April 30, 2000
Semi Annual Report
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 Fund
Value Fund
Lakefront Fund
Established Value Fund
Diversified Stock Fund
Stock Index Fund
Growth Fund
Special Value Fund
Ohio Regional Stock Fund
Small Company Opportunity Fund
International Growth Fund
Victory Funds
(LOGO)(R)
<PAGE>
The Victory Portfolios
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.
Victory Funds
(LOGO)(R)
Call Victory at:
800-539-FUND (800-539-3863)
Visit our web site at:
www.victoryfunds.com
Table of Contents
Shareholder Letter 3
Financial Statements 4
Victory Money Market Funds
U.S. Government Obligations Fund
Schedules of Investments 4
Statements of Assets and Liabilities 9
Statements of Operations 10
Statements of Changes in Net Assets 11
Financial Highlights 12
Prime Obligations Fund
Schedules of Investments 5
Statements of Assets and Liabilities 9
Statements of Operations 10
Statements of Changes in Net Assets 11
Financial Highlights 13
Financial Reserves Fund
Schedules of Investments 7
Statements of Assets and Liabilities 9
Statements of Operations 10
Statements of Changes in Net Assets 11
Financial Highlights 14
Tax-Free Money Market Fund
Schedules of Investments 15
Statements of Assets and Liabilities 29
Statements of Operations 30
Statements of Changes in Net Assets 31
Financial Highlights 32
Ohio Municipal Money Market Fund
Schedules of Investments 22
Statements of Assets and Liabilities 29
Statements of Operations 30
Statements of Changes in Net Assets 31
Financial Highlights 33
Victory Taxable Fixed Income Funds
Limited Term Income Fund
Schedules of Investments 34
Statements of Assets and Liabilities 45
Statements of Operations 46
Statements of Changes in Net Assets 47
Financial Highlights 49
Statements of Cash Flows 140
Intermediate Income Fund
Schedules of Investments 36
Statements of Assets and Liabilities 45
Statements of Operations 46
Statements of Changes in Net Assets 47
Financial Highlights 50
Statements of Cash Flows 140
Fund for Income
Schedules of Investments 39
Statements of Assets and Liabilities 45
Statements of Operations 46
Statements of Changes in Net Assets 47
Financial Highlights 51
1
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Table of Contents (continued)
Government Mortgage Fund
Schedules of Investments 40
Statements of Assets and Liabilities 45
Statements of Operations 46
Statements of Changes in Net Assets 48
Financial Highlights 52
Investment Quality Bond Fund
Schedules of Investments 41
Statements of Assets and Liabilities 45
Statements of Operations 46
Statements of Changes in Net Assets 48
Financial Highlights 53
Statements of Cash Flows 140
Victory Municipal Fixed Income Funds
National Municipal Bond Fund
Schedules of Investments 54
Statements of Assets and Liabilities 64
Statements of Operations 65
Statements of Changes in Net Assets 66
Financial Highlights 67
New York Tax-Free Fund
Schedules of Investments 56
Statements of Assets and Liabilities 64
Statements of Operations 65
Statements of Changes in Net Assets 66
Financial Highlights 68
Ohio Municipal Bond Fund
Schedules of Investments 58
Statements of Assets and Liabilities 64
Statements of Operations 65
Statements of Changes in Net Assets 66
Financial Highlights 69
Victory Specialty Funds
Balanced Fund
Schedules of Investments 70
Statements of Assets and Liabilities 85
Statements of Operations 86
Statements of Changes in Net Assets 87
Financial Highlights 88-89
Statements of Cash Flows 140
Convertible Securities Fund
Schedules of Investments 80
Statements of Assets and Liabilities 85
Statements of Operations 86
Statements of Changes in Net Assets 87
Financial Highlights 90
Real Estate Investment Fund
Schedules of Investments 84
Statements of Assets and Liabilities 85
Statements of Operations 86
Statements of Changes in Net Assets 87
Financial Highlights 91
Victory Equity Funds
Value Fund
Schedules of Investments 92
Statements of Assets and Liabilities 110
Statements of Operations 111
Statements of Changes in Net Assets 112
Financial Highlights 114
Lakefront Fund
Schedules of Investments 95
Statements of Assets and Liabilities 110
Statements of Operations 111
Statements of Changes in Net Assets 112
Financial Highlights 115
Established Value Fund
Schedules of Investments 97
Statements of Assets and Liabilities 110
Statements of Operations 111
Statements of Changes in Net Assets 112
Financial Highlights 116
Diversified Stock Fund
Schedules of Investments 99
Statements of Assets and Liabilities 110
Statements of Operations 111
Statements of Changes in Net Assets 113
Financial Highlights 117-118
Statements of Cash Flows 141
Stock Index Fund
Schedules of Investments 101
Statements of Assets and Liabilities 110
Statements of Operations 111
Statements of Changes in Net Assets 113
Financial Highlights 119
Statements of Cash Flows 141
Growth Fund
Schedules of Investments 108
Statements of Assets and Liabilities 110
Statements of Operations 111
Statements of Changes in Net Assets 113
Financial Highlights 120
Special Value Fund
Schedules of Investments 121
Statements of Assets and Liabilities 133
Statements of Operations 134
Statements of Changes in Net Assets 135
Financial Highlights 136
Statements of Cash Flows 141
Ohio Regional Stock Fund
Schedules of Investments 124
Statements of Assets and Liabilities 133
Statements of Operations 134
Statements of Changes in Net Assets 135
Financial Highlights 137
Small Company Opportunity Fund
Schedules of Investments 125
Statements of Assets and Liabilities 133
Statements of Operations 134
Statements of Changes in Net Assets 135
Financial Highlights 138
Statements of Cash Flows 141
International Growth Fund
Schedules of Investments 127
Statements of Assets and Liabilities 133
Statements of Operations 134
Statements of Changes in Net Assets 135
Financial Highlights 139
Notes to Financial Statements 142
2
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Letter to our Shareholders
On behalf of Victory Funds, thank you for your continued support and
confidence in using Victory Funds to help meet your investment goals! We
strive on a daily basis to make sure you have the appropriate information you
need to remain confident in your choice to invest in Victory Funds. To that
end, I am pleased to present the Victory Funds Semi-Annual Report for the
period ended April 30, 2000. I hope you find this report useful, easy to
read, and a valuable tool.
The past few months have been an exciting time for Victory Funds. Through
the combination of a new sales and marketing literature system, a new and
improved Internet presence, and the support of the many financial
intermediaries offering Victory Funds, we are now over 30 mutual funds
strong with more than $20 billion in assets under management.
Two of Victory Funds' core beliefs are guidance and education. We
recognize it can be a complex decision to invest in securities through
mutual funds, particularly when your hard-earned savings to fund a child's
education, a new home, or a comfortable retirement is on the line. That's
why I feel it is important for our shareholders to know "What Makes
Victory Funds Different?" I am confident that after you review the
following points you will be reassured of your investment in Victory Funds
and in a better position to share the Victory story with your family,
friends, and business associates. So, "What Makes Victory Funds
Different?"
Truth in Labeling. Dependability is the essence of Victory Funds. When you
entrust your money to a Victory Fund, you can rest assured that the
portfolio managers of the Funds are known for adhering to a fund's stated
management style and investment objective.
Discipline. A highly rigorous and disciplined investment process, refined
over decades
by the wisdom of experienced money managers, guides the selection of
securities for Victory Funds. Key Asset Management, Inc., an established
firm with a 100-year heritage, meticulously implements this proven
process.
Teamwork. A knowledgeable team of investment professionals supports
Victory Fund portfolio managers, who have an average of 17 years of
experience.
Guidance. Victory strives to make sure you have the information you need
to make the best investment decisions. The guidance available through
investment professionals, "www.victoryfunds.com," our educational
materials, and Victory Funds Service Center (1-800-539-FUND) all come
together for one purpose -- our shareholders.
Performance. The ultimate measure of your investment success is
performance. At Victory Funds, our long-term perspective leads us to
pursue the optimal return with a reasonable level of risk. We are
committed to achieving consistent, rewarding results over time.
Again, thank you for choosing the Victory Funds to help you realize your
financial goals and, as always, we welcome your comments on this report.
/s/ Leigh A. Wilson
Leigh A. Wilson
President
Victory Funds
3
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
U.S. Government Obligations Fund April 30, 2000
(Amounts in Thousands) (Unaudited)
Principal Amortized
Security Description Amount Cost
U.S. Treasury Notes (24.2%)
5.38%, 6/30/00 $ 35,000 $ 35,005
5.88%, 6/30/00 15,000 15,013
5.38%, 7/31/00 50,000 49,975
5.13%, 8/31/00 85,000 84,731
6.25%, 8/31/00 25,000 25,058
4.50%, 9/30/00 75,000 74,700
4.00%, 10/31/00 110,000 109,057
5.75%, 11/15/00 25,000 24,951
4.63%, 11/30/00 75,000 74,371
5.00%, 2/28/01 25,000 24,740
5.63%, 5/15/01 25,000 24,805
Total U.S. Treasury Notes (Amortized Cost $542,406) 542,406
Repurchase Agreements (75.9%)
Barclays Capital, Inc., 5.72%, 5/1/00,
(Collateralized by $100,000
U.S. Treasury Note, 5.00%, 2/28/01,
market value $102,000) 100,000 100,000
Bear Stearns, 5.73%, 5/1/00,
(Collateralized by $557,089 various
U.S. Government Securities,
0.00%-11.75%, 8/31/00-2/15/27,
market value $556,407) 550,000 550,000
Deutsche Bank, 5.73%, 5/1/00,
(Collateralized by $100,001 various
U.S. Government Securities,
0.00%, 8/15/00-11/15/04,
market value $102,001) 100,000 100,000
Donaldson-Lufkin Jenrette, 5.73%, 5/1/00,
(Collateralized by $103,318 various
U.S.Government Securities,
0.00%, 8/15/13-11/15/21,
market value $105,385) 103,318 103,318
Goldman Sachs Group L.P., 5.67%, 5/1/00,
(Collateralized by $100,000 various
U.S. Securities,
0.00%-9.13%, 7/13/00-5/15/18,
market value $102,000) $100,000 $ 100,000
Greenwich Partners, 5.71%, 5/1/00,
(Collateralized by $102,002
U.S. Treasury Bond,
12.50%, 8/15/14,
market value $100,209) 100,000 100,000
Lehman Brothers, Inc., 5.73%, 5/1/00,
(Collateralized by $561,003 various
U.S. Government Securities,
5.00%-12.50%, 9/30/00-8/15/15,
market value $552,430) 550,000 550,000
Warburg Dillon Read, 5.71%, 5/1/00,
(Collateralized by $102,002 various
U.S. Government Securities,
0.00%-11.75%, 2/15/12-11/15/14,
market value $102,002) 100,000 100,000
Total Repurchase Agreements
(Amortized Cost $1,703,318) 1,703,318
Total Investments
(Amortized Cost $2,245,724) (a)-- 100.1% 2,245,724
Liabilities in excess of other assets -- (0.1)% (2,187)
TOTAL NET ASSETS-- 100.0% $2,243,537
(a) Cost and value for federal income tax and financial reporting purposes
are the same.
See notes to financial statements.
4
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THE VICTORY PORTFOLIOS Schedules of Investments
Prime Obligations Fund April 30, 2000
(Amounts in Thousands) (Unaudited)
Principal Amortized
Security Description Amount Cost
Certificates of Deposit (15.0%)
ABN-AMRO North American Bank,
6.72%, 3/2/01 $ 20,000 $ 19,998
Bank One National Illinois,
6.18%, 6/23/00 20,000 20,000
Bayerische Landesbank New York,
6.60%, 3/7/01 20,000 19,994
Credit Suisse First Boston New York,
5.82%, 7/5/00 20,000 19,981
Deutsche Bank, 6.51%, 1/31/01 18,000 17,994
Dresdner Bank, 6.25%, 8/31/00 8,000 8,000
First National Bank of Chicago,
5.85%, 8/4/00 15,000 14,985
First Union National Bank,
6.00%, 5/17/00 15,000 14,999
First Union National Bank,
6.05%, 6/30/00 25,000 24,999
Huntington National Bank,
5.66%, 7/6/00 16,000 15,979
National Westminster Bank,
5.37%, 5/31/00 35,000 34,972
National Westminster Bank,
6.93%, 4/27/01 20,000 19,995
Rabobank, 5.29%, 5/19/00 10,000 10,000
Rabobank, 5.67%, 6/30/00 10,000 9,990
Rabobank, 6.68%, 2/12/01 20,000 19,994
Rabobank, 6.62%, 2/16/01 20,000 19,992
Toronto Dominion, 6.08%, 6/26/00 15,000 15,000
Toronto Dominion, 6.69%, 12/27/00 20,000 20,000
UBS Finance, 6.22%, 12/11/00 20,000 19,957
Total Certificates of Deposit (Amortized Cost $346,829) 346,829
Commercial Paper (59.1%)
ABB Treasury Center USA,
6.01%, 5/17/00 50,000 49,866
Asset Securitization Capital Corp.,
6.05%, 5/18/00 (b) 25,000 24,929
Asset Securitization Capital Corp.,
6.04%, 5/22/00 (b) 25,000 24,912
Asset Securitization Capital Corp.,
6.10%, 6/29/00 (b) 30,000 29,700
Baker Hughes, Inc., 6.06%, 5/1/00 (b) 100,000 100,000
Bell Atlantic Network Funding,
6.03%, 5/23/00 14,247 14,195
Bellsouth Corp., 6.01%, 5/22/00 25,000 24,912
Bellsouth Corp., 6.02%, 5/23/00 54,400 54,200
Brown Forman Corp., 6.02%, 5/4/00 (b) 10,000 9,995
Clorox Co., 6.09%, 7/6/00 9,000 8,900
Delaware Funding Corp.,
6.07% 6/6/00 (b) 30,000 29,818
Delaware Funding Corp.,
6.07% 6/9/00 (b) 70,013 69,553
Eastman Kodak Co., 6.10%, 6/22/00 22,500 22,302
Edison Asset Securities,
6.05%, 5/19/00 (b) 25,000 24,924
Fleet Funding Corp., 6.07%, 5/17/00 25,819 25,749
Fleet Funding Corp., 6.05%, 5/18/00 (b) $ 50,000 $ 49,857
Fleet Funding Corp., 6.05%, 5/25/00 (b) 24,000 23,903
General Mills, Inc., 6.03%, 5/2/00 35,000 34,993
General Mills, Inc., 6.00%, 5/22/00 15,000 14,948
Great Lakes Chemical Corp.,
6.07%, 5/18/00 (b) 50,000 49,857
Household Finance, 6.10%, 5/1/00 50,000 50,001
Iowa Student Loan Liquidity Corp.,
6.05%, 5/11/00, LOC Bank of America 12,000 11,980
Koch Industries, 6.04%, 5/1/00 (b) 100,000 100,000
Marsh USA, Inc., 6.15%, 7/19/00 15,740 15,528
Matson Navigation Co., Inc.,
6.05%, 5/24/00 10,000 9,961
McCormick & Co., Inc., 6.20%, 9/26/00 5,460 5,321
McGraw Hill, 6.02%, 5/22/00 (b) 26,000 25,908
McGraw Hill, 6.07%, 6/1/00 12,500 12,435
McGraw Hill, 6.06%, 6/2/00 22,100 21,981
Merck & Co., Inc., 6.03%, 5/17/00 35,000 34,906
Mont Blanc Capital Corp.,
6.11%, 6/27/00 (b) 19,695 19,504
Monte Rosa Capital Corp.,
6.08%, 6/7/00 (b) 17,624 17,514
Redwood Receivables Corp.,
6.02%, 5/12/00 (b) 40,000 39,926
Redwood Receivables Corp.,
6.05%, 5/18/00 (b) 50,954 50,809
Salomon Smith Barney, Inc.,
6.07%, 6/12/00 50,000 49,646
SBC Communications, Inc.,
5.69%, 5/15/00 (b) 15,000 14,967
SBC Communications, Inc.,
6.05%, 5/23/00 30,500 30,387
Sheffield Receivables, 6.05%, 5/22/00 (b) 100,000 99,647
Texas Agriculture Finance,
6.09%, 5/19/00 16,000 15,951
Weyerhauser Real Estate, 6.07%, 5/3/00 26,000 25,991
Windmill Funding Corp.,
6.05%, 5/22/00 (b) 25,000 24,912
Total Commercial Paper (Amortized Cost $1,364,788) 1,364,788
Corporate Bonds (21.4%)
American General Financial Corp.,
6.13%, 9/15/00 12,000 12,001
American Manufacturing Co.,
6.30%*, 5/4/00**, LOC Mellon Bank 8,700 8,700
AT&T Capital Corp., 6.59%, 8/4/00 9,500 9,508
AVCO Financial Services, 6.35%, 9/15/00 6,000 5,997
Capital One Funding Corp.,
6.20%*, 5/4/00**, LOC Bank One 13,477 13,477
Dome Corp., 6.27%*, 5/3/00**,
LOC Societe Generale 2,620 2,620
First Union National Bank,
6.40%*, 5/1/00** 45,000 45,000
Ford Motor Credit Co., 6.38%, 10/6/00 5,000 5,002
Ford Motor Credit Co., 5.75%, 1/25/01 5,000 4,967
Ford Motor Credit Co.,
5.77%, 2/12/01, MTN 4,000 3,971
See notes to financial statements.
5
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THE VICTORY PORTFOLIOS Schedules of Investments--continued
Prime Obligations Fund April 30, 2000
(Amounts in Thousands) (Unaudited)
Principal Amortized
Security Description Amount Cost
Ford Motor Credit Co.,
6.00%, 2/27/01, MTN $ 5,450 $ 5,419
General Electric Capital Corp.,
5.93%, 5/1/00, MTN 8,000 8,000
General Motors Acceptance Corp.,
6.32%*, 5/1/00**, MTN 12,000 12,019
General Motors Acceptance Corp.,
6.43%*, 5/9/00**, MTN 9,000 9,013
General Motors Acceptance Corp.,
6.41%*, 5/22/00**, MTN 2,000 2,002
General Motors Acceptance Corp.,
6.41%*, 5/22/00**, MTN 9,000 9,009
General Motors Acceptance Corp.,
6.25%*, 5/23/00**, MTN 10,000 10,011
General Motors Acceptance Corp.,
5.33%, 10/20/00, MTN 6,500 6,466
Goldman Sachs Group,
6.35*, 6/27/00** (c) 10,000 10,002
Household Finance, 6.00%, 5/8/00 5,000 5,000
Household Finance, 6.45%, 3/15/01 3,048 3,040
IBM Credit Corp., 6.21%, 12/11/00 15,000 14,989
J.P. Morgan & Co., 6.12%*, 5/16/00** 25,000 25,000
John Deere Capital Corp., 5.73%, 7/13/00 10,000 9,999
Merrill Lynch, 6.70%, 8/1/00 5,000 5,006
Morgan Stanley Dean Witter,
6.18%*, 5/1/00**, MTN 40,000 39,999
Morgan Stanley Dean Witter,
6.21%*, 5/1/00** 50,000 50,000
Morgan Stanley Dean Witter,
6.25%*, 6/15/00**, MTN 8,000 8,000
Morgan Stanley Dean Witter,
6.58%*, 6/27/00** 5,600 5,602
Pepsico, Inc., 5.88%, 6/1/00 30,000 29,986
Prudential Funding, 5.89%, 4/16/01 4,000 3,965
Richfield Technology Associates,
6.25%*, 5/4/00**, LOC Star Bank 4,500 4,500
RKS LLC Health Care, 6.25%*, 5/3/00**,
LOC AmSouth Bank 11,500 11,500
Sea River Maritime, Inc., 6.12%*, 5/1/00**,
Guaranteed by Exxon Mobil Corp. 29,900 29,900
Sigma Finance, Inc., 6.28%*, 5/11/00** (c) 25,000 25,000
Southwestern Ohio Steel,
6.25%*, 5/4/00**, LOC Star Bank 7,960 7,960
Transamerica Financial Corp.,
6.21%*, 6/2/00**, MTN 15,000 15,000
Transamerica Financial Corp.,
5.89%, 3/5/01, MTN 6,000 5,957
Walt Disney Co., 6.38%, 3/30/01 4,000 3,991
Xerox Corp., 5.40%, 9/11/00 5,000 4,986
Total Corporate Bonds (Amortized Cost $492,564) 492,564
Municipal Bonds (1.0%)
Arkansas (0.5%):
Union County Industrial Development
Revenue, Del-Tin Fiber Project,
6.20%*, 5/3/00**,
LOC Bank One Chicago 10,000 10,000
Kentucky (0.2%):
Maruga Series 1999-A, 6.23%*, 5/4/00**,
LOC Fifth Third Bank $ 5,620 $ 5,620
Ohio (0.3%):
Cuyahoga County EDR, Gateway Arena
Project, Series B, 6.20%*, 5/3/00**,
LOC Canadian Imperial Bank
of Commerce 6,900 6,900
Total Municipal Bonds (Amortized Cost $22,520) 22,520
U.S. Government Agencies (1.0%)
Federal Farm Credit Bank (0.2%):
5.73%, 6/1/00 5,675 5,674
Federal Home Loan Bank (0.4%):
5.97%, 12/1/00 10,000 9,983
Student Loan Marketing Assoc. (0.4%):
6.46%*, 5/2/00** 8,500 8,498
Total U.S. Government Agencies
(Amortized Cost $24,155) 24,155
Repurchase Agreements (2.4%)
Lehman Brothers, Inc., 5.73%, 5/1/00,
(Collateralized by $30,602
U.S. Treasury Note, 6.00%, 7/31/02,
market value $30,159) 30,000 30,000
Paine Webber, 5.73%, 5/1/00,
(Collateralized by $25,254 various
U.S. Government Securities,
6.13%-8.50%, 2/15/20-11/15/27,
market value $25,254) 24,758 24,758
Total Repurchase Agreements (Amortized Cost $54,758) 54,758
Total Investments
(Amortized Cost $2,305,614) (a) -- 99.9% 2,305,614
Other assets in excess of liabilities -- 0.1% 1,456
TOTAL NET ASSETS -- 100.0% $2,307,070
(a) Cost and value for federal income tax and financial reporting purposes
are the same.
(b) Section 4(2) commercial paper which is restricted as to resale.
(c) 144a security which is restricted as to resale to institutional
investors only.
* 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, 2000. 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.
6
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THE VICTORY PORTFOLIOS Schedules of Investments
Financial Reserves Fund April 30, 2000
(Amounts in Thousands) (Unaudited)
Principal Amortized
Security Description Amount Cost
Bankers Acceptances (0.6%)
Bank of Hawaii, 6.25%, 9/12/00 $ 5,362 $ 5,237
Total Bankers Acceptances (Amortized Cost $5,237) 5,237
Certificates of Deposit (10.2%)
Bank One National Illinois,
6.18%, 6/23/00 10,000 10,000
Canadian Imperial Bank of Commerce,
6.20%, 8/1/00 3,500 3,499
Credit Suisse First Boston New York,
5.82%, 7/5/00 10,000 9,991
Deutsche Bank, 6.51%, 1/31/01 7,000 6,998
First National Bank of Chicago,
5.85%, 8/4/00 7,600 7,592
First Union National Bank,
6.00%, 5/17/00 10,000 9,999
Rabobank, 6.36%, 9/25/00 10,000 9,997
Rabobank, 6.62%, 2/16/01 9,000 8,997
Toronto Dominion, 6.69%, 12/27/00 10,000 9,999
Toronto Dominion, 6.68%, 2/8/01 10,000 9,996
Total Certificates of Deposit (Amortized Cost $87,068) 87,068
Commercial Paper (45.3%)
Akzo Nobel, Inc., 6.17%, 8/1/00 7,000 6,890
Akzo Nobel, Inc., 6.17%, 8/7/00 4,034 3,966
Asset Securitization Capital Corp.,
6.10%, 6/29/00 13,000 12,870
Bell Atlantic Financial Services,
6.04%, 5/16/00 25,000 24,937
Diageo Capital PLC, 6.02%, 5/18/00 15,000 14,957
Eastman Kodak Co., 6.10%, 6/19/00 10,000 9,917
Fountain Square Commercial Funding
Corp., 6.05%, 5/9/00 (b) 5,012 5,005
Fountain Square Commercial Funding
Corp., 6.10%, 6/5/00 (b) 8,150 8,102
Fuji Photo Finance, 6.12%, 6/27/00 7,500 7,427
Household Finance, 6.10%, 5/1/00 25,000 25,001
Koch Industries, 6.04%, 5/1/00 (b) 25,000 25,000
Louis Dreyfus Natural Gas, 6.04%, 5/18/00,
LOC Dresdner Bank 6,500 6,481
Matson Navigation, 6.07%, 5/17/00 10,000 9,973
Matson Navigation, 6.05%, 5/25/00 10,000 9,960
McGraw Hill, 6.06%, 6/2/00 20,000 19,892
Merck & Co., Inc., 6.03%, 5/17/00 25,000 24,933
Monte Rosa Capital Corp.,
6.09%, 6/6/00 (b) 18,520 18,407
Pemex Capital Ltd., 6.00%, 5/25/00,
LOC Barclays Bank 10,000 9,960
Pemex Capital Ltd., 6.03%, 6/27/00,
LOC Barclays Bank 10,000 9,905
Pitney Bowes Credit Corp.,
6.00%, 5/18/00 35,000 34,901
Redwood Receivables Corp.,
6.02%, 5/12/00 (b) 25,429 25,382
SBC Communications, Inc.,
5.69%, 5/15/00 (b) $15,000 $ 14,967
Sigma Financial Corp.,
6.08%, 5/23/00 (b) 12,260 12,214
Southwest Student Services Corp.,
6.05%, 5/8/00, LOC Dresdner Bank 2,700 2,697
Texas Agriculture Finance,
6.09%, 5/19/00 10,000 9,970
Walt Disney Co., 6.00%, 5/29/00 15,000 14,980
Weyerhauser Real Estate, 6.08%, 5/2/00 17,000 16,997
Total Commercial Paper (Amortized Cost $385,691) 385,691
Corporate Bonds (30.6%)
4-L Co. of Carmel, 6.20%*, 5/3/00**,
LOC NBD Bank 2,310 2,310
American General Financial Corp.,
6.78%, 5/15/00 5,605 5,607
American General Financial Corp.,
5.88%, 7/1/00 2,000 2,000
American General Financial Corp.,
6.78%, 7/20/00 5,000 5,010
American General Financial Corp.,
6.13%, 9/15/00 8,000 8,001
Associates Corp., N.A., 6.00%, 6/15/00 5,000 4,999
AT&T Capital Corp., 6.83%, 1/30/01 1,500 1,501
AT&T Capital Corp., 6.80%, 2/1/01 1,000 1,000
Beneficial Corp., 6.33%, 12/18/00, MTN 5,000 5,001
CS Manufacturing, 6.20%*, 5/3/00**,
LOC First National Bank of Chicago 4,100 4,100
Exxon Mobil Corp., 5.79%., 1/2/01 1,101 1,097
Exxon Mobil Corp., 8.38%., 2/12/01 3,000 3,038
First Union National Bank,
6.40%*, 5/1/00** 30,000 30,000
Ford Motor Credit Co.,
7.02%, 10/10/00, MTN 2,000 2,004
Galileo Corp., 6.20%*, 5/3/00**,
LOC LaSalle Bank 10,400 10,400
General Motors Acceptance Corp.,
5.80%, 2/23/01, MTN 1,125 1,117
General Motors Acceptance Corp.,
6.08%, 5/22/01 3,000 2,990
Glen Oaks Real Estate,
6.20%*, 5/3/00**,
LOC American National Bank & Trust 6,200 6,200
Goldman Sachs Group,
6.35*, 6/27/00** (c) 5,000 5,001
Goldman Sachs Group,
6.46%*, 7/17/00 (c) 7,500 7,508
Goldman Sachs Group,
6.49%*, 7/25/00** (c) 6,500 6,507
Household Finance, 6.81%, 5/25/00 5,000 5,002
Household Finance, 6.75%, 6/1/00 2,005 2,006
IBM Credit Corp., 8.90%, 6/20/00 5,000 5,023
IBM Credit Corp., 6.20%, 8/28/00, MTN 1,675 1,676
IBM Credit Corp., 6.21%, 12/11/00 5,000 4,998
IBM Credit Corp., 5.05%, 1/22/01, MTN 2,000 1,980
See notes to financial statements.
7
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Financial Reserves Fund April 30, 2000
(Amounts in Thousands) (Unaudited)
Principal Amortized
Security Description Amount Cost
Ivex of Delaware, Kama Project,
6.39%*, 5/4/00**,
LOC Societe Generale $ 6,500 $ 6,500
J.P. Morgan & Co., 6.12%*, 5/16/00** 10,000 10,000
John Deere Capital Corp.,
5.73%, 7/13/00 5,000 5,000
John Deere Capital Corp.,
6.28%, 10/11/00, MTN 3,000 2,999
John Deere Capital Corp.,
6.08%, 12/18/00, MTN 2,000 1,998
Merrill Lynch & Co.,
6.25%*, 5/1/00**, MTN 10,000 10,008
Merrill Lynch & Co.,
6.33%, 8/25/00, MTN 3,000 2,998
Morgan Stanley Dean Witter,
6.18%*, 5/1/00**, MTN 20,000 19,999
Morgan Stanley Dean Witter,
6.25%*, 6/15/00**, MTN 15,000 14,999
Morgan Stanley Dean Witter,
6.58%*, 6/27/00** 2,000 2,001
Salomon Smith Barney Holdings,
6.26%*, 5/1/00, MTN 5,000 5,003
Sea River Maritime, Inc., 6.12%*, 5/1/00**,
Guaranteed by Exxon Mobil Corp. 21,400 21,400
Sharp Electronics, 6.23%*, 5/4/00**,
LOC Fifth Third Bank 3,715 3,715
Sigma Finance, Inc., 6.28%*, 5/11/00** 10,000 10,000
Transamerica Financial Corp.,
6.21%*, 6/2/00**, MTN 8,000 8,000
Total Corporate Bonds (Amortized Cost $260,696) 260,696
Municipal Bonds (2.7%)
Arkansas (1.0%):
Union County Industrial Development
Revenue, Del-Tin Fiber Project,
6.20%*, 5/3/00**,
LOC Bank One Chicago 8,000 8,000
Idaho (0.5%):
Idaho Assoc. LLC., 6.20%*, 5/3/00**,
LOC LaSalle Bank 3,850 3,850
Kentucky (0.7%):
Maruga, Series 1999b, 6.30%*, 5/4/00**,
LOC First Star 1,365 1,365
Warren County Industrial Development
Authority, 6.23%*, 5/4/00**,
LOC Nationsbank 5,000 5,000
6,365
New York (0.2%):
Rockland County, NY Industrial
Development, 6.30%*, 5/3/00**,
LOC Mellon Bank $ 1,900 $ 1,900
Pennsylvania (0.3%):
Franconia Township Industrial
Development, 6.30%*, 5/4/00**,
LOC Mellon Bank 2,765 2,765
Total Municipal Bonds (Amortized Cost $22,880) 22,880
Repurchase Agreements (6.9%)
Lehman Brothers, Inc., 5.73%, 5/1/00,
(Collateralized by $30,602
U.S. Treasury Bond, 7.25%, 8/15/22,
market value $30,208) 30,000 30,000
Paine Webber, 5.73%, 5/1/00,
(Collateralized by $29,500 various
U.S. Government Securities,
5.75%-11.63%, 8/15/03-8/15/26,
market value $29,121) 28,921 28,921
Total Repurchase Agreements (Amortized Cost $58,921) 58,921
Time Deposits (4.1%)
Bank of Hawaii, 6.09%, 5/1/00 35,000 35,000
Total Time Deposits (Amortized Cost $35,000) 35,000
Total Investments
(Amortized Cost $855,493) (a) -- 100.4% 855,493
Liabilities in excess of other assets -- (0.4)% (3,013)
TOTAL NET ASSETS -- 100.0% $852,480
(a) Cost and value for federal income tax and financial reporting purposes
are the same.
(b) Section 4(2) commercial paper which is restricted as to resale.
(c) 144a security which is restricted as to resale to institutional
investors only.
* 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, 2000. 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.
8
<PAGE>
Statements of Assets and Liabilities
The Victory Portfolios April 30, 2000
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
<TABLE>
<CAPTION>
U.S. Government Prime Financial
Obligations Obligations Reserves
Fund Fund Fund
<S> <C> <C> <C>
ASSETS:
Investments, at amortized cost $ 542,406 $2,250,856 $796,572
Repurchase agreements, at cost 1,703,318 54,758 58,921
Total 2,245,724 2,305,614 855,493
Cash -- 181 2
Interest receivable 8,878 12,985 3,949
Receivable for capital shares issued -- 1 --
Prepaid expenses and other assets 36 104 61
Total Assets 2,254,638 2,318,885 859,505
LIABILITIES:
Dividends payable 9,859 10,393 3,549
Payable to brokers for investments purchased -- -- 3,008
Accrued expenses and other payables:
Investment advisory fees 658 669 321
Administration fees 40 41 104
Custodian fees 39 37 15
Accounting fees 2 1 10
Transfer agent fees 30 26 10
Shareholder service fees -- 475 --
Shareholder service fees -- Select Shares 349 -- --
Other 124 173 8
Total Liabilities 11,101 11,815 7,025
NET ASSETS:
Capital 2,243,536 2,307,062 852,479
Undistributed net investment income -- 16 1
Accumulated undistributed net realized
gains (losses) from investment transactions 1 (8) --
Net Assets $2,243,537 $2,307,070 $852,480
Net Assets
Investor Shares $ 499,347 -- --
Select Shares 1,744,190 -- --
Total $2,243,537 -- --
Outstanding units of beneficial interest (shares)
Investor Shares 499,319 -- --
Select Shares 1,744,275 -- --
Total 2,243,594 2,307,062 852,370
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.
9
<PAGE>
Statements of Operations
The Victory Portfolios For the Six Months Ended April 30, 2000
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
U.S. Government Prime Financial
Obligations Obligations Reserves
Fund Fund Fund
<S> <C> <C> <C>
Investment Income:
Interest income $60,901 $64,714 $23,885
Securities Lending 9 -- --
Total Income 60,910 64,714 23,885
Expenses:
Investment advisory fees 3,834 3,804 2,010
Administration fees 1,200 1,191 507
Shareholder service fees -- 2,717 --
Shareholder service fees -- Select Shares 2,206 -- --
Accounting fees 65 70 58
Custodian fees 223 220 93
Legal and audit fees 96 99 39
Trustees' fees and expenses 21 20 7
Transfer agent fees 39 46 12
Registration and filing fees 16 87 54
Printing fees 100 232 4
Other 38 16 6
Total Expenses 7,838 8,502 2,790
Net Investment Income 53,072 56,212 21,095
Realized Gains (Losses) from Investments:
Net realized gains (losses)
from investment transactions -- 4 --
Change in net assets resulting from operations $53,072 $56,216 $21,095
</TABLE>
See notes to financial statements.
10
<PAGE>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
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,
2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 53,072 $ 92,639 $ 56,212 $ 76,539 $ 21,095 $ 37,907
Net realized gains (losses) from
investment transactions -- -- 4 (12) -- 7
Change in net assets resulting
from operations 53,072 92,639 56,216 76,527 21,095 37,914
Distributions to Shareholders:
From net investment income -- -- (56,212) (76,539) (21,095) (37,907)
Investor Shares (10,792) (20,842) -- -- -- --
Select Shares (42,280) (71,797) -- -- -- --
Change in net assets from
distributions to shareholders (53,072) (92,639) (56,212) (76,539) (21,095) (37,907)
Capital Transactions:
Proceeds from shares issued 3,480,702 3,987,901 2,828,506 4,151,240 1,437,797 1,615,129
Dividends reinvested 36,030 60,057 52,835 71,662 1,777 2,868
Cost of shares redeemed (3,472,917) (4,021,260) (2,634,314) (3,541,564) (1,405,546) (1,585,072)
Change in net assets from
capital transactions 43,815 26,698 247,027 681,338 34,028 32,925
Change in net assets 43,815 26,698 247,031 681,326 34,028 32,932
Net Assets:
Beginning of period 2,199,722 2,173,024 2,060,039 1,378,713 818,452 785,520
End of period $ 2,243,537 $ 2,199,722 $ 2,307,070 $ 2,060,039 $ 852,480 $ 818,452
Share Transactions:
Issued 3,480,702 3,987,901 2,828,506 4,151,241 1,437,797 1,615,128
Reinvested 36,030 60,057 52,835 71,662 1,777 2,868
Redeemed (3,472,917) (4,021,260) (2,634,314) (3,541,564) (1,405,546) (1,585,072)
Change in shares 43,815 26,698 247,027 681,339 34,028 32,924
</TABLE>
See notes to financial statements.
