $ (357) $ 602
Net realized gains/(losses) from
investment transactions (1,143) (7,458) 7,501 8,282
Net realized (losses) from foreign
currency transactions -- -- (236) (4,180)
Net change in unrealized appreciation/
depreciation from investments 16,229 (37,144) 16,369 (563)
Net change in unrealized appreciation/
depreciation from translation of
assets and liabilities in foreign
currencies -- -- -- 3,830
Change in net assets resulting
from operations 15,030 (43,980) 23,277 7,971
Distributions to Shareholders:
From net investment income
Class A -- -- -- (431)
Class G -- (890) -- --
From net realized gains from
investment transactions
Class A -- -- (4,776) (5,849)
Class G -- (6,817) -- --
Change in net assets from
distributions to shareholders -- (7,707) (4,776) (6,280)
Capital Transactions:
Proceeds from shares issued 4,823 163,831 120,099 191,985
Proceeds from shares issued in
connection with acquisition -- 70,516 29,074 --
Dividends reinvested -- 7,587 4,467 4,034
Cost of shares redeemed (12,692) (175,583) (138,768) (169,240)
Change in net assets from
capital transactions (7,869) 66,351 14,872 26,779
Change in net assets 7,161 14,664 33,373 28,470
Net Assets:
Beginning of period 190,348 175,684 134,843 106,373
End of period $197,509 $ 190,348 $ 168,216 $ 134,843
Share Transactions:
Issued 273 6,944 8,582 14,295
Issued in connection with acquisition -- 3,124 2,363 --
Reinvested -- 305 228 325
Redeemed (662) (7,479) (9,798) (12,387)
Change in shares (389) 2,894 1,375 2,233
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Established Value Fund
One Month Year Year Year Year 11 Months Year
Ended Ended Ended Ended Ended Ended Ended
April 30, March 31, March 31, March 31, March 31, March 31, April 30,
1999 1999<F2> 1998 1997 1996 1995 1994
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 31.34 $ 33.94 $ 28.83 $ 27.57 $ 23.38 $ 22.52 $ 21.38
Investment Activities
Net investment
income (loss) (0.01) 0.29 0.46 0.44 0.44 0.38 0.26
Net realized and
unrealized gains
(losses) from
investments 3.57 (0.71) 7.70 3.62 5.19 1.52 2.10
Total from
Investment Activities 3.56 (0.42) 8.16 4.06 5.63 1.90 2.36
Distributions
Net investment income -- (0.30) (0.48) (0.45) (0.43) (0.37) (0.22)
Net realized gains -- (1.88) (2.57) (2.35) (1.01) (0.66) (1.00)
Total Distributions -- (2.18) (3.05) (2.80) (1.44) (1.03) (1.22)
Net Asset Value,
End of Period $ 34.90 $ 31.34 $ 33.94 $ 28.83 $ 27.57 $ 23.39 $ 22.52
Total Return
(excludes sales charges) 11.36%<F3> (1.01)% 29.67% 15.14% 24.84% 8.85%<F3> 11.30%
Ratios/Supplemental Data:
Net Assets,
End of Period (000) $521,387 $478,984 $567,255 $429,726 $366,417 $277,370 $253,292
Ratio of
expenses to average
net assets<F5> 1.10%<F4> 1.09% 1.10% 1.12% 1.15% 1.20%<F4> 1.22%
Ratio of net
investment income
to average net
assets<F5> (0.62)%<F4> 0.92% 1.44% 1.57% 1.70% 1.87%<F4> 1.15%
Ratio of
expenses to average
net assets<F1> 1.25%<F4> <F6> <F6> <F6> <F6> <F6> <F6>
Ratio of net
investment income
to average net assets<F1> (0.77)%<F4> <F6> <F6> <F6> <F6> <F6> <F6>
Portfolio turnover 2% 37% 20% 31% 18% 24% 38%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or reimbursed. If such voluntary fee
reductions and/or reimbursements had not occurred, the ratios would have been as indicated.
<F2> Effective April 1, 1999, the Gradison Established Value Fund became the Victory Established Value Fund.
Financial highlights prior to April 1, 1999 represent the Gradison Established Value Fund.
<F3> Not annualized.
<F4> Annualized.
<F5> On April 1, 1999, the adviser agreed to waive its management fee or to reimburse expenses, as allowed
by law, to the extent necessary to maintain the net operating expenses of the Class G shares of the
Fund at a maximum of 1.10% until at least April 1, 2001.
<F6> There were no fee reductions during the period.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Special Value Fund
Class A Shares
Six Months Year Year Year
Ended Ended Ended Ended
April 30, October 31, October 31, October 31,
1999 1998 1997 1996<F5>
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 13.64 $ 16.68 $ 14.15 $ 12.15
Investment Activities
Net investment income (loss) 0.04 0.09 0.10 0.12
Net realized and unrealized
gains (losses) on investments 0.43 (1.79) 3.50 2.33
Total from Investment Activities 0.47 (1.70) 3.60 2.45
Distributions
Net investment income (0.05) (0.09) (0.12) (0.11)
In excess of net investment income -- -- -- --
Net realized gains (0.58) (1.25) (0.95) (0.34)
Total Distributions (0.63) (1.34) (1.07) (0.45)
Net Asset Value, End of Period $ 13.48 $ 13.64 $ 16.68 $ 14.15
Total Return (excludes sales charges) 3.57%<F3> (11.22)% 27.05% 20.60%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $272,551 $346,962 $420,020 $289,460
Ratio of expenses to average
net assets 1.40% 1.37% 1.37% 2.69%<F4>
Ratio of net investment income
(loss) to average net assets 0.61%<F4> 0.56% 0.65% 0.88%
Ratio of expenses to average
net assets<F1> 1.53%<F4> 1.51% <F8> 1.40%
Ratio of net investment income
(loss) to average net assets<F1> 0.51%<F4> 0.45% <F8> 0.85%
Portfolio turnover<F7> 19% 44% 39% 55%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been as indicated.
<F2> Period from commencement of operations.
<F3> Not annualized.
<F4> Annualized.
<F5> Effective March 1, 1996, the Fund designated the existing shares as Class A Shares and commenced offering Class B Shares.
<F6> Represents total return for the Fund for the period November 1, 1995 through February 29, 1996 plus total return for
Class B Shares for the Period March 1, 1996 through October 31, 1996. The total return for the Class B shares for the
period from March 1, 1996 through October 31, 1996 was 9.66%.
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of
shares issued.
<F8> There were no voluntary fee reductions during the period.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Special Value Fund
Class B Shares
March 1, December 3,
Six Months Year Year 1996 Year 1993
Ended Ended Ended through Ended through
April 30, October 31, October 31, October 31, October 31, October 31,
1999 1998 1997 1996<F5> 1995 1994<F2>
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $13.38 $ 16.49 $14.09 $12.89 $ 10.49 $ 10.00
Investment Activities
Net investment income (loss) (0.07) (0.08) (0.04) 0.01 0.15 0.11
Net realized and unrealized
gains (losses) on investments 0.45 (1.78) 3.41 1.23 1.71 0.48
Total from Investment Activities 0.38 (1.86) 3.37 1.24 1.86 0.59
Distributions
Net investment income -- -- -- (0.01) (0.15) (0.10)
In excess of net investment income -- -- (0.02) (0.03) -- --
Net realized gains (0.58) (1.25) (0.95) -- (0.05) --
Total Distributions (0.58) (1.25) (0.97) (0.04) (0.20) (0.10)
Net Asset Value, End of Period $13.18 $ 13.38 $16.49 $14.09 $ 12.15 $ 10.49
Total Return (excludes sales charges) 2.93%<F3> (12.32)% 25.41% 19.80%<F6> 18.01% 5.92%<F3>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $1,668 $1,936 $1,660 $ 386 $194,700 $118,600
Ratio of expenses to average
net assets 1.43%<F4> 2.65% 2.66% 2.51%<F4> 1.04% 1.00%<F4>
Ratio of net investment income
(loss) to average net assets (0.64)%<F4> (0.68)% (0.62)% (0.31)%<F4> 1.35% 1.23%<F4>
Ratio of expenses to average
net assets<F1> 2.79%<F4> 3.02% 3.63% 3.75%<F4> 1.30% 1.49%<F4>
Ratio of net investment income
(loss) to average net assets<F1> (0.74)%<F4> (1.05)% (1.59)% (1.55)%<F4> 1.09% 0.74%<F4>
Portfolio turnover<F7> 19% 44% 39% 55% 39% 18%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been as indicated.
<F2> Period from commencement of operations.
<F3> Not annualized.
<F4> Annualized.
<F5> Effective March 1, 1996, the Fund designated the existing shares as Class A Shares and commenced offering Class B Shares.
<F6> Represents total return for the Fund for the period November 1, 1995 through February 29, 1996 plus total return for
Class B Shares for the Period March 1, 1996 through October 31, 1996. The total return for the Class B shares for the
period from March 1, 1996 through October 31, 1996 was 9.66%.
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of
shares issued.
<F8> There were no voluntary fee reductions during the period.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Ohio Regional Stock Fund
Class A Shares
Six Months Year Year Year
Ended Ended Ended Ended
April 30, October 31, October 31, October 31,
1999 1998 1997 1996<F2>
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 20.67 $ 23.56 $ 17.95 $ 15.94
Investment Activities
Net investment income (loss) 0.09 0.18 0.14 0.14
Net realized and unrealized
gains (losses) from investments 0.80 (0.80) 5.96 2.62
Total from Investment Activities 0.89 (0.62) 6.10 2.76
Distributions
Net investment income (0.09) (0.17) (0.14) (0.14)
In excess of net investment income -- -- -- --
Net realized gains (2.42) (2.10) (0.35) (0.36)
In excess of net realized gains -- -- -- (0.25)
Total Distributions (2.51) (2.27) (0.49) (0.75)
Net Asset Value, End of Period $ 19.05 $ 20.67 $ 23.56 $ 17.95
Total Return (excludes sales charges) 4.52%<F6> (3.13)% 34.61% 17.79%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $33,576 $41,653 $53,703 $45,294
Ratio of expenses to average net assets 1.36%<F4> 1.26% 1.26% 1.39%
Ratio of net investment income
(loss) to average net assets 0.90%<F4> 0.76% 0.67% 0.79%
Ratio of expenses to average
net assets<F1> 1.46%<F4> 1.37% 1.26% 1.40%
Ratio of net investment income
(loss) to average net assets<F1> 0.80%<F4> 0.65% 0.67% 0.78%
Portfolio turnover<F5> 1% 6% 8% 6%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or reimbursed. If such voluntaryfee reductions
and/or reimbursements had not occurred, the ratios would have been as indicated.