11
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
U.S. Government Obligations Fund
Investor Shares Select Shares
Six Six
Months Year Year Period Months Year Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended
April October October October April October October October October October
30, 31, 31, 31, 30, 31, 31, 31, 31, 31,
2000 1999 1998 1997<F2> 2000 1999 1998 1997<F2> 1996 1995<F3>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <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 $ 1.000 $ 1.000 $ 1.000
Investment
Activities
Net
investment
income 0.025 0.044 0.050 0.041 0.024 0.042 0.048 0.047 0.049 0.052
Distributions
Net
investment
income (0.025) (0.044) (0.050) (0.041) (0.024) (0.042) (0.048) (0.047) (0.049) (0.052)
Net Asset
Value,
End of
Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total Return 2.41%<F4> 4.54% 5.12% 4.19%<F4> 2.53%<F4> 4.27% 4.86% 4.75% 4.96% 5.38%
Ratios/
Supplemental
Data:
Net Assets,
End of
Period (000) $499,347 $386,264 $571,104 $456,133 $1,744,190 $1,813,458 $1,601,920 $1,235,475 $1,357,817 $964,929
Ratio of
expenses
to average
net assets 0.51%<F5> 0.52% 0.52% 0.56%<F5> 0.76%<F5> 0.77% 0.77% 0.74% 0.61% 0.58%
Ratio of net
investment
income to
average
net assets 5.06%<F5> 4.44% 5.03% 4.95%<F5> 4.79%<F5> 4.19% 4.78% 4.75% 4.84% 5.28%
Ratio of
expenses
to average
net assets<F1> <F6> <F6> <F6> <F6> <F6> <F6> <F6> <F6> <F6> 0.60%
Ratio of net
investment
income to
average
net assets<F1> <F6> <F6> <F6> <F6> <F6> <F6> <F6> <F6> <F6> 5.26%
<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.
12
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Prime Obligations Fund
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,
2000 1999 1998 1997 1996 1995
(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 0.026 0.044 0.049 0.048 0.047 0.051
Distributions
Net investment income (0.026) (0.044) (0.049) (0.048) (0.047) (0.051)
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total Return 2.60%<F1> 4.52% 4.98% 4.89% 4.81% 5.26%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $2,307,070 $2,060,039 $1,378,713 $736,449 $496,019 $456,266
Ratio of expenses to
average net assets 0.78%<F2> 0.79% 0.80% 0.85% 0.87% 0.74%
Ratio of net investment income
to average net assets 5.17%<F2> 4.43% 4.89% 4.79% 4.72% 5.09%
<FN>
<F1> Not annualized.
<F2> Annualized.
</FN>
</TABLE>
See notes to financial statements.
13
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Financial Reserves Fund
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,
2000 1999 1998 1997 1996 1995<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 0.026 0.045 0.050 0.049 0.049 0.054
Distributions
Net investment income (0.026) (0.045) (0.050) (0.049) (0.049) (0.054)
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total Return 2.64%<F2> 4.62% 5.10% 5.04% 5.00% 5.50%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $852,480 $818,452 $785,520 $800,642 $767,990 $762,870
Ratio of expenses to
average net assets 0.69%<F4> 0.68% 0.67% 0.67% 0.67% 0.60%
Ratio of net investment income
to average net assets 5.25%<F4> 4.52% 5.01% 4.94% 4.89% 5.40%
Ratio of expenses to
average net assets<F1> <F4> <F4> 0.68% 0.71% 0.75% 0.76%
Ratio of net investment income
to average net assets<F1> <F4> <F4> 5.00% 4.90% 4.81% 5.24%
<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>
See notes to financial statements.
14
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Tax-Free Money Market Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Amortized
Security Description Amount Cost
Municipal Bonds (99.4%)
Alabama (3.2%):
Montgomery Hospital,
Series C, 5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank $ 5,800 $ 5,800
Montgomery Hospital,
Series D, 5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank 5,000 5,000
Montgomery Hospital,
Series E, 5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank 4,600 4,600
Montgomery Hospital,
Series G, 5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank N.A. 1,635 1,635
Montgomery Special Care Facilities
Financing Authority Revenue,
5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank 4,900 4,900
21,935
Arizona (1.4%):
Maricopa County School District NO 4,
6.90% 7/1/00, AMBAC 7,000 7,031
Pima County,
Industrial Development Authority,
IDR, Brush Wellman, Inc. Project,
5.15%*, 5/4/00**,
LOC National City Bank 1,500 1,500
State Transportation Board,
7.00%, 7/1/00,
Prerefunded 7/1/00 @ 101 1,000 1,016
9,547
Arkansas (1.4%):
Paragould Sales and Use Tax,
5.25%, 7/1/00, AMBAC 1,205 1,209
State Development Authority,
Police- Wireless Data,
5.00%, 6/1/00, FGIC 1,100 1,101
State Development Finance Authority,
Potlatch Corp. Project,
Series A, 5.10%*, 5/3/00**,
LOC Bank One AMT 7,250 7,250
9,560
Colorado (1.0%):
Denver Colorado City and County,
5.90%, 8/1/03,
LOC Bank One Texas,
Prerefunded 8/1/00 @ 101 1,000 1,014
Housing Finance Authority,
5.05%*, 5/3/00**, FNMA 1,060 1,060
Housing Finance Authority,
5.05%*, 5/3/00**, FNMA $ 1,075 $ 1,075
Pitkin County Industrial
Development Revenue,
5.95%*, 5/1/00**,
LOC Bank One N.A. AMT 3,500 3,500
6,649
District of Columbia (3.8%):
District Columbia Revenue
National Academy Of Science
Series B, 4.10%, 8/25/00,
AMBAC, LOC Bank Of America 2,500 2,500
District Columbia Revenue
National Childrens Center Inc.,
5.10%*,5/4/00**,
LOC Bank of America 5,305 5,305
District of Columbia Washington,
4.15%, 7/21/00 LOC Bank One 10,000 10,000
District of Columbia Housing- Carmel,
5.15%*, 5/4/00**,
LOC Bank Of America 1,000 1,000
District of Columbia,
GO, 4.50, 6/1/00, MBIA 7,460 7,465
26,270
Florida (0.8%):
Volusia County Housing Financial
Multifamily Housing Revenue,
5.10%*, 5/3/00**,
LOC Bank Of N.A. AMT 5,700 5,700
Georgia (2.1%):
Burke County Development Authority
Pollution Control Revenue,
4.00%, 7/14/00, AMBAC,
SPA Rabobank 7,000 7,000
Cobb County & Marietta Water
Authority Revenue,
4.60% 11/1/00 3,000 3,006
Marietta Housing Authority
Mulitfamily Revenue,
5.10%*, 5/3/00**, LOC First Union 4,300 4,300
14,306
Hawaii (0.3%):
Honolulu City and County,
Series C, GO, 6.90%, 6/1/00,
LOC Morgan Guaranty Trust 2,000 2,006
Idaho (0.1%):
Nez Perce County,
Pollution Control Revenue,
5.05%*, 5/4/00**,
LOC Bank One N.A. 1,000 1,000
See notes to financial statements.
15
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Tax-Free Money Market Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Amortized
Security Description Amount Cost
Illinois (12.0%):
Chicago, Noble State Charter,
5.10%*, 5/3/00**,
LOC Bank One N.A. $ 2,500 $ 2,500
Chicago, Special Facility,
5.10%*, 5/3/00**,
LOC Bank One N.A. AMT 9,300 9,300
Development Financial Authority Revenue,
5.10%*, 5/4/00**,
LOC Bank One N.A. AMT 5,390 5,390
Development Financial Authority Revenue,
5.20%*, 5/4/00**,
LOC Bank One N.A. AMT 1,420 1,420
Development Financial Authority Revenue,
5.20%*, 5/4/00**,
LOC American National
Bank & Trust AMT 1,000 1,000
Development Financial Authority Revenue,
5.10%*, 5/2/00,
LOC Morgan Guaranty Trust AMT 10,000 10,000
Development Financial Authority Revenue,
5.20%*, 5/4/00**,
LOC American National
Bank & Trust AMT 1,850 1,850
Development Financial Authority Revenue,
5.20%*, 5/4/00**,
LOC American National
Bank & Trust 1,070 1,070
Development Financial Authority Revenue,
5.20%*, 5/3/00**,
LOC American National
Bank & Trust 1,600 1,600
Development Financial Authority Revenue,
5.20%*, 5/4/00**,
LOC American National
Bank & Trust AMT 1,100 1,100
Development Financial Authority Revenue,
5.20%*, 5/4/00**,
LOC American National
Bank & Trust AMT 2,210 2,210
Development Financial Authority Revenue,
5.05%*, 5/3/00**,
LOC American National
Bank & Trust 5,900 5,900
Development Financial Authority,
Catherine Cook School Project,
5.00%*, 5/3/00**,
LOC Harris Bank & Trust 2,875 2,875
East St. Louis Tax Increment Revenue,
5.20*, 5/4/00**,
LOC Bank Of America 3,870 3,870
Educational Facility Authority Revenue,
5.05%*, 5/3/00,
LOC American National
Bank & Trust 11,005 11,005
Galesburg Revenue Knox College Project,
5.15%*, 5/4/00**,
LOC LaSalle National Bank $ 5,000 $ 5,000
Hanover Park IDR,
Spectra-Tech, Inc. Project,
5.35%*, 5/4/00**,
LOC Harris Bank & Trust AMT 1,595 1,595
Havana Industrial Development Authority,
5.25%*, 5/4/00**,
LOC Bank Of America AMT 2,400 2,400
Kendall & Kane County Community
United School District No 115,
4.99%, 1/11/00 2,000 2,008
Lombard, 5.20%*, 5/4/00**,
LOC American National
Bank & Trust AMT 1,830 1,830
Savanna Industrial Development
Revenue Metform Corp.
Project Series B, 5.10%*, 5/3/00**,
LOC Bank One N.A. AMT 1,000 1,000
State Development Financial Authority,
EDR, CPL/Downers Grove Partnership,
5.59%*, 5/3/00**,
LOC LaSalle National Bank 4,400 4,400
Tinley Park Special Assignment,
5.10%*, 5/3/00**,
LOC Old Kent Bank AMT 140 140
Yorkville Wheaton & Co. Project,
5.20%*, 5/4/00**,
LOC Amrican National Bank AMT 1,800 1,800
81,263
Indiana (10.2%):
Auburn Economic Development,
4.05*, 5/1/00**,
LOC Bank One Michigan AMT 2,000 2,000
Bedford Economic Development
Revenue White River Lodge,
5.10%*, 5/4/00**, LOC FHLC 1,725 1,725
Educational Facility Authority Revenue,
Bethel College,
Series A, 5.05%*, 5/3/00**,
LOC Bank One 3,200 3,200
Elkhart, EDR, 4.40%*, 5/1/00**,
LOC Bank One N.A. 525 525
Evansville Economic Development
Revenue Ball Corp. Project,
5.05%*, 5/3/00,
LOC Wachovia 3,500 3,500
Financing Authority Health
Facility Revenue,
Baptist Homes of Indiana,
5.10%*, 5/4/00**,
LOC Bank One 4,785 4,785
Fort Wayne Industrial Economic
Development Revenue,
5.10%*, 5/3/00**,
LOC Societe Generale AMT 3,000 3,000
See notes to financial statements.
16
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Tax-Free Money Market Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Amortized
Security Description Amount Cost
Indianapolis, EDR,
White Arts, Inc. Project,
5.25%*, 5/4/00**,
LOC Fifth Third Bank $ 4,300 $ 4,300
Lagrande County Industrial
Economic Development Revenue
LA West Inc. Project,
5.20%*, 5/3/00**,
LOC Bank One AMT 2,200 2,200
Lagrande County, IDR,
5.20%*, 5/3/00**,
LOC Bank One N.A. AMT 2,600 2,600
Lawrence Southwark,
5.35%*, 5/4/00**,
LOC Mellon Bank AMT 2,500 2,500
Madison Economic Development
Revenue Arvin Sango, Inc. Project,
5.20%*, 5/3/00**,
LOC Bank One N.A. 7,900 7,900
Mooresville Viking Air Tools,
5.20%*, 5/3/00**,
LOC Bank One N.A. 4,060 4,060
Noblesville,
Rivers Edge Apartments Project,
5.10%*, 5/4/00**, LOC Bank One 2,935 2,935
Orleans Industry Economic Development,
5.20%*, 5/4/00**,
LOC Bank One N.A. AMT 4,600 4,600
Plymouth, EDR,
5.57%*, 5/4/00**, LOC Star Bank 5,060 5,060
Richmond Economic Development Revenue
Friends Fellowship Project,
5.10%*, 5/4/00**, LOC Bank One 2,700 2,700
Rushville Economic Development Revenue,
5.25%*, 5/4/00**, FGIC 1,780 1,780
Seymour Economic Development Revenue
Spaceguard, Inc. Project,
5.20%*, 5/3/00**, LOC Bank One 1,210 1,210
State Development Financial Authority
Economic Development Revenue,
5.20%*, 5/4/00,
LOC American National
Bank & Trust AMT 1,100 1,100
State Development Financial Authority,
EDR, Dura-Crete Project,
5.20%*, 5/4/00,
LOC Bank One AMT 3,470 3,470
State Education Wesleyan,
5.10%*, 5/3/00**, LOC Bank One 2,500 2,500
Vincennes Economic Development Revenue,
5.25%*, 5/4/00**, FHLB 1,875 1,875
69,525
Iowa (1.3%):
City of Urbandale,
5.10%*, 5/3/00**,
Guaranteed by Principle
Mutual Life Insurance Co. 9,200 9,200
Kentucky (5.8%):
Boone County,
3.75%, 6/30/00 $ 2,100 $ 2,100
Boone County, Industrial Building Revenue,
Multi-Color Corp. Project,
5.25*, 5/4/00**,
LOC PNC Bank AMT 1,750 1,750
Covington Industrial Building Revenue
St. Charles Center,
5.22%*, 5/4/00**,
LOC First Star Bank 3,495 3,495
Dayton Industrial Building Revenue,
Woodcraft
Manufacturing Co., Inc. Project,
5.45%*, 5/4/00**,
LOC Fifth Third Bank 610 610
Economic Development Financial Authority
Hospital Facilities Revenue,
5.20%*, 5/4/00,
LOC Firstar Bank 7,100 7,100
Kenton County,
3.75%, 6/30/00 4,489 4,489
Kentucky Interlocal School,
4.00%, 6/30/00 10,000 10,008
Lexington Fayette Urban County
Government Industrial
Building Revenue,
5.15%*, 5/4/00**,
LOC National City Bank 3,870 3,870
Mayfield Multi-City Lease Revenue,
5.20%*, 5/3/00**, LOC PNC Bank 4,000 4,000
Somerset, Industrial Building Revenue,
Glen Oak Lumber & Mining,
5.20%*, 5/4/00**,
LOC Bank One AMT 2,010 2,010
39,432
Maine (1.5%):
Maine Health & Higher Education,
4.00%, 7/1/00, MBIA 1,180 1,181
Maine Health & Higher Education,
5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank N.A. 5,300 5,300
Maine Health & Higher Education,
5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank N.A. 1,600 1,600
State Of Maine, 4.50%, 6/22/00 2,085 2,086
10,167
Maryland (0.6%):
Harford County,
5.25%*, 5/4/00**,
LOC Harris Trust & Savings
Bank AMT 1,725 1,725
Maryland State,
6.75%, 7/1/00,
Prerefunded 7/1/00 @ 102, UST 2,560 2,683
4,408
See notes to financial statements.
17
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Tax-Free Money Market Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Amortized
Security Description Amount Cost
Michigan (3.2%):
Kentucky Hospital Financial Authority
Michigan Limited Obligation Revenue,
5.10%*, 5/4/00**,
LOC Hunington Bank $ 1,010 $ 1,010
Lawrence-Fort Harrison Industrial Reuse
Authority Tax Increment Revenue,
5.18%*, 5/5/00**,
LOC Fifth Third Bank 2,500 2,500
State Strategic FD Limited Obligation
Revenue International Sales Project,
5.20%*, 5/3/00**,
LOC Bank One AMT 3,100 3,100
State Strategic FD Limited Obligation
Revenue International Sales Project,
5.20%*, 5/3/00**,
LOC Bank One AMT 2,000 2,000
State Strategic FD Limited Obligation
Revenue International Sales Project,
5.20%*, 5/3/00**,
LOC Bank One AMT 2,700 2,700
State Strategic FD Limited Obligation
Revenue International Sales Project,
5.20%*, 5/3/00**,
LOC Bank One AMT 2,000 2,000
State Strategic FD Limited Obligation
Revenue International Sales Project,
5.20%*, 5/3/00**,
LOC Bank One AMT 1,200 1,200
State Strategic FD Limited Obligation
Revenue International Sales Project,
5.10%*, 5/4/00**,
LOC Old Kent Bank 1,100 1,100
State Micron,
5.20%*, 5/3/00**, LOC Bank One 1,000 1,000
State Strategic,
Fleet Engineers Inc. Project,
5.25%*, 5/4/00,
LOC Comerica Bank AMT 1,600 1,600
State Strategic,
Thermal Transfer Inc. Project,
5.25%, 5/4/00**,
LOC Comerica Bank AMT 3,575 3,575
21,785
Minnesota (0.9%):
Hubbard County Solid Waste Disposal Revenue
Potlatch Corp. Project,
5.10%*, 5/3/00**,
LOC Wachovia AMT 4,000 4,000
St. Paul Housing and Redevelopment
Authority Revenue,
4.70%, 12/1/00 LOC Norwest 1,980 1,988
5,988
Missouri (2.7%):
Health Care - Series AA,
5.40% 6/1/00, MBIA 1,450 1,452
Kansas City, IDR,
Multifamily Housing Revenue,
J.C. Nichols Co. Project,
5.20%*, 5/1/00**,
Guaranteed by Principle Mutual
Life Insurance Co. $ 3,600 $ 3,600
St. Charles County Industrial
Development Revenue Cedar Ridge,
5.10%*, 5/4/00**,
LOC Bank One N.A. 13,700 13,700
18,752
Nevada (0.7%):
Reno, EDR, Dunsirn Industries Project,
5.25%, 5/4/00**,
LOC Firstar Bank AMT 3,800 3,800
Washoe County,
4.45%, 7/1/00, MBIA 1,000 1,001
4,801
New Hampshire (1.5%):
Higher Education,
5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank N.A. 1,500 1,500
Higher Educational & Health Facilities
Authority Revenue,
5.10%*, 5/3/00**,
AMBAC, LOC SPA Mellon Bank 5,300 5,300
State Business APEX,
5.33%*, 5/4/00**
LOC Huntington Bank 3,500 3,500
10,300
North Calolina (0.3%):
Wilkes County Industrial & Pollution
Control Authority,
5.20%*, 5/4/00**,
LOC Bank Of America AMT 2,200 2,200
North Dakota (0.3%):
Burleigh County Health,
5.00%, 5/1/00, MBIA 2,060 2,060
Ohio (11.1%)"
Akron Special Assignment,
4.36%, 12/15/00 2,000 2,003
Amanda Clearcreek Local School
District Fairfield County,
4.68%, 6/15/00 2,060 2,062
Avon Local School District,
4.64%, 6/15/00 2,600 2,602
Central Ohio Local School District,
4.75%, 6/7/00 1,242 1,243
Cuyahoga County Hospital Revenue,
5.10%*, 5/3/00**, AMBAC 10,000 10,000
Cuyahoga County Hospital Revenue
Cleveland Clinic,
5.10%*, 5/3/00**,
LOC Chase Manhatten 21,700 21,699
See notes to financial statements.
18
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Tax-Free Money Market Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Amortized
Security Description Amount Cost
Franklin County Hospital Revenue
Doctors Ohio Health,
5.12%*, 5/4/00**,
LOC Bank One $ 8,000 $ 8,000
Lake County, 4.50%, 12/14/00 1,650 1,654
Massilion Ohio, 4.51%, 1/12/01 4,150 4,157
Norteastern Local School District,
4.60%, 6/28/00 7,750 7,757
Northwood, TRAN,
4.45%, 7/27/00 900 901
Richland County Ohio,
4.32%, 11/30/00 1,437 1,440
Riverside Local School District,
4.73%, 6/10/00 1,500 1,501
Seneca County, 4.36%, 12/7/00 1,150 1,152
Twinsburg Industrial
Development Revenue,
5.95%*, 5/1/00**,
LOC PNC Bank AMT 3,000 3,000
Westfall Local School District,
4.75%, 6/1/00 6,507 6,510
75,681
Oklahoma (1.1%):
County Finance Authority,
IDR, Hutto-Carbon Office Project,
3.80%*, 5/1/00**, FGIC 1,650 1,650
County Finance Authority,
IDR, Perrine Office Project,
3.80%*, 5/1/00**, FGIC 3,170 3,170
Creek County Industrial Authority Revenue,
4.00%, 6/1/00, LOC Bank One 1,575 1,575
Tulsa, OK, 6.00%, 12/1/00 1,040 1,050
7,445
Pennsylvania (5.6%):
College Township Industrial Development
Authority Revenue,,
5.05%*, 5/3/00**,
LOC Bank One N.A. 4,500 4,500
Emmaus General Authority Revenue,
5.10%*, 5/3/00**,
GIC Goldman Sachs 13,000 13,000
Emmaus General Authority Revenue,
5.10%*, 5/3/00**,
GIC Goldman Sachs 10,000 10,000
Erie County Hospital Authority,
Mercy Terrace Project,
5.10*, 5/4/00**,
LOC PNC Bank 2,145 2,145
Lancaster Hospital Luthercare,
5.13%*, 5/4/00**,
LOC Allfirst Bank 5,000 5,000
Pittsburgh Urban Redevelopment,
3.65%, 8/15/00, AMT $ 2,000 $ 2,000
Scranton-Lackwanna Health & Welfare
Authority Revenue,
5.00%, 7/1/00, MBIA 1,825 1,829
38,474
South Carolina (0.6%):
Cherokee County,
5.20*, 5/3/00**,
LOC Bank One N.A. AMT 2,900 2,900
South Carolina State,
5.75%, 8/1/00 1,025 1,031
3,931
Tennessee (4.8%):
Clarksville Public Building
Authority Revenue,
5.10%*, 5/4/00**,
LOC Bank One N.A. 10,000 10,000
Clarksville Public Building
Authority Revenue,
5.10%*, 5/4/00**,
LOC Bank One N.A. 4,200 4,200
Memphis, 5.20%*, 5/3/00**,
LOC WestDeutsche Bank AMT 3,100 3,100
Metropolitan Government
Nashville & Davidson County,
5.10%*, 5/4/00**,
LOC Bank of America N.A. 1,900 1,900
Montgomery County Public
Building Authority,
5.10%*, 5/4/00**,
LOC Bank Of America 6,000 6,000
Shelby County, 4.75%, 6/1/00 1,000 1,001
Stewart County, 5.15%*, 5/3/00**,
LOC Toronto Dominion Bank AMT 5,000 5,000
White House Utility District Tennessee
Robertson And Sumner Waterworks,
4.50%, 6/1/00 2,000 2,001
33,202
Texas (2.5%):
Port Corpus Christie Authority Nueces
County Solid Waste Disposal
Koch Refining Co.,
5.20%*, 5/3/00**, AMT 2,000 2,000
State, GO, 4.50%, 8/31/00 8,500 8,522
Texas State Financial Assistance,
4.25% 8/1/00 2,735 2,735
Texas State, 5.70%, 2/1/01 1,000 1,009
Trinity River Authority Regulation
Wastewater System Revenue,
7.00%, 8/1/00, AMBAC 2,750 2,770
17,036
See notes to financial statements.
19
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Tax-Free Money Market Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Amortized
Security Description Amount Cost
Utah (0.1%):
State, GO, 4.70%, 7/1/00, AMBAC $ 1,000 $ 1,002
Vermont (2.0%):
Education & Health Buildings,
5.10%*, 5/3/00**, AMBAC,
SPA Mellon Bank N.A. 8,200 8,200
Education & Health Buildings,
5.10%*, 5/3/00**, AMBAC,
SPA Mellon Bank N.A. 4,000 4,000
Education & Health Buildings,
5.10%*, 5/3/00**, AMBAC,
SPA Mellon Bank N.A. 1,800 1,800
14,000
Virginia (2.2%):
Capital Region Apartment Community
Passenger Facility Charge Revenue,
5.20*, 5/4/00**,
LOC First Union AMT 3,500 3,500
Lynchburg Industrial Development
Authority Hospital,
5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank N.A. 1,000 1,000
Lynchburg Industrial Development
Authority Hospital,
5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank N.A. 5,100 5,101
State Public Building,
5.70%, 8/1/00 1,000 1,005
Virginia State Public School Authority,
5.00% 8/1/00 4,775 4,785
15,391
West Virginia (1.6%):
State Hospital Finance Authority,
5.10%, 5/3/00**, AMBAC,
SPA Mellon Bank N.A. 5,700 5,700
State Hospital Financial Authority
Hospital Revenue,
5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank 5,300 5,300
11,000
Wisconsin (12.7%):
Antigo,
4.06%, 10/30/00, TRANS 4,100 4,101
Antigo Industrial Development
Revenue Plaspack USA,
5.25%*, 5/3/00**,
LOC Firstar Bank AMT 2,100 2,100
Beaver Dam Industrial
Development Revenue,
5.20%*, 5/3/00**,
LOC Bank One Wisconsin AMT 2,000 2,000
Beloit School District,
4.19%, 11/1/00 1,425 1,425
Bethel & Tate Local School District,
4.63%, 6/21/00 5,326 5,330
Burlington Community Development
Authority Industrial
Development Revenue,
5.20*, 5/4/00**,
LOC Bank One AMT $ 4,500 $ 4,500
Caledonia Industrial Development,
5.20%*, 5/4/00**,
LOC Bank One AMT 3,000 3,000
Cook County, 7.25%, P/R 11/1/00 3,000 3,103
D.C. Everest Area School,
GO, 3.87%, 8/24/00 5,100 5,101
Evansville Industrial Development
Revenue Stoughton Trailers Inc.,
5.20%*, 5/4/00**,
LOC Bank One AMT 2,000 2,000
Fox Point & Bayside
School District NO 002,
4.12%, 10/13/00, AMT 1,170 1,170
Fredonia, IDR,
Capital Stampings Corp. Project,
5.20%*, 5/4/00**,
LOC Bank One AMT 2,175 2,175
Grafton School District, TRAN,
4.12%, 6/30/00 1,700 1,700
Grafton School District, TRAN,
4.10%, 9/29/00 1,700 1,700
Industrial Development Revenue Bond,
5.25%*, 5/4/00**,
LOC Firstar Bank AMT 1,565 1,565
Industrial Development Revenue Bond,
5.25%*, 5/4/00**,
Firstar Bank LOC 1,595 1,595
Industrial Development Revenue Bond,
5.25%*, 5/4/00,
LOC Firstar Bank AMT 1,850 1,850
Industrial Development Revenue Bond,
5.25%*, 5/4/00**,
LOC Firstar Bank AMT 1,930 1,930
Kenosha Industrial Development
Revenue Metalmen Building Project,
5.20%*, 5/4/00,
LOC Bank One AMT 3,295 3,296
Kenosha Industrial Development
Revenue Metalmen Building Project,
5.20%*, 5/3/00**,
LOC Bank One AMT 1,500 1,500
Lake Geneva Genoa City Unified
High School District,
4.27%, 9/29/00 1,500 1,500
Lake Mills School District Tax & Revenue,
4.00%, 9/1/00 2,300 2,300
New Richmond School District,
4.20%, 11/1/00 2,500 2,501
Nicolet School District,
4.08%, 10/30/00,
LOC Bank Of America 1,200 1,200
See notes to financial statements.
20
<PAGE>
THE VICTORY PORTFOLIO Schedules of Investments--continued
Tax-Free Money Market Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Onalaska School District,
4.08%, 10/18/00 $ 2,600 $ 2,601
Pewaukee School District, TRAN,
3.95%, 9/14/00 5,000 5,001
Port Washington Saukville,
4.14%, 10/30/00 2,350 2,351
Pulaski Industrial Development Revenue,
5.20%*, 5/3/00**,
LOC Bank One AMT 1,485 1,485
Rock Industrial Development
Revenue State Disposal Project,
5.20%*, 5/4/00**,
LOC Bank One Wisconsin AMT 1,200 1,200
Saukville Busch,
5.20%*, 5/4/00**,
LOC Bank One Wisconsin AMT 2,375 2,375
Waukesha Industrial Development,
5.20%*, 5/4/00**,
LOC Bank One Wisconsin AMT 3,800 3,800
West Bend City School District No. 1,
4.23%, 10/6/00 2,000 2,000
Whitefish Bay, 4.00%, 6/21/00 2,200 2,200
Whitewater Maclean, IDR,
5.20%*, 5/3/00**,
LOC Bank of America 1,900 1,900
William Bay School District
Tax & Revenue,
4.12%, 8/25/00 1,200 1,201
Winneconne, TRAN,
4.20%, 10/25/00 1,500 1,500
86,256
Total Municipal Bonds (Amortized Cost $680,272) 680,272
Investment Companies (0.2%)
Federated Tax-Free
Money Market Fund 1,658,625 $ 1,659
Total Investment Companies (Cost $1,659) 1,659
Total Investments (Cost $681,931) (a) -- 99.6% 681,931
Other assets in excess of liabilities -- 0.4% 2,909
TOTAL NET ASSETS -- 100.0% $684,840
(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
FGIC -- Insured by Financial Guaranty Insurance Corp.
FHLB -- Insured by Federal Home Loan Bank
FHLC -- Insured by Federal Home Loan Corp.
FNMA -- Federal National Mortgage Assoc.
IDR -- Industrial Development Revenue
LOC -- Letter of Credit
MBIA -- Insured by Municipal Bond Insurance Assoc.
P/R -- Prerefunded U.S. Treasury Security
SPA -- Standby Purchase Agreement
TRAN -- Tax and Revenue Anticipation Note
See notes to financial statements.
21
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Ohio Municipal Money Market Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Municipal Bonds (99.5%)
Ohio (99.5%):
Akron Bath Copley Township Hospital,
Visiting Nurse Services Inc. Project,
5.15%*, 5/4/00**,
LOC National City Bank $ 35 $ 35
Anthony Wayne Local School District,
GO, BAN, 4.61%, 5,000 5,010
Ashland County Jail Construction,
GO, 4.28%, 11/30/00 2,100 2,103
Ashtabula County Medical Center Project
Revenue, Hospital & Nursing
Home Improvements,
5.10%*, 5/4/00**, LOC Bank One 2,950 2,950
Ashtabula County, Brighton Manor Co.
Project Revenue, Industrial
Improvement, 5.20%*, 5/3/00**,
LOC Bank One AMT 2,400 2,400
Auglaize County, G.A. Wintzer & Son Co.
Project, IDR, 5.20%*, 5/4/00**,
LOC Bank One AMT 1,780 1,780
Barberton, GO, 4.60%, 4/19/01 2,600 2,605
Bedford Heights,
Olympic Steel Inc. Project,
5.20%*, 5/3/00**,
LOC National City Bank AMT 1,050 1,050
Blanchester Local School District,
GO, BAN, 4.65%, 6/26/00 4,646 4,651
Bowling Green, IDR,
Lamson & Sessions Project,
5.20%*, 5/4/00**, LOC General Electric
Capital Corp. AMT 2,000 2,000
Bowling Green, IDR,
Lamson & Sessions Project,
5.27%*, 5/4/00**, LOC Mid American
National Bank AMT 1,605 1,605
Brooklyn, IDR, Clinton Road Project,
4.45%*, 5/1/00**, LOC Bank One 510 510
Bryan, GO, BAN, 4.15%, 9/7/00 4,888 4,888
Butler County, Crystal Partners, IDR,
5.25%*, 5/4/00**, LOC Firstar AMT 3,430 3,430
Butler County, Hospital Facilities Revenue,
5.15%*, 5/4/00**,
LOC Fifth Third Bank 1,300 1,300
Cambridge City School District, GO, BAN,
4.75%, 6/1/00 8,232 8,236
Centerville Health Care Revenue,
Bethany Lutheran,
5.10%*, 5/3/00**, LOC PNC Bank 4,350 4,350
Cincinnati City School District,
Series C, TAN,
5.25%, 12/1/00, AMBAC 3,325 3,345
Cincinnati, Bethesda One Ltd.
Partners Revenue,
3.60%*, 8/1/00**, LOC Bank One 1,065 1,065
Cincinnati, IDR, 4th Star Ltd.
Partnership Project, TAN,
4.35%*, 5/1/00**, LOC PNC Bank $ 6,450 $ 6,450
Cleveland Airport Improvement, Series D,
5.10%*, 5/3/00**,
LOC Toronto Dominion Bank AMT 1,400 1,400
Cleveland Heights, GO, BAN,
3.82%, 8/25/00 1,035 1,036
Cleveland Heights, GO, BAN,
4.55%, 4/27/01 1,000 1,001
Cleveland Income Tax Revenue,
4.95%*, 5/3/00**, AMBAC,
SPA Toronto Dominion 219 219
Clinton County Revenue, Hospital &
Nursing Home Improvements,
5.10%*, 5/3/00**,
LOC Fifth Third Bank 27,000 26,999
Clinton County, Airport Facilities Revenue,
5.10%*, 5/4/00**,
LOC Wachovia Bank 6,800 6,800
Clinton County, Hospital Capital,
5.10%*, 5/3/00**,
LOC Fifth Third Bank 23,600 23,600
Columbiana County, IDR,
C & S Land Co. Project,
5.20%*, 5/4/00**,
LOC Bank One AMT 2,970 2,970
Columbus Sewer Revenue,
5.70%, 6/1/00 1,330 1,333
Coshocton County, Memorial Hospital
Project Revenue,
5.10%*, 5/4/00**, LOC Bank One 3,155 3,155
Coshocton County, Memorial Hospital
Project Revenue,
5.05%*, 5/4/00**, LOC Bank One 3,000 3,000
Crestline Village, GO, BAN,
4.72%, 4/5/01 1,176 1,179
Cuyahoga County Health Care
Facilities Revenue,
Applewood Centers Inc. Project,
5.18%*, 5/5/00**,
LOC Fifth Third Bank 1,250 1,250
Cuyahoga County Hospitals Revenue,
Series A, 5.10%*, 5/3/00**,
AMBAC, SPA Bank of America 2,600 2,600
Cuyahoga County Hospitals,
Cleveland Clinic Project Revenue,
Series B, 5.10%*, 5/3/00**,
LOC Chase Manhattan Bank 12,200 12,200
Cuyahoga County Hospitals,
Cleveland Clinic,
Series C, 5.10%*, 5/3/00**,
SPA Bank of America 7,350 7,350
Cuyahoga County Hospitals,
Cleveland Clinic, Series D,
5.80%*, 5/1/00** 9,345 9,345
See notes to financial statements.
22
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Ohio Municipal Money Market Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Amortized
Security Description Amount Cost
Cuyahoga County Hospitals,
University Hospital Cleveland,
5.95%*, 5/1/00**,
LOC Chase Manhattan Bank $ 9,080 $ 9,080
Cuyahoga County Hospitals,
University Hospital Revenue,
Series D, 5.10%*, 5/4/00**,
AMBAC, SPA Chase Manhattan Bank 7,400 7,400
Cuyahoga County, Cleveland Clinic,
Series A, 5.10%*, 5/3/00**,
SPA Chase Manhattan Bank 425 425
Cuyahoga County,
Continuing Care Facilities Revenue,
5.10%*, 5/4/00**,
LOC Lasalle National Bank 7,500 7,500
Cuyahoga County, IDR,
Allen Group Inc. Project,
5.10%*, 5/3/00**,
LOC Dresdner Bank AG AMT 2,600 2,600
Cuyahoga County, IDR, Crestmont-Cleveland
Partnership Project,
4.85%*, 10/16/00**,
LOC Bank One AMT 415 415
Cuyahoga County, IDR, Decorp Project,
5.10%*, 5/4/00**, LOC Bank One 1,720 1,720
Cuyahoga County, IDR,
Landerhaven Executive Project,
4.77%*, 5/3/00**, LOC Firstar 1,995 1,995
Cuyahoga County, IDR,
Progressive Plastics Project,
5.20%*, 5/4/00**,
LOC Bank One AMT 1,225 1,225
Cuyahoga County, IDR,
Watt Printing Co. Project,
5.20%*, 5/4/00**,
LOC Bank One AMT 2,810 2,810
Cuyahoga Falls,
Hospital Facilities Revenue,
Portage Trail Care Center Project,
5.23%*, 5/4/00**,
LOC Fifth Third Bank 2,100 2,100
Cuyahoga Falls,
Hospital Facilities Revenue,
Portage Trail Care
Center Project,
5.23%*, 5/4/00**,
LOC Fifth Third Bank 3,000 3,000
Deerfield Township, GO,
3.87%, 6/29/00 800 800
Deerfield Township, GO,
Equipment Acquisition,
4.43%, 12/7/00 1,000 1,002
Deerfield Township, GO,
Public Utilities, 4.47%, 12/7/00 500 501
Deerfield Township, GO, TAN,
4.67%, 2/1/01 1,000 1,002
Deerfield Township,
Sewer Improvement Project, GO,
3.87%, 6/29/00 $ 659 $ 659
Deerfield Township,GO, BAN,
Public Improvements,
4.03%, 8/3/00 367 367
Eastlake, IDR,
Astro Model Development Project,
5.20%*, 5/4/00**,
LOC Bank One AMT 3,225 3,225
Erie County, GO, BAN,
4.13%, 6/1/00 1,120 1,120
Erie County, GO, BAN,
4.88%, 10/26/00 1,900 1,906
Erie County, GO, BAN,
4.13%, 10/26/00 1,440 1,442
Euclid, GO, BAN, 3.70%, 7/28/00 2,055 2,056
Fairborn, EDR,
5.47%*, 5/4/00**, LOC Firstar 540 540
Fairfield County School District,
GO, TAN, 4.28%, 10/28/00 1,550 1,553
Fairfield County, BAN,
3.97%, 7/25/00, AMT 1,000 1,001
Fairfield County, GO, BAN,
4.54%, 1/25/01 AMT 930 932
Franklin County Hospital Revenue,
Children's Hospital Project,
Series B, 5.20%*, 5/4/00**,
LOC Bank One 8,600 8,600
Franklin County Hospital Revenue,
Doctors Ohio Health,
Series B, 5.12%*, 5/4/00**,
LOC National City Bank 25,455 25,455
Franklin County Hospital Revenue,
Riverside Hospital,
7.25%, 5/15/20,
Prerefunded 5/15/00 @ 102, MBIA 1,350 1,379
Franklin County Hospital Revenue,
Riverside Hospital,
7.60%, 5/15/20,
Prerefunded 5/15/00 @ 102 1,500 1,532
Franklin County Hospital Revenue,
U.S. Health Corp.,
Series A, 5.10%*, 5/4/00**,
LOC Morgan Guaranty Trust 5,945 5,945
Franklin County Hospital Revenue,
U.S. Health Corp.,
Series C, 5.10%*, 5/4/00**,
LOC Morgan Guaranty Trust 10,150 10,150
Franklin County,
Health Care Facilities Revenue,
5.15%*, 5/4/00**,
LOC National City Bank 2,275 2,275
Franklin County, IDR,
Alco Standard Corp. Project,
5.15%*, 5/4/00**,
LOC Bank of America 1,300 1,300
See notes to financial statements.