<F2> Effective March 1, 1996, the Fund designated the existing shares as Class A Shares and commenced offering
Class B Shares.
<F3> Represents total return for the Fund for the period November 1, 1995 through February 29, 1996 plus total return
for Class B Shares for the period March 1, 1996 through October 31, 1996. The total return for the Class B shares
for the period from March 1, 1996 through October 31, 1996 was 9.03%.
<F4> Annualized.
<F5> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of
shares issued.
<F6> Not annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Ohio Regional Stock Fund
Class B Shares
March 1,
Six Months Year Year 1996 Year Year
Ended Ended Ended through Ended Ended
April 30, October 31, October 31, October 31, October 31, October 31,
1999 1998 1997 1996<F2> 1995 1994
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $20.30 $23.28 $17.87 $16.43 $14.56 $ --
Investment Activities
Net investment income (loss) (0.02) (0.11) (0.14) (0.03) 0.17 0.18
Net realized and unrealized
gains (losses) from investments 0.78 (0.77) 5.90 1.51 2.13 15.08
Total from Investment Activities 0.76 (0.88) 5.76 1.48 2.30 15.26
Distributions
Net investment income -- -- -- -- (0.17) (0.17)
In excess of net investment income -- -- -- (0.04) (0.01) --
Net realized gains (2.42) (2.10) (0.35) -- (0.65) (0.53)
In excess of net realized gains -- -- -- -- (0.09) --
Total Distributions (2.42) (2.10) (0.35) (0.04) (0.92) (0.70)
Net Asset Value, End of Period $18.64 $20.30 $23.28 $17.87 $ 15.94 $ 14.56
Total Return (excludes sales charges) 3.89%<F6> (4.33)% 32.71% 16.95%<F3> 16.93% 3.96%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 965 $1,001 $ 705 $ 326 $39,048 $33,965
Ratio of expenses to average net assets 2.60%<F4> 2.52% 2.65% 2.61%<F4> 1.20% 1.04%
Ratio of net investment income
(loss) to average net assets (0.36)%<F4> (0.54)% (0.76)% (0.60)%<F4> 1.13% 1.27%
Ratio of expenses to average
net assets<F1> 3.74%<F4> 3.59% 4.25% 3.50%<F4> 1.24% 1.27%
Ratio of net investment income
(loss) to average net assets<F1> (1.50)%<F4> (1.61)% (2.36)% (1.49)%<F4> 1.09% 1.04%
Portfolio turnover<F5> 1% 6% 8% 6% 11% 14%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or reimbursed. If such voluntaryfee reductions
and/or reimbursements had not occurred, the ratios would have been as indicated.
<F2> Effective March 1, 1996, the Fund designated the existing shares as Class A Shares and commenced offering
Class B Shares.
<F3> Represents total return for the Fund for the period November 1, 1995 through February 29, 1996 plus total return
for Class B Shares for the period March 1, 1996 through October 31, 1996. The total return for the Class B shares
for the period from March 1, 1996 through October 31, 1996 was 9.03%.
<F4> Annualized.
<F5> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of
shares issued.
<F6> Not annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Small Company Opportunity Fund
Class A Shares Class G Shares
One One
Month March 26, Month Year
Ended 1999 to Ended Ended
April 30, March 31, April 30, March 31,
1999 1999<F2><F3> 1999 1999<F3>
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 20.71 $ 20.23 $ 20.71 $ 27.89
Investment Activities
Net investment income -- -- -- 0.10
Net realized and unrealized
gains (losses) on investments 1.73 0.48 1.72 (6.06)
Total from Investment Activities 1.73 0.48 1.72 (5.96)
Distributions
Net investment income -- -- -- (0.14)
Net realized gains -- -- -- (1.08)
Total Distributions -- -- -- (1.22)
Net Asset Value, End of Period $ 22.44 $ 20.71 $ 22.43 $ 20.71
Total Return (excludes sales charges) 8.35%<F5> 2.37%<F5> 8.31%<F5> (22.08)%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $66,408 $64,587 $131,101 $125,761
Ratio of expenses to average
net assets<F4> 1.01%<F6> 0.98%<F6> 1.26%<F6> 1.30%<F6>
Ratio of net investment income
(loss) to average net assets<F4> (0.19)%<F6> 1.50%<F6> (0.45)%<F6> 0.41%
Ratio of expenses to average
net assets<F1> 1.24%<F6> 1.19%<F6> 1.48%<F6> 1.30%
Ratio of net investment income
(loss) to average net assets<F1> (0.42)%<F6> 1.29%<F6> (0.63)%<F6> 0.41%
Portfolio turnover <F7> 1% 30% 1% 30%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not
occurred, the ratios would have been as indicated.
<F2> Period from commencement of operations.
<F3> Effective March 26, 1999, the Gradison Opportunity Value Fund merged into the Victory Special Growth Fund.
Concurrent with the merger the Fund was renamed Victory Small Company Opportunity Fund. Financial highlights
prior to March 26, 1999 represent the Gradison Opportunity Value Fund.
<F4> Effective March 26, 1999, the Adviser agreed to waive its management fee or to reimburse expenses, as allowed
by law, to the extent necessary to maintain the net operating expenses of the Class G shares of the Fund at
a maximum of 1.30% until at least April 1, 2001. The Adviser has also agreed to waive its management fee for
Class A shares to the same extent the fee is waived for Class G shares until at least April 1, 2001.
<F5> Not annualized
<F6> Annualized
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes
of shares issued.
<F8> There were no fee reductions during the period.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Small Company Opportunity Fund
Class G Shares
Year Year Year 11 Months Year
Ended Ended Ended Ended Ended
March 31, March 31, March 31, March 31, April 30,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 22.77 $ 22.26 $18.10 $18.35 $17.55
Investment Activities
Net investment income 0.23 0.20 0.19 0.13 0.08
Net realized and unrealized
gains (losses) on investments 8.72 2.51 4.73 0.18 1.59
Total from Investment
Activities 8.95 2.71 4.92 0.31 1.67
Distributions
Net investment income (0.27) (0.17) (0.18) (0.12) (0.07)
Net realized gains (3.56) (2.04) (0.58) (0.44) (0.80)
Total Distributions (3.83) (2.21) (0.76) (0.56) (0.87)
Net Asset Value, End of Period $ 27.89 $ 22.77 $22.26 $18.10 $18.35
Total Return (excludes sales charges) 42.02% 12.46% 28.00% 1.75% 9.75%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $175,684 $114,451 $ 103 $ 85 $ 83
Ratio of expenses to average
net assets<F4> 1.31% 1.36% 1.41% 1.37% 1.38%
Ratio of net investment income
(loss) to average net assets<F4> 0.86% 0.90% 0.95% 0.84% 0.47%
Ratio of expenses to average
net assets<F1> <F8> <F8> <F8> <F8> <F8>
Ratio of net investment income
(loss) to average net assets<F1> <F8> <F8> <F8> <F8> <F8>
Portfolio turnover <F7> 42% 35% 24% 32% 40%
<FN>
<F1> During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not
occurred, the ratios would have been as indicated.
<F2> Period from commencement of operations.
<F3> Effective March 26, 1999, the Gradison Opportunity Value Fund merged into the Victory Special Growth Fund.
Concurrent with the merger the Fund was renamed Victory Small Company Opportunity Fund. Financial highlights
prior to March 26, 1999 represent the Gradison Opportunity Value Fund.
<F4> Effective March 26, 1999, the Adviser agreed to waive its management fee or to reimburse expenses, as allowed
by law, to the extent necessary to maintain the net operating expenses of the Class G shares of the Fund at
a maximum of 1.30% until at least April 1, 2001. The Adviser has also agreed to waive its management fee for
Class A shares to the same extent the fee is waived for Class G shares until at least April 1, 2001.
<F5> Not annualized
<F6> Annualized
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes
of shares issued.
<F8> There were no fee reductions during the period.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
International Growth Fund
Class A Shares Class B Shares
Six Six
Months Year Year Year Months Year
Ended Ended Ended Ended Ended Ended
April 30, October 31, October 31, October 31, April 30, October 31,
1999 1998 1997 1996<F3> 1999 1998
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 13.19 $ 13.31 $ 13.01 $ 12.33 $12.82 $13.07
Investment Activities
Net investment income (loss) (0.04) 0.07<F2> 0.09 0.08 (0.05) (0.13)
Net realized and unrealized
gains (losses) from
investments and
foreign currencies 1.84 0.65 0.67 0.62 1.71 0.66
Total from
Investment Activities 1.80 0.72 0.76 0.70 1.66 0.53
Distributions
Net investment income -- (0.06) (0.01) (0.02) -- --
Net realized gains (0.48) (0.78) (0.45) -- (0.48) (0.78)
Tax return of capital -- -- -- -- -- --
Total Distributions (0.48) (0.84) (0.46) (0.02) (0.48) (0.78)
Net Asset Value, End of Period $ 14.51 $ 13.19 $ 13.31 $ 13.01 $14.00 $12.82
Total Return
(excludes sales charges) 13.75%<F8> 5.79% 6.04% 5.65% 13.04%<F8> 4.44%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $133,603 $134,491 $106,189 $121,517 $ 547 $ 352
Ratio of expenses to
average net assets<F11> 1.75%<F6> 1.71% 1.69% 1.73% 3.07%<F6> 2.98%
Ratio of net investment income
(loss) to average net assets<F11> (0.50)%<F6> 0.55% 0.63% 0.64% (1.70)%<F6> (0.80)%
Ratio of expenses to
average net assets<F1> 1.90%<F6> 1.82% 1.69% 1.75% 6.19%<F6> 6.44%
Ratio of net investment income
(loss) to average net assets<F1> (0.65)%<F6> 0.44% 0.63% 0.62% (4.82)%<F6> (4.26)%
Portfolio turnover<F7> 42% 86% 116% 178% 42% 86%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or
reimbursed. If such voluntary fee reductions and/or reimbursements had not
occurred, the ratios would have been as indicated.
<F2> Calculated using average shares for the period.
<F3> Effective March 1, 1996, the Fund designated the existing shares as Class
A Shares and commenced offering Class B Shares.
<F4> Effective June 5, 1995, the Victory Foreign Markets Portfolio merged into the
International Growth Fund. Financial highlights for the periods prior to
June 5, 1995 represent the International Growth Portfolio.
<F5> Represents total return for the Fund for the period November 1, 1995
through February 29, 1996 plus total return for Class B Shares for the period
March 1, 1996 through October 31, 1996. The total return for the Class B shares
for the period from March 1, 1996 through October 31, 1996 was 1.11%.
<F6> Annualized.
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
<F8> Not Annualized.
<F9> Period from commencement of operations.
<F10> Effective March 26, 1999, the Gradison International Fund merged into the Victory
International Growth Fund.
<F11> On March 26, 1999, the adviser agreed to waive its management fee or to reimburse
expenses, as allowed by law, to the extent necessary to maintain the net operating
expenses of the Class G shares of the Fund at a maximum of 2.00% until at least
April 1, 2001. The Adviser has also agreed to waive its management fee for Class A
and Class B shares to the same extent the fee is waived for Class G shares until at
least April 1, 2001.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
International Growth Fund
Class G
Class B Shares Shares
March 1,
Year 1996 Year Year March 26,
Ended through Ended Ended 1999 to
October 31, October 31, October 31, October 31, April 30,
1997 1996<F3> 1995<F4> 1994 1999<F9><F10>
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $12.93 $12.79 $ 13.32 $ 11.93 $ 13.73
Investment Activities
Net investment income (loss) (0.06) -- 0.05 (0.01) --
Net realized and unrealized
gains (losses) from
investments and
foreign currencies 0.65 0.14 (0.42) 1.40 0.77
Total from
Investment Activities 0.59 0.14 (0.37) 1.39 0.77
Distributions
Net investment income -- -- -- -- --
Net realized gains (0.45) -- (0.55) -- --
Tax return of capital -- -- (0.07) -- --
Total Distributions (0.45) -- (0.62) -- --
Net Asset Value, End of Period $13.07 $12.93 $ 12.33 $ 13.32 $ 14.50
Total Return
(excludes sales charges) 4.68% 4.89%<F5> (2.50)% 11.65% 5.61%<F8>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 184 $ 118 $106,477 $81,307 $34,066
Ratio of expenses to
average net assets<F11> 3.07% 2.91%<F6> 1.53% 1.48% 1.96%<F6>
Ratio of net investment income
(loss) to average net assets<F11> (0.68)% (0.10)%<F6> 0.75% (0.51)% (0.32)%<F6>
Ratio of expenses to
average net assets<F1> 10.01% 6.46%<F6> 1.65% 1.83% 2.14%<F6>
Ratio of net investment income
(loss) to average net assets<F1> (7.62)% (3.65)%<F6> 0.63% (0.86)% (0.50)%<F6>
Portfolio turnover<F7> 116% 178% 68% 51% 42%
<FN>
<F1> During the period, certain fees were voluntarily reduced and/or
reimbursed. If such voluntary fee reductions and/or reimbursements had not
occurred, the ratios would have been as indicated.
<F2> Calculated using average shares for the period.
<F3> Effective March 1, 1996, the Fund designated the existing shares as Class
A Shares and commenced offering Class B Shares.
<F4> Effective June 5, 1995, the Victory Foreign Markets Portfolio merged into the
International Growth Fund. Financial highlights for the periods prior to
June 5, 1995 represent the International Growth Portfolio.
<F5> Represents total return for the Fund for the period November 1, 1995
through February 29, 1996 plus total return for Class B Shares for the period
March 1, 1996 through October 31, 1996. The total return for the Class B shares
for the period from March 1, 1996 through October 31, 1996 was 1.11%.
<F6> Annualized.
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
<F8> Not Annualized.
<F9> Period from commencement of operations.
<F10> Effective March 26, 1999, the Gradison International Fund merged into the Victory
International Growth Fund.
<F11> On March 26, 1999, the adviser agreed to waive its management fee or to reimburse
expenses, as allowed by law, to the extent necessary to maintain the net operating
expenses of the Class G shares of the Fund at a maximum of 2.00% until at least
April 1, 2001. The Adviser has also agreed to waive its management fee for Class A
and Class B shares to the same extent the fee is waived for Class G shares until at
least April 1, 2001.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Statements of Cash Flows
The Victory Portfolios For the Six Months Ended April 30, 1999
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Diversified Special
Value Stock Value
Fund Fund Fund
<S> <C> <C> <C>
Increase (decrease) in cash
Cash Flows from Operating Activities:
Net increase in net assets from operations $ 435 $ 1,827 $ 928
Adjustments to reconcile net increase
in net assets from operations to net
cash used in operating activities:
Purchase of investment securities (929,853) (3,341,402) (521,624)
Proceeds from disposition of
investment securities 942,387 3,337,764 604,458
Increase/decrease in collateral
for securities loaned (5,840) (33,888) (18,943)
Increase/decrease in dividends
and interest receivable (78) (104) 178
Increase/decrease in payable upon
return of securities loaned 5,840 33,888 (18,943)
Increase/decrease in accrued expenses 98 162 (78)
Net cash used in operating activities 12,989 (1,753) 83,862
Cash Flows from Financing Activities:
Proceeds from shares sold 49,724 216,094 28,282
Payment on shares redeemed (56,729) (180,208) (109,657)
Cash distributions paid (5,984) (33,667) (2,487)
Net cash provided by financing activities (12,989) 2,219 (83,862)
Cash:
Beginning balance -- 2 --
Ending balance $ -- $ 468 $ --
<FN>
<F1> Non-cash financing activities not included herein consist of reinvestment of dividends
and distributions of $80,846, $167,392 and $12,701.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Notes to Financial Statements
The Victory Portfolios April 30, 1999
(Unaudited)
1. Organization:
The Victory Portfolios (the "Trust") was organized on December 6, 1995 as a
successor to a company of the same name organized as a Massachusetts business
trust on February 5, 1986. The Trust is registered under the Investment
Company Act of 1940, as amended, (the "1940 Act") as an open-end investment
company established as a Delaware business trust. The Trust is authorized to
issue an unlimited number of shares, which are units of beneficial interest
with a par value of $0.001. The Trust currently offers shares of 32 active
funds. The accompanying financial statements and financial highlights are
those of the U.S. Government Obligations Fund, Prime Obligations Fund,
Financial Reserves Fund, Tax-Free Money Market Fund, Ohio Municipal Money
Market Fund, Limited Term Income Fund, Intermediate Income Fund, Fund for
Income, Government Mortgage Fund, Investment Quality Bond Fund, National
Municipal Bond Fund, New York Tax-Free Fund, Ohio Municipal Bond Fund,
Balanced Fund, Convertible Securities Fund, Real Estate Investment ("REI")
Fund, Value Fund, Lakefront Fund, Diversified Stock Fund, Stock Index Fund,
Growth Fund, Established Value Fund, Special Value Fund, Ohio Regional Stock
Fund, International Growth Fund, Small Company Opportunity Fund (previously
the Special Growth Fund) (collectively, the "Funds").
The U.S. Government Obligations Fund is authorized to issue two classes of
shares: Investor Shares and Select Shares. The National Municipal Bond Fund,
New York Tax-Free Fund, Balanced Fund, Special Value Fund and Ohio Regional
Stock Fund are authorized to issue two classes of shares: Class A Shares and
Class B Shares. The Fund for Income, Ohio Municipal Bond Fund and Small
Company Opportunity Fund are authorized to issue two classes of shares: Class
A Shares and Class G Shares. The Diversified Stock Fund and International
Growth Fund are authorized to issue three classes of shares: Class A Shares,
Class B Shares and Class G Shares. The Established Value Fund is authorized
to issue Class G Shares. Each class of shares in a Fund has substantially
identical rights and privileges except with respect to sales charges, fees
paid under shareholder servicing or distribution plans, expenses allocable
exclusively to each class of shares, voting rights on matters affecting a
single class of shares, and the exchange privilege of each class of shares.
The U.S. Government Obligations Fund and the Prime Obligations Fund seek to
provide current income consistent with liquidity and stability of principal.
The Financial Reserves Fund seeks to provide as high a level of current
income as is consistent with preserving capital and providing liquidity. The
Tax-Free Money Market Fund seeks to provide current interest income free from
federal income taxes consistent with relative liquidity and stability of
principal. The Ohio Municipal Money Market Fund seeks to provide current
income exempt from federal regular income tax and the personal income taxes
imposed by the State of Ohio and Ohio municipalities consistent with
stability of principal. The Limited Term Income Fund seeks to provide income
consistent with limited fluctuation of principal. The Intermediate Income
Fund and the Investment Quality Bond Fund seek to provide a high level of
income. The Government Mortgage Fund seeks to provide a high level of current
income consistent with safety of principal. The Fund for Income seeks to
provide a high level of current income consistent with preservation of
shareholders' capital. The National Municipal Bond Fund seeks to provide a
high level of current interest income exempt from federal income tax, as is
consistent with the preservation of capital. The New York Tax-Free Fund seeks
to provide a high level of current income exempt from federal, New York
State, and New York City income taxes, consistent with the preservation of
shareholders' capital. The Ohio Municipal Bond Fund seeks to produce a high
level of current interest income which is exempt from both federal income tax
and Ohio personal income tax. The Convertible Securities Fund seeks to
provide a high level of current income together with long-term capital
appreciation. The Balanced Fund seeks to provide income and long-term growth
of capital. The Stock Index Fund seeks to provide long-term capital
appreciation by attempting to match the investment performance of the
Standard & Poor's 500 Composite Stock Index. The Diversified Stock Fund and
the Growth Fund seek to provide long term growth of capital. The Value Fund
and the Special Value Fund seek to provide long-term growth of capital and
dividend income. The Established Value Fund seeks to obtain long-term capital
growth by investing primarily in common stocks. The Small Company Opportunity
Fund and the Ohio Regional Stock Fund seek to provide capital appreciation.
The International Growth Fund seeks to provide capital growth consistent with
reasonable investment risk. The Lakefront Fund seeks to provide long-term
growth of capital and income. The REI Fund seeks to provide total return
through investments in real estate-related securities.
2. Reorganizations:
The Trust entered an Agreement and Plan of Reorganization and Termination
(the "Agreement") with the Gradison Custodian Trust, the Gradison-McDonald
Municipal Custodian Trust and the Gradison Growth Trust (collectively, the
"Gradison Trusts"). Each Gradison Trust was registered as an open-end
investment management company under the 1940 Act. Pursuant to the Agreement,
all of the assets and liabilities of the Gradison Government Income Fund,
Gradison Ohio Tax-Free Income Fund, Gradison Growth and Income Fund, Gradison
Established Value Fund, Gradison International Fund and the Gradison
Opportunity Value Fund (collectively, the "Gradison Funds") were transferred
individually to separate Funds of the Trust in exchange for Class G shares, a
new class of shares issued in connection with the reorganization, of the
corresponding Fund. The Gradison Government Income Fund transferred its
assets and liabilities to the Victory Fund for Income. The Gradison Ohio
Tax-Free Income Fund transferred its assets and liabilities to the Victory
Ohio Municipal Bond Fund. The Gradison Growth and Income Fund transferred its
assets and liabilities to the Victory Diversified Stock Fund. The Gradison
Established Value Fund transferred its assets and liabilities to the Victory
Established Value Fund. The Gradison International Fund transferred its
assets and liabilities to the Victory International Growth Fund. The Gradison
Opportunity Value Fund transferred its assets and liabilities to the Victory
Special Growth Fund. Concurrent with the reorganization, the Victory Special
Growth Fund was renamed the Victory Small Company Opportunity Fund.