23
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Ohio Municipal Money Market Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Amortized
Security Description Amount Cost
Franklin County, IDR,
Capitol South Community
Redevelopment, 4.35%*, 5/1/00**,
LOC Huntington National Bank $ 5,920 $ 5,920
Franklin County,
IDR, Media Inc. Project,
3.40%*, 9/1/00**, LOC KeyBank 1,605 1,605
Franklin County, Jacobson Stores,
4.35%*, 5/1/00**,
LOC Bank One 6,600 6,600
Geauga County,
Health Care Facilities,
Heather Hill Inc. Project,
Series B, 5.13%*, 5/4/00**,
LOC Bank One 10,025 10,025
Geauga County, IDR,
Gold Key Processing Project,
5.10%*, 5/3/00**,
LOC Fifth Third Bank AMT 1,400 1,400
Granville, GO, BAN, 3.76%, 5/16/00 500 500
Greene County, Health Care,
Friends Health Care Association,
5.18%*, 5/4/00**, LOC Bank One 3,885 3,885
Grove City, IDR,
Cross Country Inns Inc.,
5.10%*, 5/4/00**, LOC Bank One 1,370 1,370
Hamilton County Hospital Revenue,
Beechwood Home Project,
5.17%*, 5/4/00**, LOC Firstar 3,900 3,900
Hamilton County Hospital Revenue,
Drake Center Inc.,
Series A, 5.10%*, 5/4/00**,
LOC Firstar 15,500 15,500
Hamilton County Revenue,
Affordable Housing,
Series A, 5.10%*, 5/4/00,
LOC Bank One 3,500 3,500
Hamilton County Revenue,
Childrens Hospital Medical Center,
Series A, 5.10%*, 5/4/00**,
LOC PNC Bank 3,800 3,800
Hamilton County Revenue,
Mulitfamily Housing,
Pleasent Run Apartments Project,
5.15%*, 5/4/00**,
LOC PNC Bank AMT 1,700 1,700
Hamilton County Revenue,
Multifamily Housing,
Forest Ridge Apartment Project,
5.15%*, 5/4/00**, LOC PNC Bank 9,800 9,800
Hamilton County, EDR,
Boys/Girls Club Inc. Project,
5.10%*, 5/4/00**, LOC PNC Bank 2,700 2,700
Hamilton County, EDR,
Cincinnati Performing Arts,
5.15%*, 5/4/00**,
LOC Fifth Third Bank 1,100 1,100
Hamilton County, EDR,
Union Institute Project,
5.20%*, 5/4/00**,
LOC Bank of Montreal 2,335 2,335
Hamilton County, GO, BAN,
3.40%, 6/9/00 $ 6,400 $ 6,400
Hancock County, GO, BAN,
5.00%, 11/21/00 1,012 1,017
Hilliard, GO, BAN,
3.85%, 7/21/00 1,500 1,501
Hilliard, IDR, National Sign,
5.20%*, 5/3/00**,
LOC Bank One AMT 3,400 3,400
Huber Heights, BAN,
4.25%, 11/1/00 726 727
Huron County, IDR,
American Baler Project,
5.20%*, 5/4/00**,
LOC Bank One AMT 1,700 1,700
Independence, GO, BAN,
3.24%, 5/12/00 4,600 4,600
Independence, GO, BAN,
3.85%, 8/10/00 2,000 1,999
Independence, GO, BAN,
3.95%, 8/10/00 9,250 9,251
Indian Hill, EDR,
Cincinnati Country Day School,
4.97%*, 5/3/00**,
LOC Fifth Third Bank 200 200
Jackson County, GO, BAN,
4.75%, 11/1/00 9,900 9,922
Jackson Local School District,
Stark & Summit Counties, BAN,
4.13%, 10/12/00 1,364 1,365
Lake County, EDR,
Lake County YMCA Project,
5.10%*, 5/4/00**, LOC Bank One 2,860 2,860
Lake County, GO, BAN,
4.50%, 6/15/00 12,390 12,397
Lake County, GO, BAN,
4.13%, 9/14/00 1,910 1,912
Lake Local School District,
Stark County, GO, BAN,
3.75%, 6/29/00 3,600 3,601
Lakewood, Series A, GO, BAN,
4.75%, 12/1/00 2,870 2,877
Lebanon, GO, BAN,
3.91%, 7/28/00 600 600
Licking County, IDR,
Sunfield Inc. Project,
5.20%*, 5/4/00**,
LOC Bank One AMT 1,115 1,115
Lorain County, EDR,
Crestmont-Cleveland
Partnership Project,
4.40%*, 10/16/00**,
LOC Bank One 905 905
Lowellville Local School District, GO,
BAN, 4.75%, 12/14/00 1,050 1,053
Lucas County, EDR,
Maumee Valley Country Day School
Project, 5.27%*, 5/4/00**,
LOC Mid American National Bank 3,705 3,705
See notes to financial statements.
24
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Ohio Municipal Money Market Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Amortized
Security Description Amount Cost
Lucas County, IDR,
American Capital Properties,
5.25%*, 5/4/00**,
LOC National City Bank AMT $ 3,405 $ 3,405
Lucas County, IDR,
Bunting Bearings Corp. Project,
5.25%*, 5/4/00**,
LOC National City Bank 1,525 1,525
Lucas County, IDR,
Conforming Matrix Corp. Project,
5.32%*, 5/4/00**,
LOC Mid American National Bank 1,320 1,320
Mahoning County Healthcare
Facilities Revenue,
Copeland Oaks Project,
5.10%*, 5/4/00**,
LOC Bank One 3,090 3,090
Mansfield, GO, BAN, 3.62%, 5/25/00 3,000 3,001
Mansfield, GO, BAN, 4.20%, 9/28/00 1,250 1,252
Maplewood Local School District, GO, BAN,
4.46%, 8/15/00 1,397 1,398
Marion City School District, GO, BAN,
4.43%, 8/17/00 4,950 4,956
Marion City School District, GO, BAN,
4.78%, 8/17/00 2,500 2,504
Marion County Hospital Revenue,
Pooled Leasing Program,
5.15%*, 5/4/00**, LOC Bank One 2,460 2,460
Marion County, Hospital Revenue,
Pooled Leasing Program,
5.15%*, 5/4/00**, LOC Bank One 2,475 2,475
Marion County, IDR, Semco Inc. Project,
5.23%*, 5/4/00**,
LOC Huntington National Bank 1,000 1,000
Marion Local School District, BAN,
4.96%, 6/15/00 1,266 1,267
Marysville Local School District,
GO, BAN, 3.61%, 6/1/00 10,000 10,003
Marysville, GO, 7.20%, 12/1/10, AMBAC 1,000 1,036
Mason, GO, BAN, 3.95%, 10/26/00 1,600 1,600
Mason, GO, BAN, 4.32%, 10/26/00 1,200 1,203
Mason, GO, BAN, 4.21%, 11/9/00 1,000 1,001
Mayfield City School District, BAN,
Series A, 3.61%, 7/6/00 1,350 1,350
Monroe County,
Income Tax Corridor 75,
5.20%*, 5/4/00**,
LOC Bank of Montreal 2,000 2,000
Monroe, GO, BAN, 4.09%, 6/1/00 700 700
Montgomery County Healthcare
Facilities Revenue,
Greater Dayton Area-MRI Project,
5.25%*, 5/3/00**, LOC KeyBank 340 340
Montgomery County, IDR,
Citywide Development Corp. Project,
5.20%*, 5/4/00**,
LOC Bank One AMT 2,190 2,190
Montgomery County, IDR,
Town Centers Ltd. Partner Project,
4.05%*, 5/15/00**,
LOC National City Bank $ 2,270 $ 2,270
Montgomery, IDR, Bethesda Two Ltd.,
5.53%*, 5/5/00**,
LOC Huntington National Bank 2,635 2,635
Morrow County, GO, BAN,
4.15%, 9/7/00 3,740 3,744
Mt. Gilead Exempt Village
School District, GO, BAN,
4.92%, 6/15/00 1,000 1,001
Mt. Gilead Exempt Village
School District, GO, BAN,
4.48%, 12/20/00 5,000 5,009
New Albany, GO, BAN,
4.49%, 12/21/00 2,080 2,085
New Miami Local School District, BAN,
4.65%, 8/24/00 1,000 1,002
Oak Hill Local School District, GO, BAN,
4.65%, 8/9/00 3,427 3,432
Olentangy Local School District, BAN,
4.88%, 9/15/00 5,808 5,819
Paulding County Hopitals, GO,
4.50%, 9/14/00 1,900 1,903
Perrysburg, BAN, 4.30%, 8/17/00 4,045 4,052
Perrysburg, GO, BAN, 4.45%, 11/16/00 2,250 2,255
Pickerington, GO, BAN, 3.57%, 6/23/00 1,875 1,875
Plymouth-Shiloh Local
School District, GO, BAN,
5.00%, 8/14/00 1,761 1,763
Portage County, IDR,
NCSP Limited Partnership Project,
5.20%*, 5/3/00**,
LOC Bank One AMT 3,400 3,400
Reading, IDR,
General Tool Co. Project,
5.25%*, 5/4/00**,
LOC Bank of Montreal AMT 4,150 4,150
Richland County, IDR,
Mansfield Motel Partnership,
5.20%*, 5/4/00**,
LOC Huntington National Bank AMT 2,950 2,950
Rickenbacker, Port Authority Revenue,
5.10%*, 5/4/00**, LOC Bank One 2,800 2,800
Salem Hospital Revenue,
Community Hospital Project,
5.10%*, 5/3/00**, LOC PNC Bank 2,800 2,800
Sandusky, BAN, 4.75%, 9/14/00 2,400 2,405
Sandusky, GO, BAN, 4.13%, 9/14/00 2,700 2,703
Scioto County Hospital Revenue,
VHA Center Inc., Capital Assets,
Series C, 5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank 4,775 4,775
Scioto County Hospital Revenue,
VHA Center Inc., Capital Assets,
Series D, 5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank 2,095 2,095
See notes to financial statements.
25
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Ohio Municipal Money Market Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Amortized
Security Description Amount Cost
Scioto County Hospital Revenue,
VHA Center Inc., Capital Assets,
Series E, 5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank $ 3,075 $ 3,075
Scioto County Hospital Revenue,
VHA Center Inc., Capital Assets,
Series G, 5.10%*, 5/3/00**,
AMBAC, SPA Mellon Bank 3,100 3,100
Scioto Local School District,
Ross County, GO, BAN,
4.70%, 9/21/00 3,882 3,891
Seneca County Hospital Facilities Revenue,
St. Francis Home Inc. Project,
5.10%*, 5/4/00**,
LOC National City Bank 1,900 1,900
Seven Hills, BAN, 3.42%, 5/25/00 870 870
South Euclid,
Lyndhurst City School District, GO,
4.55%, 2/8/01 2,650 2,655
South Western City School District,
GO, BAN, 4.13%, 6/13/00 4,000 4,001
St. Henry Consolidated Local
School District, GO, BAN,
4.61%, 6/21/00 2,451 2,453
State Air Quality Development Authority,
Pollution Control Facilities Revenue,
Duquesne Light Co. Project,
Series A, 5.15%*, 5/3/00**,
AMBAC, SPA Bank of New York 10,750 10,750
State Air Quality Development Authority,
Pollution Control Facilities Revenue,
Duquesne Light Co. Project,
Series B, 5.10%*, 5/3/00**,
AMBAC, SPA Bank of New York 8,500 8,500
State Air Quality Development Authority,
Pollution Control Facilities Revenue,
Duquesne Light Co. Project,
Series C, 5.05%*, 5/3/00**,
AMBAC, SPA Bank of New York 4,655 4,655
State Air Quality Revenue,
JMG Funding Ltd. Partnership,
Series A, 5.05%*, 5/3/00**,
LOC Societe Generale AMT 4,300 4,300
State Air Quality Revenue,
Ohio Edison Project,
Series A, 3.95%, 8/1/00, LOC Canadian
Imperial Bank of Montreal 2,000 2,000
State Air Quality Revenue,
Timken Co.,
5.05%*, 5/3/00**,
LOC Bank One Michigan 3,000 3,000
State Air Quality, IDR,
Ohio Edison Co. Project,
Series C, 3.75%*, 9/1/00**,
LOC Barclays Bank 9,300 9,300
State Enviromental Improvement
Revenue, U.S. Steel Corp. Project,
4.45%*, 5/1/00**, LOC PNC Bank $ 1,000 $ 1,000
State Environmental Improvement
Revenue, Newark Group
Industries Inc. Project,
5.25%*, 5/4/00**,
LOC Chase Manhattan Bank AMT 4,700 4,700
State Higher Education Revenue,
4.10%, 9/7/00, LOC Bank One 10,000 10,000
State Higher Education Revenue,
5.10%*, 5/4/00**,
LOC Fifth Third Bank 2,525 2,525
State Higher Education Revenue,
5.10%*, 5/4/00**,
LOC Fifth Third Bank 10,955 10,955
State Higher Education Revenue,
Wilmington College,
5.10%*, 5/4/00**,
LOC Fifth Third Bank 2,605 2,605
State Highway, GO,
Capital Improvements,
Series C, 4.00%, 5/1/00 5,000 5,000
State Highway, GO,
Capital Improvements,
Series D, 4.00%, 5/1/00 10,000 10,000
State Housing Finance Agency,
Residential, Series A-2,
4.05%, 9/1/00, GNMA AMT 2,000 2,000
State Housing Finance Agency,
Residential, Series A-3,
4.25%, 3/1/01, GNMA AMT 5,000 5,000
State Housing Finance Agency,
Residential, Series C,
4.15%, 3/1/32, GNMA AMT 15,000 15,000
State Infrastucture Improvements,
Series B, GO, 4.50%, 2/1/01 750 751
State Public Facilities Revenue,
Higher Education Commisssion,
Series II-C, 4.00%, 6/1/00, FSA 5,000 5,002
State Revenue,
Major New Infrastructure-1,
4.75%, 12/15/00 2,000 2,007
State Special Obligation Revenue,
Elementary & Secondary
Education Capital Facilities,
Series A, 4.50%, 6/1/00 1,600 1,601
State University, Series B2,
5.05%*, 5/3/00** 8,400 8,400
State Water Development Authority,
Cleveland Electric,
Series B, 5.05%*, 5/3/00**,
LOC Bank One 20,800 20,800
State Water Development Authority,
PA Power Co. Project,
5.05%*, 5/3/00**,
LOC Bank One 5,800 5,800
See notes to financial statements.
26
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Ohio Municipal Money Market Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Amortized
Security Description Amount Cost
State Water Development Authority,
Pollution Control Facilities Revenue,
Duquesne Light Co.,
Series A, 5.15%*, 5/3/00**,
AMBAC, SPA Bank of New York $15,400 $ 15,400
State Water Development Authority,
Pollution Control Facilities Revenue,
Duquesne Light Co.,
Series B, 5.10%*, 5/3/00**,
AMBAC, SPA Bank of New York 5,000 5,000
State Water Development Authority,
Pollution Control Facilities Revenue,
Duquesne Light Co.,
Series C, 5.05%*, 5/3/00**,
AMBAC, SPA Bank of New York 25,000 25,000
State Water Development Authority,
Pollution Control Facilities
Revenue, Edison Co. Project,
Series B, 3.75%*, 9/1/00**,
LOC Barclays Bank 13,155 13,155
State Water Development Authority,
Timken Co. Project,
5.05%*, 5/3/00**,
LOC Wachovia Bank 8,000 8,000
State Water Development Authority,
Timken Co. Project,
5.10%*, 5/3/00**,
LOC Wachovia Bank 3,300 3,300
State, EDR, YMCA,
5.10%*, 5/4/00**, LOC Bank One 4,350 4,350
Strongsville, GO, BAN, Series 1,
3.98%, 10/19/00 1,100 1,101
Struthers City School District, GO, BAN,
4.85%, 11/30/00 4,321 4,332
Student Loan Funding Corp.,
Cincinnati Student Loan Revenue,
Series A-1, 5.10%*, 5/3/00**,
SPA Bank of America AMT 21,400 21,400
Student Loan Funding Corp.,
Cincinnati Student Loan Revenue,
Series A-2, 5.10%*, 5/3/00**,
SPA Bank of America 25,000 25,000
Summit County Hospital,
Cuyuhoga Falls General Hospital,
Series B, 5.15%*, 5/4/00**,
LOC Bank One 1,000 1,000
Summit County Port Authority,
ASC Industries Inc. Project,
5.20%*, 5/3/00**,
LOC Bank One 3,500 3,500
Summit County, IDR, Delco Corp. Project,
5.25%*, 5/4/00**,
LOC National City Bank AMT 1,440 1,440
Summit County, IDR, Fiocca Inc. Project,
5.20%*, 5/4/00**,
LOC Fifth Third Bank AMT 2,190 2,190
Summit County, IDR,
Forest Manufacturing Project,
5.10%*, 5/3/00**,
LOC Fifth Third Bank AMT $ 900 $ 900
Summit County, IDR,
GO-JO Industries Inc, Project,
5.10%*, 5/4/00**, LOC Bank One 1,895 1,895
Summit County, IDR,
Rogers Industrial Products Project,
4.75%*, 5/1/00**,
LOC Fifth Third Bank AMT 935 935
Summit County, IDR,
SSP Fittings Corp. Project,
5.10%*, 5/4/00**, LOC Bank One 1,515 1,515
Summit County, IDR,
Texler Inc. Project,
4.00%*, 5/1/00**,
LOC Bank One AMT 525 525
Summit County, IDR,
VMS Development Project,
5.20%*, 5/4/00**,
LOC Bank One AMT 2,990 2,990
Tallmadge, GO, BAN,
3.48%, 6/22/00 1,155 1,155
Teays Valley Local School District,
GO, BAN, 4.75%, 6/15/00 5,951 5,955
Toledo, IDR,
Lucas County Port Authority,
Frostbite Brands Inc. Project,
5.25%*, 5/4/00**,
LOC Old Kent Bank & Trust 2,205 2,205
Toledo, Lucas County,
5.15%*, 5/4/00**,
LOC Wells Fargo Bank 2,800 2,800
Tri-County North Local School District,
BAN, 4.02%, 7/20/00 1,380 1,381
Triad Local School District,
BAN, 5.00%, 6/1/00 3,194 3,196
Troy, EDR, L & CP Corp. Project,
3.95%*, 12/1/00**,
LOC Societe Generale 1,775 1,775
Trumbull County Health Care
Facilities Revenue,
5.15%*, 5/4/00**,
LOC National City Bank 2,750 2,750
Trumbull County, IDR,
5.20%*, 5/4/00**,
LOC Bank One Columbus 4,145 4,145
Trumbull County, IDR,
Eliwood Engineered Casting,
5.35%*, 5/4/00**,
LOC Mellon Bank 7,000 7,000
Union County, GO, BAN,
3.61%, 6/15/00 1,850 1,851
Union Scioto Local School District,
GO, BAN, 4.90%, 12/8/00 1,100 1,104
Union Township,
GO, BAN, 4.01%, 6/23/00 1,950 1,952
See notes to financial statements.
27
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Ohio Municipal Money Market Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Amortized
Security Description Amount Cost
University of Cincinnati,
Series AE-2, BAN, 4.50%, 10/5/00 $ 1,000 $ 1,002
Upper Scioto Valley Local School District,
GO, BAN, 4.94%, 7/26/00 2,253 2,257
Van Wert, 5.20%*, 5/4/00**,
LOC Bank One AMT 2,400 2,400
Vermilion, IDR,
Landover Properties Ltd.,
5.05%*, 5/4/00**,
LOC Bank One 1,170 1,170
Walnut Hills High School
Alumni Foundation,
4.97%*, 5/3/00**,
LOC Fifth Third Bank 2,000 2,000
Washington,
GO, BAN, 4.38%, 12/21/00 600 601
Waterville,
BAN, 4.35%, 3/7/01 1,825 1,825
Wauseon,
BAN, 4.15%, 5/18/00 350 350
Wayne County,
Health Care Facilities Revenue,
West View Manor Project,
5.18%*, 5/4/00**,
LOC Fifth Third Bank 4,830 4,830
West Clermont Local School District,
GO, BAN, 5.00%, 4/26/01 1,200 1,206
Westerville, EDR,
American Ceramic Society,
5.38%*, 5/4/00**,
LOC National City Bank 1,930 1,930
Westlake, IDR, Logan Westlake Project,
5.20%*, 5/4/00**,
LOC Fifth Third Bank 1,575 1,575
Williams County,
4.15%, 5/11/00 400 400
Williams County, IDR,
Letts Industries Inc. Project,
5.25%*, 5/4/00**,
LOC Comerica Bank 2,390 2,390
Wood County Revenue,
Facilities Improvements-Young Men,
5.27%*, 5/4/00**,
LOC Mid American National Bank 4,440 4,440
Wood County, EDR,
Cast Masters Inc. Acquisition,
5.32%*, 5/4/00**,
LOC National City Bank AMT 2,230 2,230
Wood County, EDR,
Precision Aggregate II,
5.32%*, 5/4/00**,
LOC Mid American
National Bank AMT 2,335 2,335
Wood County, IDR,
Aluminite Ohio Inc. Project,
5.32%*, 5/4/00**,
LOC Mid American National Bank 1,690 1,690
Wood County, IDR,
Principle Bus Project,
Series A, 5.25%*, 5/4/00**,
LOC Fifth Third Bank AMT $ 1,475 $ 1,475
Woodlawn, IDR,
Southland Properties LLP Project,
5.25%*, 5/4/00**,
LOC Bank of Montreal AMT 1,845 1,845
Wooster, GO, BAN,
4.00%, 10/11/00 3,000 3,003
945,705
Total Municipal Bonds (Amortized Cost $945,705) 945,705
Investment Companies (0.0%)
Ohio (0.0%):
Federated Ohio Municipal
Cash Trust Fund 456,280 456
Total Investment Companies (Cost $456) 456
Total Investments
(Amortized Cost $946,161) (a) -- 99.5% 946,161
Other assets in excess of liabilities -- 0.5% 4,522
TOTAL NET ASSETS -- 100.0% $950,683
(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, 2000.
** 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
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
TAN -- Tax Anticipation Note
See notes to financial statements.
28
<PAGE>
Statements of Assets and Liabilities
The Victory Portfolios April 30, 2000
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
<TABLE>
<CAPTION>
Tax-Free Ohio Municipal
Money Market Money Market
Fund Fund
<S> <C> <C>
ASSETS:
Investments, at amortized cost $681,931 $946,161
Cash 28 --
Interest and dividends receivable 5,258 7,793
Prepaid expenses and other assets 36 27
Total Assets 687,253 953,981
LIABILITIES:
Dividends payable 2,049 2,688
Accrued expenses and other payables:
Investment advisory fees 213 358
Administration fees 15 19
Custodian fees 13 19
Accounting fees 1 2
Transfer agent fees 7 8
Shareholder service fees 98 181
Other 17 23
Total Liabilities 2,413 3,298
NET ASSETS:
Capital 684,872 950,683
Undistributed net investment income -- 5
Accumulated undistributed net realized
gains (losses) from investment transactions (32) (5)
Net Assets $684,840 $950,683
Outstanding units of beneficial interest (shares) 684,870 950,679
Net asset value
Offering and redemption price per share $ 1.00 $ 1.00
</TABLE>
See notes to financial statements.
29
<PAGE>
Statements of Operations
The Victory PortfoliosFor the Six Months Ended April 30, 2000
(Amounts in Thousands)(Unaudited)
<TABLE>
<CAPTION>
Tax-Free Ohio Municipal
Money Market Money Market
Fund Fund
<S> <C> <C>
Investment Income:
Interest income $14,140 $18,783
Dividend income 157 52
Total Income 14,297 18,835
Expenses:
Investment advisory fees 1,303 2,471
Administration fees 477 599
Shareholder service fees 931 1,236
Accounting fees 52 59
Custodian fees 77 100
Legal and audit fees 32 47
Trustees' fees and expenses 7 9
Transfer agent fees 13 15
Registration and filing fees 39 33
Printing fees 22 34
Other 6 7
Total Expenses 2,959 4,610
Expenses voluntarily reduced -- (447)
Net Expenses 2,959 4,163
Net Investment Income 11,338 14,672
Realized Gains (Losses) from Investments:
Net realized gains (losses) from
investment transactions (1) --
Change in net assets resulting
from operations $11,337 $14,672
</TABLE>
See notes to financial statements.
30
<PAGE>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
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,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 11,338 $ 17,415 $ 14,672 $ 24,370
Net realized gains (losses)
from investment transactions (1) (27) -- (5)
Change in net assets resulting
from operations 11,337 17,388 14,672 24,365
Distributions to Shareholders:
From net investment income (11,338) (17,415) (14,672) (24,370)
Change in net assets from distributions
to shareholders (11,338) (17,415) (14,672) (24,370)
Capital Transactions:
Proceeds from shares issued 982,369 1,771,474 1,150,160 2,178,950
Dividends reinvested 8,180 11,883 11,531 19,098
Cost of shares redeemed (1,003,341) (1,551,225) (1,145,752) (2,014,842)
Change in net assets from
capital transactions (12,792) 232,132 15,939 183,206
Change in net assets (12,793) 232,105 15,939 183,201
Net Assets:
Beginning of period 697,633 465,528 934,744 751,543
End of period $ 684,840 $ 697,633 $ 950,683 $ 934,744
Share Transactions:
Issued 982,369 1,771,474 1,150,160 2,178,950
Reinvested 8,180 11,883 11,531 19,098
Redeemed (1,003,341) (1,551,225) (1,145,752) (2,014,842)
Change in shares (12,792) 232,132 15,939 183,206
</TABLE>
See notes to financial statements.
31
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Tax-Free Money Market Fund
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,
2000 1999 1998 1997 1996 1995
(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 0.015 0.025 0.029 0.030 0.030 0.034
Distributions
Net investment income (0.015) (0.025) (0.029) (0.030) (0.030) (0.034)
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total Return 1.52%<F3> 2.55% 2.91% 3.07% 3.04% 3.42%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $684,840 $697,633 $465,528 $412,224 $344,796 $307,726
Ratio of expenses to
average net assets 0.79%<F4> 0.79% 0.80% 0.73% 0.78% 0.61%
Ratio of net investment income
to average net assets 3.04%<F4> 2.51% 2.88% 3.03% 2.97% 3.36%
Ratio of expenses to
average net assets<F1> <F2> <F2> 0.80% 0.74% 0.80% 0.62%
Ratio of net investment income
to average net assets<F1> <F2> <F2> 2.88% 3.02% 2.95% 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> There were no voluntary fee reductions during the period.
<F3> Not annualized.
<F4> Annualized.
</FN>
</TABLE>
See notes to financial statements.
32
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Ohio Municipal Money Market Fund
Six Two
Months Year Year Year Year Months Year
Ended Ended Ended Ended Ended Ended Ended
April 30, October 31, October 31, October 31, October 31, October 31, August31,
2000 1999 1998 1997 1996 1995 1995<F2>
(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 0.015 0.025 0.029 0.030 0.030 0.006 0.033
Distributions
Net investment income (0.015) (0.025) (0.029) (0.030) (0.030) (0.006) (0.033)
Net Asset Value,
End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total Return 1.49%<F3> 2.49% 2.94% 3.01% 3.11% 0.55%<F3> 3.33%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $950,683 $934,744 $751,543 $650,978 $561,131 $510,632 $502,453
Ratio of expenses to
average net assets 0.84%<F4> 0.82% 0.80% 0.75% 0.67% 0.64%<F4> 0.63%
Ratio of net investment income
to average net assets 2.97%<F4> 2.45% 2.90% 2.97% 3.03% 3.31%<F4> 3.33%
Ratio of expenses to
average net assets<F1> 0.93%<F4> 0.93% 0.94% 0.94% 0.97% 0.92%<F4> 0.94%
Ratio of net investment income
to average net assets<F1> 2.88%<F4> 2.34% 2.76% 2.78% 2.73% 3.03%<F4> 3.02%
<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.
33
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Limited Term Income Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Asset Backed Securities (16.5%)
Caterpillar Financial Asset Trust,
Series 1997-A, Class A3,
6.45%, 5/25/03 $ 613 $ 607
Equicredit Home Equity Loan Trust,
Series 1996-1, Class A3,
6.19%, 12/15/10 672 659
Fleetwood Credit Corp. Grantor Trust,
Series 1994-B, Class A,
6.75%, 3/15/10 1,949 1,930
Fleetwood Credit Corp. Grantor Trust,
Series 1997-A, Class A,
6.64%, 9/15/12 854 846
MBNA Master Credit Card Trust,
Series 1999-I, Class A, 6.40%,
1/18/05 2,000 1,962
Premier Auto Trust, Series 1998-5,
Class A3, 5.07%, 7/8/02 270 266
The Money Store Home Equity Trust,
Series 1998A, Class AF3,
6.13%, 9/15/16 391 389
Total Asset Backed Securities (Cost $6,745) 6,659
Collateralized Mortgage Obligations (2.4%)
American Housing Trust, Series VIII,
Class K, 9.00%, 1/25/21 967 970
Total Collateralized Mortgage Obligations (Cost $1,028) 970
Commercial Paper (1.9%)
Household Finance, 6.10%, 5/1/00 755 755
Total Commercial Paper (Cost $755) 755
Corporate Bonds (27.5%)
Automobiles (1.9%):
Daimler-Chrylser North American
Holdings Corp., 6.63%, 9/21/01 390 385
General Motors Acceptance Corp.,
5.50%, 1/14/02 300 290
General Motors Acceptance Corp.,
6.75%, 2/7/02 100 99
774
Automotive Parts (2.4%):
TRW, Inc., 6.45%, 6/15/01 1,000 981
Beverages (3.6%):
J. Seagram & Sons, Inc.,
6.25%, 12/15/01 1,500 1,464
Brokerage Services (1.2%):
Lehman Brothers, Inc., 6.13%, 2/1/01 500 496
Financial Services (9.0%):
American General Finance,
7.45%, 1/15/05 1,485 1,462
AT&T Capital Corp., 6.75%, 2/04/02 90 89
CIT Group, Inc., 7.38%, 3/15/03 180 178
General Electric Capital Corp.,
7.00%, 2/3/03 500 495
Heller Financial, Inc., 6.44%, 10/6/02 700 681
Household Finance Corp., 6.88%, 3/1/03 700 683
3,588
Oil-Integrated Companies (1.5%):
Atlantic Richfield, 5.55%, 4/15/03 620 588
Retail (1.6%):
Dayton Hudson Target Corp.,
6.80%, 10/1/01 650 644
Software & Computer Services (2.4%):
Sun Microsystems, Inc., 7.00%, 8/15/02 1,000 988
Telecommunications (3.9%):
MCI Communications Corp.,
6.13%, 4/15/02 1,500 1,461
Worldcom, Inc., 6.13%, 8/15/01 120 118
1,579
Total Corporate Bonds (Cost $11,254) 11,102
U.S. Government Agencies (9.8%)
Federal Farm Credit Bank (0.7%):
6.63%, 2/1/02 (b) 300 298
Federal Home Loan Bank (7.0%):
6.00%, 11/15/01 840 828
5.13%, 9/15/03 2,145 2,012
2,840
Federal National Mortgage Assoc. (1.2%):
7.55%, 4/22/02 480 468
U.S. Government Loan Trust (0.9%):
Israel Trust, Series 1-B, 8.50%, 4/1/06 339 355
Total U.S. Government Agencies (Cost $4,009) 3,961
See notes to financial statements.
34
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Limited Term Income Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
U.S. Government Mortgage Backed (9.8%)
Federal Home Loan
Mortgage Corp. (3.4%):
6.00%, 2/1/13-4/1/26 $ 146 $ 137
6.50%, 5/1/26 386 366
7.00%, 11/1/28-1/1/30 117 113
7.50%, 3/1/29 43 42
8.00%, 1/1/29 49 49
9.50%, 12/01/01 640 667
1,374
Federal National Mortgage Assoc. (5.7%):
10.00%, 11/1/13 532 562
10.50%, 11/1/13 431 454
11.00%, 11/1/13 392 414
8.50%, 11/1/17 408 414
8.50%, 8/1/19 82 83
8.00%, 11/1/19 83 83
8.50%, 11/1/19 49 50
6.00%, 10/1/23 129 120
7.00%, 10/1/26 35 34
7.00%, 6/1/28 10 10
8.50%, 10/1/29 19 19
8.50%, 1/1/30 38 38
8.00%, 2/1/30 23 23
2,304
Government National
Mortgage Assoc. (0.7%):
9.00%, 11/15/17 124 128
7.00%, 7/15/23 62 60
7.00%, 12/15/25 85 82
270
Total U.S. Government Mortgage Backed (Cost $4,005) 3,948
U.S. Treasury Obligations (30.5%)
U.S. Treasury Notes (30.5%):
5.88%, 10/31/01 11,110 10,978
6.38%, 8/15/02 (b) 1,312 1,304
5.88%, 11/15/04 44 43
Total U.S. Treasury Obligations (Cost $12,347) 12,325
Securities Purchased With Cash Collateral (23.5%)
Commercial Paper (2.9%):
Windmill Funding, 5/12%, 5/17/00 1,155 1,155
Investment Companies (0.5%):
AIM Short Term Prime
Money Market Fund 91,241 91
AIM Liquid Assets Money Market Fund 121,569 122
213
Time Deposits (2.3%):
Fifth Third Bank, 6.06%, 5/1/00 349 349
Firstar Bank, 6.00%, 5/1/00 582 582
931
Repurchase Agreements (17.8%):
Morgan Stanley Dean Witter, 6.16%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
for collateral description) 1,800 1,800
Goldman Sachs Group L.P., 6.14%, 5/1/00
(Collateralized by $4,574
Quebec Province, 7.50%, 9/15/29
First Union Corp., 7.70%, 2/15/05
Market value -- $4,574) 1,800 1,800
First Union, 6.22%, 5/1/00
(Collateralized by $1,854
Countrywide Capital,
8.05%, 6/15/27
market value -- $1,854) 1,800 1,800
Merrill Lynch 6.19%, 5/01/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
for collateral description) 1,800 1,800
7,200
Total Securities Purchased
With Cash Collateral (Cost $9,499) 9,499
Total Investments (Cost $49,642) (a) -- 121.9% 49,219
Liabilities in excess of other assets -- (21.9%) (8,835)
TOTAL NET ASSETS -- 100.0% $40,384
(a) Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 5
Unrealized depreciation (428)
Net unrealized depreciation $(423)
(b) All or a portion of this security was loaned as of April 30, 2000.
See notes to financial statements.
35
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Intermediate Income Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Asset Backed Securities (8.7%)
Capital Auto Receivables Asset Trust,
Series 1999-2, Class A2,
6.06%, 6/15/02 $ 940 $ 934
Copelco Capital Funding Corp.,
Series 1997-A, Class A-4,
6.47%, 4/20/05 3,550 3,533
Discover Card Master Trust,
Series 1999-1, Class A,
5.30%, 8/15/04 1,140 1,101
Discover Card Master Trust,
Series 1999-2, Class A,
5.90%, 10/15/04 2,200 2,140
Ford Credit Auto Owner Trust,
Series 1998-A, Class A3,
5.65%, 10/15/01 1,180 1,171
Green Tree Financial Corp.,
Series 1999-2, Class A3,
6.08%, 12/1/30 2,260 2,124
MBNA Master Credit Card Trust,
Series 1998-D, Class A,
5.80%, 12/15/05 2,000 1,913
MBNA Master Credit Card Trust,
Series 1999-M, Class A,
6.60%, 4/16/07 1,380 1,340
Peco Energy Transition Trust,
Series 2000-A, Class A2,
7.30%, 9/1/04 1,320 1,319
Residential Asset Securities Corp.,
Series 1999-KS3, Class A4,
7.38%, 12/25/25 1,200 1,177
Toyota Auto Receivables Guarantor Trust,
Series 1997-A, Class A,
6.45%, 4/15/02 206 204
Total Asset Backed Securities (Cost $17,364) 16,956
Collateralized Mortgage Obligations (2.0%)
Federal National Mortgage Assoc.,
Series 1988-26, Class C,
7.50%, 7/25/18 62 61
First Union National Bank Commercial
Mortgage, Series 1999-C4, Class A1,
7.18%, 9/15/08 1,883 1,846
Heller Financial Commercial Mortgage
Asset, Series 1999-PH1, Class A2,
6.85%, 5/15/31 1,010 955
LB Commercial Conduit Mortgage Trust,
Series 1999-C1, Class A1,
6.41%, 8/15/07 1,033 984
Total Collateralized Mortgage Obligations (Cost $3,922) 3,846
Commercial Paper (1.2%)
Household Finance, 6.10%, 5/1/00 2,356 2,356
Total Commercial Paper (Cost $2,356) 2,356
Corporate Bonds (37.3%)
Aerospace/Defense (2.3%):
Lockheed Martin Corp.,
7.95%, 12/1/05 2,000 1,967
Raytheon Co., 8.20%, 3/1/06 (b) 1,580 1,574
Raytheon Co., 6.75%, 8/15/07 1,030 935
4,476
Airlines (1.0%):
Delta Air Lines, 7.70%,
12/15/05 (b) (c) 2,057 1,970
Automobiles (1.4%):
Daimler-Chrylser North American
Holdings Corp., 6.63%, 1,821 1,800
General Motors Acceptance Corp.,
5.50%, 1/14/02 930 899
2,699
Automotive Parts (0.5%):
TRW, Inc., 6.45%, 6/15/01 1,000 981
Banks (0.6%):
Bank of America Corp.,
7.80%, 2/15/10 (c) 1,170 1,167
Banks -- Money Centers Regional (0.5%):
Royal Bank of Scotland, 9.12%, 3/31/49 875 882
Beverages (0.4%):
J. Seagram & Sons, Inc.,
6.25%, 12/15/01 770 752
Broadcasting/Cable (0.8%):
Continental Cablevision, 8.88%, 9/15/05 485 507
Time Warner, Inc., 7.75%, 6/15/05 1,100 1,093
1,600
Building Materials (0.2%):
Oakwood Homes, 7.88%, 3/1/04 810 437
Chemicals -- General (0.4%):
E.I. Dupont Nemour, 6.88%, 10/15/09 (c) 875 840
Cosmetics & Related (0.3%):
Avon Products, 7.15%, 11/15/09 705 654
Diversified (1.4%):
D.R. Investments, 7.10%, 5/15/02 (b) 2,750 2,705
Electronic & Electrical -- General (1.5%):
Endesa-Chile Nacional Electri,
7.75%, 7/15/08 1,305 1,199
Sony Corp., 6.13%, 3/4/03 1,000 964
Texas Instruments, Inc., 7.00%, 8/15/04 795 778
2,941
Entertainment (0.3%):
Viacom, Inc., 7.75%, 6/1/05 605 600
Financial Services (8.0%):
American General Finance,
7.45%, 1/15/05 565 556
Amerus Life Holdings, Inc.,
6.95%, 6/15/05 2,700 2,478
AT&T Capital Corp., 6.75%, 2/4/02 240 237
AT&T Capital Corp.,
6.60%, 5/15/05, MTN 915 870
See notes to financial statements.
36
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Intermediate Income Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Chrysler Financial Co.,
5.69%, 11/15/01, MTN $ 1,495 $ 1,459
CIT Group, Inc., 7.38%, 3/15/03 (c) 865 857
Finova Capital Corp., 7.25%, 11/8/04 1,455 1,335
Ford Motor Credit Co., 7.38%, 10/28/09 940 911
General Electric Capital Corp.,
6.33%, 9/17/01, MTN 815 805
General Electric Capital Corp.,
7.00%, 2/3/03, MTN 2,400 2,377
Household Finance Co., 7.88%, 3/1/07 1,640 1,626
Morgan Stanley Dean Witter,
7.13%, 1/15/03 2,020 1,997
15,508
Industrial Goods & Services (2.1%):
Tyco International Group,
6.13%, 6/15/01 2,826 2,787
Tyco International Group,
6.88%, 9/5/02 (b) 1,330 1,305
4,092
Insurance (2.1%):
Allstate Corp., 7.20%, 12/1/09 650 609
Liberty Mutual Insurance,
8.20%, 5/4/07 (b) 630 631
Metropolitan Life Insurance Co.,
6.30%, 11/1/03 (b) 525 504
Prudential Insurance, 7.65%, 7/1/07 2,300 2,257
4,001
Oil & Gas Exploration,
Production & Services (2.6%):
Amerada Hess Corp., 7.38% 10/1/09 1,902 1,873
Chevron Corp., 6.63%, 10/1/04 1,030 999
Union Oil Co. of California,
7.20%, 5/15/05 2,230 2,161
5,033
Oil-Integrated Companies (0.2%):
Occidental Petroleum, 6.50% 4/1/05 510 473
Pipelines (0.3%):
Kinder Morgan Energy Partners LP,
8.00%, 3/15/05 (b) 525 520
Railroads (0.2%):
Union Pacific Corp., 7.38%, 5/15/01 430 427
Real Estate (2.0%):
Cabot Industrial, 7.13%, 5/1/04 740 696
Duke Realty LP, 7.38%, 9/22/05 2,630 2,531
EOP Operating LP, 8.38%, 3/15/06 (c) 610 605
3,832
Real Estate Investment Trusts (0.9%):
Colonial Realty LP, 6.96%, 7/26/04, MTN 992 943
Simon Debartolo, 6.75%, 6/15/05 867 793
1,736
Retail (1.3%):
J.C. Penny & Co., 7.60%, 4/1/07 (c) 220 188
Rohm & Haas Co, 7.40%, 7/15/09 1,757 1,722
Wal-Mart Stores, 6.88%, 8/10/09 690 665
2,575
Sovereign Governments: (0.8%):
Province of Ontario, 7.38%, 1/27/03 1,142 1,142
United Mexican States, 9.88%, 2/1/10 475 489
1,631
Special Purpose Entity (0.9%):
Duke Capital Corp., 7.50%, 10/1/09 (c) 1,720 1,662
Steel (0.6%):
USX Corp., 7.20%, 2/15/04 1,135 1,101
Telecommunications (1.3%):
GTE Corp., 6.36%, 4/15/06 1,590 1,488
WorldCom, Inc., 6.13%, 8/15/01 1,110 1,095
2,583
Telecommunications -- Services & Equipment (0.5%):
Vodafon Airtouch Plc,
7.63%, 2/15/05 (b) 935 929
Tobacco & Tobacco Products (0.2%):
R.J. Reynolds Tobacco Holding,
7.38%, 5/15/03 390 340
Utilities -- Electric (1.1%):
Edison International, Inc.,
6.88%, 9/15/04 992 949
Korea Electric Power, 6.38%, 12/1/03 1,265 1,176
2,125
Utilities -- Natural Gas (0.6%):
Williams Cos., 6.63%, 11/15/04 1,165 1,107
Total Corporate Bonds (Cost $74,898) 72,379
U.S. Government Agencies (12.7%)
Federal Farm Credit Bank (1.5%):
6.63%, 2/1/02 2,945 2,923
Federal Home Loan Mortgage
Corp. (3.5%):
6.25%, 7/15/04 (c) 550 529
6.88%, 1/15/05 (c) 6,370 6,271
6,800
Federal National Mortgage
Assoc. (7.1%):
5.38%, 3/15/02 (c) 1,672 1,622
5.63%, 3/15/01 (c) 2,412 2,392
5.78%, 5/7/04 3,050 2,890
6.00%, 5/15/08 (c) 2,930 2,694
7.12%, 7/3/06 2,730 2,710
7.55%, 4/22/02 1,375 1,385
13,693
Small Business Administration (0.6%):
Small Business Administration
Participation Certificates,
Series 1999-20D, Class 1,
6.15%, 4/1/19 1,409 1,321
Total U.S. Government Agencies (Cost $25,276) 24,737
See notes to financial statements.
37
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Intermediate Income Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
U.S. Government Mortgage Backed (7.7%)
Federal Home Loan Mortgage
Corp. (5.9%):
6.00%, 2/1/13-1/1/29 $ 2,397 $ 2,235
6.50%, 1/1/29-7/1/29 824 771
7.00%, 10/1/28-1/1/30 1,195 1,147
7.50%, 4/1/28-3/1/29 324 318
8.00%, 1/1/29 227 227
4,698
Federal National Mortgage
Assoc. (x.x%):
6.00%, 7/1/29 (c) 174 298
6.50%, 7/1/28-9/1/28 574 538
7.00%, 10/1/26 165 158
7.50%, 2/1/29 178 174
8.00%, 11/1/19-2/1/30 1,201 1,199
8.50%, 11/1/17-1/1/30 2,511 2,545
10.00%, 11/1/13 1,653 1,742
10.50%, 11/1/13 827 872
11.00%, 11/1/13 752 794
8,320
Government National Mortgage
Assoc. (1.0%):
6.50%, 7/15/28 285 268
7.00%, 9/15/23-4/15/28 1,200 1,164
7.50%, 4/15/29 188 185
9.00%, 11/15/17 386 399
2,016
Total U.S. Government Mortgage Backed
(Cost $15,330) 15,034
U.S. Treasury Obligations (28.5%)
U.S. Treasury Bonds (2.7%):
7.79%, 11/15/07 5,169 5,295
U.S. Treasury Notes (25.8%):
5.88%, 10/31/01 4,910 4,851
6.38%, 8/15/02 (c) 8,893 8,839
5.75%, 4/30/03 8,097 7,908
5.88%, 11/15/04 12,435 12,103
6.50%, 8/15/05 (c) 2,000 1,995
7.00%, 7/15/06 (c) 3,374 3,453
6.62%, 5/15/07 (c) 8,550 8,613
6.50%, 2/15/10 (c) 2,288 2,333
50,095
Total U.S. Treasury Obligations (Cost $55,506) 55,390
Securities Purchased With Cash Collateral (26.1%)
Commercial Paper (1.4%):
Windmill Funding, 6.12%, 5/17/00 2,793 2,793
Investment Companies (0.3%):
AIM Short Term Prime
Money Market Fund 220,740 221
AIM Liquid Assets Money Market Fund 294,114 294
515
Time Deposits (1.2%):
Fifth Third Bank, 6.06%, 5/1/00 845 845
Firstar Bank, 6.00%, 5/1/00 1,408 1,408
2,253
Repurchase Agreements (23.2%):
Lehman Corp., 6.11%, 5/1/00
(See Significant Accounting
Policies, Securities Lending
in the Notes to Financial
Statements for collateral
description) 15,000 15,000
Merrill Lynch, 6.19%, 5/1/00
(Collateralized by $5,151
Southwestern Bell, 6.25%, 7/7/05
Dial Corp, 6.01%, 10/25/02
Market value -- 5,151) 5,000 5,000
Morgan Stanley Dean Witter,
6.16%, 5/1/00
(See Significant Accounting
Policies, Securities Lending
in the Notes to Financial
Statements for collateral
description) 10,000 10,000
First Union, 6.22%, 5/1/00
(Collateralized by $5,150
Hitachi American Corp.,
5.54%, 5/18/00
Countrywide Capital, 8.05%, 6/15/27
market value - $5,083) 5,000 5,000
Goldman Sachs Group L.P.,
6.14%, 5/1/00
(Collateralized by $12,838
McDonald's Corp., 7.31%, 9/15/27
market value - $12,718) 10,000 10,000
45,000
Total Securities Purchased
With Cash Collateral (Cost $50,561) 50,561
Total Investments (Cost $245,213) (a) -- 124.2% 241,259
Liabilities in excess of other assets -- (24.2%) (47,074)
TOTAL NET ASSETS -- 100.0% $194,185
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 96
Unrealized depreciation (4,050)
Net unrealized depreciation $(3,954)
(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, 2000.
See notes to financial statements.
38
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Fund for Income April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Collateralized Mortgage Obligations (21.7%)
Government National Mortgage
Assoc. (21.7%):
Government National Mortgage Assoc.,
Series 1996-21, Class J,
7.00%, 7/16/13 $ 2,147 $ 2,041
Government National Mortgage Assoc.,
Series 1999-22, Class VB,
7.00%, 11/20/14 3,000 2,829
Government National Mortgage Assoc.,
Series 1999-47, Class VD,
8.00%, 12/20/14 4,000 4,064
Government National Mortgage Assoc.,
Series 1998-19, Class DB,
8.50%, 6/20/16 1,627 1,644
Government National Mortgage Assoc.,
Series 1995-8, Class B,
7.50%, 8/20/20 97 97
Government National Mortgage Assoc.,
Series 1997-20, Class B,
9.50%, 8/20/21 1,117 1,140
Government National Mortgage Assoc.,
Series 1998-4, Class P,
9.00%, 3/20/22 1,456 1,484
Government National Mortgage Assoc.,
Series 1998-13, Class DB,
9.00%, 4/20/22 1,253 1,288
Government National Mortgage Assoc.,
Series 1996-20, Class C,
7.50%, 5/16/23 2,000 1,975
Government National Mortgage Assoc.,
Series 1999-36, Class HA,
7.50%, 6/20/23 2,321 2,301
Government National Mortgage Assoc.,
Series 1998-12, Class GA,
9.00%, 12/20/23 2,004 2,049
Government National Mortgage Assoc.,
Series 1998-25, Class AP,
8.50%, 2/20/24 866 885
Government National Mortgage Assoc.,
Series 1996-9, Class PE,
7.00%, 10/20/25 3,261 3,024
Government National Mortgage Assoc.,
Series 1999-33, Class H,
7.50%, 1/20/26 2,000 1,990
Government National Mortgage Assoc.,
Series 1999-24, Class D,
7.00%, 7/20/26 2,480 2,354
Government National Mortgage Assoc.,
Series 2000-6, Class BC,
8.00%, 9/20/26 5,000 5,112
Government National Mortgage Assoc.,
Series 2000-13, Class HA,
8.00%, 10/16/26 5,080 5,160
Government National Mortgage Assoc.,
Series 1997-2, Class E,
7.50%, 2/20/27 735 715
Government National Mortgage Assoc.,
Series 1999-6, Class AB,
8.00%, 3/16/28 2,717 2,724
Total Collateralized Mortgage Obligations
(Cost $43,943) 42,876
Investment Companies (0.1%)
Federated U.S. Treasury Cash
Reserve Fund 219,518 220
Total Investment Companies (Cost $220) 220
U.S. Government Mortgage Backed (69.9%)
Government National Mortgage
Assoc. (69.9%):
6.50%, 1/15/13-1/15/29 22,918 21,632
6.63%, 1/15/27 2,946 2,799
7.00%, 9/15/16-7/20/29 28,081 27,204
7.50%, 8/15/09-7/15/31 25,658 25,391
7.75%, 8/15/29-11/15/38 8,470 8,495
8.00%, 7/15/02-3/15/35 21,162 21,239
8.13%, 7/15/38 3,473 3,505
8.25%, 12/20/19-1/14/30 7,509 7,576
8.34%, 3/1/35, TBA 4,744 4,929
8.50%, 3/15/05-7/15/29 6,042 6,146
8.62%, 5/15/35 1,078 1,149
8.75%, 3/20/17-4/15/22 2,867 2,944
9.00%, 9/15/06-8/15/25 1,707 1,760
9.50%, 10/15/02-6/15/21 1,624 1,697
10.00%, 5/15/12-8/15/25 1,269 1,352
10.25%, 6/15/19 12 13
10.50%, 2/15/16 13 14
Total U.S. Government Mortgage Backed (Cost $142,782) 137,845
U.S. Treasury Obligations (10.0%)
U.S. Treasury Bills (2.6%):
4.90%, 5/25/00 5,120 5,103
U.S. Treasury Bonds (4.2%):
8.75%, 11/15/08 8,000 8,486
U.S. Treasury Notes (3.2%):
7.75%, 2/15/01 2,000 2,020
7.88%, 11/15/04 4,000 4,197
6,217
Total U.S. Treasury Obligations (Cost $20,471) 19,806
Total Investments (Cost $207,416) (a) -- 101.7% 200,747
Liabilities in excess of other assets -- (1.7)% (3,447)
TOTAL NET ASSETS -- 100.0% $197,300
(a) Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 379
Unrealized depreciation (7,048)
Net unrealized depreciation $(6,669)
TBA -- To Be Announced
See notes to financial statements.
39
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Government Mortgage Fund April 30, 2000
(Amounts in Thousands) (Unaudited)
Principal Market
Security Description Amount Value
U.S. Government Agencies (2.4%)
Federal Home Loan Bank (2.4%):
5.80%, 5/1/00 $ 2,009 $ 2,009
Total U.S. Government Agencies (Cost $2,009) 2,009
U.S. Government Mortgage Backed (84.3%)
Government National Mortgage
Assoc. (84.3%):
6.50%, 11/15/23-10/15/28 17,987 17,092
7.00%, 7/15/23-4/15/28 14,888 14,471
7.50%, 12/15/27-12/15/29 27,828 27,373
8.25%, 4/15/30 3,049 3,159
8.50%, 7/15/10-12/15/21 2,870 2,922
9.00%, 10/15/29 6,537 6,756
Total U.S. Government Mortgage Backed (Cost $72,618) 71,773
U.S. Treasury Obligations (12.3%)
U.S. Treasury Bonds (12.3%):
8.75%, 11/15/08 7,000 7,425
11.75%, 11/15/14 2,250 3,067
Total U.S. Treasury Obligations (Cost $10,534) 10,492
Total Investments (Cost $85,161) (a) -- 99.0% 84,274
Other assets in excess of liabilities -- 1.0% 866
TOTAL NET ASSETS -- 100.0% $85,140
(a) Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 133
Unrealized depreciation (1,020)
Net unrealized depreciation $ (887)
See notes to financial statements.
40
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Investment Quality Bond Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Asset Backed Securities (6.9%)
Capital Auto Receivables Asset Trust,
Series 1999-2, Class A2,
6.06%, 6/15/02 $ 670 $ 666
CIT Recreational Vehicle Trust,
Series A-2, Class 1999-A,
5.78%, 7/15/08 1,520 1,494
Ford Credit Auto Owner Trust,
Series 1999-C, Class A4,
6.08%, 9/16/02 990 980
GS Mortgage Securities Corp.,
Series 1998-Gl2, Class A2,
6.56%, 4/13/31 625 578
MBNA Master Credit Card Trust,
Series 1998-D, Class A,
5.80%, 12/15/05 1,400 1,339
MBNA Master Credit Card Trust,
Series 2000-A, Class C,
7.90%, 7/16/07 430 426
Peco Energy Transition Trust,
Series 2000-A, Class A,
7.30%, 9/1/04 780 779
Premier Auto Trust, Series 1998-5,
Class A3, 5.07%, 7/8/02 830 818
Residential Asset Securities Corp.,
Series 1999-KS, Class A3,
7.18%, 10/1/29 780 766
Total Asset Backed Securities (Cost $7,976) 7,846
Collateralized Mortgage Obligations (0.6%)
LB Commercial Conduit Mortgage Trust,
Series 1999-C1, Class A1,
6.41%, 8/15/07 753 718
Total Collateralized Mortgage Obligations (Cost $737) 718
Commercial Paper (0.1%)
Household Finance, 6.10%, 5/1/00 101 101
Total Commercial Paper (Cost $101) 101
Corporate Bonds (32.1%)
Aerospace/Defense (1.9%):
Lockheed Martin Corp., 7.95%, 12/1/05 465 457
Lockheed Martin Corp., 8.20%, 12/1/09 165 160
Raytheon Co., 8.20%, 3/1/06 890 887
Raytheon Co., 6.75%, 8/15/07 660 599
2,103
Airlines (0.4%):
Delta Air Lines, 8.30%, 12/15/29 515 462
Automotive Parts (0.4%):
TRW, Inc., 6.45%, 6/15/01 500 491
Banks (0.8%):
Bank of America, 7.80%, 2/15/10 (c) 690 688
First Union Capital, 7.95%, 11/15/29 265 249
937
Banks -- Outside Money Center (1.0%):
Bank of Tokyo-Mitsubishi,
8.40%, 4/15/10 215 216
Korea Development Bank,
6.50%, 11/15/02 465 448
Royal Bank of Scotland, 9.12%, 3/31/49 520 523
1,187
Beverages (0.2%):
J Seagram & Sons, 6.25%, 12/15/01 285 278
Broadcasting/Cable (0.3%):
Continental Cablevision, 8.88%, 9/15/05 290 303
Building Materials (0.3%):
Owens Corning, 7.50%, 5/1/05 405 385
Chemicals -- General (0.3%):
Rohm & Haas Co., 7.85%, 7/15/29 (c) 380 377
Consulting (0.4%):
Comdisco, Inc., 6.00%, 1/30/02 465 449
Cosmetics & Related (0.4%):
Avon Products, 7.15%, 11/15/09 (c) 485 450
Electrical Services (0.5%):
Empresa Nacional Electric,
7.75%, 7/15/08 630 579
Electronic & Electrical -- General (0.5%):
Sony Corp., 6.13%, 3/4/03 35 34
Texas Instruments, Inc., 7.00%, 8/15/04 500 489
523
Financial Services (7.3%):
AT&T Capital Corp., 6.60%, 5/15/05 540 513
Chrysler Financial Corp.,
5.69%, 11/15/01, MTN 890 869
CIT Group, Inc., 7.38%, 3/15/03 (c) 985 977
Citigroup Capital II, 7.75%, 12/1/36 280 254
Citigroup, Inc., 5.80%, 3/15/04 (c) 310 291
Duke Capital Corp., 8.00%, 10/1/19 510 491
Finova Capital Corp., 7.25%, 11/8/04 (c) 865 794
Ford Motor Credit Corp.,
6.70%, 7/16/04 90 87
Ford Motor Credit Corp.,
7.38%, 10/28/09 180 174
General Electric Capital Corp.,
6.33%, 9/17/01, MTN 865 854
General Electric Capital Corp.,
6.52%, 10/8/02, MTN 295 290
General Electric Capital Corp.,
7.00%, 2/3/03, MTN (c) 530 525
Heller Financial, Inc., 6.85%, 5/15/31 615 581
See notes to financial statements.
41
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Investment Quality Bond Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
IBM Credit Corp., 6.45%, 11/12/02 $ 415 $ 407
Morgan Stanley Dean Witter,
7.13%, 1/15/03 (c) 600 593
PP&L Capital Funding, 7.75%, 4/15/05 440 432
8,132
Financial -- Banking (0.4%):
Goldman Sachs Group, Inc.,
7.80%, 1/28/10 (c) 465 456
Heavy Machinery (0.4%):
Deere & Co., 6.55%, 10/1/28 470 398
Insurance (1.5%):
AON Capital Trust, 8.21%, 1/1/27 650 608
Liberty Mutual Insurance Co.,
8.20%, 5/4/07 630 631
Metropolitan Life Insurance Co.,
6.30%, 11/1/03 500 480
1,719
Insurance -- Life (0.3%):
American General Finance,
7.45%, 1/15/05 370 364
Insurance -- Multi-Line (0.3%):
Allstate Corp., 7.20%, 12/1/09 410 384
Investment Company (0.4%):
Barclays Bank NY, 7.40%, 12/15/09 430 412
Manufactured Housing (0.3%):
Oakwood Homes Corp., 7.88%, 3/1/04 525 284
Manufacturing -- Consumer Goods (1.1%):
Tyco International Group,
6.13%, 6/15/01 435 429
Tyco International Group,
6.88%, 9/5/02 360 353
Tyco International Group,
6.38%, 6/15/05 (c) 465 436
1,218
Media (0.9%):
Time Warner, Inc., 7.75%, 6/15/05 300 298
Time Warner, Inc., 6.63%, 5/15/29 (c) 470 390
Viacom, Inc., 7.75%, 6/1/05 385 382
1,070
Mortgage Bankers &
Correspondents (0.3%):
Abbey National PLC, 6.70%, 6/29/49 440 393
Oil & Gas Exploration,
Production & Services (1.1%):
Anadarko Petroleum Corp.,
7.20%, 3/15/29 420 378
Pemex Finance Ltd., 9.03%, 2/15/11 455 464
Williams Co., Inc., 6.13%, 12/1/03 450 423
1,265
Oil-Integrated Companies (1.2%):
Amerada Hess Corp., 7.79%, 10/1/29 730 689
Conoco, Inc., 6.95%, 4/15/29 (c) 130 117
Occidental Petroleum, 6.50% 4/1/05 290 269
Union Oil Co. of California,
7.50%, 2/15/29 (c) 315 298
1,373
Oilfield Services & Equipment (0.5%):
Baker Hughes, Inc., 6.88%, 1/15/29 615 544
Pipelines (1.0%):
Enron Corp., 7.38%, 5/15/19 450 412
Kinder Morgan Energy Partners LP,
8.00%, 3/15/05 295 292
Williams Companies, Inc.,
6.63%, 11/15/04 420 399
1,103
Real Estate (0.7%):
Duke Realty LP, 7.38%, 9/22/05 (c) 465 448
EOP Operating LP, 8.38%, 3/15/06 345 342
790
Real Estate Investment Trusts (0.3%):
Cabot Industrial Property LP,
7.13%, 5/1/04 310 291
Retail (0.3%):
Lowes Companies, Inc., 6.50%, 3/15/29 375 314
Retail -- Department Stores (0.5%):
Dayton Hudson Co., 6.80%, 10/1/01 265 262
J.C. Penny & Co., 7.60%, 4/1/07 (c) 425 362
624
Software & Computer Services (1.2%):
Sun Microsystems, Inc., 7.35%, 8/15/04 465 457
Sun Microsystems, Inc., 7.65%, 8/15/09 940 929
1,386
Sovereign Governments (1.1%):
Province of Ontario, 7.38%, 1/27/03 490 490
Republic of Korea, 8.88%, 4/15/08 465 480
United Mexican States,
9.88%, 2/1/10 (c) 265 273
1,243
Steel (0.3%):
USX Corp., 7.20%, 2/15/04 340 330
Telecommunications (1.4%):
GTE Corp., 6.94%, 4/15/28 (c) 475 427
Telecommunications, Inc.,
9.80%, 2/1/12 490 556
WorldCom, Inc., 6.13%, 8/15/01 600 592
1,575
Telecommunications --
Services & Equipment (0.5%):
Vodafone Airtouch Plc.,
7.75%, 2/15/10 (c) 125 123
Vodafone Airtouch Plc.,
7.88%, 2/15/30 (c) 460 449
572
See notes to financial statements.
42
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Investment Quality Bond Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Tobacco & Tobacco Products (0.2%):
RJ Reynolds Tobacco Holdings, Inc.,
7.38%, 5/15/03 $ 255 $ 223
Transportation Services (0.2%):
Union Pacific Corp., 7.38%, 5/15/01 280 278
Utilities -- Electric (1.0%):
Edison International, Inc.,
6.88%, 9/15/04 405 387
Korea Electric Power,
6.38%, 12/1/03 (c) 820 763
1,150
Total Corporate Bonds (Cost $37,756) 36,415
U.S. Government Agencies (2.6%)
Federal Home Loan Mortgage
Corp. (0.1%):
6.25%, 7/15/04 (c) 690 664
Federal National Mortgage Assoc. (1.4%):
5.63%, 5/14/04 (c) 870 820
5.88%, 4/23/04 (c) 870 826
1,646
U.S. Government Loan Trust (0.6%):
Israel, Series 1-B, 8.50%, 4/1/06 637 666
Total U.S. Government Agencies (Cost $3,055) 2,976
U.S. Government Mortgage Backed (34.3%)
Federal Home Loan Mortgage
Corp. (13.1%):
6.00%, 2/1/13-1/1/29 4,822 4,463
6.50%, 5/1/26-7/1/29 4,916 4,619
7.00%, 10/1/28-1/1/30 3,545 3,405
7.50%, 4/25/24-11/1/29 1,554 1,524
8.00%, 1/1/29 567 567
8.50%, 7/1/21-4/1/29 324 330
14,908
Federal National Mortgage Assoc. (14.5%):
6.00%, 10/1/23-7/1/29 2,426 2,225
6.50%, 7/1/28-3/1/29 2,686 2,512
7.00%, 10/1/26 822 786
7.50%, 3/1/27-11/1/29 1,914 1,874
8.00%, 11/1/19-2/1/30 1,933 1,929
8.50%, 11/1/17-1/1/30 2,884 2,924
10.00%, 11/1/13 1,907 2,010
10.50%, 11/1/13 1,082 1,140
11.00%, 11/1/13 984 1,039
16,439
Government National Mortgage
Assoc. (6.7%):
6.50%, 7/15/28 747 702
7.00%, 7/15/23-4/15/28 5,087 4,941
7.50%, 4/15/29 534 526
9.00%, 2/15/17-11/15/17 1,365 1,407
7,576
Total U.S. Government Mortgage Backed (Cost $39,873) 38,923
U.S. Treasury Obligations (22.1%)
U.S. Treasury Strips (0.6%):
0.00%, 7/15/20 2,602 713
U.S. Treasury Bonds (9.4%):
7.79%, 11/15/07 380 389
10.63%, 8/15/15 (c) 800 1,132
7.50%, 11/15/16 (c) 1,130 1,267
8.75%, 8/15/20 (c) 1,630 2,087
8.00%, 11/15/21 (c) 1,798 2,165
7.13%, 2/15/23 (c) 1,040 1,149
6.50%, 11/15/26 (c) 1,442 1,497
6.13%, 8/15/29 (c) 1,001 1,002
10,688
U.S. Treasury Notes (12.1%):
4.63%, 11/30/00 (c) 671 664
5.75%, 4/30/03 589 575
5.88%, 10/31/01-11/15/04 4,716 4,598
6.38%, 8/15/02-8/15/27 (c) 2,664 2,674
6.50%, 8/15/05-2/15/10 (c) 1,966 1,988
6.63%, 5/15/07 (c) 1,240 1,249
7.00%, 7/15/06 (c) 1,880 1,924
13,672
Total U.S. Treasury Obligations (Cost $24,946) 25,073
Securities Purchased With Cash Collateral (26.7%)
Commercial Paper (2.8%):
Windmill Funding, 6.12%, 5/17/00 3,196 3,196
Investment Companies (0.5%):
AIM Short Term Prime
Money Market Fund 252,590 253
AIM Liquid Assets Money Market Fund 336,551 336
589
Time Deposits (2.3%):
Fifth Third Bank, 6.06%, 5/1/00 967 967
Firstar Bank, 6.00%, 5/1/00 1,612 1,611
2,578
See notes to financial statements.
43
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Investment Quality Bond Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Repurchase Agreements (21.1%):
Lehman Corp., 6.11%, 5/1/00
(Collateralized by $5,152
Newbury Funding, 22.60%, 2/15/30,
market value -- $5,152) $ 5,000 $ 5,000
Merrill Lynch, 6.19%, 5/1/00
(Collateralized by $5,154
Waste Management, 7.70%, 10/1/02
USA Waste Services, 7.00%, 10/1/04
SK Telecom, 7.75%, 4/29/04
Market value -- $5,153) 5,000 5,000
Morgan Stanley Dean Witter,
6.16%, 5/1/00
(Collateralized by $4,140
Transcanada, 9.88%, 1/1/21,
Eastern Funding Co. ,
6.45%, 5/15/05,
GMAC, 5.95%, 3/14/03,
Amsouth Bancorp, 6.75%, 11/1/25,
market value -- $4,058) 4,000 4,000
First Union, 6.22%, 5/1/00
(Collateralized by $5,150
Rockwell International,
7.88%, 2/15/05
Hitachi American Corp.,
5.54%, 5/18/00,
market value - $5,101) 5,000 5,000
Goldman Sachs Group L.P.,
6.14%, 5/1/00
(Collateralized by $7,081
Jackson National Life, 8.15%, 03/15/27
Proctor & Gamble, 8.50%, 08/10/09
Market value -- $6,976) 5,000 5,000
24,000
Total Securities Purchased
With Cash Collateral (Cost $30,363) 30,363
Total Investments (Cost $144,807) (a) -- 125.4% 142,415
Liabilities in excess of other assets -- (25.4%) (28,863)
TOTAL NET ASSETS -- 100.0% $113,552
(a) Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 291
Unrealized depreciation (2,683)
Net unrealized depreciation $(2,392)
(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, 2000.
MTN -- Medium Term Note
See notes to financial statements.
44
<PAGE>
Statements of Assets and Liabilities
The Victory Portfolios April 30, 2000
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
<TABLE>
<CAPTION>
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 $42,442;
$200,213; $207,416; $85,161 & $120,807) $42,019 $196,259 $200,747 $84,274 $118,415
Repurchase agreements, at cost 7,200 45,000 -- -- 24,000
Cash 326 -- 1 51 --
Interest receivable 299 3,562 1,627 853 1,594
Receivable for capital shares issued -- -- 31 -- 8
Receivable from brokers for investments sold 56 1,807 -- -- 1,790
Receivable from affiliates 9 25 8 -- 13
Prepaid expenses and other assets 9 20 13 46 8
Total Assets 49,918 246,673 202,427 85,224 145,828
LIABILITIES:
Interest payable -- -- 27 -- 17
Payable to brokers for investments purchased -- 1,783 4,906 -- 1,754
Payable for capital shares redeemed -- -- 13 -- 35
Payable for return of collateral received 9,499 50,561 -- -- 30,363
Accrued expenses and other payables:
Investment advisory fees 15 83 74 35 48
Administration fees 1 5 2 12 3
Custodian fees 6 9 7 9 7
Accounting fees 4 1 -- 6 --
Transfer agent fees 1 8 16 4 23
Shareholder service fees -- Class A 6 37 23 17 21
12B-1 -- Class G -- -- 45 -- --
Other 2 1 14 1 5
Total Liabilities 9,534 52,488 5,127 84 32,276
NET ASSETS:
Capital 45,380 207,995 213,452 91,696 135,774
Undistributed (distributions in excess of)
net investment income 48 184 173 (57) 99
Net unrealized appreciation/depreciation
from investments (423) (3,954) (6,669) (887) (2,392)
Accumulated undistributed net realized gains
(losses) from investment transactions (4,621) (10,040) (9,656) (5,612) (19,929)
Net Assets $40,384 $194,185 $197,300 $85,140 $113,552
Net Assets
Class A $40,384 $194,159 $ 39,140 $85,140 $113,545
Class G 26 158,160 7
Total $40,384 $194,185 $197,300 $85,140 $113,552
Outstanding units of beneficial
interest (shares)
Class A 4,201 21,239 3,115 8,209 12,381
Class G 3 12,587 1
Total 4,201 21,242 15,702 8,209 12,382
Net asset value
Redemption price per share -- Class A $ 9.61 $ 9.14 $ 12.57 $ 10.37 $ 9.17
Offering and redemption price
per share -- Class G 9.10 $ 12.57 9.19
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 $ 9.81 $ 9.70 $ 12.82 $ 11.00 $ 9.73
</TABLE>
See notes to financial statements.
45
<PAGE>
Statements of Operations
The Victory Portfolios For the Six Months Ended April 30, 2000
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Limited
Term Intermediate Fund Government Investment
Income Income for Mortgage Quality
Fund Fund Income Fund Bond Fund
<S> <C> <C> <C> <C> <C>
Investment Income:
Interest income $ 1,371 $ 6,886 $ 7,802 $ 3,372 $ 4,459
Securities lending income 6 53 -- -- 32
Total Income 1,377 6,939 7,802 3,372 4,491
Expenses:
Investment advisory fees 109 767 522 229 472
Administration fees 33 154 157 69 94
Shareholder service fees -- Class A 54 255 50 113 157
12b-1 fees -- Class G -- -- 210 -- --
Accounting fees 28 47 53 30 41
Custodian fees 20 39 33 25 36
Legal and audit fees 3 10 10 8 6
Trustees' fees and expenses -- 2 -- 1 1
Transfer agent fees 5 10 14 7 31
Registration and filing fees 6 7 32 6 6
Printing fees 1 2 19 2 10
Other 1 7 -- 2 5
Total Expenses 260 1,300 1,100 492 859
Expenses voluntarily reduced (9) (235) (145) -- (157)
Expenses before reimbursement from distributor 251 1,065 955 492 702
Expenses reimbursed by the distributor (41) (110) (2) -- (51)
Net Expenses 210 955 953 492 651
Net Investment Income 1,167 5,984 6,849 2,880 3,840
Realized/Unrealized Gains (losses) from Investments:
Net realized gains (losses) from investment transactions (654) (4,652) (2,047) (2,260) (3,260)
Change in unrealized appreciation/depreciation
from investments 131 752 (1,634) 264 584
Net realized/unrealized gains (losses) from investments (523) (3,900) (3,681) (1,996) (2,676)
Change in net assets resulting from operations $ 644 $ 2,084 $ 3,168 $ 884 $ 1,164
</TABLE>
See notes to financial statements.