Immediately prior to these transfers, the Victory Fund for Income and Victory
Small Company Opportunity Fund
<PAGE>
each effected a reverse stock split to adjust the net asset value per share
to equal the net asset value per share of the Gradison Government Income Fund
and the Gradison Opportunity Value Fund, respectively. The reorganization,
which qualified as a tax-free exchange for federal income tax purposes, was
completed on March 26, 1999 for the Victory Fund for Income, Victory Ohio
Municipal Bond Fund, Victory Diversified Stock Fund, Victory International
Growth Fund and the Victory Small Company Opportunity Fund, and on April 1,
1999 for the Victory Established Value Fund (the "Effective Date(s) of the
Reorganization"), following approval by shareholders of the Gradison Funds at
a special shareholder meeting held on March 5, 1999.
For accounting purposes as a result of the reorganization, the historical
basis of assets and liabilities of the Victory Fund for Income, Victory Ohio
Municipal Bond Fund, Victory Diversified Stock Fund, Victory Established
Value Fund, Victory International Growth Fund and Victory Small Company
Opportunity Fund is that of the Gradison Government Income Fund, Victory Ohio
Municipal Bond Fund, Victory Diversified Stock Fund, Gradison Established
Value fund, Victory International Growth Fund and Gradison Opportunity Value
Fund, respectively.
The following is a summary of shares outstanding, net assets, net asset value
per share and net unrealized appreciation immediately before and after the
reorganization:
<TABLE>
<CAPTION>
Before After
Reorganization Reorganization
Gradison Victory Victory
Government Fund for Fund for
Income Fund Income Income
<S> <C> <C> <C>
Class A Shares (000) -- 3,314 2,426
Class G Shares (000) -- -- 12,352
Total Shares (000) 12,352 3,314 14,778
Class A Net Assets (000) -- $31,894 $ 31,894
Class G Net Assets (000) -- -- 162,313
Total Net Assets (000) $162,313 $31,894 $194,207
Net Asset Value $ 13.14 -- --
Class A Shares -- $ 9.62 $ 13.14
Class G Shares -- -- $ 13.14
Unrealized Appreciation/
(Depreciation) (000) $ 440 $ (190) $ 250
</TABLE>
<TABLE>
<CAPTION>
Before After
Reorganization Reorganization
Gradison Victory Victory
Ohio Ohio Ohio
Tax-Free Municipal Municipal
Fund Bond Fund Bond Fund
<S> <C> <C> <C>
Class A Shares (000) -- 7,059 7,059
Class G Shares (000) -- -- 10,429
Total Shares (000) 8,885 7,059 17,488
Class A Net Assets (000) -- $83,257 $ 83,257
Class G Net Assets (000) -- -- 122,932
Total Net Assets (000) $122,932 $83,257 $206,189
Net Asset Value $ 13.84 -- --
Class A Shares -- $ 11.79 $ 11.79
Class G Shares -- -- $ 11.79
Unrealized Appreciation (000) $ 4,805 $ 4,677 $ 9,482
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Before After
Reorganization Reorganization
Gradison Victory Victory
Growth & Diversified Diversified
Income Stock Stock
Fund Fund Fund
<S> <C> <C> <C>
Class A Shares (000) -- 58,119 58,119
Class B Shares (000) -- 3,883 3,883
Class G Shares (000) -- -- 4,456
Total Shares (000) 2,620 62,002 66,458
Class A Net Assets (000) -- $ 996,070 $ 996,070
Class B Net Assets (000) -- 65,343 65,343
Class G Net Assets (000) -- -- 76,373
Total Net Assets (000) $76,373 $1,061,413 $1,137,786
Net Asset Value $ 29.15 -- --
Class A Shares -- $ 17.14 $ 17.14
Class B Shares -- $ 16.83 $ 16.83
Class G Shares -- -- $ 17.14
Unrealized Appreciation (000) $16,342 $ 156,843 $ 173,185
</TABLE>
<TABLE>
<CAPTION>
Before After
Reorganization Reorganization
Gradison Victory Victory
Established Established Established
Value Value Value
Fund Fund Fund
<S> <C> <C> <C>
Class G Shares (000) -- N/A 15,233
Total Shares (000) 15,233 N/A 15,233
Class G Net Assets (000) -- N/A $479,568
Total Net Assets (000) $479,568 N/A $479,568
Net Asset Value $ 31.48 N/A --
Class G Shares -- N/A $ 31.48
Unrealized Appreciation (000) $153,283 N/A $153,283
</TABLE>
<TABLE>
<CAPTION>
Before After
Reorganization Reorganization
Victory Victory
Gradison International International
International Growth Growth
Fund Fund Fund
<S> <C> <C> <C>
Class A Shares (000) -- 9,551 9,551
Class B Shares (000) -- 39 39
Class G Shares (000) -- -- 2,363
Total Shares (000) 1,848 9,590 11,953
Class A Net Assets (000) -- $131,095 $131,095
Class B Net Assets (000) -- 515 515
Class G Net Assets (000) -- -- 32,440
Total Net Assets (000) $32,440 $131,610 $164,050
Net Asset Value $ 17.56 -- --
Class A Shares -- $ 13.73 $ 13.73
Class B Shares -- $ 13.26 $ 13.26
Class G Shares -- -- $ 13.73
Unrealized Appreciation (000) $ 3,364 $ 17,987 $ 21,351
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Before After
Reorganization Reorganization
Gradison Victory Victory
Opportunity Special Special
Value Growth Growth
Fund Fund Fund
<S> <C> <C> <C>
Class A Shares (000) -- 5,824 3,124
Class G Shares (000) -- -- 6,003
Total Shares (000) 6,003 5,824 9,127
Class A Net Assets (000) -- $63,184 $ 63,184
Class G Net Assets (000) -- -- 121,427
Total Net Assets (000) $121,427 $63,184 $184,611
Net Asset Value $ 20.23 -- --
Class A Shares -- $ 10.85 $ 20.23
Class G Shares -- -- $ 20.23
Unrealized Appreciation/
(Depreciation) (000) $ 20,262 $(2,393) $ 17,869
</TABLE>
The Trust entered an Agreement and Plan of Reorganization with The SBSF
Funds, Inc. d/b/a Key Mutual Funds pursuant to which all of the assets and
liabilities of each Key Mutual Fund transferred to a Fund of the Victory
Portfolios in exchange for shares of the corresponding Fund. The SBSF Fund
transferred its assets and liabilities to the Victory Diversified Stock Fund.
The Key Stock Index Fund transferred its assets and liabilities to the
Victory Stock Index Fund. The SBSF Capital Growth Fund transferred its assets
and liabilities to the Victory Special Growth Fund. The SBSF Convertible
Securities Fund transferred its assets and liabilities to the Victory
Convertible Securities Fund. The reorganization, which qualified as a
tax-free exchange for federal income tax purposes, was completed on March 16,
1998 for the Victory Diversified Stock, Victory Stock Index, and Victory
Special Growth funds and March 23, 1998 for the Victory Convertible
Securities Fund, following approval by shareholders of SBSF Funds, Inc. d/b/a
Key Mutual Funds at a special shareholder meeting held on March 6, 1998. The
following is a summary of shares outstanding, net assets, net asset value per
share and unrealized appreciation immediately before and after the
reorganization:
<TABLE>
<CAPTION>
Before After
Reorganization Reorganization
SBSF Victory Victory
Convertible Convertible Convertible
Securities Securities Securities
Fund Fund Fund
<S> <C> <C> <C>
Shares (000) 8,557 -- 8,557
Net Assets (000) $120,143 -- $120,143
Net Asset Value $ 14.04 -- $ 14.04
Unrealized Appreciation (000) $ 15,775 -- $ 15,775
</TABLE>
<TABLE>
<CAPTION>
Before After
Reorganization Reorganization
Victory Victory
Diversified Diversified
SBSF Stock Fund Stock Fund
Fund (Class A) (Class A)
<S> <C> <C> <C>
Shares (000) 5,825 47,409 52,135
Net Assets (000) $86,317 $865,944 $952,261
Net Asset Value $ 14.82 $ 18.27 $ 18.27
Unrealized Appreciation (000) $24,319 $215,899 $240,218
</TABLE>
<TABLE>
<CAPTION>
Before After
Reorganization Reorganization
Key Victory Victory
Stock Index Stock Stock
Fund Index Fund Index Fund
<S> <C> <C> <C>
Shares (000) 3,286 28,599 30,871
Net Assets (000) $46,866 $589,611 $636,477
Net Asset Value $ 14.26 $ 20.62 $ 20.62
Unrealized Appreciation (000) $ 8,966 $189,225 $198,191
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Before After
Reorganization Reorganization
SBSF Victory Victory
Capital Special Special
Growth Fund Growth Fund Growth Fund
<S> <C> <C> <C>
Shares (000) 3,454 7,340 9,821
Net Assets (000) $35,309 $104,465 $139,774
Net Asset Value $ 10.22 $ 14.23 $ 14.23
Unrealized Appreciation (000) $ 4,227 $ 15,458 $ 19,685
</TABLE>
3. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles (GAAP). The
preparation of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of income and
expenses for the period. Actual results could differ from those estimates.
Securities Valuation:
Investments of the U.S. Government Obligations Fund, Prime Obligations Fund,
Financial Reserves Fund, Tax-Free Money Market Fund and Ohio Municipal Money
Market Fund (collectively "the money market funds") are valued at either
amortized cost, which approximates market value, or at original cost which,
combined with accrued interest, approximates market value. Under the
amortized cost valuation method, discount or premium is amortized on a
constant basis to the maturity of the security. In addition, the money market
funds may not (a) purchase any instrument with a remaining maturity greater
than 397 days unless such instrument is subject to a demand feature within
397 days, or (b) maintain a dollar-weighted-average portfolio maturity which
exceeds 90 days.