46
<PAGE>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Limited Term Intermediate Fund for
Income Fund Income Fund Income
Six Six Six Ten
Months Year Months Year Months Months Year
Ended Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, April 30, October 31, December 31,
2000 1999 2000 1999 2000 1999<F1> 1998
<S> <C> <C> <C> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 1,167 $ 3,853 $ 5,984 $ 12,785 $ 6,849 $ 10,141 $ 9,225
Net realized gains
(losses) from
investment transactions (654) (1,162) (4,652) (5,275) (2,047) (1,816) 226
Net change in unrealized
appreciation/depreciation
from investments 131 (1,429) 752 (8,183) (1,634) (7,522) 1,816
Change in net assets resulting
from operations 644 1,262 2,084 (673) 3,168 803 11,267
Distributions to Shareholders:
From net investment
income by class:
Class A (1,170) (3,852) (6,050) (12,677) (1,330) (1,239) --
Class G -- -- -- -- (5,538) (8,850) (9,113)
From net realized gains from
investment transactions -- -- -- (298) -- -- --
Change in net assets from
distributions to shareholders (1,170) (3,852) (6,050) (12,975) (6,868) (10,089) (9,113)
Capital Transactions:
Proceeds from shares issued 2,429 13,368 15,768 48,771 34,544 103,753 52,319
Proceeds from shares
issued in connection
with acquisition -- -- -- -- -- 33,350 --
Dividends reinvested 595 2,715 4,154 9,350 6,314 9,191 7,552
Cost of shares redeemed (9,602) (47,348) (45,961) (76,550) (72,550) (64,028) (57,385)
Change in net assets from
capital transactions (6,578) (31,265) (26,039) (18,429) (31,692) 82,266 2,486
Change in net assets (7,104) (33,855) (30,005) (32,077) (35,392) 72,980 4,640
Net Assets:
Beginning of period 47,488 81,343 224,190 256,267 232,692 159,712 155,072
End of period $40,384 $ 47,488 $194,185 $224,190 $197,300 $232,692 $159,712
Share Transactions:
Issued 250 1,351 1,713 5,075 2,724 8,005 3,958
Issued in connection
with acquisition -- -- -- -- -- 2,426 --
Reinvested 62 276 452 979 500 711 572
Redeemed (993) (4,834) (4,979) (8,002) (5,723) (4,935) (4,338)
Change in shares (681) (3,207) (2,814) (1,948) (2,499) 6,207 192
<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.
47
<PAGE>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
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,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 2,880 $ 5,839 $ 3,840 $ 8,469
Net realized gains (losses) from investment transactions (2,260) (2,539) (3,260) (6,618)
Net change in unrealized appreciation/depreciation
from investments 264 (1,918) 584 (3,689)
Change in net assets resulting from operations 884 1,382 1,164 (1,838)
Distributions to Shareholders:
From net investment income by class:
Class A (3,044) (5,768) (3,927) (8,392)
Class G -- -- -- --
Change in net assets from distributions to shareholders (3,044) (5,768) (3,927) (8,392)
Capital Transactions:
Proceeds from shares issued 10,356 23,681 9,738 44,058
Dividends reinvested 1,602 3,088 2,514 5,673
Cost of shares redeemed (23,984) (28,142) (36,899) (68,471)
Change in net assets from capital transactions (12,026) (1,373) (24,647) (18,740)
Change in net assets (14,186) (5,759) (27,410) (28,970)
Net Assets:
Beginning of period 99,326 105,085 140,962 169,932
End of period $ 85,140 $ 99,326 $113,552 $140,962
Share Transactions:
Issued 990 2,201 1,056 5,665
Reinvested 154 261 272 604
Redeemed (2,299) (2,466) (3,998) (7,790)
Change in shares (1,155) (4) (2,670) (1,521)
</TABLE>
See notes to financial statements.
48
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Limited Term Income Fund
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,
2000 1999 1998 1997 1996 1995<F2>
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.73 $ 10.06 $ 9.94 $ 10.01 $ 10.15 $ 9.88
Investment Activities
Net investment income 0.26 0.50 0.54 0.61 0.63 0.57
Net realized and unrealized
gains (losses) from investments (0.12) (0.33) 0.12 (0.07) (0.14) 0.27
Total from Investment Activities 0.14 0.17 0.66 0.54 0.49 0.84
Distributions
Net investment income (0.26) (0.50) (0.54) (0.61) (0.62) (0.57)
In excess of net investment income -- -- -- -- (0.01) --
Total Distributions (0.26) (0.50) (0.54) (0.61) (0.63) (0.57)
Net Asset Value, End of Period $ 9.61 $ 9.73 $ 10.06 $ 9.94 $ 10.01 $ 10.15
Total Return (excludes sales charges) 1.47%<F3> 1.72% 6.86% 5.57% 4.94% 8.77%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $40,384 $47,488 $81,343 $81,913 $90,019 $172,002
Ratio of expenses to
average net assets <F5> 0.96%<F4> 0.96% 0.87% 0.85% 0.86% 0.78%
Ratio of net investment income
to average net assets <F5> 5.37%<F4> 5.03% 5.44% 6.06% 5.90% 5.77%
Ratio of expenses to
average net assets<F1> 1.19%<F4> 1.09% 1.02% 0.87% 0.89% 0.79%
Ratio of net investment income
to average net assets<F1> 5.14%<F4> 4.90% 5.29% 6.04% 5.87% 5.76%
Portfolio turnover 107% 220% 177% 139% 221% 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 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.
<F5> Effective December 15, 1999, the advisor 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 Fund at a maximum of .90%
until at least February 28, 2001.
</FN>
</TABLE>
See notes to financial statements.
49
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Intermediate Income Fund
Class G
Class A Shares Shares
Six December 21,
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,
2000 1999 1998 1997 1996 1995 2000<F2>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 9.32 $ 9.85 $ 9.61 $ 9.56 $ 9.69 $ 9.25 $ 9.25
Investment Activities
Net investment income 0.27 0.50 0.53 0.56 0.56 0.60 0.20
Net realized and unrealized
gains (losses)
from investments (0.18) (0.52) 0.24 0.05 (0.13) 0.44 (0.12)
Total from
Investment Activities 0.09 (0.02) 0.77 0.61 0.43 1.04 0.08
Distributions
Net investment income (0.27) (0.50) (0.53) (0.56) (0.56) (0.60) (0.23)
Net realized gains -- (0.01) -- -- -- -- --
Total Distributions (0.27) (0.51) (0.53) (0.56) (0.56) (0.60) (0.23)
Net Asset Value, End of Period $ 9.14 $ 9.32 $ 9.85 $ 9.61 $ 9.56 $ 9.69 $ 9.10
Total Return
(excludes sales charges) 1.03%<F3> (0.18)% 8.30% 6.62% 4.56% 11.65% 0.88%<F3>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $194,159 $224,190 $256,267 $248,841 $272,087 $163,281 $ 26
Ratio of expenses to
average net assets <F6> 0.93%<F4> 1.00% 0.96% 0.96% 0.94% 0.82% 1.00%<F4>
Ratio of net investment income
to average net assets <F6> 5.86%<F4> 5.26% 5.48% 5.87% 5.81% 6.32% 5.93%<F4>
Ratio of expenses to
average net assets<F1> 1.27%<F4> 1.26% 1.24% 1.09% 1.11% 1.06% 58.98%<F4>
Ratio of net investment income
to average net assets<F1> 5.52%<F4> 5.00% 5.20% 5.74% 5.64% 6.08% (52.05)%<F4>
Portfolio turnover <F5> 152% 303% 318% 195% 164% 98% 152%
<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> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
<F6> On December 15, 1999, the advisor 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 Class A Shares and Class G Shares
of the Fund at a maximum of 0.90% and 1.00%, respectively, until at
least February 28, 2001.
</FN>
</TABLE>
See notes to financial statements.
50
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Fund for Income
Class A Shares
Six March 26,
Months 1999
Ended to
April 30, October 31,
2000 1999<F4><F7>
(Unaudited)
<S> <C> <C>
Net Asset Value, Beginning of Period $ 12.79 $ 13.14
Investment Activities
Net investment income 0.41 0.46
Net realized and unrealized gains (losses) on investments (0.22) (0.36)
Total from Investment Activities 0.19 (0.10)
Distributions
Net investment income (0.41) (0.45)
In excess of net investment income -- --
Net realized gains -- --
Tax return of capital -- --
Total Distributions (0.41) (0.45)
Net Asset Value, End of Period $ 12.57 $ 12.79
Total Return (excludes sales charges) 1.54%<F2> 0.72%<F2>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $39,140 $40,270
Ratio of expenses to average net assets <F5> 1.00%<F3> 1.00%<F3>
Ratio of net investment income to average net assets <F5> 6.48%<F3> 6.02%<F3>
Ratio of expenses to average net assets<F1> 1.15%<F3> 1.22%<F3>
Ratio of net investment income to average net assets<F1> 6.33%<F3> 5.80%<F3>
Portfolio turnover <F8> 15% 24%
<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. Effective February 28,
2000, the Adviser has also agreed to waive its management fee for Class
A shares to the extent necessary to maintain the net operating expenses
of the Fund at a maximum of 1.00% until at least February 28, 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>
<TABLE>
<CAPTION>
Fund for Income
Class G Shares
Six January 1,
Months 1999 Year Year Year Year Year
Ended to Ended Ended Ended Ended Ended
April 30, October 31, December 31, December 31, December 31, December 31, December 31,
2000 1999<F4> 1998 1997 1996 1995 1994
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning
of Period $ 12.78 $ 13.32 $ 13.14 $ 12.88 $ 13.21 $ 12.02 $ 13.37
Investment
Activities
Net investment
income 0.42 0.66 0.77 0.78 0.78 0.79 0.76
Net realized and
unrealized
gains
(losses) on
investments (0.21) (0.54) 0.17 0.26 (0.34) 1.23 (1.25)
Total from
Investment
Activities 0.21 0.12 0.94 1.04 0.44 2.02 (0.49)
Distributions
Net investment
income (0.42) (0.66) (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 (0.42) (0.66) (0.76) (0.78) (0.77) (0.83) (0.86)
Net Asset Value,
End of Period $ 12.57 $ 12.78 $ 13.32 $ 13.14 $ 12.88 $ 13.21 $ 12.02
Total Return
(excludes
sales charges) 1.59%<F2> 0.94%<F2> 7.37% 8.36% 3.51% 17.20% (3.69)%
Ratios/Supplemental
Data:
Net Assets,
End of Period
(000) $158,160 $192,422 $159,712 $155,072 $162,874 $185,434 $184,029
Ratio of expenses
to average net
assets <F5> 0.89%<F3> 0.88%<F3> 0.89% 0.90% 0.90% 0.92% 0.90%
Ratio of net
investment
income to average
net assets <F5> 6.58%<F3> 6.12%<F3> 5.79% 6.04% 6.06% 6.19% 6.03%
Ratio of expenses
to average net
assets<F1> 1.03%<F3> 1.04%<F3> 0.90% <F6> <F6> <F6> <F6>
Ratio of net
investment
income to average
net assets<F1> 6.44%<F3> 5.96%<F3> 5.78% <F6> <F6> <F6> <F6>
Portfolio
turnover <F8> 15% 24% 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. Effective February 28,
2000, the Adviser has also agreed to waive its management fee for Class
A shares to the extent necessary to maintain the net operating expenses
of the Fund at a maximum of 1.00% until at least February 28, 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.
51
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Government Mortgage Fund
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,
2000 1999 1998 1997 1996 1995
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.61 $ 11.07 $ 10.93 $ 10.76 $ 10.86 $ 10.33
Investment Activities
Net investment income 0.33 0.62 0.63 0.69 0.70 0.72
Net realized and unrealized
gains (losses) from investments (0.22) (0.47) 0.14 0.16 (0.12) 0.62
Total from Investment Activities 0.11 0.15 0.77 0.85 0.58 1.34
Distributions
Net investment income (0.35) (0.61) (0.63) (0.68) (0.67) (0.71)
In excess of net realized gains -- -- -- -- -- (0.08)
Tax return of capital -- -- -- <F3> (0.01) (0.02)
Total Distributions (0.35) (0.61) (0.63) (0.68) (0.68) (0.81)
Net Asset Value, End of Period $ 10.37 $ 10.61 $ 11.07 $ 10.93 $ 10.76 $ 10.86
Total Return (excludes sales charges) 1.08%<F4> 1.38% 7.23% 8.22% 5.54% 13.55%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $85,140 $99,326 $105,085 $103,761 $125,992 $136,103
Ratio of expenses to
average net assets 1.07%<F5> 0.99% 0.88% 0.85% 0.89% 0.77%
Ratio of net investment income
to average net assets 6.29%<F5> 5.67% 5.72% 6.32% 6.46% 6.81%
Ratio of expenses to
average net assets<F1> <F2> 1.08% 1.01% <F2> 0.90% 0.79%
Ratio of net investment income
to average net assets<F1> <F2> 5.58% 5.59% <F2> 6.45% 6.80%
Portfolio turnover 131% 274% 296% 115% 127% 59%
<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> 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.
52
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Investment Quality Bond Fund
Class G
Class A Shares Shares
Six December 21,
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,
2000 1999 1998 1997<F3> 1996 1995<F2> 2000<F8>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 9.37 $ 10.00 $ 9.78 $ 9.63 $ 9.76 $ 9.10 $ 9.27
Investment Activities
Net investment income 0.29 0.54 0.55 0.57 0.57 0.62 0.22
Net realized and
Unrealized gains
(losses) from investments (0.20) (0.64) 0.22 0.14 (0.13) 0.67 (0.05)
Total from
Investment Activities 0.09 (0.10) 0.77 0.71 0.44 1.29 0.17
Distributions
Net investment income (0.29) (0.53) (0.55) (0.56) (0.56) (0.62) (0.25)
In excess of net
investment income -- -- -- -- -- (0.01) --
Tax return of capital -- -- -- -- (0.01) -- --
Total Distributions (0.29) (0.53) (0.55) (0.56) (0.57) (0.63) (0.25)
Net Asset Value, End of Period $ 9.17 $ 9.37 $ 10.00 $ 9.78 $ 9.63 $ 9.76 $ 9.19
Total Return
(excludes sales charges) 1.08%<F4> (1.18)% 8.06% 7.67% 4.65% 14.63% 1.81%<F4>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $113,545 $140,962 $169,932 $181,007 $150,807 $125,248 $ 7
Ratio of expenses to
average net assets<F7> 1.04%<F5> 1.09% 1.06% 1.04% 1.01% 0.88% 1.09%<F5>
Ratio of net investment income
to average net assets<F7> 6.11%<F5> 5.44% 5.49% 5.90% 5.99% 6.59% 5.97%<F5>
Ratio of expenses to
average net assets<F1> 1.37%<F5> 1.34% 1.31% 1.17% 1.14% 1.10% 344.14%<F5>
Ratio of net investment income
to average net assets<F1> 5.78%<F5> 5.19% 5.24% 5.77% 5.86% 6.37% (337.08)%<F5>
Portfolio turnover <F6> 167% 398% 492% 249% 182% 160% 167%
<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 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.
<F3> 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.
<F4> Not annualized.
<F5> Annualized.
<F6> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
<F7> Effective December 15, 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 A shares and Class G
shares of the Fund at a maximum of 1.10% until at least February 28,
2001.
<F8> Period from commencement of operations.
</FN>
</TABLE>
See notes to financial statements.
53
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
National Municipal Bond Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Municipal Bonds (93.8%)
Alabama (1.6%):
Houston County Health Care
Authority Revenue,
6.13%, 10/1/25,
Callable 10/1/09 @ 101, AMBAC $ 500 $ 498
Scottsboro, Series B,
5.30%, 7/1/06, FSA 100 101
599
Alaska (1.4%):
Anchorage Lease Revenue,
Correctional Facility,
5.13%, 2/1/09, FSA 500 493
Arizona (2.7%):
Pima County Industrial Development
Authority, 5.00%, 4/1/04, MBIA 1,000 999
California (9.5%):
A B C School District,
Capital Appreciation, Series B, GO,
0.00%, 8/1/24, FGIC 500 117
Bellevue School District,
Capital Appreciation, GO,
0.00%, 8/1/24, FGIC 1,000 237
State, GO, 4.50%, 5/1/05, FGIC 3,000 2,973
Union Elementary School District,
Capital Appreciation, Series A, GO,
0.00%, 9/1/24, FGIC 620 143
3,470
Connecticut (0.6%):
State, Special Tax Obligation
Revenue Bond, Series B,
6.00%, 9/1/06 200 210
Florida (13.8%):
Dade County Seaport, 5.13%, 10/1/16,
Callable 10/1/06 @ 102, MBIA 1,000 942
Lakeland Electric & Water Revenue,
Series A, 4.75%, 10/1/17,
Callable 10/1/09 @ 101, MBIA 250 218
Orlando Utilities Commission,
Water & Electric Revenue,
5.80%, 10/1/06 150 156
State Board Financial Department,
Environmental Protection-Preservation
Revenue, 4.00%, 7/1/07, FGIC 2,400 2,208
State Board Financial Department,
Environmental Protection-Preservation
Revenue 2000-A, 5.25%, 7/1/04, FSA 500 506
State Department, Environmental
Protection-Preservation Revenue,
Series A, 5.25%, 7/1/05, FGIC 1,000 1,012
5,042
Georgia (0.7%):
Columbia County
Water & Sewer Revenue,
5.50%, 6/1/25,
Callable 6/1/10 @ 100, FGIC $ 250 $ 237
Illinois (10.0%):
Chicago Public Building Commission,
6.05%, 1/1/06,
Callable 1/1/05 @ 100, AMBAC 250 258
State Health Facilities Authority,
5.55%, 10/1/06, FGIC 1,000 1,013
State Health Facilities Authority,
5.60%, 10/1/07, FGIC 2,310 2,346
3,617
Indiana (0.8%):
Westfield Elementary School Building
Corp., 5.00%, 7/15/01, AMBAC 280 281
Iowa (2.2%):
Harlan 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 550 550
800
Kansas (0.4%):
Haysville, Water & Wastewater Utility,
4.60%, 10/1/00, FSA 130 130
Maine (2.0%):
State Turnpike Authority Revenue, 5.50%,
7/1/30, Callable 7/1/10 @ 101, FGIC 750 709
Michigan (6.4%):
Byron Center, GO, 5.40%, 5/1/07,
Prerefunded 5/1/05 @ 101, MBIA 240 246
Genesee School District, GO, 6.00%, 5/1/29,
Callable 5/1/10 @ 100, FSA 1,000 1,013
Grosse Ile Township School District,
GO, 6.00%, 5/1/22,
Prerefunded 5/1/07 @ 100, FGIC 250 263
Leslie Public Schools, GO, 5.55%, 5/1/07,
Prerefunded 5/1/05 @ 101, AMBAC 250 258
Municipal Bond Authority, 6.70%, 11/1/06,
Callable 11/1/04 @ 102 225 240
Municipal Bond Authority, 6.80%, 11/1/07,
Callable 11/1/04 @ 102 275 294
2,314
Missouri (1.4%):
Excelsior Springs School District
Building Corp., 6.50%, 3/1/09,
Callable 3/1/04 @ 100, FSA 500 524
Nebraska (4.6%):
Education Financial Authority Revenue,
Creighton University,
Series A, 3.55%, 9/1/01, AMBAC 1,710 1,672
See notes to financial statements.
54
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
National Municipal Bond Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
New York (2.8%):
Albany Municipal Water Finance
Authority, Water & Sewer Systems
Revenue, Capital Appreciation,
Series A, 0.00%, 12/1/22, FGIC $ 500 $ 132
State Dormitory Authority Revenue,
University of Rochester,
Series A, 5.00%, 7/1/23,
Callable 7/1/08 @ 101, MBIA 1,000 870
1,002
Ohio (21.3%):
Dayton Water Systems Revenue,
4.05%, 12/1/06, FSA 1,000 916
Franklin County Development Revenue,
American Chemical Society Project,
5.00%, 10/1/07 850 830
Franklin County Development Revenue,
American Chemical Society Project,
5.50%, 10/1/12,
Callable 10/1/09 @ 101 1,000 994
State Building Authority, Correctional
Facilities, 4.60%, 10/1/03 500 493
State Highway Capital Improvements,
Series E, 4.75%, 5/1/05 1,000 989
State Public Facilities Commission,
Higher Education Capital Facilities,
Series II, 4.50%, 11/1/07 3,250 3,053
State Special Obligation, Elementary
and Secondary Facilities,
5.80%, 6/1/03, AMBAC 500 512
7,787
South Dakota (1.0%):
Sioux Falls Sales Tax Revenue,
4.00%, 11/15/00, AMBAC 370 369
Tennessee (1.4%):
Dickson Electric Systems Revenue,
5.00%, 9/1/03, MBIA 500 501
Texas (2.0%):
Conroe Independent School District, GO,
6.50%, 2/1/04 200 210
Keller Independent School District, GO,
6.20%, 8/15/04 200 209
State, Series A, GO, 6.00%, 10/1/08 100 105
Ysleta Independent School District, GO,
5.60%, 8/15/02 200 203
727
Vermont (2.7%):
Education & Health Building Finance
Agency Revenue, Fletcher Allen
Health, Series A, 5.75%, 12/1/18,
Callable 12/1/10 @ 101 $1,000 $ 981
Washington (1.1%):
Seattle Municipal Light & Power,
6.00%, 7/1/03 200 206
Skagit County School District, No. 103,
Anacortes, GO, 4.75%, 12/1/01, FGIC 200 200
406
Wisconsin (3.4%):
Milwaukee Sewer District, Series A, GO,
6.70%, 10/1/02 200 208
University of Wisconsin Hospital & Clinic
Authority Revenue, 6.20%, 4/1/29,
Callable 4/1/10 @ 101, FSA 1,000 1,015
1,223
Total Municipal Bonds (Cost $34,195) 34,093
Investment Companies (3.8%)
Federated Tax-Free
Money Market Fund 1,392,293 1,392
Total Investment Companies (Cost $1,392) 1,392
Total Investments (Cost $35,587) (a) -- 97.6% 35,485
Other assets in excess of liabilities -- 2.4% 864
TOTAL NET ASSETS -- 100.0% $36,349
(a) Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 368
Unrealized depreciation (470)
Net unrealized appreciation $(102)
AMBAC -- AMBAC Indemnity Corp.
FGIC -- Financial Guaranty Insurance Co.
FSA -- Insured by Financial Security Assurance
GO -- General Obligation
MBIA -- Municipal Bond Insurance Assoc.
See notes to financial statements.
55
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
New York Tax-Free Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
New York Municipal Bonds (97.6%)
Albany Municipal Water Finance Authority,
Water & Sewer System Revenue,
0.00%, 12/1/18, FGIC $ 1,000 $ 338
Albany Municipal Water Finance Authority,
Water & Sewer System Revenue,
0.00%, 12/1/19, FGIC 1,000 318
Albany Municipal Water Finance Authority,
Water & Sewer System Revenue,
0.00%, 12/1/21, FGIC 1,000 281
Clifton Park Water System,
5.00%, 10/1/19,
Callable 10/1/09 @ 101, FGIC 310 276
Metropolitan Transportation Authority,
Transportation Facilities, Series I,
7.00%, 7/1/09, AMBAC 250 281
Nassau County Industrial Development
Agency, 5.00%, 7/1/23,
Callable 7/1/08 @ 102, MBIA 150 131
Nassau County Industrial Development
Agency, Civic Facilities, Hofstra
University Project, 6.75%, 8/1/11,
Prerefunded 8/1/01 @ 102, AMBAC 250 261
New York City, Series C, GO,
7.00%, 2/1/12,
Callable 8/1/00 @ 100, FGIC 60 60
New York City, Series B, GO,
7.00%, 10/1/18,
Callable 10/1/00 @ 100, FSA, ETM 300 303
New York City Cultural Resources,
Museum of Modern Art,
6.63%, 1/1/11,
Prerefunded 1/1/02 @ 102, AMBAC 680 713
New York City Housing Development Corp.,
Multi-Unit Mortgage, Series A,
7.30%, 6/1/10,
Callable 6/1/01 @ 102, FHA 700 730
New York City Housing Development Corp.,
Multi-Unit Mortgage, Series A,
7.35%, 6/1/19,
Callable 6/1/01 @ 102, FHA 675 704
New York City Industrial Development
Agency, Civic Facilities,
USTA National Tennis Center Project,
6.38%, 11/15/14,
Callable 11/15/04 @ 102, FSA 200 210
New York City Municipal Water Finance
Authority, Water & Sewer System
Revenue, 6.75%, 6/15/16,
Callable 6/15/01 @ 101, FGIC 325 335
New York City Municipal Water Finance
Authority, Water & Sewer System
Revenue, 6.75%, 6/15/16,
Prerefunded 6/15/01 @ 101, FGIC 325 336
New York City Municipal Water Finance
Authority, Water & Sewer System
Revenue, 0.00%, 6/15/19, MBIA $ 3,000 $ 971
North Hempstead,
4.75%, 1/15/23,
Callable 1/15/08 @ 101, FGIC 750 630
State, GO,
6.75%, 8/1/18,
Prerefunded 8/1/01 @ 102, AMBAC 370 387
State, GO,
6.75%, 8/1/19,
Prerefunded 8/1/01 @ 102, AMBAC 325 340
State Dormitory Authority,
0.00%, 7/1/18, MBIA 1,010 347
State Dormitory Authority,
4.75%, 8/15/19,
Callable 2/15/09 @ 101, MBIA 500 426
State Dormitory Authority,
4.75%, 5/15/24,
Callable 5/15/08 @ 101, MBIA 300 249
State Dormitory Authority,
City University, Series 2,
6.75%, 7/1/24,
Prerefunded 7/1/04 @ 102, MBIA 700 758
State Dormitory Authority, Ithaca College,
6.50%, 7/1/10,
Prerefunded 7/1/01 @ 102, MBIA 750 781
State Dormitory Authority,
Judicial Facilities Leases, Series B,
7.00%, 4/15/16,
Callable 4/15/01 @ 102, MBIA 225 234
State Local Government Assistance,
Series B, 4.88%, 4/1/20,
Callable 4/1/08 @ 101, MBIA 500 433
State Medical Care Facilities Finance
Agency, 7.38%, 8/15/19,
Callable 8/15/00 @ 101, MBIA 165 169
State Medical Care Facilities Finance
Agency, North Shore University Hospital,
7.20%, 11/1/20,
Prerefunded 11/1/00 @ 102, MBIA 565 584
State Tollway Authority, Series C,
6.00%, 1/1/25,
Prerefunded 1/1/05 @ 102, FGIC 550 580
Triborough Bridge & Tunnel Authority,
Series T, 7.00%, 1/1/20,
Prerefunded 1/1/01 @ 102, MBIA 900 932
Triborough Bridge & Tunnel Authority,
Special Obligation, Series B,
6.88%, 1/1/15,
Callable 1/1/01 @ 102, AMBAC 1,000 1,031
Warwick Valley Central School District,
5.35%, 6/15/23,
Callable 10/1/09 @ 101, FGIC 560 521
Total New York Municipal Bonds (Cost $14,448) 14,650
See notes to financial statements.
56
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
New York Tax-Free Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Investment Companies (0.7%)
Providence of New York Fund 109,650 $ 110
Total Investment Companies (Cost $110) 110
Total Investments (Cost $14,558) (a) -- 98.3% 14,760
Other assets in excess of liabilities -- 1.7% 256
TOTAL NET ASSETS -- 100.0% $15,016
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 479
Unrealized depreciation (277)
Net unrealized appreciation $ 202
AMBAC -- AMBAC Indemnity Corp.
ETM -- Escrowed To Maturity
FGIC -- Insured by Financial Guaranty Insurance Co.
FHA -- Federal Housing Administration
FSA -- Insured by Financial Security Assurance
GO -- General Obligation
MBIA -- Insured by Municipal Bond Insurance Assoc.
See notes to financial statements.
57
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Ohio Municipal Bond Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Municipal Bonds (97.3%)
Certificates of Participation (1.0%):
Education (1.0%):
Worthington City School District,
5.50%, 12/1/16,
Callable 12/1/10 @ 100, MBIA $ 500 $ 491
Worthington City School District,
5.65%, 12/1/18,
Callable 12/1/10 @ 100, MBIA 730 717
Worthington City School District,
5.70%, 12/1/19,
Callable 12/1/10 @ 100, MBIA 600 589
Total Certificates of Participation 1,797
General Obligations (43.9%):
County, City & Special District (5.3%):
Akron, 4.55%, 12/1/08 300 278
Bath Township Capital Appreciation,
Real Estate Acquisition,
0.00%, 12/1/07, AMBAC 205 137
Bath Township Capital Appreciation,
Real Estate Acquisition,
0.00%, 12/1/08, AMBAC 205 130
Butler County, 5.60%, 12/1/09,
Callable 12/1/06 @ 101, AMBAC 180 185
Cincinnati, 6.30%, 12/1/15,
Callable 6/1/05 @ 101 AMT 1,250 1,303
Columbus Tax Increment, Easton Project,
4.88%, 12/1/24,
Callable 6/1/09 @ 101, AMBAC 1,000 849
Crawford County Capital Appreciation,
0.00%, 12/1/10, AMBAC 300 167
Crawford County Capital Appreciation,
0.00%, 12/1/13, AMBAC 500 230
Erie County, 5.63%, 10/1/19,
Callable 10/1/09 @ 100, FGIC 250 248
Madison County, 7.00%, 12/1/19,
Prerefunded 12/1/04 @ 102, AMBAC 600 660
Maple Heights Capital Appreciation,
0.00%, 12/1/07, FSA 500 335
Maple Heights Capital Appreciation,
0.00%, 12/1/08, FSA 505 319
Maple Heights Capital Appreciation,
0.00%, 12/1/10, FSA 310 174
Monroe Falls, Series A, 6.95%, 12/1/14,
Callable 12/1/04 @ 101, AMBAC 1,000 1,077
Newark Capital Appreciation,
0.00%, 12/1/16, FGIC 1,490 571
Scioto County, 5.70%, 12/1/20,
Callable 6/1/10 @101, AMBAC 400 397
Summit County, Series A, 6.90%, 8/1/12,
Prerefunded 8/1/01 @ 102, AMBAC 255 267
Summit County, Series A, 6.90%, 8/1/12,
Prerefunded 8/1/03 @ 100, AMBAC 230 243
Warren County Special Assesment,
6.55%, 12/1/14 $ 725 $ 795
Westerville, 4.50%, 12/1/18,
Callable 12/1/09 @ 101 1,000 839
9,204
Education (30.4%):
Avon Local School District,
5.50%, 12/1/04, AMBAC 465 475
Avon Local School District,
5.55%, 12/1/05, AMBAC 250 257
Barnesville Village School District,
5.75%, 12/1/22,
Callable 12/1/10 @ 101 500 493
Batavia Local School District,
7.00%, 12/1/14, MBIA 1,500 1,670
Big Walnut Local School District,
Capital Appreciation,
0.00%, 12/1/09, AMBAC 250 149
Brecksville-Broadview Heights
City School District, 6.50%, 12/1/16,
Callable 12/1/06 @ 102, FGIC 1,000 1,071
Brunswick City School District
Improvements,
3.60%, 12/1/00, AMBAC 185 184
Brunswick City School District
Improvements,
3.70%, 12/1/01, AMBAC 200 196
Brunswick City School District
Improvements, 6.00%, 12/1/26,
Callable 12/1/09 @ 101, FGIC 750 760
Cambridge City School District,
5.70% 12/1/20,
Callable 12/1/10 @ 100 1,555 1,546
Cardinal Local School District,
5.80%, 12/1/25,
Callable 12/1/10 @ 100 2,000 1,988
Dublin City School District,
Capital Appreciation,
0.00%, 12/1/09, MBIA 1,250 745
Edgewood City School District,
Capital Appreciation, Series A,
0.00%, 12/1/13, MBIA 1,625 756
Edgewood City School District,
Capital Appreciation, Series A,
0.00%, 12/1/15, MBIA 1,610 657
Edgewood City School District, Series A,
4.30%, 12/1/06, MBIA 175 164
Fairfield City School District, TCRS,
7.45%, 12/1/14, FGIC 1,000 1,190
Fostoria City School District,
Capital Appreciation,
0.00%, 12/1/10, MBIA 375 211
Franklin City School District,
Capital Appreciation,
0.00%, 12/1/12, AMBAC 280 140
See notes to financial statements.
58
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Ohio Municipal Bond Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Franklin City School District,
Capital Appreciation,
0.00%, 12/1/13, AMBAC $ 280 $ 131
Franklin City School District,
Capital Appreciation,
0.00%, 12/1/14, AMBAC 280 123
Graham Local School District,
Capital Appreciation,
0.00%, 12/1/11, MBIA 200 106
Graham Local School District,
Capital Appreciation,
0.00%, 12/1/12, MBIA 200 100
Hamilton City School District
Improvements, Series A,
6.15%, 12/1/15 500 535
Hamilton City School District
Improvements, Series A,
6.15%, 12/1/16 600 641
Hilliard Local School District, Series A,
Series A, 5.00%, 12/1/20,
Callable 12/1/06 @ 101, FGIC 1,050 937
Hilliard School District, 0.00%, 12/1/16 3,720 1,413
Hilliard School District, 0.00%, 12/1/17 3,720 1,322
Hilliard School District,
0.00% 12/1/19, FGIC 2,000 626
Indian Lake Local School District,
Capital Appreciation,
Construction & Improvements,
0.00%, 12/1/11, AMBAC 250 132
Indian Lake Local School District,
Capital Appreciation,
Construction & Improvements,
0.00%, 12/1/12, AMBAC 250 125
Indian Lake Local School District,
Capital Appreciation,
Construction & Improvements,
0.00%, 12/1/13, AMBAC 250 117
Indian Lake Local School District,
Capital Appreciation,
Construction & Improvements,
0.00%, 12/1/14, AMBAC 250 110
Indian Lake Local School District,
Capital Appreciation,
Construction & Improvements,
0.00%, 12/1/15, AMBAC 250 103
Indian Lake Local School District,
Capital Appreciation,
Construction & Improvements,
0.00%, 12/1/16, AMBAC 250 96
Indian Valley Local School District,
7.00%, 12/1/14,
Callable 12/1/05 @ 102, AMBAC 2,500 2,734
Kettering City School District
Improvements, 5.25%, 12/1/22,
Callable 12/1/05 @ 101, FGIC 1,000 917
Lake Local School District,
5.75%, 12/1/26,
Callable 12/1/10 @ 100, FGIC $1,000 $ 984
Lakeview Local School District,
6.95%, 12/1/19,
Callable 12/1/04 @ 102, AMBAC 1,250 1,372
Lakota Local School District,
Capital Appreciation,
0.00%, 12/1/08, FGIC 320 200
Liberty Benton Local School District,
Capital Appreciation,
0.00%, 12/1/15, AMBAC 570 234
Liberty Benton Local School District,
Capital Appreciation,
0.00%, 12/1/16, AMBAC 285 109
Marion Local School District,
5.75%, 12/1/22,
Callable 12/1/10 @101, MBIA 230 227
Marysville Village School District,
0.00%, 12/1/13, AMBAC 555 257
Marysville Village School District,
0.00%, 12/1/16, MBIA 500 193
Marysville Village School District,
0.00%, 12/1/17, AMBAC 955 339
Marysville Village School District,
6.00%, 12/1/24, Callable @ 101,
12/1/10, AMBAC 2,000 2,026
Morgan Local School District,
Capital Appreciation,
0.00%, 12/1/13 200 93
Morgan Local School District,
Capital Appreciation, 0.00%, 12/1/16 220 90
Mount Vernon City School District,
7.50%, 12/1/14,
Callable 12/1/04 @ 101, FGIC 500 549
Northeastern Local School District,
5.80%, 12/1/26,
Callable 12/1/10 @ 101, MBIA 1,500 1,501
Northwest Local School District,
Capital Appreciation,
0.00%, 12/1/13, AMBAC 280 131
Northwest Local School District,
Capital Appreciation,
0.00%, 12/1/14, AMBAC 280 123
Norwalk City School District,
4.75%, 12/1/26,
Callable 12/1/09 @ 100, AMBAC 1,250 1,041
Olentangy Local School District,
Series A, 6.25%, 12/1/14,
Callable 12/1/04 @ 102 500 533
Pickerington Local School District,
Capital Appreciation,
0.00%, 12/1/12, AMBAC 870 427
Reynoldsburg City School District,
5.45%, 12/1/17,
Callable 12/1/07 @ 101, FGIC 2,575 2,517
See notes to financial statements.
59
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Ohio Municipal Bond Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Ridgemont Local School District,
Capital Appreciation,
0.00%, 12/1/10, AMBAC $ 185 $ 104
Ridgemont Local School District,
Capital Appreciation,
0.00%, 12/1/11, AMBAC 185 98
Ridgemont Local School District,
Capital Appreciation,
0.00%, 12/1/12, AMBAC 185 92
Ridgemont Local School District,
Capital Appreciation,
0.00%, 12/1/13, AMBAC 185 87
Ridgemont Local School District,
Capital Appreciation,
0.00%, 12/1/14, AMBAC 185 82
Ripley-Union-Lewis, Local School District,
Capital Appreciation,
0.00%, 12/1/06, FGIC 145 103
Ripley-Union-Lewis, Local School District,
Capital Appreciation,
0.00%, 12/1/07, FGIC 245 164
Ripley-Union-Lewis, Local School District,
Capital Appreciation,
0.00%, 12/1/10, FGIC 245 138
Ripley-Union-Lewis, Local School District,
Capital Appreciation,
0.00%, 12/1/11, FGIC 245 130
Ripley-Union-Lewis, Local School District,
Capital Appreciation,
0.00%, 12/1/12, FGIC 240 120
Ripley-Union-Lewis, Local School District,
Capital Appreciation,
0.00%, 12/1/13, FGIC 240 113
Ripley-Union-Lewis, Local School District,
Capital Appreciation,
0.00%, 12/1/14, FGIC 235 104
Riverside Local School District,
Capital Appreciation,
0.00%,12/1/11, MBIA 145 75
Riverside Local School District,
Capital Appretiation,
0.00%, 12/1/12, MBIA 145 70
South-Western City School District,
4.75%, 12/1/19,
Callable 12/1/09 @ 100, AMBAC 1,000 860
South-Western City School District,
4.75%, 12/1/26,
Callable 12/1/09 @ 100, AMBAC 5,000 4,140
Springfield Local School District,
Capital Appreciation,
0.00%, 12/1/11, AMBAC 1,715 907
Springfield Local School District,
Capital Appreciation,
0.00%, 12/1/12, MBIA 340 169
State Higher Education,
5.00%, 2/1/07 $4,000 $ 3,983
Sycamore Community School District,
4.75%, 12/1/19,
Callable 12/1/08 @ 100, AMBAC 1,000 860
Sycamore Community School District
Improvements, Capital Appreciation,
0.00%, 12/1/07 360 240
Tuscarawas Valley School District,
Capital Appreciation,
0.00%, 12/1/19, MBIA 580 175
Upper Arlington City School District,
5.13%, 12/1/19,
Callable 12/1/06 @ 101, MBIA 2,500 2,296
Wadsworth City School District,
0.00%, 12/1/07, FGIC 555 371
Wadsworth City School District,
0.00%, 12/1/08, FGIC 555 348
Wadsworth City School District,
0.00%, 12/1/10, FGIC 105 59
Wadsworth City School District,
0.00%, 12/1/11, FGIC 105 55
Wadsworth City School District,
0.00%, 12/1/16, FGIC 105 52
Wadsworth City School District,
Capital Appreciation,
0.00%, 12/1/11, FGIC 555 291
Wadsworth City School District,
Capital Appreciation,
0.00%, 12/1/12, FGIC 575 282
52,434
Housing (0.3%):
Belmont County Home Improvements,
3.65%, 12/1/01, MBIA 170 167
Belmont County Home Improvements,
3.70%, 12/1/02, MBIA 175 169
Belmont County Home Improvements,
3.80%, 12/1/03, MBIA 185 176
512
Public Facilities (Convention, Sport,
Public Buildings) (0.9%):
Crawford County, Correctional Facilities,
6.75%, 12/1/19,
Prerefunded 12/1/04 @ 102, AMBAC 1,385 1,509
Transportation (5.5%):
State Highway Capital Improvement,
Series D, 4.50%, 5/1/07 3,000 2,866
State Highway Capital Improvement,
Series D, 4.50%, 5/1/08 5,000 4,723
State Highway Capital Improvements,
Series E, 4.75%, 5/1/05 2,000 1,976
9,565
See notes to financial statements.
60
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Ohio Municipal Bond Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Utility (Sewers, Telephone, Electric) (1.5%):
Avon Route 83 Sewer Improvements,
6.50%, 12/1/15 $ 335 $ 363
Canton, Waterworks System,
5.75%, 12/1/10,
Callable 12/1/05 @ 102, AMBAC 500 516
Huron County, Landfill Issue II,
5.40%, 12/1/07, MBIA 285 290
Huron County, Landfill Issue II,
5.60%, 12/1/09,
Callable 12/1/07 @ 102, MBIA 320 330
Toledo, Sewer Improvements,
6.10%, 12/1/14,
Callable 12/1/04 @ 102, AMBAC 1,000 1,040
2,539
Total General Obligations 75,763
Revenue Bonds (52.4%):
County, City & Special District (0.8%):
Akron Pension, 4.75%, 12/1/23,
Callable 12/1/10 @ 101, AMBAC 1,750 1,462
Education (15.2%):
Franklin County IDR,
Columbus College of Art & Design, 6.00%, 9/1/13,
Callable 9/1/00 @ 102, LOC Bank One 1,310 1,302
State Education Loan, Series A-1,
5.85%, 12/1/19,
Callable 6/1/07 @ 102, AMBAC AMT 1,000 982
State Higher Education Facility Revenue,
Oberlin College, 5.00%, 10/1/29,
Callable 10/1/00 @101 2,800 2,408
State Higher Educational Facility Revenue,
Series II-A, 4.50% 11/1/08 5,900 5,477
State Higher Educational Facility Revenue,
Ohio Northern University,
3.70%, 5/1/01 250 246
State Higher Educational Facility Revenue,
Series II-A, 5.00%, 11/1/13,
Callabe 11/1/08 @100 4,000 3,778
State Higher Educational Facility Revenue,
Wittenberg University,
3.55%, 6/1/01, AMBAC 340 335
State Higher Educational Facility Revenue,
Xavier University, 6.00%, 5/15/08,
Callable 5/15/07 @ 102, MBIA 500 527
State Public Facilities Commission,
Higher Education Facilities,
Series II-B, 4.63%, 12/1/02 2,800 2,781
State Public Facilities Commission,
Higher Education Facilities,
Series II-B, 5.00%, 11/1/03, MBIA 1,500 1,503
State Public Facilities Commission,
Higher Education Facilities,
Series II-B, 5.00% 11/1/04, MBIA 1,000 1,001
State Special Obligation, Elementary &
Secondary Education Facilities,
Series B, 5.00%, 12/1/06, FSA $1,550 $ 1,543
State Special Obligation, Elementary &
Secondary Education Facilities,
Series A, 5.00%, 6/1/07, AMBAC 1,850 1,842
State University General Receipts,
5.75%, 12/1/24,
Callable 12/1/09 @ 101 1,250 1,232
University of Akron General Receipts,
5.00%, 1/1/02, AMBAC 440 441
University of Akron General Receipts,
5.25%, 1/1/22,
Callable 1/1/07 @ 102, AMBAC 700 646
26,044
Hospitals, Nursing Homes & Health Care (8.1%):
Athens County Mental Health,
Kevin Coleman Foundation,
5.90%, 3/1/09, Callable 3/1/03 @ 102,
LOC National City Bank 545 549
Cuyahoga County Hospital,
Fairview General Hospital Project,
6.25%, 8/15/10,
Callable 2/15/03 @ 102 500 517
Cuyahoga County Hospital,
University Hospital Health,
5.00%, 1/15/02, AMBAC 1,060 1,062
Garfield Heights, Marymont Hospital,
6.70%, 11/15/15,
Prerefunded 11/15/02 @ 102 1,000 1,061
Hamilton County Hospital Facilities,
Deaconess Hospital,
7.00%, 1/1/12, Callable 7/1/02 @ 102 2,150 2,243
Lake County Hospital,
Improvement Facilities,
6.38%, 8/15/03, AMBAC 1,200 1,228
Lucas County Hospital,
Promedica Healthcare,
5.75%, 11/15/14,
Callable 11/15/06 @ 102, MBIA 2,000 2,026
Lucas County Hospital,
The Toledo Hospital,
5.00%, 11/15/22,
Callable 11/15/03 @ 102, MBIA 500 430
Mahoning County Hospital Facilities,
YHA Project,
Series A, 7.00%, 10/15/14,
Prerefunded 10/15/02 @ 100, MBIA 855 882
Portage County Hospital,
Robinson Memorial Hospital,
6.50%, 11/15/03, MBIA 635 665
Portage County Hospital,
Robinson Memorial Hospital,
6.50%, 11/15/04, MBIA 675 714
Portage County Hospital,
Robinson Memorial Hospital,
6.50%, 11/15/05, MBIA 715 762
See notes to financial statements.
61
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Ohio Municipal Bond Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Westlake IDR, Westbay I & II Projects,
Series A, 6.40%, 8/1/09,
Callable 12/13/99 @ 103, FNMA $1,755 $ 1,762
13,901
Housing (8.1%):
Cuyahoga County Multifamily,
Dalebridge Apartments,
6.60%, 10/20/30,
Callable 10/20/05 @ 102, GNMA AMT 2,000 2,037
Cuyahoga County Multifamily,
Water Street Assoc.,
5.60%, 6/20/08, GNMA AMT 370 370
Greater Cincinnati Elderly Housing
Finance Corp., Walnut Towers,
Series A, 6.90%, 8/1/25,
Callable 8/1/04 @ 102, FHA 2,020 2,074
Montgomery County Multifamily Housing,
Creekside Villas Project,
Series A, 6.00%, 9/1/31,
Callable 9/1/09 @ 100 5,000 4,845
Ohio Capital Corp., Housing
Management, Bucyrus Estate,
5.75%, 7/1/06,
Callable 7/1/05 @ 102, MBIA 180 182
Ohio Capital Corp., Housing Management,
Kent Gardens, 6.35%, 7/1/15,
Callable 1/1/03 @ 101, MBIA 1,000 1,014
Ohio Capital Corp., Housing Management,
Springhill Homes,
Series C, 6.50%, 7/1/24,
Callable 1/1/03 @ 103, MBIA 920 938
Ohio Housing Finance Agency,
Residential, Series A-1,
5.70%, 9/1/09, GNMA AMT 1,000 1,014
Ohio Housing Finance Agency,
Residential A-1,
6.35%, 9/1/31,
Callable 9/1/09 @ 100, GNMA 1,500 1,518
13,992
Industrial Development (1.9%):
Broadview Heights IDR, Royalview,
Series A, 6.25%, 7/1/13,
Callable 12/13/99 @ 103, FHA 1,075 1,079
Cuyahoga County IDR,
Southwest Assoc. Project,
6.50%, 6/1/16,
Callable 12/1/04 @ 102, FHA 2,185 2,139
3,218
Public Facilities (Convention,
Sport, Public Buildings) (6.2%):
Cuyahoga County, Gateway Economic
Development Corp.,
Greater Cleveland Ohio Stadium,
6.50%, 9/15/14,
Callable 9/15/03 @ 102,
County Guaranteed AMT 2,300 2,302
State Building Authority,
Administration Building,
Series A, 4.50%, 10/1/09 $1,000 $ 919
State Building Authority,
Administration Building,
Series A, 4.75%, 10/1/17,
Callable 10/1/08 @ 101 1,000 870
State Building Authority,
Adult Correctional Facilities,
Series A, 6.00%, 10/1/07,
Callable 10/1/03 @ 102 2,000 2,079
State Building Authority,
Adult Correctional Facilities,
Series A, 6.13%, 10/1/12,
Callable 10/1/03 @ 102 1,000 1,035
State Building Authority,
DAS Data Center Project,
Series A, 5.13%, 10/1/07 500 499
State Building Authority,
Juvenile Correctional Facilities,
5.00%, 10/1/08 1,750 1,724
State Public Facilities Commission,
Series II-B, 4.63%, 6/1/09,
Callable 6/1/08 @ 100 750 705
Toledo-Lucas County Lodging Tax,
Convention Center Project,
5.50%, 10/1/10,
Callable 10/1/06 @ 102, MBIA 500 509
10,642
Public Improvements (2.9%):
Franklin County Development,
American Chemical Society Project,
4.50%, 10/1/02 1,300 1,284
Franklin County Development,
American Chemical Society Project,
4.50%, 10/1/04 900 873
Franklin County Development,
American Chemical Society Project,
5.00%, 10/1/06 1,350 1,325
State Economic Development,
ABS Industries, Inc. Project,
6.00%, 6/1/04 AMT 455 463
State Economic Development,
Ohio Enterprise Board Fund,
Series 2, 5.60%, 6/1/02 AMT 295 297
State Economic Development,
Ohio Enterprise Board Fund,
Series 4, 6.50%, 12/1/09,
Callable 12/1/04 @ 102 AMT 815 810
5,052
Transportation (0.9%):
State Infrastructure Highway,
5.00%, 12/15/07 1,425 1,411
State Turnpike,
Series B, 4.50%, 2/15/24,
Callable 8/15/08 @ 101, FGIC 200 160
1,571
See notes to financial statements.
62
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Ohio Municipal Bond Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Utility (Sewers, Telephone, Electric) (8.3%):
Cleveland Public Power Systems,
Series A, 7.00%, 11/15/16,
Prerefunded 11/15/04 @ 102, MBIA $ 410 $ 449
Cleveland Public Power Systems,
Series A, 7.00%, 11/15/16,
Prerefunded 11/15/04 @ 102, MBIA 340 373
Cleveland Public Power Systems,
Series A, 7.00%, 11/15/24,
Prerefunded 11/15/04 @ 102, MBIA 1,985 2,178
Cleveland Waterworks, First Mortgage,
Series G, 5.25%, 1/1/04, MBIA 2,000 2,018
Cleveland Waterworks,
5.75%, 1/1/21,
Prerefunded 1/1/06 @ 102, MBIA 940 983
Cuyahoga County Utility System,
Medical Center Co. Project,
Series B, 5.85%, 8/15/10,
Callable 8/15/05 @ 102, MBIA AMT 1,500 1,536
Dayton Water System,
4.15%, 12/1/07, FSA 500 457
Green County Sewer System,
Governmental Enterprise,
5.13%, 12/1/20,
Callable 12/1/08 @ 102, MBIA 750 684
Huber Heights Water Systems,
Capital Appreciation,
0.00%, 12/1/24, MBIA 1,000 230
Huber Heights Water Systems,
Capital Appreciation,
0.00%, 12/1/25, MBIA 1,000 216
Ravenna Waterworks,
3.60%, 12/1/00, AMBAC 255 254
Ravenna Waterworks,
3.70%, 12/1/01, AMBAC 265 $ 259
Ravenna Waterworks,
3.80%, 12/1/02, AMBAC 270 261
Ravenna Waterworks, 3.90%,
12/1/03, AMBAC 280 267
State Water Development Authority,
Dayton Power & Light,
Series C, 6.40%, 8/15/27,
Callable 8/15/02 @ 102 $3,250 $ 3,265
Wilmington Water, 5.25%, 6/15/29,
Callable 6/15/08 @ 101, AMBAC 1,000 903
14,333
Total Revenue Bonds 90,215
Total Municipal Bonds (Cost $169,686) 167,775
Investment Companies (1.0%)
Federated Ohio Municipal
Cash Trust Fund 1,711,742 1,712
Total Investment Companies (Cost $1,712) 1,712
Total Investments (Cost $171,398) (a) -- 98.3% 169,487
Other assets in excess of liabilities -- 1.7% 2,939
TOTAL NET ASSETS -- 100.0% $172,426
(a) Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 2,010
Unrealized depreciation (3,921)
Net unrealized depreciation $(1,911)
AMBAC -- AMBAC Indemnity Corp.
FGIC -- Insured by Financial Guaranty Insurance Corp.
FHA -- Federal Housing Administration
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.
63
<PAGE>
Statements of Assets and Liabilities
The Victory Portfolios April 30, 2000
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
<TABLE>
<CAPTION>
National Ohio
Municipal New York Municipal
Bond Tax-Free Bond
Fund Fund Fund
<S> <C> <C> <C>
ASSETS:
Investments, at value (Cost $35,587; $14,558; & $171,398) $35,485 $14,760 $169,487
Interest and dividends receivable 377 254 2,767
Receivable from brokers for investments sold 997 -- 434
Receivable from affiliates 18 5 4
Prepaid expenses and other assets 18 17 --
Total Assets 36,895 15,036 172,692
LIABILITIES:
Payable to brokers for investments purchased 496 -- 146
Payable for capital shares redeemed 17 -- 2
Accrued expenses and other payables:
Investment advisory fees 7 4 57
Administration fees 1 -- 4
Custodian fees 1 -- 5
Transfer agent fees 15 10 9
Shareholder service fees -- Class A 8 5 13
Shareholder service and 12b-1 fees -- Class G -- -- 22
Other 1 1 8
Total Liabilities 546 20 266
NET ASSETS:
Capital 36,386 14,881 175,141
Undistributed net investment income 31 13 142
Net unrealized appreciation/depreciation from investments (102) 202 (1,911)
Accumulated undistributed net realized gains (losses)
from investment transactions 34 (80) (946)
Net Assets $36,349 $15,016 $172,426
Net Assets
Class A $36,241 $14,745 $ 65,455
Class G 108 271 106,971
Total $36,349 $15,016 $172,426
Outstanding units of beneficial interest (shares)
Class A 3,578 1,232 5,899
Class G 11 23 9,653
Total 3,589 1,255 15,552
Net asset value
Redemption price per share -- Class A $ 10.13 $ 11.96 $ 11.10
Offering and Redemption price per share -- Class G $ 10.14 $ 11.92 $ 11.08
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 $ 10.75 $ 12.69 $ 11.78
</TABLE>
See notes to financial statements.
64
<PAGE>
Statements of Operations
The Victory Portfolios For the Six Months Ended April 30, 2000
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
National Ohio
Municipal New York Municipal
Bond Tax-Free Bond
Fund Fund Fund
<S> <C> <C> <C>
Investment Income:
Interest income $903 $487 $4,912
Dividend income 34 4 101
Total Income 937 491 5,013
Expenses:
Investment advisory fees 103 44 554
Administration fees 28 12 139
Shareholder service fees -- Class A 43 17 84
Shareholder service fees and 12b-1 fees -- Class B 7 9 --
Shareholder service fees and 12b-1 fees -- Class G -- -- 145
Accounting fees 29 26 41
Custodian fees 7 4 23
Legal and audit fees 2 1 12
Trustees' fees and expenses -- -- 2
Transfer agent fees 24 15 5
Registration and filing fees 11 4 19
Printing fees 6 3 12
Other 2 1 5
Total Expenses 262 136 1,041
Expenses voluntarily reduced (56) (27) (189)
Expenses before reimbursement from distributor 206 109 852
Expenses reimbursed by distributor (5) (21) (1)
Net Expenses 201 88 851
Net Investment Income 736 403 4,162
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment transactions 34 (62) (423)
Change in unrealized appreciation/
depreciation from investments (52) 32 230
Net realized/unrealized gains (losses) from investments (18) (30) (193)
Change in net assets resulting from operations $718 $373 $3,969
</TABLE>
See notes to financial statements.
65
<PAGE>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
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,
2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 736 $ 1,778 $ 403 $ 873 $ 4,162 $ 6,495
Net realized gains (losses) from
investment transactions 34 179 (62) (16) (423) (523)
Net change in unrealized
appreciation/depreciation
from investments (52) (2,358) 32 (1,182) 230 (7,432)
Change in net assets resulting
from operations 718 (401) 373 (325) 3,969 (1,460)
Distributions to Shareholders:
From net investment income:
Class A (697) (1,726) (357) (738) (1,517) (3,392)
Class B (20) (70) (43) (134) -- --
Class G -- -- (3) -- (2,572) (3,059)
From net realized gains from
investment transactions (179) (1,095) -- -- -- (711)
In excess of net realized gains
from investment transactions -- -- -- -- -- (574)
Change in net assets from
distributions to shareholders (896) (2,891) (403) (872) (4,089) (7,736)
Capital Transactions:
Proceeds from shares issued 8,053 12,771 1,051 4,093 7,777 40,708
Proceeds from shares issued
in connection with acquisition -- -- -- -- -- 118,155
Proceeds from shares exchanged
from Class B 2,150 -- 3,605 -- -- --
Dividends reinvested 617 2,135 258 583 2,877 4,149
Cost of shares redeemed (12,075) (21,366) (3,621) (7,631) (35,550) (39,078)
Cost of shares exchanged to Class A (2,150) -- (3,605) -- -- --
Change in net assets from
capital transactions (3,405) (6,460) (2,312) (2,955) (24,896) 123,934
Change in net assets (3,583) (9,752) (2,342) (4,152) (25,016) 114,738
Net Assets:
Beginning of period 39,932 49,684 17,358 21,510 197,442 82,704
End of period $ 36,349 $ 39,932 $15,016 $17,358 $172,426 $197,442
Share Transactions:
Issued 794 1,205 88 324 701 3,513
Issued in connection with acquisition -- -- -- -- -- 10,429
Issued in connection with exchange
from Class B 214 -- 258 -- -- --
Reinvested 61 202 22 47 260 362
Redeemed (1,191) (2,034) (303) (603) (3,198) (3,387)
Redeemed in connection with exchange
to Class A (214) -- (258) -- -- --
Change in shares (336) (627) (193) (232) (2,237) 10,917
</TABLE>
See notes to financial statements.
66
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
National Municipal Bond Fund
Class A Shares Class G Shares
Six Six December 17,
Months Year Year Year Year Months Year 1999
Ended Ended Ended Ended Ended Ended Ended through
April 30, October 31, October 31, October 31, October 31, October 31, April 30, April 30,
2000 1999 1998 1997 1996 1995<F4> 1995<F5> 2000<F7>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 10.17 $ 10.92 $ 10.51 $ 10.16 $ 10.06 $ 9.59 $ 9.64 $ 10.13
Investment Activities
Net investment income 0.20 0.41 0.43 0.45 0.44 0.24 0.44 0.16
Net realized and
unrealized gains
(losses) from investments 0.01 (0.51) 0.41 0.35 0.13 0.46 (0.05) (0.01)
Total from
Investment
Activities 0.21 (0.10) 0.84 0.80 0.57 0.70 0.39 0.15
Distributions
Net investment income (0.20) (0.41) (0.43) (0.45) (0.44) (0.23) (0.44) (0.14)
In excess of net
realized gains -- -- -- -- (0.03) -- -- --
Net realized gains (0.05) (0.24) -- -- -- -- -- --
Total Distributions (0.25) (0.65) (0.43) (0.45) (0.47) (0.23) (0.44) (0.14)
Net Asset Value,
End of Period $ 10.13 $ 10.17 $ 10.92 $ 10.51 $ 10.16 $ 10.06 $ 9.59 $ 10.14
Total Return (excludes
sales charges) 2.03%<F2> (0.99)% 8.15% 8.10% 5.83% 7.39%<F2> 4.21% 1.52%<F2>
Ratios/Supplemental Data:
Net Assets,
End of Period (000) $36,241 $37,579 $47,296 $47,705 $36,958 $11,964 $5,118 $ 108
Ratio of expenses to
average net assets 1.01%<F3> 0.86% 0.67% 0.36% 0.29% 0.02%<F3> 0.20% 1.49%<F3>
Ratio of net investment income
(loss) to average net assets 3.96%<F3> 3.80% 4.02% 4.43% 4.37% 5.11%<F3> 5.01% 3.51%<F3>
Ratio of expenses to average
net assets<F1> 1.31%<F3> 1.24% 1.22% 1.27% 1.35% 2.57%<F3> 3.95% 23.97%<F3>
Ratio of net investment income
to average net assets<F1> 3.66%<F3> 3.42% 3.47% 3.52% 3.31% 2.56%<F3> 1.26% (18.97)%<F3>
Portfolio turnover<F6> 83% 127% 152% 154% 143% 72% 52% 83%
<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.
67
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
New York Tax-Free Fund
Class A Shares Class G Shares
Six December 21,
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,
2000 1999 1998 1997 1996 1995<F4> 2000<F6>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 11.99 $ 12.80 $ 12.68 $ 12.73 $ 12.85 $ 12.39 $11.94
Investment Activities
Net investment income 0.31 0.61 0.61 0.68 0.68 0.87 0.23
Net realized and
unrealized gains
(losses) from investments (0.03) (0.81) 0.14 0.03 (0.11) 0.42 0.01
Total from
Investment Activities 0.28 (0.20) 0.75 0.71 0.57 1.29 0.24
Distributions
Net investment income (0.31) (0.61) (0.61) (0.72) (0.68) (0.83) (0.26)
In excess of net
investment income -- -- -- -- -- -- --
Net realized gains -- -- (0.02) (0.04) (0.01) -- --
Total Distributions (0.31) (0.61) (0.63) (0.76) (0.69) (0.83) (0.26)
Net Asset Value,
End of Period $ 11.96 $ 11.99 $ 12.80 $ 12.68 $ 12.73 $ 12.85 $11.92
Total Return (excludes
sales charges) 2.46%<F2> (1.74)% 6.12% 5.77% 4.53% 10.82% 2.06%<F2>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $14,745 $14,084 $18,073 $15,335 $13,754 $15,374 $ 271
Ratio of expenses to
average net assets 0.96%<F3> 0.95% 0.94% 0.94% 0.93% 1.16% 1.54%<F3>
Ratio of net investment income
to average net assets 5.14%<F3> 4.82% 4.85% 5.32% 5.25% 5.50% 4.61%<F3>
Ratio of expenses to
average net assets<F1> 1.56%<F3> 1.42% 1.35% 1.49% 1.58% 1.96% 8.72%<F3>
Ratio of net investment income
to average net assets<F1> 4.54%<F3> 4.35% 4.44% 4.77% 4.60% 4.70% (2.57)%<F3>
Portfolio turnover<F5> 16% 28% 38% 11% -- 18% 16%
<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> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
<F6> Period from commencement of operations.
</FN>
</TABLE>
See notes to financial statements.
68
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Ohio Municipal Bond Fund
Class A Shares Class G Shares
Six Six March 26,
Months Year Year Year Year Year Months 1999
Ended Ended Ended Ended Ended Ended Ended through
April 30, October 31, October 31, October 31, October 31, October 31, April 30, October 31,
2000 1999 1998 1997 1996 1995 2000 1999<F4><F5>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 11.11 $ 12.04 $ 11.72 $ 11.43 $ 11.32 $ 10.33 $ 11.09 $ 11.79
Investment Activities
Net investment income 0.26 0.49 0.51 0.53 0.54 0.52 0.25 0.28
Net realized and
unrealized gains
(losses) from investments (0.02) (0.75) 0.42 0.29 0.11 1.00 (0.01) (0.70)
Total from
Investment Activities 0.24 (0.26) 0.93 0.82 0.65 1.52 0.24 (0.42)
Distributions
Net investment income (0.25) (0.49) (0.51) (0.53) (0.54) (0.52) (0.25) (0.28)
In excess of net
investment income -- -- -- -- -- (0.01) -- --
Net realized gains -- (0.10) (0.10) -- -- -- -- --
In excess of net
realized gains -- (0.08) -- -- -- -- -- --
Total Distributions (0.25) (0.67) (0.61) (0.53) (0.54) (0.53) (0.25) (0.28)
Net Asset Value, End of Period $ 11.10 $ 11.11 $ 12.04 $ 11.72 $ 11.43 $ 11.32 $ 11.08 $ 11.09
Total Return (excludes
sales charges) 2.05%<F2> (2.29)% 8.18% 7.37% 5.87% 15.03 2.16%<F2> (3.59)%<F2>
Ratios/Supplemental Data:
Net Assets,
End of Period (000) $65,455 $74,984 $82,704 $78,043 $73,463 $60,031 $106,971 $122,458
Ratio of expenses to
average net assets <F7> 0.94%<F3> 0.92% 0.91% 0.89% 0.89% 0.66% 0.91%<F3> 0.90%<F3>
Ratio of net investment income
to average net assets <F7> 4.50%<F3> 4.20% 4.31% 4.60% 4.72% 4.78% 4.52%<F3> 4.18%<F3>
Ratio of expenses to
average net assets<F1> 1.15%<F3> 1.14% 1.13% 0.99% 1.05% 0.94% 1.12%<F3> 1.12%<F3>
Ratio of net investment income
to average net assets<F1> 4.29%<F3> 3.98% 4.09% 4.50% 4.56% 4.49% 4.31%<F3> 3.96%<F3>
Portfolio turnover <F6> 35% 112% 95% 74% 81% 125% 35% 112%
<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> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
<F7> On December 15, 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 Class G shares of the fund at a maximum of .91%
until at least April 1, 2001.
</FN>
</TABLE>
See notes to financial statements.
69
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Balanced Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (3.7%)
Household Finance, 6.10%, 5/1/00 $ 14,578 $ 14,578
Total Commercial Paper (Cost $14,578) 14,578
Common Stocks (55.4%)
Aerospace/Defense (0.6%):
Boeing Co. 65,000 2,580
Aluminum (0.8%):
Alcoa, Inc. (d) 48,400 3,140
Banks (3.4%):
Bank of America Corp. 72,090 3,532
First Union Corp. (d) 21,700 692
Mellon Financial Corp. 148,000 4,754
Suntrust Banks, Inc. 10,000 508
Wells Fargo Co. 95,000 3,901
13,387
Chemicals -- General (0.2%):
Air Products & Chemicals, Inc. (d) 26,000 808
Chemicals -- Specialty (0.4%):
Eastman Chemical 15,000 785
Sigma-Aldrich 31,000 910
1,695
Computer Services (0.3%):
Electronic Data Systems 20,000 1,375
Computers & Peripherals (4.5%):
Cisco Systems, Inc. (d) (b) 89,000 6,169
Hewlett-Packard Co. 44,800 6,048
International Business Machines Corp. 49,000 5,470
17,687
Cosmetics & Related (1.0%):
Avon Products (d) 99,200 4,117
Diversified (0.3%):
Berkshire Hathaway, Inc. (b) 619 1,186
Electrical Equipment (0.4%):
Emerson Electric Co. 28,200 1,547
Financial Services (4.1%):
Citigroup, Inc. 60,000 3,565
Fannie Mae 53,200 3,209
Franklin Resources, Inc. 107,000 3,450
Household International, Inc. 80,000 3,340
Morgan Stanley Dean Witter & Co. 34,000 2,610
16,174
Food Processing & Packaging (1.1%):
Conagra, Inc. 108,000 2,039
Sara Lee Corp. 161,000 2,415
4,454
Food Products (0.8%):
General Mills, Inc. (d) 91,000 3,310
Forest Products -- Lumber
& Paper (0.5%):
Bowater, Inc. (d) 16,000 $ 880
Mead Corp. 28,000 975
1,855
Health Care (1.3%):
Columbia HCA Healthcare Corp. 87,500 2,488
Medtronic, Inc. (d) 55,000 2,857
5,345
Household Goods -- Appliances,
Furnishings & Electronics (0.3%):
Newell Rubbermaid, Inc. (d) 54,600 1,375
Industrial Goods & Services (0.4%):
Parker Hannifin Corp. 35,000 1,628
Insurance (2.4%):
Allstate Corp. (d) 137,884 3,257
American General Corp. 24,000 1,344
Everest Reinsurance Group Ltd. 25,500 746
Lincoln National Corp. 72,000 2,507
Torchmark Corp. 65,000 1,629
9,483
Insurance -- Multi-Line (0.1%):
American International Group, Inc. 5,000 548
Machinery & Equipment (0.2%):
Deere & Co. 15,000 606
Manufacturing -- Miscellaneous (2.7%):
General Electric Co. 46,300 7,282
Honeywell International, Inc. 37,400 2,094
Textron, Inc. 18,800 1,164
10,540
Media (2.2%):
Time Warner, Inc. (d) 31,000 2,788
Viacom, Inc. (b) (d) 107,400 5,840
8,628
Oil & Gas Exploration,
Production & Services (3.2%):
Enron Corp. 65,200 4,544
Exxon Mobil Corp. 73,895 5,740
Transocean Sedco Forex, Inc. 10,067 473
USX-Marathon Group, Inc. 80,000 1,865
12,622
Oil-Integrated Companies (2.9%):
Amerada Hess Corp. (d) 18,000 1,145
Chevron Corp. 57,001 4,853
Royal Dutch Petroleum Co. 4,900 281
Texaco, Inc. (d) 76,000 3,762
Unocal Corp. 51,000 1,648
11,689
Oilfield Services & Equipment (1.4%):
Baker Hughes, Inc. 54,600 1,737
Schlumberger Ltd. 52,000 3,981
5,718
See notes to financial statements.
70
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Balanced Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Paper Products (0.3%):
International Paper Co. 35,000 $ 1,286
Pharmaceuticals (4.7%):
Abbott Laboratories 95,000 3,652
American Home Products Corp. 53,800 3,023
Bristol-Myers Squibb Co. 41,000 2,150
Pfizer, Inc. 214,600 9,039
Schering-Plough Corp. 20,000 806
18,670
Retail (1.3%):
May Department Stores Co. 44,500 1,224
Target Corp. 56,800 3,781
5,005
Retail -- Drug Stores (0.4%):
Walgreen Co. 61,200 1,721
Retail -- Specialty Stores (0.6%):
Autozone, Inc. (d) (b) 30,000 688
Lowe's Cos., Inc. 33,000 1,634
2,322
Semiconductors (2.5%):
Altera Corp. (b) 15,000 1,534
Intel Corp. 65,800 8,344
9,878
Software & Computer Services (2.3%):
Compuware Corp. (b) 10,000 126
Microsoft Corp. (b) 58,000 4,046
Oracle Corp. (d) (b) 61,250 4,895
Parametric Technology Corp. (b) 30,000 245
9,312
Steel (0.1%):
USX-U.S. Steel Group, Inc. 17,100 429
Telecommunications -- Equipment (1.6%):
Motorola, Inc. (d) 48,000 5,715
Tellabs 10,000 548
6,263
Tools (0.2%):
Kennametal, Inc. (d) 28,549 821
Transportation (0.5%):
Union Pacific Corp. (d) 51,000 2,148
Utilities -- Electric (0.5%):
Duke Energy Corp. 35,000 2,013
Utilities-Telecommunications (4.9%):
ALLTEL Corp. (d) 53,000 3,531
AT&T Corp. (d) 78,177 3,650
GTE Corp. 35,500 2,405
SBC Communications, Inc. 86,856 3,805
WorldCom, Inc. (d) (b) 123,938 5,631
19,022
Total Common Stocks (Cost $151,334) 220,387
Foreign Common Stocks (6.4%)
Australia (0.2%):
Beverages (0.0%):
Foster's Brewing Group Ltd. 23,400 $ 59
Computers & Peripherals (0.0%):
Solution 6 Holdings Ltd. 4,600 14
Entertainment (0.1%):
Aristocrat Leisure Ltd. 20,700 184
Financial Services (0.0%):
Lend Lease Corp. Ltd. 3,500 38
Media (0.1%):
News Corp. Ltd. 5,300 67
Publishing & Broadcasting Ltd. 15,300 118
185
Medical Services -- Hospital
Management & Nursing Homes (0.0%):
Gradipore Ltd. 5,200 18
Multimedia (0.0%):
News Corporation Ltd. 2,200 24
Telecommunication Services (0.0%):
Davnet Ltd. 11,600 17
Telecommunications (0.0%):
Cable & Wireless Optus Ltd. 32,400 104
Erg Ltd. 2,700 13
117
Utilities -- Telecommunications (0.0%):
Telstra Corp. Ltd., ADR 5,000 108
Total Australia 764
Brazil (0.1%):
Commercial Banking (0.0%):
Unibanco ADR 1,000 25
Food Distributors,
Supermarkets & Wholesalers (0.0%):
Companhia Brasileira de Distribuicao
Grupo Pao de Acucar 1,900 54
Utilities -- Electric (0.0%):
CIA Paranaense De Energia-Copel 4,701 35
Utilities -- Telecommunications (0.1%):
Telecomunicacoes Brasileiras SA, ADR 800 94
Total Brazil 208
Britain (0.9%):
Advertising (0.0%):
WPP Group PLC 3,300 53
Banks (0.1%):
Barclays Bank PLC 6,800 175
HSBC Holdings PLC 9,447 106
Lloyds TSB Group PLC 11,177 110
391
See notes to financial statements.
71
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Balanced Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Food Distributors,
Supermarkets & Wholesalers (0.0%):
Compass Group PLC 13,500 $ 194
Gas & Electric Utility (0.0%):
Centrica 14,700 52
Manufacturing -- Miscellaneous (0.0%):
Siebe PLC 31,028 150
Media (0.0%):
Pearson PLC 4,400 151
Oil & Gas Exploration,
Production & Services (0.1%):
BP Amoco PLC 67,869 589
Pharmaceuticals (0.3%):
Glaxo Wellcome PLC 12,188 379
Smithkline Beecham PLC 20,027 276
655
Retail (0.0%):
Dixons Group PLC 19,524 80
Software & Computer Services (0.0%):
Sema Group PLC 4,700 76
Telecommunications (0.3%):
Energis PLC (b) 1,600 79
Vodafone AirTouch PLC 180,064 828
907
Telecommunications -- Equipment (0.0%):
COLT Telecom Group PLC (b) 1,400 60
Utilities-Telecommunications (0.1%)
British Telecom PLC 18,900 339
Cable & Wireless 6,010 100
439
Total Britain 3,797
Canada (0.3%):
Manufacturing -- Miscellaneous (0.1%):
Bombardier, Inc. 8,900 239
Oil & Gas Exploration,
Production & Services (0.0%):
Suncor Energy, Inc. 4,000 171
Telecommunications (0.0%):
GT Group Telecom, Inc.- Class B 1,055 14
Partner Communications (b) 2,800 30
44
Telecommunications -- Equipment (0.2%):
Nortel Networks Corp. 5,502 621
Total Canada 1,075
Denmark (0.0%):
Telecommunications (0.0%):
Tele Danmark, Series B 1,510 $ 111
Total Denmark 111
Finland (0.3%):
Banks (0.0%):
Nordbanken FDR 17,438 111
Telecommunications (0.0%):
Sonera OYJ 2,100 116
Telecommunications -- Equipment (0.3%):
Nokia Oyj -- Class A 14,136 812
Total Finland 1,039
France (0.7%):
Banks (0.0%):
Banque Nationale de Paris 1,483 120
Credit Lyonnais SA (b) 1,100 43
163
Building Materials (0.0%):
Compagnie de Saint Gobain 720 99
Lafarge 700 58
157
Commercial Services (0.1%):
Vivendi 3,340 331
Computer Services (0.0%):
Cap Gemini SA 429 84
Construction (0.0%):
Bouygues 70 45
Electronic & Electrical-General (0.0%):
Schneider SA 960 63
Electronic
Components/Instruments (0.0%):
Thomson Multimedia 600 59
Food Products (0.0%)
Carrefour Supermarche 2,260 147
Insurance (0.0%):
AXA 590 88
Leisure -- Recreation, Gaming (0.0%):
Casino Guichard Perrachon 850 78
Oil & Gas Exploration,
Production & Services (0.2%):
Total Fina SA 3,074 469
Publishing (0.0%):
Lagardere S.C.A 700 48
Retail -- Department Stores (0.1%):
Pinault-Printemps-Redoute 1,130 228
Semiconductors (0.1%):
STMicroelectronics N.V. 1,470 281
See notes to financial statements.