Investments of the Limited Term Income Fund, Intermediate Income Fund,
Investment Quality Bond Fund, Government Mortgage Fund, Fund for Income,
National Municipal Bond Fund, New York Tax-Free Fund, Ohio Municipal Bond
Fund, Convertible Securities Fund, Balanced Fund, Stock Index Fund,
Diversified Stock Fund, Value Fund, Growth Fund, Established Value Fund,
Special Value Fund, Small Company Opportunity Fund, Ohio Regional Stock Fund,
International Growth Fund, Lakefront Fund, and the REI Fund (collectively
"the variable net asset value funds") are valued at their market values
determined on the basis of the latest available bid prices in the principal
market (closing sales prices if the principal market is an exchange) in which
such securities are normally traded or on the basis of valuation procedures
approved by the Board of Trustees. Investments in investment companies are
valued at their respective net asset values as reported by such companies.
The differences between the cost and market values of investments held by the
variable net asset value funds are reflected as either unrealized
appreciation or depreciation.
Securities Transactions and Related Income:
Securities transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the accrual
basis and includes, where applicable, the pro rata amortization of premium or
accretion of discount. Dividend income is recorded on the ex-dividend date,
net of foreign taxes withheld. Gains or losses realized on sales of
securities are determined by comparing the identified cost of the security
lot sold with the net sales proceeds.
Foreign Currency Translation:
The accounting records of the Trust are maintained in U.S. dollars.
Investment securities and other assets and liabilities of the Balanced Fund
and the International Growth Fund denominated in a foreign currency are
translated into U.S. dollars at current exchange rates. Purchases and sales
of securities, income receipts and expense payments are translated into U.S.
dollars at the exchange rate on the dates of the transactions.
The Trust isolates that portion of the results of operations resulting from
changes in foreign exchange rates from those resulting from changes in market
prices of securities held.
Realized foreign exchange gains or losses arise from sales and maturities of
securities, sales of foreign currencies, currency exchange fluctuations
between the trade and settlement dates of securities transactions, and the
difference between the amount of assets and liabilities recorded and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in the value of assets
and liabilities, including investments in securities, resulting from changes
in currency exchange rates.
<PAGE>
Repurchase Agreements:
Each Fund may acquire repurchase agreements from financial institutions such
as banks and broker-dealers which the Trust's investment adviser deems
creditworthy under guidelines approved by the Board of Trustees, subject to
the seller's agreement to repurchase such securities at a mutually
agreed-upon date and price. The repurchase price generally equals the price
paid by a Fund plus interest negotiated on the basis of current short-term
rates, which may be more or less than the rate on the underlying securities.
The seller, under a repurchase agreement, is required to maintain the value
of collateral held pursuant to the agreement at not less than the repurchase
price (including accrued interest). Securities subject to repurchase
agreements are held by the Trust's custodian or another qualified custodian
or in the Federal Reserve/Treasury book-entry system. Repurchase agreements
are considered to be loans by a Fund under the 1940 Act.
Forward Currency Contracts:
A forward currency contract ("forward") is an agreement between two parties
to buy and sell a currency at a set price on a future date. The market value
of the forward fluctuates with changes in currency exchange rates. The
forward is marked-to-market daily and the change in market value is recorded
by a Fund as unrealized appreciation or depreciation. When the forward is
closed, the Fund records a realized gain or loss equal to the fluctuation in
value during the period the forward was open. A Fund could be exposed to risk
if a counterparty is unable to meet the terms of a forward or if the value of
the currency changes unfavorably.
Futures Contracts:
The Balanced Fund, Stock Index Fund, Diversified Stock Fund, Value Fund,
Growth Fund, Established Value Fund, Special Value Fund, Small Company
Opportunity Fund, Ohio Regional Stock Fund, International Growth Fund, and
Lakefront Fund may enter into contracts for the future delivery of securities
or foreign currencies and futures contracts based on a specific security,
class of securities, foreign currency or an index, purchase or sell options
on any such futures contracts and engage in related closing transactions. A
futures contract on a securities index is an agreement obligating either
party to pay, and entitling the other party to receive, while the contract is
outstanding, cash payments based on the level of a specified securities
index. The Trust may enter into futures contracts in an effort to hedge
against market risks. The acquisition of put and call options on futures
contracts will give the Trust the right (but not the obligation), for a
specified price, to sell or to purchase the underlying futures contract, upon
exercise of the option, at any time during the option period. Futures
transactions involve brokerage costs and require the Trust to segregate
assets to cover contracts that would require it to purchase securities or
currencies. A Fund may lose the expected benefit of futures transactions if
interest rates, exchange rates or securities prices change in an
unanticipated manner. Such unanticipated changes may also result in lower
overall performance than if the Fund had not entered into any futures
transactions. In addition, the value of a Fund's futures positions may not
prove to be perfectly or even highly correlated with the value of its
portfolio securities or foreign currencies, limiting a Fund's ability to
hedge effectively against interest rate, exchange rate and/or market risk and
giving rise to additional risks. There is no assurance of liquidity in the
secondary market for purposes of closing out futures positions.
Securities Purchased on a When-Issued Basis:
Each Fund may purchase securities on a "when-issued" basis. When-issued
securities are securities purchased for delivery beyond the normal settlement
date at a stated price and/or yield, thereby involving the risk that the
price and/or yield obtained may be more or less than those available in the
market when delivery takes place. At the time a Fund makes the commitment to
purchase a security on a when-issued basis, the Fund records the transaction
and reflects the value of the security in determining net asset value. No
interest accrues to the Fund until the transaction settles and payment takes
place. Normally, the settlement date occurs within one month of the purchase.
A segregated account is established and the Fund maintains cash and
marketable securities at least equal in value to commitments for when-issued
securities. As of April 30, 1999, the Funds had outstanding "when issued"
purchase commitments, with a corresponding amount of assets segregated, as
follows (amounts in thousands):
Investment Quality Bond $1,153 (0.7% of net assets)
These amounts are included in amounts payable for investments purchased on
the accompanying statements of assets and liabilities.
<PAGE>
Securities Lending:
The U.S. Government Obligations Fund, Prime Obligations Fund, Financial
Reserves Fund, Tax-Free Money Market Fund, Ohio Municipal Money Market Fund,
Limited Term Income Fund, Intermediate Income Fund, Investment Quality Bond
Fund, Government Mortgage Fund, Fund for Income, Convertible Securities Fund,
Balanced Fund, Stock Index Fund, Diversified Stock Fund, Value Fund, Growth
Fund, Established Value Fund, Special Value Fund, Small Company Opportunity
Fund, Ohio Regional Stock Fund, International Growth Fund, Lakefront Fund and
the REI Fund may, from time to time, lend securities from their portfolio to
broker-dealers, banks, financial institutions and other institutional
borrowers approved by the Board of Trustees. The Trust will limit its
securities lending activity to 33 1/3% of the total assets of each Fund. Key
Trust Company of Ohio, N.A. ("Key Trust"), an affiliate of the Adviser,
serves as the lending agent for the Trust pursuant to a Securities Lending
Agency Agreement (the "Lending Agreement"). Under guidelines established by
the Board of Trustees, Key Trust must maintain the loan collateral at all
times in an amount equal to at least 100% of the current market value of the
loaned securities in the form of cash or U.S. Government obligations, to
secure the return of the loaned securities. Key Trust, at the direction of
the Adviser, may invest the collateral in short-term debt instruments that
the Adviser has determined present minimal credit risks. There is a risk of
delay in receiving collateral or in receiving the securities loaned or even a
loss of rights in the collateral should the borrower of the securities fail
financially. By lending its securities, a Fund can increase its income by
continuing to receive interest or dividends on the loaned securities as well
as investing the cash collateral in short-term U.S. Government securities,
repurchase agreements, or other short-term securities. The cash collateral,
or short-term investments purchased with such collateral, is recorded as
assets of the Funds, offset by a corresponding liability to return all
collateral as cash at the termination of the loan. In addition, the
short-term securities purchased with the cash collateral are included in the
accompanying Schedules of Investments. Fixed income securities received as
collateral are not recorded as an asset or liability of the Trust because the
lending Fund does not have effective control of such securities. Loans are
subject to termination by the Trust or the borrower at any time. In
accordance with GAAP, a statement of cash flows is presented if a Fund
recorded collateral assets exceeding 10% of average net assets during the
year. Under this guideline, a statement of cash flows is presented for
Diversified Stock Fund, Special Value Fund, and Value Fund. The following
Funds had securities with the following market values on loan as of April 30,
1999 (amounts in thousands):
Market Value of
Loaned Securities
U.S. Government Obligations Fund $153,642
Prime Obligations Fund 30,002
Financial Reserves Fund 50,578
Limited Term Income Fund 14,484
Intermediate Income Fund 56,401
Investment Quality Bond Fund 21,351
Balanced Fund 64,370
Convertible Securities Fund 11,473
Value Fund 54,827
Diversified Stock Fund 212,426
Stock Index Fund 104,606
Growth Fund 37,299
Special Value Fund 25,402
Ohio Regional Stock Fund 3,198
Small Company Opportunity Fund 10,101
The loaned securities were fully collateralized by cash, and short-term
securities purchased with such cash collateral, as of April 30, 1999.
<PAGE>
As disclosed in the Schedule of Investments the Victory Value Fund invested
cash collateral in a Merrill Lynch Repurchase Agreement with an interest rate
of 4.97% and a maturity date of 5/3/99 which was collateralized by the
following securities (amounts in thousands):
Principal Description Market Value
$2,000 Banco de Credito, CP, 6/29/99 $ 1,984
800 Block Financial Corp., CP, 5/6/99 799
625 Capital Credit Corp., 4.90%, 6/30/99 620
700 Coca Cola Co., CP, 6/28/99 695
800 Delaware Funding Corp., CP, 5/11/99 799
920 Diageo, CP, 7/1/99 912
625 Dorada Finance, Inc., CP, 6/30/99 620
407 Enterprise Funding, CP, 5/10/99 407
830 Falcon Asset Securities, CP, 5/27/99 827
400 Quincy Capital Corp., CP, 5/6/99 400
723 Trident Capital Corp., 4.88%, 5/17/99 721
700 Trident Capital Corp., CP, 5/13/99 698
587 Triple A Funding Corp., CP, 5/18/99 585
756 Windmill Funding, CP, 5/18/99 754
$10,821
As disclosed in the Schedule of Investments the Victory Balanced Fund
invested cash collateral in Goldman Sachs Group, L.P. Repurchase Agreement
with an interest rate of 5.04% and a maturity date of 5/3/99 which was
collateralized by the following securities (amounts in thousands):
Principal Description Market Value
$ 700 Carolina Power & Light Co., 5.88%, 1/15/04 $ 709
48 City of Naples, 7.52%, 7/15/06 51
282 Conoco, Inc., 6.35%, 4/15/09 282
925 Conoco, Inc., 6.95%, 4/15/29 921
2,023 Heller Financial, Inc., 6.44%, 10/6/02 2,060
3,600 Hutchison Whampoa Financial, 6.99%, 8/1/37 3,593
1,000 PEFCO, 6.90%, 1/31/03 1,064
$8,680
As disclosed in the Schedule of Investments the Victory Investment Quality
Bond Fund invested cash collateral in a Merrill Lynch Repurchase Agreement
with an interest rate of 4.97% and a maturity date of 5/3/99 which was
collateralized by the following securities (amounts in thousands):
Principal Description Market Value
$420 Barton Capital Corp., CP, 6/21/99 $ 417
763 C.S.C. Enterprises, CP, 6/10/99 759
400 CIBA Specialty Chemical Co., CP, 6/4/99 398
450 Coca Cola Co., CP, 6/4/99 448
712 Dorada Finance, Inc., CP, 6/14/99 708
544 Enterprise Funding Corp., CP, 6/4/99 541
617 Enterprise Funding Corp., CP, 6/18/99 613
514 GMAC, CP, 6/4/99 512
300 Motorola, CP, 6/4/99 299
723 Southland Corp., CP, 7/27/99 714
$5,409
<PAGE>
As disclosed in the Schedule of Investments the Victory Growth Fund invested
cash collateral in a Merrill Lynch Repurchase Agreement with an interest rate
of 4.97% and a maturity date of 5/3/99 which was collateralized by the
following securities (amounts in thousands):
Principal Description Market Value
$633 Charta Corp., CP, 6/2/99 $ 630
425 Enterprise Funding Corp., CP, 6/14/99 423
765 Ford Motor, CP, 7/15/99 757
945 Johnson & Johnson, CP, 10/10/99 923
500 K2 USA, LLC, CP, 6/2/99 498
750 K2 USA, LLC, CP, 8/2/99 741
750 LG&E Capital Corp., CP, 6/7/99 746
700 Sigma Finance, Inc., CP, 10/25/99 683
$5,401
As disclosed in the Schedule of Investments the Victory Stock Index Fund
invested cash collateral in a Nations Bank Repurchase Agreement with an
interest rate of 5.08% and a maturity date of 5/3/99 which was collateralized
by the following securities (amounts in thousands):
Principal Description Market Value
$1,284 Finova Capital Corp., 6.75%, 3/9/09 $ 1,316
875 Finova Capital Corp., 6.13%, 3/15/04 875
1,500 KN Energy, Inc., 6.80%, 3/1/08 1,558
6,825 Key Corp., 7.50%, 6/15/06 7,485
4,000 Loral Corp., 7.00%, 9/15/23 4,058
1,000 Occidental Petroleum, 7.38%, 11/15/08 1,052
5,000 Occidental Petroleum, 6.50%, 4/1/05 4,907
1,000 ProLogis Trust, 7.10%, 4/15/08 999
3,421 Waste Management, Inc., 6.13%, 7/15/11 3,498
$25,750
As disclosed in the Schedule of Investments the Victory Stock Index Fund
invested cash collateral in a Goldman Sachs Group, L.P. Repurchase Agreement
with an interest rate of 5.04% and a maturity date of 5/3/99 which was
collateralized by the following securities (amounts in thousands):
Principal Description Market Value
$2,599 Atlantic Richfield Co., 5.90%, 4/15/09 $ 2,579
1,740 Bank of America Corp., 9.50%, 6/1/04 2,074
4,000 Boeing Co., 7.95%, 8/15/24 4,652
2,700 Corning, Inc., 6.85%, 3/1/29 2,725
1,723 City of Naples, 7.52%, 7/15/06 1,846
1,175 Farmers Insurance, 8.63%, 5/1/24 1,397
4,050 Heller Financial, Inc., 6.44%, 10/6/02 4,124
1,065 PEFCO, 7.90%, 3/31/00 1,099
4,173 Province de Quebec, 7.50%, 7/15/23 4,697
201 Public Service Electric & Gas Co.,
6.00%, 5/1/00 207
$25,400
<PAGE>
As disclosed in the Schedule of Investments the Victory Diversified Stock
Fund invested cash collateral in a Nations Bank Repurchase Agreement with an
interest rate of 5.08% and a maturity date of 5/3/99 which was collateralized
by the following securities (amounts in thousands):
Principal Description Market Value
$ 8,425 AMVESCAP PLC, 6.60%, 5/15/05 $ 8,617
1,000 CSX Corp., 6.25%, 10/15/08 988
11,000 Computer Associates Intl., 6.38%, 4/15/05 10,754
8,935 Computer Associates Intl., 6.25%, 4/15/03 8,813
5,000 Empresa Nacional de Electricidad,
8.50%, 4/1/09 5,294
3,420 Empresa Nacional de Electricidad,
7.75%, 7/15/08 3,468
8,216 Finova Capital Corp., 6.75%, 3/9/09 8,417
$46,350
As disclosed in the Schedule of Investments the Victory Diversified Stock
Fund invested cash collateral in a Morgan Stanley Dean Witter Repurchase
Agreement with an interest rate of 5.04% and a maturity date of 5/3/99 which
was collateralized by the following securities (amounts in thousands):
Principal Description Market Value
$ 2,950 AFLAC, Inc., 6.50%, 4/15/09 $ 2,946
10 Chesapeake & Potomac, 8.30%, 8/1/31 12
19,075 Coastal Corp., 8.75%, 5/15/99 19,860
1,365 Coca-Cola Enterprises, 7.88%, 2/1/02 1,468
2,500 IBM, 8.38%, 11/1/19 3,095
6,585 Merrill Lynch, CP, 6/30/99 19,031
3,700 Morgan Stanley Dean Witter, CP, 4/2/06 3,636
600 Norsk Hydro, 6.80%, 1/15/28 583
5,000 Province de Quebec, 7.00%, 1/30/07 5,370
$56,001
As disclosed in the Schedule of Investments the Victory Diversified Stock
Fund invested cash collateral in a Salomon Corp. Repurchase Agreement with an
interest rate of 5.04% and a maturity date of 5/3/99 which was collateralized
by the following securities (amounts in thousands):
Principal Description Market Value
$6,300 Albertson's, Inc., 7.75%, 6/15/26 $ 7,150
6,935 Ford Motor, 7.00%, 9/25/01 7,146
5,000 Lowe's Corp., 6.50%, 3/15/29 4,796
4,500 Lowe's Corp., 7.11%, 5/15/37 4,938
5,000 Monsanto Co., 5.88%, 12/1/08 4,864
5,475 Tele-Communications, Inc., 10.13%, 8/1/01 5,992
4,653 Tele-Communications, Inc., 8.25%, 1/15/03 5,029
3,219 United Utilities, 6.88%, 8/15/28 3,130
$43,045
Dividends to Shareholders:
Dividends from net investment income are declared daily and paid monthly for
the money market funds. Dividends from net investment income are declared and
paid quarterly for the Convertible Securities Fund, Stock Index Fund,
Diversified Stock Fund, Value Fund, Growth Fund, Established Value Fund,
Special Value Fund, Small Company Opportunity Fund, Ohio Regional Stock Fund,
International Growth Fund, Lakefront Fund, and the REI Fund. Dividends from
net investment income are declared and paid monthly for the Limited Term
Income Fund, Intermediate Income Fund, Investment Quality Bond Fund,
Government Mortgage Fund, Fund for Income, National Municipal Bond Fund, New
York Tax-Free Fund, Ohio Municipal Bond Fund, and Balanced Fund.
Distributable net realized capital gains, if any, are declared and
distributed at least annually.
<PAGE>
The amounts of dividends from net investment income and distributions from
net realized gains are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the components of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassification.
Dividends and distributions to shareholders which exceed net investment
income and realized capital gains for financial reporting purposes but not
for tax purposes are reported as dividends in excess of net investment income
or distributions in excess of net realized gains. To the extent they exceed
net investment income and net realized gains for tax purposes, they are
reported as distributions of capital.
Federal Income Taxes:
It is the policy of each Fund to qualify or continue to qualify as a
regulated investment company by complying with the provisions available to
certain investment companies, as defined in applicable sections of the
Internal Revenue Code, and to make distributions of net investment income and
net realized capital gains sufficient to relieve it from all, or
substantially all, federal income taxes.
Other:
Expenses that are directly related to one of the Funds are charged directly
to that Fund. Other operating expenses of the Trust are prorated to each Fund
on the basis of relative net assets or other appropriate basis. Fees paid
under a Fund's shareholder servicing or distribution plans are borne by the
specific class of shares to which they apply.
All expenses in connection with Lakefront and REI's organization and
registration under the 1940 Act and the Securities Act of 1933 were paid by
those Funds. Such expenses are being amortized over a period of five years
commencing with the respective inception dates.
4. Purchases and Sales of Securities:
Purchases (excluding securities acquired through the reorganization described
in Note 2 -- Reorganization above) and sales of securities (excluding
short-term securities) for the period ended April 30, 1999 were as follows
(amounts in thousands):
Purchases Sales
Limited Term Income Fund $ 93,128 $ 93,457
Intermediate Income Fund 364,752 366,367
Fund for Income 32,010 28,887
Government Mortgage Fund 158,454 160,362
Investment Quality Bond Fund 356,082 364,733
National Municipal Bond Fund 27,224 25,794
New York Tax-Free Fund 976 4,004
Ohio Municipal Bond Fund 56,233 56,236
Balanced Fund 429,089 427,256
Convertible Securities Fund 28,314 52,836
REI Fund 1,712 2,951
Value Fund 92,614 99,776
Lakefront Fund 207 242
Diversified Stock Fund 484,067 517,757
Stock Index Fund 104,523 8,847
Growth Fund 84,332 55,797
Established Value Fund 8,564 15,354
Special Value Fund 59,275 139,782
Ohio Regional Stock Fund 402 9,485
International Growth Fund 59,905 78,136
Small Company Opportunity Fund 2,388 6,261
<PAGE>
5. Related Party Transactions:
Investment advisory services are provided to all the Funds by Key Asset
Management Inc. ("the Adviser"), a wholly owned subsidiary of KeyCorp.
Lakefront Capital Investors, Inc. serves as a sub-adviser for the Lakefront
Fund, and, effective May 15, 1998, Indocam International Investment Services,
S.A. serves as a sub-adviser for the International Growth Fund. Under the
terms of the investment advisory agreements, the Adviser is entitled to
receive fees based on a percentage of the average daily net assets of the
Funds. The Adviser, and not the Trust, pays sub-advisory fees as applicable.