72
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Balanced Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Telecommunications -- Equipment (0.1%):
Alcatel SA 1,300 $ 302
Utilities -- Telecommunications (0.1%):
France Telecom SA 2,070 321
Utilities -- Water (0.0%)
Suez Lyonnaise DES Eaux 480 75
Total France 2,939
Germany (0.4%)
Automobiles (0.0%):
Bayerische Motoren Werke AG 4,200 112
DaimlerChrysler AG 1,157 67
179
Banks (0.0%):
Dresdner Bank AG 2,020 83
Chemicals -- General (0.0%):
BASF AG 4,100 178
Insurance (0.2%):
Allianz AG 770 297
Muenchener
Rueckversicherungs-AG (Registered) 500 146
443
Manufacturing -- Miscellaneous (0.1%):
Siemens AG 1,900 281
Software & Computer Services (0.0%):
SAP AG 130 61
Telecommunication Services (0.0%):
T-Online International (b) 250 9
Telecommunications (0.1%):
Deutsche Telekom 5,790 379
Total Germany 1,613
Greece (0.0%):
Banks (0.0%):
Alpha Credit Bank 600 33
National Bank of Greece SA 2,335 100
133
Utilities -- Telecommunications (0.0%):
Hellenic Telecommunications
Organization SA 1,876 42
Total Greece 175
Hong Kong (0.2%):
Computer Services (0.0%):
iSteelAsia.com (b) 30,459 2
Financial Services (0.1%):
Guoco Group Ltd. 43,000 100
Hutchison Whampoa Ltd. 16,000 233
333
Media (0.0%):
South China Morning Post 64,000 68
Real Estate (0.0%):
Cheung Kong 10,000 $ 120
Sun Hung Kai Properties 8,000 63
183
Telecommunications (0.1%):
Cable & Wireless HKT Ltd. 58,143 137
China Telecommunications Ltd. 13,000 94
231
Wholesale & International Trade (0.0%):
Van Shung Chong Holdings Ltd. 39,000 10
Total Hong Kong 827
Hungary (0.0%):
Utilities -- Telecommunications (0.0%):
Magyar Tavkozlesi Rt., ADR 4,300 150
Total Hungary 150
Ireland (0.0%):
Building Materials (0.0%):
CRH PLC 9,567 153
Total Ireland 153
Israel (0.0%):
Banks (0.0%):
Bank Leumi Le-Israel 20,000 44
Total Israel 44
Italy (0.2%):
Oil & Gas Exploration,
Production & Services (0.0%):
ENI SpA 1 0
Telecommunications (0.1%)
TIM SpA 35,000 335
Utilities -- Telecommunications (0.1%)
Telecom Italia SpA 16,000 224
Telecom Italia SpA 20,383 129
353
Total Italy 688
Japan (1.5%):
Banks (0.0%):
Industrial Bank Of Japan Ltd. 5,000 41
Beverages (0.1%):
Kirin Brewery Co. Ltd. 20,000 260
Chemicals -- General (0.1%):
Kaneka Corp. 12,000 154
Shin-Etsu Chemical Co. 5,000 265
419
Computers & Peripherals (0.1%):
Fujitsu Ltd. 9,000 255
Construction (0.0%):
Sekisui House Ltd. 3,000 27
Cosmetics & Related (0.1%):
KAO Corp. 9,000 274
See notes to financial statements.
73
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Balanced Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Electronic & Electrical -- General (0.3%):
Fanuc Ltd. 2,000 $ 209
Murata MFG Co. Ltd. 2,000 389
Secom Co. Ltd. 3,000 252
Sharp Corp. 17,000 328
Sony Corp 1,200 138
1,316
Engineering (0.0%):
Nippon Comsys Corp. 4,000 77
Financial Services (0.0%):
Daiwa Securities Group, Inc. 3,000 46
Health Care (0.1%):
Hoya Corp. 3,000 305
Terumo 4,000 121
426
Insurance (0.0%):
Tokio Marine & Fire Insurance 16,000 156
Machinery & Equipment (0.0%):
Daifuku Co. Ltd. 5,000 49
Makino Milling Machine Co. 7,000 70
119
Manufacturing -- Miscellaneous (0.0%):
Taiyo Yuden Co. Ltd. 2,000 142
Office Equipment & Supplies
(Non-Computer Related) (0.1%):
Canon, Inc. 2,000 91
Ricoh Corp. Ltd. 13,000 275
366
Paper and Forest Products (0.0%):
Hokuetsu Paper Mills Ltd. 6,000 44
Rengo Company Ltd. 6,000 34
78
Pharmaceuticals (0.0%):
Takeda Chemical Industries 3,000 197
Retail (0.2%):
Fast Retailing Co. Ltd. 200 88
Ryohin Keikaku Co. Ltd. 1,200 223
Seven-Eleven Japan 4,000 493
804
Telecommunication Services (0.0%):
Bellsystem 24, Inc. 100 69
Telecommunications (0.2%):
NTT Data Corp. 21 280
NTT Mobile Communications
Network, Inc. 13 434
714
Telecommunications -- Equipment (0.1%):
Hikari Tsushin, Inc. 200 29
Matsushita Communication 2,000 313
342
Utilities -- Telecommunications (0.1%):
Nippon Telegraph & Telephone Corp. 22 $ 273
Total Japan 6,401
Korea (0.1%):
Electronic
Components/Instruments (0.1%):
Samsung Electronics 1,700 269
Total Korea 269
Malaysia (0.0%):
Automobiles (0.0%):
Oriental Holdings Berhad 42,000 100
Telecommunication Services (0.0%):
Telekom Malaysia 7,000 24
Total Malaysia 124
Mexico (0.1%):
Financial Services (0.0%):
Grupo Financiero
Bancomer -- Class O (b) 179,000 81
Retail (0.0%):
Controladora Comercial
Mexicana SA (b) 49,000 53
Telecommunications (0.1%):
Telefonos De Mexico SA, Series L 28,000 83
Total Mexico 217
Netherlands (0.3%):
Banks (0.2%):
ING Groep NV 4,908 268
Chemicals -- General (0.0%):
Akzo Nobel 2,900 119
Computers & Peripherals (0.0%):
CMG PLC 1,400 90
Electronic
Components/Instruments (0.1%):
Philips Electronics 5,120 229
Financial Services (0.0%):
Fortis (NL) NV 4,200 106
Food Products (0.0%):
Unilever NV-CVA 780 36
Insurance (0.0%):
Aegon NV 1,754 126
Oil & Gas Exploration,
Production & Services (0.0%):
Royal Dutch Petroleum Co. 3,000 173
Publishing (0.0%):
Wolters Kluwer 3,340 79
Total Netherlands 1,226
New Zealand (0.0%):
Telecommunications (0.0%):
Telecom Corp. of New Zealand Ltd. 10,000 42
Total New Zealand 42
See notes to financial statements.
74
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Balanced Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Norway (0.0%):
Banks (0.0%):
Den Norske Bank 22,000 $ 77
Total Norway 77
Portugal (0.0%):
Telecommunications -- Equipment (0.0%):
PT Multimedia Servicos (b) 700 49
Total Portugal 49
Singapore (0.1%):
Airlines (0.0%):
Singapore Airlines Ltd. 9,000 93
Electronics (0.1%):
Natsteel Electronics Ltd. 19,000 110
Real Estate (0.0%):
Pacific Century Region
Developments Ltd. 1,000 8
Total Singapore 211
South Africa (0.1%):
Banks (0.1%):
ABSA Group Ltd. 25,100 89
Computers & Peripherals (0.0%):
Comparex Holdings Ltd. 29,100 43
Datatec Ltd. 3,400 25
Dimension Data Holdings Ltd. 2,000 13
81
Diversified (0.0%)
Rembrandt Group 6,600 51
Total South Africa 221
South Korea (0.1%):
Steel (0.0%):
Pohang Iron & Steel Co. Ltd., ADR 2,000 42
Telecommunications (0.1%):
Hanara Telecom, Inc. ADR (b) 1,000 8
Korea Telecom Corp. ADR (b) 4,200 145
153
Utilities -- Electric (0.0%):
Korea Electric Power Corp., ADR 3,500 57
Total South Korea 252
Spain (0.2%):
Banks (0.1%):
Banco Bilbao Vizcaya SA 6,000 82
Banco Santander Central Hispano SA 10,520 110
192
Travel Services (0.0%):
Amadeus Global Travel
Distribution -- Class A (b) 7,110 88
Utilities -- Telecommunications (0.1%):
Telefonica SA (b) 15,462 345
Total Spain 625
Sweden (0.3%):
Insurance (0.0%):
Skandia Forsakrings AB 2,480 $ 119
Retail (0.0%):
Hennes & Mauritz AB -- B Shares 2,000 53
Telecommunications -- Equipment (0.3%):
Telefonaktiebolaget LM Ericsson 9,600 855
Total Sweden 1,027
Switzerland (0.2%):
Commercial Services (0.0%):
Adecco SA 240 197
Food Products (0.0%):
Nestle SA, Registered 50 88
Pharmaceuticals (0.2%):
Novartis AG 200 280
Roche Holding AG 25 262
542
Total Switzerland 827
Taiwan (0.1%):
Semiconductors (0.1%):
Taiwan Semiconductor
Manufacturing Co. Ltd., ADR (b) 4,060 212
Total Taiwan 212
Thailand (0.0%):
Industrial Goods & Services (0.0%):
National Petrochemical PLC 14,400 16
Total Thailand 16
Turkey (0.0%):
Banks (0.0%):
Yapi ve Kredi Bankasi AS, GDR 1,808 58
Electronic
Components/Instruments (0.0%):
Vestel Elektronik Sanayi 70,000 26
Total Turkey 84
Total Foreign Common Stocks (Cost $18,880) 25,463
Preferred Stocks (0.0%)
Germany (0.0%):
Medical Services -- Hospital
Management & Nursing Homes (0.0%):
Fresenius AG-Preferred 400 86
Total Preferred Stocks (Cost $71) 86
See notes to financial statements.
75
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Balanced Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Asset Backed Securities (1.6%):
Capital Auto Receivables Asset Trust,
Series 1999-2, Class A2,
6.06%, 6/15/02 $ 740 $ 735
CIT Recreational Vehicle,
Series 1999-A, Class A-2,
5.78%, 7/15/08 1,420 1,397
Ford Credit Auto Owner Trust,
Series 1999-C, Class A4,
6.08%, 9/16/02 1,070 1,059
MBNA Master Credit Card Trust,
Series 1998-D, Class A,
5.80%, 12/15/05 1,400 1,339
Premier Auto Trust, Series 1998-5,
Class A3, 5.07%, 7/8/02 800 788
Residential Asset Securities Corp.,
Series 1999-KS, Class A3,
7.18%, 10/1/29 880 864
Total Asset Backed Securities (Cost $6,306) 6,182
Convertible Bonds (0.0%)
Banks (0.0%):
Mitsubishi Bank International
Finance Bermuda,
Convertible Subordinated Notes,
3.00%, 11/30/02,
Callable 11/25/02 @ 121.6 114 122
Total Convertible Bonds (Cost $134) 122
Collateralized Mortgage Obligations (0.4%)
GS Mortgage Securities Corp.
Series 1998-Gl2 Cl A2,
6.56%, 4/13/31 785 726
LB Commericial Conduit Mortgage Trust,
Series 1999-C1, Class A1,
6.41%, 8/15/07 753 718
Total Collateralized
Mortgage Obligations (Cost $1,466) 1,444
Corporate Bonds (11.6%)
Aerospace/Defense (0.6%):
Lockheed Martin Corp,
7.95%, 12/1/05 550 541
Lockheed Martin Corp.,
8.20%, 12/1/09 190 184
Raytheon Co., 8.20%, 3/1/06 1,110 1,105
Raytheon Co., 6.75%, 8/15/07 740 672
2,502
Airlines (0.1%):
Delta Air Lines, 8.30%, 12/15/29 600 538
Automobiles (0.7%):
Chrysler Financial Corp.,
5.69%, 11/15/01 $ 1,025 $ 1,001
Daimler-Chrylser
North American Holdings Corp.,
6.63%, 9/21/01 1,349 1,333
TRW, Inc., 6.45%, 6/15/01 560 550
2,884
Banks (0.3%):
Bank Of America, 7.80%, 2/15/10 (d) 795 793
First Union Capital, 7.95%, 11/15/29 345 324
1,117
Beverages (0.1%):
J. Seagram & Sons, Inc.,
6.25%, 12/15/01 300 293
Broadcasting/Cable (0.2%):
Continental Cablevision,
8.88%, 9/15/05 335 350
Time Warner, Inc., 6.63%, 5/15/29 585 486
836
Building Materials (0.1%):
Owens Corning, 7.50%, 5/1/05 410 390
Commercial Banking (0.5%):
Abbey National PLC,
6.70%, 6/29/49 425 379
Bank Of Tokyo-Mitsubishi,
8.40%, 4/15/10 270 271
Korea Development Bank,
6.50%, 11/15/02 535 515
Royal Bank Of Scotland,
9.12% 3/31/49 645 650
1,815
Computers & Peripherals (0.1%):
IBM Credit Corp, 6.45%, 11/12/02 540 529
Cosmetics & Related (0.1%):
Avon Products, 7.15%, 11/15/09 555 515
Diversified (0.1%):
Williams Cos., Inc., 6.13%, 12/1/03 450 423
Electronic & Electrical -- General (0.3%):
PP&L Capital Funding,
7.75%, 4/15/05 575 564
Sony Corp., 6.13%, 3/4/03 195 188
Texas Instruments, Inc.,
7.00%, 8/15/04 560 548
1,300
Financial Services (2.4%):
AT&T Capital Corp., 6.75%, 2/4/02 120 119
AT&T Capital Corp., 6.60%, 5/15/05 620 590
CITGroup Inc., 7.38%, 3/15/03 (d) 1,240 1,229
Citigroup Capital II, 7.75%, 12/1/36 320 290
Duke Capital Corp., 8.00%, 10/1/19 565 544
Finova Capital Corp, 7.25%, 11/8/04 (d) 990 908
See notes to financial statements.
76
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Balanced Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Ford Motor Credit Co.,
6.70%, 7/16/04 $ 100 $ 96
Ford Motor Credit Co.,
7.38%, 10/28/09 (d) 665 644
General Electric Capital Corp.,
6.33%, 9/17/01 970 958
General Electric Capital Corp.,
6.52%, 10/8/02 320 314
General Electric Capital Corp.,
7.00%, 2/3/03 (d) 640 634
Goldman Sachs Group, Inc.,
7.80%, 1/28/10 (d) 535 525
Heller Financial, 6.85% 5/15/31 805 761
MBNA Master Credit Card
Trust 2000-A Class C,
7.90%, 7/16/07 545 540
Morgan Stanley Dean Witter,
7.13%, 1/15/03 1,710 1,690
9,842
Governments (Foreign) (0.3%):
Province Of Ontario, 7.38%, 1/27/03 640 640
Republic Of Korea, 8.88%, 4/15/08 535 552
1,192
Industrial Goods & Services (0.4%):
Comdisco, Inc., 6.00%, 1/30/02 535 517
Tyco International Group,
6.13%, 6/15/01 500 493
Tyco International Group,
6.88%, 9/5/02 410 402
1,412
Insurance (0.7%):
Allstate Corp., 7.20%, 12/1/09 475 445
American General Finance,
7.45%, 1/15/05 390 384
Aon Capital Trust A,
8.21%, 1/1/27 (d) 695 650
Liberty Mutual Insurance,
8.20%, 5/4/07 (c) (d) 780 781
Metropolitan Life Insurance Co.,
6.30%, 11/1/03 (c) 635 610
2,870
Investment Company (0.1%):
Barclays Bank NY, 7.40%, 12/15/09 495 475
Machinery & Equipment (0.1%):
Deere & Co., 6.55%, 10/1/28 530 449
Manufactured Housing (0.1%):
Oakwood Homes Corp., 7.88%, 3/1/04 520 281
Manufacturing -- Consumer Goods (0.1%):
Tyco International Group,
6.38%, 6/15/05 535 501
Media (0.6%):
Telecommunications, Inc.,
9.80%, 2/1/12 $ 920 $ 1,044
Time Warner, Inc., 7.75%, 6/15/05 760 755
Viacom, Inc., 7.75%, 6/1/05 610 605
2,404
Oil & Gas Exploration,
Production & Services (0.6%):
Amerada Hess Corp., 7.79%, 10/1/29 830 784
Anadarko Petroleum Corporation,
7.20%, 3/15/29 520 468
Conoco, Inc., 6.95%, 4/15/29 205 184
Pemex Finance Ltd., 9.03%, 2/15/11 585 596
Union Oil Co. of California,
7.50%, 2/15/29 (d) 335 317
2,349
Oilfield Services & Equipment (0.1%):
Baker Hughes, Inc., 6.88%, 1/15/29 615 544
Pipelines (0.5%):
Enron Corp., 7.38%, 5/15/19 475 435
Kinder Morgan, Inc., 8.00%, 3/15/05 370 366
Occidental Petroleum, 6.50% 4/1/05 360 334
Williams Cos., 6.63%, 11/15/04 805 765
1,900
Real Estate (0.3%):
Cabot Industrial Property LP,
7.13%, 5/1/04 325 306
Duke Realty LP, 7.38%, 9/22/05 535 514
EOP Operating LP, 8.38%, 3/15/06 430 427
1,247
Retail (0.2%)
Dayton Hudson Co., 6.80%, 10/1/01 345 341
J.C. Penny & Co., Inc., 7.60%, 4/1/07 (d) 190 162
Rohm & Haas Co, 7.85%, 7/15/29 185 184
687
Retail -- Specialty Stores (0.1%):
Lowe's Cos., Inc., 6.50%, 3/15/29 420 351
Software & Computer Services (0.4%):
Sun Microsystems, Inc., 7.35%, 8/15/04 535 526
Sun Microsystems, Inc., 7.65%, 8/15/09 1,000 988
1,514
Steel (0.1%):
USX Corp., 7.20%, 2/15/04 280 272
Telecommunications (0.4%):
Vodafone Airtouch PLC, 7.75%, 2/15/10 195 192
Vodafone Airtouch PLC, 7.88%, 2/15/30 530 517
Worldcom, Inc., 6.13%, 8/15/01 770 760
1,469
Tobacco & Tobacco Products (0.1%):
R.J. Reynolds Tobacco, 7.38%, 5/15/03 270 236
See notes to financial statements.
77
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Balanced Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Utilities -- Electric (0.7%):
Edison International, Inc.,
6.88%, 9/15/04 $ 460 $ 440
Empresa Nacional Electric,
7.75%, 7/15/08 665 611
Korea Electric Power,
6.34%, 12/1/03 (d) 820 763
PECO 2000a Class A2,
7.30%, 9/1/04 900 899
2,713
Utilities -- Telecommunications (0.1%):
GTE Corp., 6.94%, 4/15/28 (d) 510 458
Total Corporate Bonds (Cost $47,734) 46,308
U.S. Treasury Obligations (0.2%)
U. S. Treasury Strips (0.2%):
RFCSP Strip, 0.00%, 7/15/20 2,999 821
Total U.S. Treasury Obligations (Cost $804) 821
U.S. Treasury Securities (7.9%)
U.S. Treasury Bonds (3.3%):
7.79%, 11/15/07 (d) 490 502
10.63%, 8/15/15 (d) 949 1,343
7.50%, 11/15/16 (d) 1,010 1,133
8.75%, 8/15/20 (d) 1,883 2,411
8.00%, 11/15/21 (d) 2,175 2,617
7.13%, 2/15/23 (d) 1,370 1,514
6.50%, 11/15/26 (d) 1,748 1,815
6.13%, 8/15/29 (d) 1,855 1,857
13,192
U.S. Treasury Notes (4.6%):
4.63%, 11/30/00 (d) 616 610
5.88%, 10/31/01 (d) 3,107 3,070
6.38%, 8/15/02 (d) 1,508 1,499
5.75%, 4/30/03 (d) 1,578 1,541
5.88%, 11/15/04 (d) 5,457 5,310
6.50%, 8/15/05 (d) 990 987
7.00%, 7/15/06 (d) 1,100 1,126
6.62%, 5/15/07 (d) 1,568 1,580
6.50%, 2/15/10 (d) 1,156 1,179
6.38%, 8/15/27 1,400 1,431
18,333
Total U.S. Treasury Securities (Cost $31,118) 31,525
U.S. Government Agencies (0.3%)
Business & Public Services (0.1%):
United Mexican States, 9.88%, 2/1/10 335 345
U.S. Government Loan Trust (0.2%):
U.S. Government Loan Trust - Israel,
Series 1-B, 8.50%, 4/1/06 637 666
Total U.S. Government Agencies (Cost $1,066) 1,011
U.S. Government Mortgage Backed (11.6%)
Federal Home Loan
Mortgage Corp. (4.4%):
6.00%, 2/1/13- 1/1/29 $ 5,582 $ 5,164
6.50%, 5/1/26-7/1/29 5,412 5,085
7.00%, 10/1/28-1/1/30 3,939 3,782
7.50%, 4/25/24-11/1/29 2,360 2,312
8.00%, 1/1/29 558 558
8.50%, 7/1/21-4/1/29 471 480
17,381
Federal National Mortgage Assoc. (5.2%):
5.88%, 4/23/04 (d) 1,170 1,111
6.00%, 10/1/23-7/1/29 3,162 2,906
6.50%, 7/1/28-3/1/29 3,010 2,819
7.00%, 10/1/26 913 872
7.50%, 3/1/27-11/1/29 2,404 2,354
8.00%, 11/1/19-2/1/30 2,295 2,291
8.50%, 11/1/17-1/1/30 2,916 2,957
10.00%, 11/1/13 1,774 1,868
10.50%, 11/1/13 1,661 1,751
11.00%, 11/1/13 1,510 1,595
20,524
Government National Mortgage Assoc. (2.0%):
6.50%, 7/15/28 871 820
7.00%, 7/15/23-4/15/28 5,703 5,630
7.50%, 11/15/28-4/15/29 676 666
9.00%, 11/15/17 874 902
9.50%, 7/15/09 95 100
8,118
Total U.S. Government
Mortgage Backed (Cost $47,081) 46,023
Securities Purchased With Cash Collateral (14.3%)
Commercial Paper (0.7%):
Windmill Funding, 6.12%, 5/17/00 2,945 2,945
Investment Companies (0.1%):
AIM Short Term Prime
Money Market Fund 232,782 233
AIM Liquid Assets Money Market Fund 310,159 310
543
Time Deposits (0.6%):
Fifth Third Bank, 6.06%, 5/1/00 891 891
Firstar Bank, 6.00%, 5/1/00 1,485 1,485
2,376
Repurchase Agreements (12.9%):
Lehman Corp., 6.11%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 10,000 10,000
See notes to financial statements.
78
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Balanced Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Merrill Lynch, 6.19%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) $ 10,000 $ 10,000
First Union, 6.22%, 5/1/00
(Collateralized by 10,300
Rockwell International,
7.87%, 2/15/05
Relient Energy Financial Co.,
7.15%, 6/15/01
Florida Res Prop & Cas,
7.45%, 7/1/04
Market value -- $10,270) 10,000 10,000
Morgan Stanley Dean Witter, 6.16%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 10,000 10,000
Goldman Sachs Group L.P., 6.14%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 11,000 11,000
51,000
Total Securities Purchased With
Cash Collateral (Cost $56,864) 56,864
Total Investments (Cost $377,436) (a) -- 113.4% 450,814
Liabilities in excess of other assets -- (13.4%) (53,446)
TOTAL NET ASSETS -- 100.0% $397,368
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 84,729
Unrealized depreciation (11,351)
Net unrealized appreciation $ 73,378
(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, 2000.
ADR -- American Depository Receipt
See notes to financial statements.
79
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Convertible Securities Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (0.8%)
Household Finance, 6.10%, 5/1/00 $ 675 $ 675
Total Commercial Paper (Cost $675) 675
Convertible Bonds (63.3%)
Advertising (0.4%):
Getty Images, Inc.,
Convertible Subordinated Notes,
5.00%, 3/15/07,
Callable 3/20/03 @ 102.86 (b) 500 359
Automotive Parts (2.0%):
Magna International, Inc.,
Convertible Subordinated Notes,
5.00%, 10/15/02,
Continuously Callable @ 100 1,600 1,610
Broadcasting & Publishing (0.8%):
Clear Channel Communications, Inc.,
Convertible Subordinated Notes,
1.50%, 12/1/02 690 658
Broadcasting/Cable (1.3%):
Liberty Media Group,
Convertible Subordinated Notes,
4.00%, 11/15/29,
Callable 11/15/03 @ 100 (b) 800 1,043
Circuits (1.7%):
Level One Communications,
Convertible Subordinated Notes,
4.00%, 9/1/04,
Callable 9/7/00 @ 102.29 335 1,385
Commercial Services (2.1%):
CUC International, Inc.,
Convertible Subordinated Notes,
3.00%, 2/15/02,
Callable 2/15/00 @ 101.2 1,000 915
Quintiles Transnational,
Convertible Subordinated Notes,
4.25%, 5/31/00,
Continuously Callable @ 101.06 750 749
1,664
Computers & Peripherals (0.7%):
Hewlett Packard Co.,
Convertible Subordinated Notes,
0.00%, 10/14/17,
Callable 10/14/00 @ 59.03 750 577
Conglomerates (1.6%):
Ogden Corp.,
Euro-dollar Convertible
Subordinated Notes Debentures,
6.00%, 6/1/02, Continuously
Callable @ 100 1,500 1,271
Electronic Components/
Instruments (2.1%):
Cymer, Inc.,
Convertible Subordinated Notes,
3.50%, 8/6/04,
Callable 8/9/00 @ 106.37 $ 750 $ 765
SCI Systems, Inc.,
Convertible Subordinated Notes,
3.00%, 3/15/07,
Callable 3/20/03 @ 101.71 800 917
1,682
Hazardous Waste Disposal (0.8%):
OHM,
Convertible Subordinated Debentures,
8.00%, 10/1/06,
Continuously Callable @ 100 735 628
Health Care (1.2%):
Quantum Health Resources, Inc.,
Convertible Subordinated Notes,
4.75%, 10/1/00,
Continuously Callable @ 100.68 1,017 938
Internet Service Provider (2.7%):
America Online,
Convertible Subordinated Notes,
0.00%, 12/6/19,
Callable 12/6/04 @ 63.98 2,500 1,312
Exodus Communications, Inc.,
Convertible Subordinated Notes,
4.75%, 7/15/08,
Callable 1/15/04 @ 102.51 600 833
2,145
Manufacturing -- Machinery (3.0%):
MascoTech, Inc.,
Convertible Subordinated Notes,
4.50%, 12/15/03,
Callable 6/12/00 @ 101.5 1,450 1,059
Thermo Fibertek, Inc.,
Convertible Subordinated Notes,
4.50%, 7/15/04,
Callable 7/15/00 @ 100 1,600 1,343
2,402
Medical Equipment & Supplies (0.4%):
Thermo Instruments System,
Convertible Subordinated Notes,
4.50%, 10/15/03,
Callable 7/15/00 @ 100 350 322
Medical -- Biotechnology (7.1%):
Affymetrix, Inc.,
Convertible Subordinated Notes,
4.75%, 2/15/07,
Callable 2/20/03 @ 100 (b) 500 353
Centocor, Inc.,
Convertible Subordinated Notes,
4.75%, 2/15/05,
Callable 2/21/01 @ 102.714 1,000 1,239
See notes to financial statements.
80
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Convertible Securities Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Chiron Corp.,
Convertible Subordinated Notes,
1.90% , 11/17/00,
Callable 6/12/00 @ 97.48 $ 450 $ 704
Genzyme Corp.,
Convertible Subordinated Notes,
5.25%, 6/1/05,
Callable 6/10/01 @ 102.63 750 1,009
Human Genome Sciences, Inc.,
Convertible Subordinated Notes,
3.75%, 3/15/07,
Callable 3/21/03 @ 101.88 (b) 500 293
Millennium Pharmaceuticals, Inc.,
Convertible Subordinated Notes,
5.50%, 1/15/07,
Callable 1/15/03 @ 103.14 (b) 350 369
Sepracor, Inc.,
Convertible Subordinated Notes,
7.00%, 12/15/05,
Callable 12/20/01 @ 104 900 1,423
Vertex Pharmaceuticals, Inc.,
Convertible Subordinated Notes,
5.00%, 3/14/07,
Callable 3/17/03 @ 100 (b) 400 313
5,703
Medical -- Hospital Services (0.9%):
Medical Care International,
Convertible Subordinated Debentures,
6.75%, 10/1/06,
Callable 10/1/01 @ 100 800 696
Oil & Gas Exploration,
Production & Services (4.6%):
Devon Energy,
Convertible Subordinated Notes,
4.90%, 8/15/08,
Callable 8/15/00 @ 104 1,100 1,060
Devon Energy,
Convertible Subordinated Notes,
4.95%, 8/15/08,
Callable 9/15/02 @ 104.24 300 291
Kerr-Mcgee Corp.,
Convertible Subordinated Notes,
7.50%, 5/15/14,
Continuously Callable @ 100 1,000 936
Kerr-McGee Corp.,
Convertible Subordinated Notes,
5.25%, 2/15/10,
Callable 2/15/05 @ 102.62 675 729
Loews Corp.,
Convertible Subordinated Notes,
3.13%, 9/15/07,
Callable 9/15/02 @ 101.56 800 703
3,719
Oil-Integrated Companies (1.5%):
Texaco Capital,
Convertible Subordinated Notes,
3.50%, 8/5/04,
Continuously Callable @ 100 $ 1,250 $ 1,188
Oilfield Services & Equipment (2.3%):
Diamond Offshore Drilling, Inc.,
Convertible Subordinated Notes,
3.75%, 2/15/07,
Callable 2/22/01 @ 102.08 900 1,029
Seacor Holdings, Inc.,
Convertible Subordinated Notes,
5.38%, 11/15/06,
Callable 11/24/99 @ 103.58 800 828
1,857
Pharmaceuticals (3.1%):
Alpharma, Inc.,
Convertible Subordinated Notes,
3.00%, 6/1/06,
Callable 6/16/02 @ 112.67 500 642
Alpharma, Inc.,
Convertible Subordinated Notes,
3.00%, 6/1/06,
Redeems @ 134.10 700 899
Alza Corp., Convertible Subordinated
Debentures, 5.00%, 5/1/06,
Callable 5/1/01 @ 102.14 780 932
2,473
Primary Metal &
Mineral Production (1.5%):
Homestake Mining Co.,
Convertible Subordinated Debentures,
5.50%, 6/23/00,
Continuously Callable @ 100 1,250 1,235
Publishing (1.1%):
Scholastic Corp.,
Convertible Subordinated Notes,
5.00%, 8/15/05,
Continuously Callable @ 100 1,000 923
Real Estate (1.4%):
Avatar Holdings,
Convertible Subordinated Notes,
7.00%, 4/1/05,
Callable 4/6/01 @ 104 1,250 1,127
Real Estate Investment Trusts (2.0%):
Health Care Property Investors, Inc.,
Convertible Subordinated Notes,
6.00%, 11/8/00 450 437
HRPT Properties,
Convertible Subordinated Notes,
7.50%, 10/1/03,
Continuously Callable @ 100 350 310
See notes to financial statements.
81
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Convertible Securities Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Macerich Co.,
Convertible Subordinated Notes,
7.25%, 12/15/02,
Callable 6/15/02 @ 100 $ 500 $ 428
Meditrust,
Convertible Subordinated Debentures,
7.50%, 3/1/01 500 442
1,617
Semiconductors (5.1%):
ASM Lithography Holding N. V.,
Convertible Subordinated Notes,
4.25%, 11/30/04,
Callable 12/5/02 @ 101.7 (b) 500 613
Atmel SA,
Convertible Subordinated Notes,
3.25%, 6/1/02,
Callable 8/9/00 @ 106.37 450 1,233
Conexant Systems, Inc.,
Convertible Subordinated Notes,
4.00%, 2/1/07,
Callable 2/6/03 @ 102.29 (b) 500 423
Cypress Semiconductor Corp.,
Convertible Subordinated Notes,
4.00%, 2/1/05,
Callable 2/5/03 @ 101 500 664
Kulicke & Soffa Industries, Inc.,
Convertible Subordinated Notes,
4.75%, 12/15/06,
Callable 12/19/02 @ 102.71 (b) 650 1,198
4,131
Software & Computer Services (5.0%):
Arbor Software,
Convertible Subordinated Notes,
4.50%, 3/15/05,
Callable 3/20/01 @ 102.57 500 413
BEA Systems, Inc.,
Convertible Subordinated Notes,
4.00%, 12/15/06,
Callable 12/15/04 @ 101.14 (b) 400 616
Rational Software Corp.,
Convertible Subordinated Notes,
5.00%,2/1/07,
Callable 2/5/03 @ 100 (b) 1,000 1,338
Siebel Systems,
Convertible Subordinated Notes,
5.50%, 9/15/06,
Callable 9/15/02 @ 103.14 600 1,660
4,027
Telecommunications -- Equipment (3.7%):
CommScope, Inc.,
Convertible Subordinated Notes,
4.00%, 12/15/06,
Callable 12/15/02 @ 102.29 (b) $ 600 $ 745
CommScope, Inc.
Convertible Subordinated Notes,
4.00%, 12/15/06,
Callable 12/15/02 @ 102.29 600 745
EchoStar Communications Corp.,
Convertible Subordinated Notes,
4.88%, 1/1/07,
Callable 1/1/03 @ 102.79 (b) 700 1,064
Juniper Networks, Inc.,
Convertible Subordinated Notes,
4.75%, 3/15/07,
Callable 3/15/03 @ 102.71 450 412
2,966
Telecommunications -- Services & Equipment (1.7%):
Bell Atlantic Financial,
Convertible Subordinated Notes,
4.25%, 9/15/05,
Callable 9/15/02 @ 104.24 500 629
Nextel Communications, Inc.,
Convertible Subordinated Notes,
5.25%, 1/15/10,
Callable 1/18/03 @ 103.5 (b) 800 780
1,409
Transportation Services (1.6%):
Offshore Logistics,
Convertible Subordinated Notes,
6.00%, 12/15/03,
Callable 6/12/00 @ 103.43 1,500 1,262
Total Convertible Bonds (Cost $45,912) 51,017
See notes to financial statements.
82
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Convertible Securities Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Convertible Preferred Stock (32.6%)
Aerospace & Military Technology (0.6%):
Coltec Capital Trust 13,000 $ 504
Banks (3.0%):
Bank United 30,000 1,335
CNB Capital Trust I 30,000 998
2,333
Building Materials (2.1%):
Texas Industries, Inc. 54,000 1,728
Cosmetics & Related (1.3%):
Estee Lauder Co. 13,000 1,066
Energy (1.6%):
Calpine Capital Trust II (b) 24,500 1,323
Food Products (0.6%):
Suiza Capital Trust 15,000 497
Insurance (5.6%):
American General Corp., Series A 8,650 608
Lincoln National Corp. 17,000 355
Metlife Capital Trust I 21,450 1,207
Philadelphia Consolidated
Holding Corp. 140,000 1,050
St. Paul Capital Corp. 20,000 1,237
4,457
Media (0.9%):
MediaOne Group, Inc. 7,100 710
Oil-Integrated Companies (2.5%):
Unocal Corp. 44,000 2,030
Oilfield Services & Equipment (1.4%):
EVI, Inc. 24,000 1,152
Paper and Forest Products (1.6%):
International Paper Co. 30,000 1,264
Pipelines (1.4%):
Western Gas Resources, Inc. 41,000 1,169
Railroads (1.8%):
Union Pacific Capital (b) 35,000 1,461
Real Estate Investment Trusts (2.9%):
Equity Office, Series B 20,000 780
Equity Residential Properties, Series G 8,000 175
Equity Residential Properties, Series J 30,000 827
Simon Property Group, Inc., Series B 7,000 467
2,249
Restaurants (0.9%):
Wendys Financing I, Series A 15,000 $ 765
Steel (1.0%):
USX Capital Trust I 22,200 824
Telecommunications -- Services & Equipment (1.6%):
Decs Trust Vi 24,000 1,278
Utilities -- Electric (1.8%):
El Paso Energy Capital Trust I 16,100 886
Houston Industries, Inc. 4,000 592
1,478
Total Convertible Preferred Stock (Cost $25,829) 26,288
Corporate Bonds (1.0%)
Financial Services (1.0%):
Bank Plus Corp., Senior Notes,
12.00%, 7/18/07,
Callable 11/15/05 @ 110 $ 1,000 800
Total Corporate Bonds (Cost $1,100) 800
Preferred Stocks (1.3%)
Banks (1.3%):
California Federal Preferred Capital,
Series A 20,000 445
Chevy Chase Savings Bank 25,000 631
Total Preferred Stocks (Cost $1,184) 1,076
Total Investments (Cost $74,700) (a) -- 99.0% 79,856
Other assets in excess of liabilities -- 1.0% 813
TOTAL NET ASSETS -- 100.0% $80,669
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 8,977
Unrealized depreciation (3,821)
Net unrealized appreciation $ 5,156
(b) 144a security which is restricted as to resale to institutional
investors.