KeyTrust Company of Ohio, serving as custodian for all of the Funds, receives
custodian fees in addition to reimbursement of actual out-of-pocket expenses
incurred.
Key and its affiliated brokerage and banking companies also serve as
Shareholder Servicing Agent for all the Funds except the U.S. Government
Obligations Funds (Investor Shares), Financial Reserves Fund and Stock Index
Fund. As such, Key and its affiliates provide support services to their
clients who are shareholders, which may include establishing and maintaining
accounts and records, processing dividend and distribution payments,
providing account information, assisting in processing of purchase, exchange
and redemption requests, and assisting shareholders in changing dividend
options, account designations and addresses. For providing such services, Key
and its affiliates may receive a fee of up to 0.25% of the average daily net
assets of the Funds serviced.
BISYS Fund Services (the "Administrator" or the "Distributor," as
applicable), an indirect, wholly owned subsidiary of The BISYS Group, Inc.
("BISYS") serves as the administrator and distributor to the Trust and,
during the period October 23, 1998 through the Effective Dates of the
Reorganizations, as distributor for the Gradison Trusts. Certain officers of
the Trust are affiliated with BISYS. Such officers receive no direct payments
or fees from the Trust for serving as officers.
Under the terms of the administration agreement, the Administrator's fee is
computed at the annual rate of 0.15% of each Fund's average daily net assets
up to $300 million, 0.12% of each Fund's average daily net assets between
$300 million and $600 million, and 0.10% of each Fund's average daily net
assets greater than $600 million. Under a Sub-Administration agreement, BISYS
pays the Adviser a fee of up to 0.05% of each Fund's average daily net assets
to perform certain of the administrative duties for the Funds. Pursuant to
the Trust's 12b-1 Plan, the Distributor may receive distribution services
fees computed at the annual rate of 0.75% of the average daily net assets of
Class B Shares of the National Municipal Bond Fund, the New York Tax-Free
Fund, the Balanced Fund, the Diversified Stock Fund, the Special Value Fund,
the Ohio Regional Stock Fund and the International Growth Fund. Pursuant to
the Trust's 12b-1 Plan, the Distributor may receive a monthly service fee at
an annual rate of 0.25% of the average daily net assets of the Class G shares
of the Fund for Income, Ohio Municipal Bond Fund, Diversified Stock Fund,
Established Value Fund, Small Company Opportunity Fund and the International
Growth Fund. The service fee is paid to securities broker dealers or other
financial intermediaries for providing personal services to shareholders of
the Funds, including responding to inquiries, providing information to
shareholders about their Fund accounts, establishing and maintaining accounts
and records, processing dividend and distribution payments, arranging for
bank wires, assisting in transactions, and changing account information. The
Distributor may also receive a fee for general distribution services and for
its assistance in selling Class G shares of the Funds. This fee is computed
and paid at an annual rate of 0.25% of the average daily net assets of the
Class G shares of the Fund for Income, Ohio Municipal Bond Fund, Diversified
Stock Fund, Established Value Fund, Small Company Opportunity Fund and the
International Growth Fund.
In addition, the Distributor is entitled to receive commissions on sales of
shares of the variable net asset value funds. For the six months ended April
30, 1999, the Distributor received approximately $982,000 from commissions
earned on sales of shares of the variable net asset value funds, a portion of
which the Distributor reallowed to dealers of the Funds' shares including
approximately $962,000 to affiliates of the Funds. BISYS also serves the Funds
and, during the period March 1, 1999 through the Effective Dates of the
Reorganization, served the Gradison Funds, as Mutual Fund Accountant and
receives a fee for these services under the terms of a fund accounting
agreement.
Fees may be voluntarily reduced or reimbursed to assist the Funds in
maintaining competitive expense ratios. The Adviser has agreed to waive its
management fee or to reimburse expenses, as allowed by law, to the extent
necessary to maintain the net operating expenses of the Class G shares of the
Fund for Income, the Ohio Municipal Bond Fund, the Diversified Stock Fund,
the Established Value Fund, the International Growth Fund and the Small
Company Opportunity Fund at a maximum of 0.89%, 0.91%, 1.44%, 1.10%, 2.00%
and 1.30% of average daily net assets, respectively, until at least April 1,
2001. Further, the Adviser has agreed to waive its management fee for Class A
and Class B shares, as applicable, of those Funds to the same extent the fee
is waived for Class G shares of the corresponding Fund until at least April
1, 2001. Effective May 3, 1999, the Adviser has agreed to waive its
management fee or to reimburse expenses, as allowed by law, to the extent
necessary to maintain the net operating expenses of the Lakefront Fund to
1.50% of average daily net assets, until at least February 29, 2000 and to
2.00% of average daily net assets, until at least February 28, 2009.
<PAGE>
Additional information regarding related party transactions is as follows for
the six months ended April 30, 1999:
Investment
Advisory Administration
Fees Fees
Percentage
of Average Voluntary Voluntary
Daily Fee Fee
Net Assets Reductions Reductions
(000) (000)
U.S. Government Obligations Fund 0.35% $ -- $ --
Prime Obligations Fund 0.35% -- --
Financial Reserves Fund 0.50% -- --
Tax-Free Money Market Fund 0.35% -- --
Ohio Municipal Money Market Fund 0.50% 559 --
Limited Term Income Fund 0.50% 53 --
Intermediate Income Fund 0.75% 344 --
Fund for Income 0.50% 21 17
Government Mortgage Fund 0.50% 60 --
Investment Quality Bond Fund 0.75% 203 --
National Municipal Bond Fund 0.55% 111 --
New York Tax-Free Fund 0.55% 24 9
Ohio Municipal Bond Fund 0.60% 113 --
Balanced Fund 1.00% 533 --
Convertible Securities Fund 0.75% -- --
Real Estate Investment Fund 1.00% 63 --
Value Fund 1.00% 158 --
Lakefront Fund 1.00% 3 --
Diversified Stock Fund 0.65% 304 --
Stock Index Fund 0.60% 448 468
Growth Fund 1.00% 144 --
Established Value Fund 0.65% 29 --
Special Value Fund 1.00% 154 --
Ohio Regional Stock Fund 0.75% 19 --
Small Company Opportunity Fund 1.00% 16 15
International Growth Fund 1.10% 53 --
Prior to the Effective Dates of the Reorganization, investment advisory
services were provided to the Gradison Funds by McDonald & Company
Securities, Inc. ("McDonald"), pursuant to investment advisory agreements
between the Gradison Funds and McDonald under substantially the same terms as
the Funds' investment advisory agreement described above, except that the
Gradison International Fund paid McDonald a fee computed and accrued daily
and paid monthly based upon the daily net assets of that fund at the annual
rate of 1.00% on the first $100 million, 0.90% on the next $150 million,
0.80% of the next $250 million and 0.75% of net assets in excess of $500
million for acting as its investment adviser. Blairlogie Capital Management
("Blairlogie") served as sub-advisor to the Gradison International Fund prior
to the Effective Date of the Reorganization. Transfer agent services,
including dividend disbursing, fund accounting services and administrative
services were provided by McDonald prior to the Effective Dates of the
Reorganization, pursuant to the terms of a Transfer Agency, Accounting
Services and Administrative Services agreement between certain of the
Gradison Funds and McDonald. Under the terms of those agreements, the
Gradison Established Value Fund, the Gradison Growth & Income Fund, the
Gradison Opportunity Value Fund and the Gradison International Fund paid
McDonald a monthly fee for transfer agent and administrative services at an
annual rate of $18.50 per shareholder non-zero balance account and $5.00 per
closed shareholder account, as defined, plus out-of-pocket costs for
statement paper, statement and reply envelopes and reply postage. The
Gradison Ohio Tax-Free Income Fund paid $24.00 per shareholder non-zero
balance account and $5.00 per closed shareholder account, as defined, plus
out-of-pocket costs for statement paper, statement and reply envelopes and
reply postage. Under the terms of a Data Processing Agreement with McDonald,
the Gradison Government Income Fund paid McDonald a monthly fee at an annual
rate of $8.25 per shareholder non-zero balance account for data processing
services provided to that fund. The Gradison Established Value, Gradison
Growth & Income, Gradison Opportunity Value and Gradison International Funds
paid fund accounting fees to McDonald under substantially the same terms as
the Funds. Under the terms of an Expense Reimbursement Agreement, McDonald
agreed to reimburse expenses to the Gradison Growth & Income and Gradison
International Funds to the extent such expenses exceeded 1.50% and 2.00% of
average daily net assets, respectively, prior to the Effective Dates of the
Reorganization. Prior to the Effective Dates of the Reorganization, officers
of the Gradison Funds were also officers of McDonald.
<PAGE>
6. Capital Share Transactions:
Capital share transactions for those Funds with multiple share classes were
as follows (amounts in thousands):
U.S. Government Obligations Fund
Six Months Year
Ended Ended
April 30, October 31,
1999 1998
Capital and Share Transactions:
Investor Shares:
Proceeds from shares issued 557,889 1,048,740
Dividends reinvested 9 22
Cost of shares redeemed (641,645) (933,795)
Total (83,747) 114,967
Select Shares:
Proceeds from shares issued 1,509,002 3,183,081
Dividends reinvested 28,926 57,576
Cost of shares redeemed (1,401,740) (2,874,230)
Total 136,188 366,427
Fund For Income
Four Months Year
Ended Ended
April 30, December 31,
1999 1998
Capital Transactions:
Class A Shares:
Proceeds from shares issued $ 609 --
Proceeds from shares issued
in connection with acquisition 32,095 --
Dividends reinvested 110 --
Cost of shares redeemed (2,104) --
Total $ 30,710 --
Class G Shares:
Proceeds from shares issued $ 20,739 $ 52,319
Proceeds from shares issued
in connection with acquisition -- --
Dividends reinvested 2,844 7,552
Cost of shares redeemed (20,186) (57,385)
Total $ 3,397 $ 2,486
Share Transactions:
Class A Shares:
Issued 46 --
Issued in connection with acquisition 2,426 --
Reinvested 8 --
Redeemed (159) --
Total 2,321 --
Class G Shares:
Issued 1,570 3,958
Issued in connection with acquisition -- --
Reinvested 216 572
Redeemed (1,530) (4,338)
Total 256 192
<PAGE>
<TABLE>
<CAPTION>
National Municipal
Bond Fund New York Tax-Free Fund Ohio Municipal Bond Fund
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, April 30, October 31,
1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C>
Capital Transactions:
Class A Shares:
Proceeds from shares issued $ 8,635 $ 16,834 $ 2,183 $ 5,992 $ 10,369 $ 16,324
Dividends reinvested 1,449 1,607 242 596 752 917
Cost of shares redeemed (9,163) (20,804) (5,455) (4,006) (8,852) (14,725)
Total $ 921 $ (2,363) $(3,030) $ 2,582 $ 2,269 $ 2,516
Class B Shares:
Proceeds from shares issued $ 634 $ 646 $ 388 $ 1,103 -- --
Dividends reinvested 91 61 58 122 -- --
Cost of shares redeemed (232) (688) (354) (548) -- --
Total $ 493 $ 19 $ 92 $ 677 -- --
Class G Shares:
Proceeds from shares issued -- -- -- -- $ 3,745 --
Proceeds from shares issued
in connection with acquisition -- -- -- -- 118,155 --
Dividends reinvested -- -- -- -- 437 --
Cost of shares redeemed -- -- -- -- (4,175) --
Total -- -- -- -- $118,162 --
Share Transactions:
Class A Shares:
Issued 808 1,576 172 470 871 1,377
Reinvested 136 150 19 47 63 78
Redeemed (856) (1,932) (427) (315) (745) (1,243)
Total 88 (206) (236) 202 189 212
Class B Shares:
Issued 59 60 30 87 -- --
Issued in connection
with acquisition -- -- -- -- -- --
Reinvested 9 6 5 10 -- --
Redeemed (22) (65) (28) (43) -- --
Total 46 1 7 54 -- --
Class G Shares:
Issued -- -- -- -- 319 --
Issued in connection
with acquisition -- -- -- -- 10,429 --
Reinvested -- -- -- -- 38 --
Redeemed -- -- -- -- (354) --
Total -- -- -- -- 10,432 --
<PAGE>
Balanced Fund Diversified Stock Fund Special Value Fund
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, April 30, October 31,
1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C>
Capital Transactions:
Class A Shares:
Proceeds from shares issued $ 28,507 $ 93,069 $ 134,952 $ 339,630 $ 28,115 $ 96,571
Dividends reinvested 28,359 25,674 156,810 69,826 12,623 28,184
Cost of shares redeemed (31,741) (65,050) (172,677) (319,480) (109,429) (116,764)
Total $ 25,125 $ 53,693 $ 119,085 $ 89,976 $ (68,691) $ 7,991
Class B Shares:
Proceeds from shares issued $ 3,419 $ 2,906 $ 11,699 $ 19,452 $ 155 $ 1,049
Dividends reinvested 468 243 10,399 3,412 78 132
Cost of shares redeemed (779) (435) (3,694) (4,782) (465) (463)
Total $ 3,108 $ 2,714 $ 18,404 $ 18,082 $ (232) $ 718
Class G Shares:
Proceeds from shares issued -- -- $ 7,566 -- -- --
Proceeds from shares issued
in connection with acquisition -- -- 60,016 -- -- --
Dividends reinvested -- -- -- -- -- --
Cost of shares redeemed -- -- (1,836) -- -- --
Total -- -- $ 65,746 -- -- --
Share Transactions:
Class A Shares:
Issued 1,907 6,530 7,993 20,330 2,064 6,124
Reinvested 1,939 1,880 10,219 4,198 951 1,804
Redeemed (2,136) (4,599) (10,188) (17,944) (8,230) (7,676)
Total 1,710 3,811 8,024 6,584 (5,215) 252
Class B Shares:
Issued 230 203 711 1,088 11 66
Reinvested 32 18 690 208 6 9
Redeemed (52) (30) (223) (271) (36) (30)
Total 210 191 1,178 1,025 (19) 45
Class G Shares:
Issued -- -- 424 -- -- --
Issued in connection
with acquisition -- -- 4,456 -- -- --
Reinvested -- -- -- -- -- --
Redeemed -- -- (104) -- -- --
Total -- -- 4,776 -- -- --
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Small Company
Ohio Regional Stock Fund Opportunity Fund International Growth Fund
Six Months Year One Month Year Six Months Year
Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, March 31, April 30, October 31,
1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C>
Capital Transactions:
Class A Shares:
Proceeds from shares issued $ 2,383 $ 8,735 $ 139 $ 71,034 $ 119,295 $191,799
Dividends reinvested 3,413 3,503 -- -- 4,452 4,023
Cost of shares redeemed (10,287) (17,668) (4,383) (609) (137,895) (169,227)
Total $ (4,491) $ (5,430) $(4,244) $ 70,425 $ (14,148) $ 26,595
Class B Shares:
Proceeds from shares issued $ 10 $ 386 -- -- $ 161 $ 186
Dividends reinvested 119 72 -- -- 15 11
Cost of shares redeemed (84) (25) -- -- (16) (13)
Total $ 45 $ 433 -- -- $ 160 $ 184
Class G Shares:
Proceeds from shares issued -- -- $ 4,684 $ 163,313 $ 643 --
Proceeds from shares issued
in connection with acquisition -- -- -- -- 29,074 --
Dividends reinvested -- -- -- 7,587 -- --
Cost of shares redeemed -- -- (8,309) (174,974) (857) --
Total -- -- $(3,625) $ (4,074) $ 28,860 --
Share Transactions:
Class A Shares:
Issued 130 382 55 3,150 8,525 14,282
Reinvested 182 160 -- -- 227 324
Redeemed (565) (806) (215) (30) (9,737) (12,386)
Total (253) (264) (160) 3,120 (985) 2,220
Class B Shares:
Issued 1 17 -- -- 12 13
Reinvested 6 3 -- -- 1 1
Redeemed (5) (1) -- -- (1) (1)
Total 2 19 -- -- 12 13
Class G Shares:
Issued -- -- 218 6,918 45 --
Issued in connection
with acquisition -- -- -- -- 2,363 --
Reinvested -- -- -- 305 -- --
Redeemed -- -- (447) (7,449) (60) --
Total -- -- (229) (226) 2,348 --
</TABLE>
7. Concentration of Credit Risk:
The Ohio Municipal Money Market Fund, New York Tax-Free Fund, and Ohio
Municipal Bond Fund invest primarily in municipal debt obligations issued by
the respective states and their political subdivisions, agencies and public
authorities to obtain funds for various public purposes, and the Ohio
Regional Stock Fund invests in equity securities issued by companies
domiciled in Ohio. These Funds are more susceptible to economic and political
factors which might adversely affect municipalities and companies within
those states than are other types of funds which are not geographically
concentrated to the same extent.
<PAGE>
8. Voting Results of a Special Meeting of the Gradison Fund Shareholders
(Unaudited):
A Special Meeting of Shareholders of the Gradison Funds was held on March 5,
1999. At the meeting, shareholders voted on the following matters with the
following results as indicated below:
Proposal 1
To approve an Agreement and Plan of Reorganization and Termination pursuant
to which the Gradison Funds will transfer all of their assets and liabilities
solely in exchange (the "Exchange") for Class G Shares of the corresponding
Victory Fund, as described above, under Reorganizations. The Gradison
Government Income Fund will distribute Class G shares of the Victory Fund for
Income received in the Exchange to its shareholders in an amount equal in net
asset value to the shares of the Gradison Government Income Fund held by such
shareholders as of the date of the exchange, after which the Gradison
Government Income Fund will be terminated. The Gradison Ohio Tax-Free Income
Fund will distribute Class G shares of the Victory Ohio Municipal Bond Fund
received in the Exchange to its shareholders in an amount equal in net asset
value to the shares of the Gradison Ohio Income Tax-Free Fund held by such
shareholders as of the date of the exchange, after which the Gradison Ohio
Tax-Free Income Fund will be terminated. The Gradison Growth & Income Fund
will distribute Class G shares of the Victory Diversified Stock Fund received
in the Exchange to its shareholders in an amount equal in net asset value to
the shares of the Gradison Growth & Income Fund held by such shareholders as
of the date of the exchange, after which the Gradison Growth & Income Fund
will be terminated. The Gradison Established Value Fund will distribute Class
G shares of the Victory Established Value Fund received in the exchange to
its shareholders in an amount equal in net asset value to the shares of the
Gradison Established Value Fund held by such shareholders as of the date of
the exchange, after which the Gradison Established Value Fund will be
terminated. The Gradison International Fund will distribute Class G shares of
the Victory International Growth Fund received in the Exchange to its
shareholders in an amount equal in net asset value to the shares of the
Gradison International Fund held by such shareholders as of the date of the
exchange, after which the Gradison International Fund will be terminated. The
Gradison Opportunity Value Fund will distribute Class G shares of the Victory
Small Company Opportunity Fund received in the Exchange to its shareholders
in an amount equal in net asset value to the shares of the Gradison
Opportunity Value Fund held by such shareholders as of the date of the
exchange, after which the Gradison Opportunity Value Fund will be terminated.
For Against Abstain
Gradison Government Income Fund 6,214,681 77,025 298,638
Gradison Ohio Tax-Free Income Fund 5,030,214 86,171 564,500
Gradison Growth & Income Fund 1,221,905 21,962 91,427
Gradison Established Value Fund 9,150,642 220,771 392,960
Gradison International Fund 968,785 19,521 127,248
Gradison Opportunity Value Fund 3,401,280 146,661 165,906
Proposal 2
To approve a new Investment Advisory Agreement between each respective
Gradison Trust, on behalf of each of the Gradison Funds, and McDonald
Investments, Inc. because the merger of McDonald's corporate parent with
KeyCorp caused the previous agreement to terminate.
For Against Abstain
Gradison Government Income Fund 6,226,902 84,278 281,293
Gradison Ohio Tax-Free Income Fund 5,230,950 48,062 401,873
Gradison Growth & Income Fund 1,221,805 20,081 93,408
Gradison Established Value Fund 9,013,177 209,306 393,279
Gradison International Fund 970,690 19,848 125,017
Gradison Opportunity Value Fund 3,384,334 156,140 166,780
Proposal 3
To approve a new Investment Sub-Advisory Agreement between the McDonald
Investments Inc. and Blairlogie Capital Management because the merger of
McDonald's corporate parent with KeyCorp and the unrelated sale of a
controlling interest in Blairlogie caused the previous agreement to
terminate.
For Against Abstain
Gradison International Fund 1,071,189 18,670 25,696
<PAGE>
This page is intentionally left blank.
<PAGE>
This page is intentionally left blank.
<PAGE>
The Victory Funds Bulk Rate
127 Public Square U.S. Postage
OH-01-27-1612 PAID
Cleveland, Ohio 44114 Cleveland, OH
Permit No. 469
LOGO (R)
Victory Funds
Call Victory at: Or Call Gradison McDonald at:
800-539-FUND (800-539-3863) 800-869-5999 or 513-579-5999
1VF-SEMI-AR 6/99