See notes to financial statements.
83
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Real Estate Investment Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Common Stocks (75.9%)
Real Estate Development (4.5%):
St. Joe Co. 14,000 $ 403
TrizecHahn Corp. 18,100 294
697
Real Estate Investment Trusts (69.7%):
Apartments (23.9%):
Avalonbay Communities, Inc. 21,366 835
Charles E. Smith Residential
Realty, Inc. 16,000 603
Equity Residential Properties Trust 15,000 683
Gables Residential Trust 20,000 480
Home Properties of NY, Inc. 20,000 560
Post Properties, Inc. 10,000 420
Summit Properties, Inc. 7,500 150
3,731
Diversified (11.8%):
Cousins Properties, Inc. 7,000 275
Security Capital Group Inc., Class B (b) 65,000 975
Vornado Realty Trust 17,000 587
1,837
Industrial Development (9.6%):
AMB Property Corp. 40,000 882
Cabot Industrial Trust 11,700 225
ProLogis Trust 20,000 394
1,501
Office (26.2%):
Amerivest Properties, Inc. 53,500 $ 207
Arden Realty, Inc. 25,000 556
Boston Properties, Inc. 26,000 907
Brandywine Realty Trust 10,000 174
Cornerstone Properties, Inc. 10,000 183
Equity Office Properties Trust 37,000 1,006
Mack-Cali Realty Corp. 23,000 592
Reckson Associates Realty Corp. 3,000 60
Spieker Properties, Inc. 9,000 399
4,084
Total Common Stocks (Cost $11,263) 11,850
Preferred Stocks (2.0%)
Apartment Investment &
Management Co. 13,000 319
Total Preferred Stocks (Cost $336) 319
U.S. Government Agencies (22.0%)
Federal Home Loan Bank (22.0%):
5.80%, 5/1/00 $ 3,430 3,429
Total U.S. Government Agencies (Cost $3,430) 3,429
Total Investments (Cost $15,029) (a) -- 99.9% 15,598
Other assets in excess of liabilities -- 0.1% 13
TOTAL NET ASSETS -- 100.0% $15,611
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 872
Unrealized depreciation (303)
Net unrealized appreciation $ 569
(b) Non-income producing securities.
See notes to financial statements.
84
<PAGE>
Statements of Assets and Liabilities
The Victory Portfolios April 30, 2000
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
<TABLE>
<CAPTION>
Convertible Real Estate
Balanced Securities Investment
Fund Fund Fund
<S> <C> <C> <C>
ASSETS:
Investments, at value
(Cost $326,436; $74,700 & $15,029) $399,814 $79,856 $15,598
Repurchase agreements, at cost 51,000
Cash 137 1 --
Foreign currency (cost $11) 11 -- --
Interest and dividends receivable 2,097 767 22
Receivable for capital shares issued 15 11 --
Receivable from brokers for investments sold 3,704 1,276 --
Reclaims receivable 21 -- --
Receivable from Affiliates 27 1 2
Unamortized organization costs -- -- 8
Prepaid expenses and other assets 38 4 13
Total Assets 456,864 81,916 15,643
LIABILITIES:
Payable for capital shares redeemed 27 2 --
Payable to brokers for investments purchased 2,205 1,174 --
Payable for return of collateral received 56,864 -- --
Payable for organization costs -- -- 17
Accrued expenses and other payables:
Investment advisory fees 263 49 5
Administration fees 9 2 --
Custodian fees 15 5 2
Transfer agent fees 23 13 6
Shareholder service fees -- Class A 75 2 --
Shareholder service and
12b-1 fees -- Class B 9 -- --
Other 6 -- 2
Total Liabilities 59,496 1,247 32
NET ASSETS:
Capital 311,444 68,353 17,295
Undistributed (distribution in excess
of) net investment income (324) 349 268
Net unrealized appreciation/
depreciation from investments 73,378 5,156 569
Net unrealized appreciation/
depreciation from translation of assets
and liabilities in foreign currencies (3) -- --
Accumulated undistributed net realized
gains (losses) from investment
transactions and foreign
currency transactions 12,873 6,811 (2,521)
Net Assets $397,368 $80,669 $15,611
Net Assets
Class A $385,995 $80,598 $15,573
Class B 10,776 -- --
Class G 597 71 38
Total $397,368 $80,669 $15,611
Outstanding units of
beneficial interest (shares)
Class A 27,447 5,939 1,451
Class B 766 -- --
Class G 42 5 4
Total 28,255 5,944 1,455
Net asset value
Redemption price per share -- Class A $ 14.06 $ 13.57 $ 10.73
Offering price per share -- Class B<F1> $ 14.06 -- --
Offering price per share -- Class G $ 14.08 $ 13.64 $ 10.72
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 $ 14.92 $ 14.40 $ 11.38
<FN>
<F1> Redemption price per Class B Share varies based on length of time held.
</FN>
</TABLE>
See notes to financial statements.
85
<PAGE>
Statements of Operations
The Victory Portfolios For the Six Months Ended April 30, 2000
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Real
Convertible Estate
Balanced Securities Investment
Fund Fund Fund
<S> <C> <C> <C>
Investment Income:
Interest income $ 5,767 $1,334 $ 47
Dividend income 1,912 909 437
Securities Lending 52 -- --
Foreign tax withholding (10) -- --
Total Income 7,721 2,243 484
Expenses:
Investment advisory fees 1,808 294 59
Administration fees 300 59 10
Shareholder service fees -- Class A 515 64 15
Shareholder service fees and 12b-1 fees -- Class B 55 -- --
12b-1 fees -- Class G 1 -- --
Accounting fees 76 24 21
Custodian fees 92 17 8
Legal and audit fees 21 4 1
Amortization of organization fees -- -- 2
Trustees' fees and expenses 4 1 --
Transfer agent fees 46 18 7
Registration and filing fees 13 2 6
Printing fees 12 5 1
Other 18 3 1
Total Expenses 2,961 491 131
Expenses voluntarily reduced (107) -- (30)
Expenses before reimbursement from distributor 2,854 491 101
Expenses reimbursed by distributor (100) (4) (5)
Net Expenses 2,754 487 96
Net Investment Income 4,967 1,756 388
Realized/Unrealized Gains (Losses)
from Investments and Foreign Currencies:
Net realized gains (losses) from
investment transactions 13,453 6,814 (619)
Net realized gains (losses) from
foreign currency transactions (69) -- --
Change in unrealized appreciation/
depreciation from investments (7,414) 555 1,888
Change in unrealized appreciation/
depreciation from translation
of assets and liabilities in foreign currencies (464) -- --
Net realized/unrealized gains (losses)
from investments and foreign currencies 5,506 7,369 1,269
Change in net assets resulting from operations $10,473 $9,125 $1,657
</TABLE>
See notes to financial statements.
86
<PAGE>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Balanced Convertible Real Estate
Fund Securities Fund Investment 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,
2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 4,967 $ 9,625 $ 1,756 $ 4,581 $ 388 $ 778
Net realized gains (losses) from
investment transactions 13,453 37,076 6,814 3,994 (619) (1,371)
Net realized gains (losses) from
foreign currency transactions (69) (164) -- -- -- --
Net change in unrealized appreciation/
depreciation from investments (7,414) 2,520 555 2,960 1,888 643
Net change in unrealized appreciation/
depreciation from translation of assets
and liabilities in foreign currencies (464) -- -- -- -- --
Change in net assets resulting
from operations 10,473 49,057 9,125 11,535 1,657 50
Distributions to Shareholders:
From net investment income:
Class A (5,575) (9,181) (1,768) (4,990) (233) (783)
Class B (87) (97) -- -- -- --
Class G (3) -- -- -- --
From net realized gains from
investment transactions and
foreign currencies (37,231) (26,725) (3,867) (212) -- --
Change in net assets from
distributions to shareholders (42,896) (36,003) (5,635) (5,202) (233) (783)
Capital Transactions:
Proceeds from shares issued 63,801 59,910 13,184 21,933 2,575 5,022
Dividends reinvested 37,355 32,955 3,905 3,658 85 285
Cost of shares redeemed (105,038) (97,329) (19,565) (60,338) (2,678) (6,993)
Change in net assets from
capital transactions (3,882) (4,464) (2,476) (34,747) (18) (1,686)
Change in net assets (36,305) 8,590 1,014 (28,414) 1,406 (2,419)
Net Assets:
Beginning of period 433,673 425,083 79,655 108,069 14,205 16,624
End of period $ 397,368 $433,673 $ 80,669 $ 79,655 $15,611 $14,205
Share Transactions:
Issued 4,402 4,001 1,006 1,691 256 489
Reinvested 2,642 2,247 307 287 9 28
Redeemed (7,510) (6,498) (1,503) (4,686) (275) (683)
Change in shares (466) (250) (190) (2,708) (10) (166)
</TABLE>
See notes to financial statements.
87
<PAGE>
The Victory Portfolios Financial Highlights
(Continued on Next Page)
<TABLE>
<CAPTION>
Balanced Fund
Class A Shares
Six
Months Year Year Year Year
Ended Ended Ended Ended Ended
April 30, October 31, October 31, October 31, October 31,
2000 1999 1998 1997 1996<F4>
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 15.10 $ 14.67 $ 13.87 $ 12.33 $ 11.01
Investment Activities
Net investment income 0.17 0.32 0.37 0.36 0.36
Net realized and unrealized gains (losses)
from investments and foreign currencies 0.21 1.34 1.54 1.90 1.39
Total from Investment Activities 0.38 1.66 1.91 2.26 1.75
Distributions
Net investment income (0.19) (0.31) (0.37) (0.35) (0.36)
Net realized gains (1.23) (0.92) (0.74) (0.37) (0.07)
Total Distributions (1.42) (1.23) (1.11) (0.72) (0.43)
Net Asset Value, End of Period $ 14.06 $ 15.10 $ 14.67 $ 13.87 $ 12.33
Total Return (excludes sales charges) 2.54%<F2> 11.73% 14.55% 19.02% 16.27%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $385,995 $422,586 $418,807 $342,933 $273,553
Ratio of expenses toaverage net assets<F6> 1.27%<F3> 1.27% 1.27% 1.25% 1.27%
Ratio of net income to average net assets<F6> 2.37%<F3> 2.13% 2.54% 2.69% 3.14%
Ratio of expenses to average net assets<F1> 1.37%<F3> 1.50% 1.50% 1.36% 1.43%
Ratio of net investment income
to average net assets<F1> 2.27%<F3> 1.90% 2.31% 2.58% 2.98%
Portfolio turnover<F5> 85% 177% 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> Not annualized.
<F3> Annualized.
<F4> Effective March 1, 1996, the Fund designated the existing shares as Class
A Shares and commenced offering Class B Shares.
<F5> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
<F6> On December 15, 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 Class G shares of the fund at a maximum of
1.55% until at least February 28, 2001.
</FN>
</TABLE>
See notes to financial statements.
88
<PAGE>
The Victory Portfolios Financial Highlights--continued
<TABLE>
<CAPTION>
Balanced Fund
Class G
Class B Shares Shares
Six March 1, December 15,
Months Year Year Year 1996 Year 1999
Ended Ended Ended Ended through Ended through
April 30, October 31, October 31, October 31, October 31, October 31, April 30,
2000 1999 1998 1997 1996<F4> 1995 2000<F7>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 15.10 $ 14.68 $13.88 $12.34 $11.51 $ 9.62 $13.92
Investment Activities
Net investment income 0.08 0.16 0.21 0.19 0.14 0.41 0.15
Net realized and unrealized
gains (losses) from
investments and foreign
currencies 0.22 1.34 1.54 1.89 0.85 1.40 0.16
Total from
Investment Activities 0.30 1.50 1.75 2.08 0.99 1.81 0.31
Distributions
Net investment income (0.11) (0.16) (0.21) (0.17) (0.14) (0.41) (0.15)
In excess of net
investment income -- -- -- -- (0.02) (0.01) --
Net realized gains (1.23) (0.92) (0.74) (0.37) -- -- --
Total Distributions (1.34) (1.08) (0.95) (0.54) (0.16) (0.42) (0.15)
Net Asset Value,
End of Period $ 14.06 $ 15.10 $14.68 $13.88 $12.34 $ 11.01 $14.08
Total Return (excludes
sales charges) 1.96%<F2> 10.48% 13.27% 17.43% 15.73%<F5> 19.24% 2.26%<F2>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $10,776 $11,087 $6,276 $3,291 $1,432 $201,073 $ 597
Ratio of expenses to
average net assets <F8> 2.44%<F3> 2.38% 2.43% 2.56% 2.46%<F3> 0.98% 1.55%<F3>
Ratio of net investment income
to average net assets <F8> 1.20%<F3> 1.03% 1.36% 1.36% 1.78%<F3> 4.05% 1.90%<F3>
Ratio of expenses to
average net assets <F1> 2.53%<F3> 2.61% 2.67% 2.95% 2.67%<F3> 1.36% 5.95%<F3>
Ratio of net investment income
to average net assets <F1> 1.11%<F3> 0.80% 1.12% 0.97% 1.57%<F3> 3.67% (2.50)%<F3>
Portfolio turnover <F6> 85% 177% 231% 109% 80% 69% 85%
<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 1, 1996, the Fund designated the existing shares as Class
A Shares and commenced offering Class B Shares.
<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 8.72%.
<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.
<F8> On December 15, 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 Class G shares of the fund at a maximum of
1.55% until at least February 28, 2001.
</FN>
</TABLE>
See notes to financial statements.
89
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Convertible Securities Fund
Class G
Class A Shares Shares
Six Eleven December 21,
Months Year Months Year Year Year Year 1999
Ended Ended Ended Ended Ended Ended Ended through
April 30, October 31, October 31, November 30, November 30, November 30, November 30, April 30,
2000 1999 1998<F2> 1997 1996 1995 1994 2000<F5>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 12.99 $ 12.22 $ 14.33 $ 13.55 $ 12.16 $ 11.05 $ 12.48 $ 12.56
Investment Activities
Net investment
income 0.29 0.67 0.58 0.62 0.65 0.60 0.61 0.27
Net realized and
unrealized gains
(losses) from
investments 1.21 0.83 (1.08) 1.43 1.68 1.50 (1.12) 1.11
Total from
Investment
Activities 1.50 1.50 (0.50) 2.05 2.33 2.10 (0.51) 1.38
Distributions
Net investment
income (0.29) (0.70) (0.54) (0.65) (0.62) (0.61) (0.61) (0.30)
Net realized
gains (0.63) (0.03) (1.07) (0.62) (0.32) (0.38) (0.31) 0.00
Total
Distributions (0.92) (0.73) (1.61) (1.27) (0.94) (0.99) (0.92) (0.30)
Net Asset Value,
End of Period $ 13.57 $ 12.99 $ 12.22 $ 14.33 $ 13.55 $ 12.16 $ 11.05 $ 13.64
Total Return
(excludes sales
charges) 12.22%<F3> 12.46% (3.69)%<F3> 16.26% 20.28% 20.43% (4.36)% 11.10%<F3>
Ratios/Supplementary
Data:
Net Assets,
End of Period (000) $80,598 $79,655 $108,069 $104,982 $81,478 $68,212 $58,845 $ 71
Ratio of expenses to
average net assets<F7> 1.24%<F4> 1.24% 1.20%<F4> 1.34% 1.31% 1.31% 1.30% 1.54%<F4>
Ratio of net investment
income to average
net assets <F7> 4.47%<F4> 4.94% 4.60%<F4> 4.75% 5.17% 5.36% 5.20% 3.59%<F4>
Ratio of expenses to
average net assets<F1> 1.24%<F4> <F6> <F6> <F6> <F6> <F6> <F6> 63.39%<F4>
Ratio of net investment
income to average
net assets<F1> 4.47%<F4> <F6> <F6> <F6> <F6> <F6> <F6> (58.26)%<F4>
Portfolio Turnover <F8> 48% 73% 77% 77% 40% 52% 49% 48%
<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 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> Period from commencement of operations.
<F6> There were no voluntary fee reductions during the period.
<F7> On December 15, 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 A and Class G shares of the fund at a
maximum of 1.24% and 1.55%, respectively, until at least February 28, 2001.
<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.
90
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Real Estate Investment Fund
Class G
Class A Shares Shares
Six December 15,
Months Year Year Period 1999
Ended Ended Ended Ended through
April 30, October 31, October 31, October 31, April 30,
2000 1999 1998 1997<F2> 2000<F3>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.70 $ 10.19 $ 12.07 $10.00 $ 9.18
Investment Activities
Net investment income 0.28 0.52 0.50 0.23 0.25
Net realized and unrealized
gains (losses) from investments 0.92 (0.50) (1.90) 2.01 1.46
Total from Investment Activities 1.20 0.02 (1.40) 2.24 1.71
Distributions
Net investment income (0.17) (0.51) (0.44) (0.17) (0.17)
Net realized gains -- -- (0.04) -- --
Total Distributions (0.17) (0.51) (0.48) (0.17) (0.17)
Net Asset Value, End of Period $ 10.73 $ 9.70 $ 10.19 $12.07 $10.72
Total Return (excludes sales charges) 12.56%<F4> 0.03% (11.91)% 22.42%<F4> 18.85%<F4>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $15,573 $14,205 $16,624 $4,376 $ 38
Ratio of expenses to average net assets<F6> 1.39%<F5> 1.16% 0.83% 0.00%<F5> 1.65%<F5>
Ratio of net investment income
to average net assets<F6> 5.62%<F5> 4.92% 4.95% 5.11%<F5> 5.09%<F5>
Ratio of expenses to average net assets<F1> 1.82%<F5> 1.91% 1.95% 2.93%<F5> 55.37%<F5>
Ratio of net investment income
to average net assets<F1> 5.19%<F5> 4.17% 3.83% 2.18%<F5> (48.63)%<F5>
Portfolio turnover<F7> 47% 62% 53% 21% 47%
<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> Period from commencement of operations.
<F4> Not annualized.
<F5> Annualized.
<F6> On December 15, 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 A and Class G shares of the fund at a
maximum of 1.40% and 1.65%, respectively, until at least February 28, 2001.
<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.
91
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Value Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (0.5%)
Household Finance, 6.10%, 5/1/00 $ 2,791 $ 2,791
Total Commercial Paper (Cost $2,791) 2,791
Common Stocks (99.4%)
Aerospace/Defense (3.6%):
Boeing Co. 183,300 7,275
Honeywell International, Inc. 110,840 6,207
United Technologies Corp. 103,000 6,405
19,887
Aluminum (0.6%):
Alcoa, Inc. (c) 53,300 3,458
Automotive Parts (1.0%):
TRW, Inc. 93,000 5,441
Banks (5.9%):
Bank of America Corp. 165,174 8,094
First Union Corp. 208,200 6,636
Mellon Financial Corp. 281,400 9,040
Wells Fargo Co. (c) 222,000 9,116
32,886
Brokerage Services (0.8%):
Morgan Stanley, Dean Witter & Co. 58,800 4,513
Building Materials (0.7%):
Rohm & Haas Co. 109,500 3,901
Chemicals -- General (1.7%):
Eastman Chemical Co. 100,801 5,273
Sigma-Aldrich Corp. 136,000 3,995
9,268
Computers & Peripherals (8.4%):
Cisco Systems, Inc. (b) (c) 203,200 14,086
Dell Computer Corp. (b) 94,000 4,712
Electronic Data Systems (c) 99,700 6,854
Hewlett-Packard Co. 62,900 8,492
International Business Machines Corp. 116,900 13,049
47,193
Consumer Products (0.7%):
Newell Rubbermaid, Inc. (c) 152,500 3,841
Cosmetics & Related (1.7%):
Avon Products, Inc. 222,500 9,234
Electrical Equipment (0.8%):
Emerson Electric Co. 77,600 4,258
Electronic & Electrical -- General (2.8%):
General Electric Co. 100,400 15,788
Financial Services (6.6%):
Citigroup, Inc. 99,700 5,926
Fannie Mae 232,500 14,022
Franklin Resources, Inc. 183,401 5,915
Household International, Inc. 260,400 10,872
36,735
Food Processing & Packaging (3.3%):
ConAgra, Inc. 263,600 4,975
General Mills, Inc. 203,600 7,406
Sara Lee Corp. 390,100 5,852
18,233
Forest Products --
Lumber & Paper (1.3%):
Bowater, Inc. (c) 36,000 1,980
International Paper Co. 50,300 1,849
Mead Corp. 93,000 3,237
7,066
Health Care (2.3%):
Columbia/HCA Healthcare Corp. (c) 207,100 5,889
Medtronic, Inc. 135,400 7,033
12,922
Heavy Machinery (0.7%):
Deere & Co. (c) 91,300 3,686
Insurance -- Multi-Line (4.4%):
Allstate Corp. 121,700 2,875
American General Corp. 66,299 3,713
American International Group 51,500 5,649
Lincoln National Corp. 162,600 5,660
Protective Life Corp. 98,800 2,353
Torchmark Corp. 167,000 4,185
24,435
Manufacturing -- Miscellaneous (1.4%):
Parker-Hannifin Corp. 74,800 3,478
Textron, Inc. 68,400 4,237
7,715
Media (2.0%):
Viacom, Inc., Class B (b) (c) 199,600 10,853
Metals -- Fabrication (0.2%):
Kennametal, Inc. 40,126 1,154
Newspapers (1.7%):
Gannett Co., Inc. 147,948 9,450
Oil & Gas Exploration,
Production & Services (1.5%):
Amerada Hess Corp. 39,501 2,513
Anadarko Petroleum Corp. (c) 20,415 887
Transocean Sedco Forex, Inc. 107,518 5,053
8,453
Oil-Integrated Companies (7.0%):
Chevron Corp. 150,250 12,790
Exxon Mobil Corp. 114,589 8,902
Texaco, Inc. 159,110 7,876
Unocal Corp. 102,200 3,302
USX-Marathon Group, Inc. 248,000 5,782
38,652
See notes to financial statements.
92
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Value Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Oilfield Services & Equipment (1.3%):
Baker Hughes, Inc. 89,050 $ 2,833
Schlumberger Ltd. 60,300 4,617
7,450
Pharmaceuticals (8.0%):
Abbott Laboratories 197,100 7,576
American Home Products Corp. (c) 152,900 8,591
Bristol-Myers Squibb Co. 113,200 5,936
Merck & Co., Inc. 9,000 626
Pfizer, Inc. 527,700 22,228
44,957
Pipelines (1.0%):
El Paso Energy Corp. 132,000 5,610
Railroads (0.9%):
Union Pacific Corp. (c) 119,900 5,051
Retail (2.1%):
Target Corp. 173,400 11,542
Retail -- Department Stores (0.6%):
May Department Stores Co. 111,300 3,061
Retail -- Drug Stores (0.7%):
Walgreen Co. (c) 144,600 4,067
Retail -- Specialty Stores (1.5%):
AutoZone, Inc. (b) 117,300 2,691
Lowe's Cos. 119,200 5,900
8,591
Semiconductors (4.0%):
Altera Corp. (b) 36,100 3,691
Intel Corp. 145,900 18,502
22,193
Software & Computer Services (3.7%):
Automatic Data Processing, Inc. 44,000 2,368
Compuware Corp. (b) 122,800 1,543
First Data Corp. 35,600 1,733
Microsoft Corp. (b) 140,300 9,786
Oracle Corp. (b) 62,400 4,988
20,418
Steel (0.3%):
USX-U.S. Steel Group, Inc. 73,500 1,842
Telecommunications -- Equipment (3.3%):
Motorola, Inc. 112,900 13,443
Tellabs, Inc. (b) 85,500 4,686
18,129
Tobacco & Tobacco Products (0.5%):
Philip Morris Cos., Inc. 128,850 2,819
Utilities -- Electric (2.6%):
Duke Energy Corp. 107,000 6,153
Texas Utilities Co. (c) 44,600 1,502
Unicom Corp. 165,900 6,594
14,249
Utilities -- Gas (0.7%):
Enron Corp. 55,972 3,901
Utilities -- Telecommunications (7.1%):
Alltel Corp. 132,900 8,854
CenturyTel, Inc. 128,799 3,156
GTE Corp. 92,300 6,253
SBC Communications, Inc. (c) 176,337 7,726
WorldCom, Inc. (b) 291,588 13,249
39,238
Total Common Stocks (Cost $400,767) 552,140
Securities Purchased With
Cash Collateral (10.4%)
Commercial Paper (1.5%):
Windmill Funding, 6.12%, 5/17/00 $ 8,328 8,328
Investment Companies (0.3%):
AIM Short Term Prime
Money Market Fund 658,208 658
AIM Liquid Assets Money Market Fund 876,997 877
1,535
Time Deposits (1.2%):
Fifth Third Bank, 6.06%, 5/1/00 2,520 2,520
Firstar Bank, 6.00%, 5/1/00 4,199 4,199
6,719
Repurchase Agreements (7.4%):
Lehman Corp., 6.11%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 6,000 6,000
Merrill Lynch, 6.19%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 4,000 4,000
Morgan Stanley Dean Witter,
6.16%, 5/1/00
(Collateralized by $10,300
Consumers Energy, 6.38%, 2/1/08,
Cox Communications, Inc.,
6.80%, 0/1/28
market value -- $10,116) 10,000 10,000
First Union, 6.22%, 5/1/00
(Collateralized by $10,300
Toll Road Inv., 0.00%, 2/15/16,
Southern Co. Cap., 8.19%, 2/1/37,
First Union, 8.04%,12/01/26
market value -- $10,049) 10,000 10,000
Goldman Sachs Group L.P.,
6.14 %, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 5,000 5,000
See notes to financial statements.
93
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Value Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Prudential Bache Corp., 6.19%, 5/1/00
(Collateralized by $6,120
Bank One NA, Illinois, 6.41%, 7/24/00
BankBoston, 6.95%, 8/24/00
MBNA, 6.59%, 6/8/00
market value -- $6,084) $ 6,000 $ 6,000
41,000
Total Securities Purchased
With Cash Collateral (Cost $57,582) 57,582
Total Investments (Cost $461,140) (a) -- 110.3% 612,513
Liabilities in excess of other assets -- (10.3%) (57,244)
TOTAL NET ASSETS -- 100.0% $555,269
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $181,093
Unrealized depreciation (29,720)
Net unrealized appreciation $151,373
(b) Non-income producing securities.
(c) All or a portion of this security was loaned as of April 30, 2000.
See notes to financial statements.
94
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Lakefront Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Market
Security Description Shares Value
Common Stocks (99.3%)
Aerospace/Defense (3.2%):
Boeing Co. 426 $ 17
United Technologies Corp. 605 38
55
Airlines (1.6%):
AMR Corp. Delaware (b) 480 16
Delta Air Lines, Inc. 230 12
28
Automobiles (2.3%):
Ford Motor Co. 388 21
General Motors Corp. 205 19
40
Automotive Parts (1.7%):
Delphi Automotive Systems 897 17
Federal-Mogul Corp. 850 12
29
Banks (6.1%):
Chase Manhattan Corp. 665 48
Mellon Financial Corp. 440 14
National City Corp. 540 9
Wells Fargo & Co. 870 36
107
Beverages (1.6%):
Pepsico, Inc. 750 28
Biotechnology (2.6%):
Pharmacia Corp. 898 45
Chemicals -- General (1.4%):
E.I. Du Pont de Nemours 520 25
Computers & Peripherals (6.4%):
Compaq Computer Corp. 640 19
Hewlett-Packard Co. 328 44
International Business Machines Corp. 440 49
112
Consumer Products (1.8%):
Procter & Gamble Co. 530 32
Cosmetics & Related (3.7%):
Avon Products, Inc. 795 33
Colgate-Palmolive Co. 557 32
65
Diversified (1.7%):
Tyco International Ltd. 656 30
Electronic & Electrical -- General (2.8%):
General Electric Co. 205 32
Johnson Controls, Inc. 262 17
49
Financial Services (9.9%):
American Express Co. 346 52
Associates First Capital Corp. 866 19
Citigroup, Inc. 1,113 66
Fannie Mae 600 36
173
Health Care (2.1%):
C.R. Bard, Inc. 511 22
Tenet Healthcare Corp. (b) 590 15
37
Heavy Machinery (2.9%):
Caterpillar, Inc. 415 16
Cummins Engine, Inc. 305 11
Deere & Co. 562 23
50
Household Goods -- Appliances,
Furnishings & Electronics (1.7%):
Maytag Corp. 850 29
Insurance -- Multi-Line (2.2%):
Allstate Corp. 765 18
CIGNA Corp. 260 21
39
Machinery -- Diversified (1.0%):
Rockwell International Corp. 425 17
Medical Supplies (1.2%):
Becton Dickinson & Co. 815 21
Medical -- Drugs (1.8%):
Bristol-Myers Squibb Co. 590 31
Metals (1.6%):
Reynolds Metal Co. 415 28
Oil-Integrated Companies (3.8%):
Exxon Mobil Corp. 429 33
Texaco, Inc. 658 33
66
Paper Products (0.9%):
International Paper Co. 420 15
Pharmaceuticals (5.8%):
American Home Products Corp. 610 34
Merck & Co., Inc. 470 33
Schering-Plough Corp. 862 35
102
Restaurants (1.1%):
Tricon Global Restaurants, Inc. (b) 600 20
Retail (1.4%):
K Mart Corp. (b) 3,110 25
Retail -- Specialty Stores (0.6%):
Gap, Inc. 285 10
See notes to financial statements.
95
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Lakefront Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Market
Security Description Shares Value
Semiconductors (4.8%):
Intel Corp. 330 $ 42
Texas Instruments, Inc. 260 42
84
Software & Computer Services (1.3%):
Computer Associates International, Inc. 412 23
Telecommunications -- Equipment (2.7%):
Lucent Technologies, Inc. 750 47
Utilities -- Electric (4.5%):
American Electric Power Co. 385 14
Duke Energy Corp. 440 25
Texas Utilities Co. 1,155 39
78
Utilities -- Natural Gas (1.9%):
Williams Cos., Inc. 885 33
Utilities -- Telecommunications (9.2%):
AT&T Corp. 590 28
BellSouth Corp. 745 36
GTE Corp. 215 15
MCI Worldcom, Inc. (b) 885 40
SBC Communications, Inc. 950 41
160
Total Common Stocks (Cost $1,570) 1,733
Investment Companies (0.6%)
AIM Treasury Money Market Fund 10,064 10
Total Investment Companies (Cost $10) 10
Total Investments (Cost $1,580) (a) -- 99.9% 1,743
Other assets in excess of liabilities -- 0.1% 2
TOTAL NET ASSETS -- 100.0% $1,745
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 316
Unrealized depreciation (153)
Net unrealized appreciation $ 163
(b) Non-income producing securities.
See notes to financial statements.
96
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Established Value Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (1.2%)
Household Finance, 6.10%, 5/1/00 $ 5,092 $ 5,092
Total Commercial Paper (Cost $5,092) 5,092
Common Stocks (98.4%)
Aerospace/Defense (2.4%):
Boeing Co. 140,000 5,556
Litton Industries, Inc. (b) 105,000 4,561
10,117
Airlines (1.3%):
Southwest Airlines Co. 250,000 5,422
Beverages (2.1%):
Adolph Coors Co. 175,000 8,925
Brokerage Services (4.5%):
Donaldson, Lufkin & Jenrette, Inc. 60,000 2,501
Morgan Stanley Dean Witter 125,000 9,594
Paine Webber Group, Inc. 150,000 6,581
18,676
Building Materials (2.4%):
Armstrong World Industries, Inc. 100,000 1,956
Centex Corp. 160,000 3,860
Pulte Corp. 200,000 4,300
10,116
Chemicals (1.1%):
Englehard Corp. 255,000 4,478
Computers & Peripherals (6.4%):
Computer Sciences Corp. (b) 100,000 8,156
Sun Microsystems, Inc. (b) 200,000 18,387
26,543
Conglomerates (1.9%):
Textron, Inc. 125,000 7,742
Consumer Products (1.3%):
Fortune Brands, Inc. 220,000 5,500
Data Processing/Management (1.2%):
First Data Corp. 105,000 5,112
Electronic & Electrical -- General (4.5%):
Honeywell International, Inc. 168,750 9,450
Johnson Controls, Inc. 148,000 9,370
18,820
Entertainment (0.9%):
Brunswick Corp. 190,000 3,646
Financial & Insurance (2.5%):
AMBAC Financial Group, Inc. 110,000 5,280
MBIA, Inc. 100,000 4,944
10,224
Financial Services (11.7%):
Citigroup, Inc. 250,000 14,858
Countrywide Credit Industries, Inc. 150,000 4,144
Fannie Mae 95,000 5,730
Household International, Inc. 300,000 12,525
Providian Financial Corp. 125,000 11,008
48,265
Food Distributors, Supermarkets
& Wholesalers (1.0%):
SUPERVALU, Inc. 200,000 4,138
Forest Products --
Lumber & Paper (2.2%):
Georgia Pacific Corp. 130,000 4,777
Weyerhauser Co. 84,000 4,489
9,266
Health Care (1.4%):
WellPoint Health Networks (b) 80,000 5,900
Heavy Machinery (1.9%):
Ingersoll-Rand Co. 165,000 7,745
Household Goods -- Appliances,
Furnishings & Electronics (1.6%):
Whirlpool Corp. 100,000 6,513
Insurance -- Life (0.8%):
Jefferson Pilot Corp. 50,000 3,328
Insurance -- Multi-Line (4.3%):
Aegon NV 85,000 6,152
CIGNA Corp. 93,000 7,416
Hartford Financial Services Group, Inc. 84,000 4,384
17,952
Leisure -- Recreation, Gaming (1.0%):
Royal Caribbean Cruises Ltd. 194,000 4,038
Manufacturing -- Capital Goods (2.3%):
Illinois Tool Works, Inc. 149,498 9,577
Manufacturing -- Miscellaneous (1.0%):
Cooper Industries, Inc. 118,000 4,049
Medical Supplies (3.2%):
Baxter International, Inc. 85,000 5,536
Edwards Lifesciences International (b) 17,000 255
Sybron International Corp. (b) 235,000 7,314
13,105
Newspapers (2.6%):
Gannett Co., Inc. 97,000 6,195
New York Times Co., Class A 115,000 4,737
10,932
Office Equipment & Supplies
(Non-Computer Related) (1.2%):
Pitney Bowes, Inc. 120,000 4,905
See notes to financial statements.
97
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Established Value Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Oil & Gas Exploration,
Production & Services (4.6%):
Coastal Corp. 150,000 $ 7,528
El Paso Energy Corp. 200,000 8,500
Occidental Petroleum Corp. 150,000 3,216
19,244
Oil-Integrated Companies (1.5%):
Chevron Corp. 75,000 6,384
Paint, Varnishes, Enamels (1.3%):
Sherwin-Williams Co. 225,000 5,597
Restaurants (3.1%):
Brinker International, Inc. (b) 225,000 7,172
Wendy's International, Inc. 254,000 5,683
12,855
Retail (3.3%):
K-Mart Corp. (b) 450,000 3,656
Target Corp. 150,000 9,985
13,641
Retail -- Department Stores (0.9%):
Federated Department Stores (b) 110,000 3,740
Retail -- Specialty Stores (1.5%):
Lowe's Cos., Inc. 125,000 6,188
Software & Computer Services (1.7%):
Fiserv, Inc. (b) 150,000 6,891
Staffing (1.1%):
Interim Services, Inc. (b) 270,000 4,624
Telecommunications (2.5%):
Qualcomm, Inc. (b) 60,000 6,506
Telephone & Data Systems, Inc. 40,000 4,080
10,586
Tools & Hardware Manufacturing (1.3%):
Black & Decker Corp. 125,000 5,258
Transportation (1.3%):
FedEx Corp. (b) 145,000 5,465
Utilities -- Electric (3.1%):
Duke Energy Corp. 105,000 6,038
PECO Energy Co. 160,000 6,670
12,708
Utilities -- Telecommunications (2.5%):
SBC Communications, Inc. 130,000 5,696
WorldCom, Inc. (b) 105,000 4,771
10,467
Total Common Stocks (Cost $304,797) 408,682
Total Investments (Cost $309,889) (a) -- 99.6% 413,774
Other assets in excess of liabilities -- 0.4% 1,513
TOTAL NET ASSETS -- 100.0% $415,287
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $135,777
Unrealized depreciation (31,892)
Net unrealized appreciation $103,885
(b) Non-income producing securities.
See notes to financial statements.
98
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Diversified Stock Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (3.2%)
Household Finance, 6.10%, 5/1/00 $ 36,728 $ 36,728
Total Commercial Paper (Cost $36,728) 36,728
Common Stocks (96.8%)
Aerospace/Defense (1.2%):
Raytheon Co., Class B 611,600 13,570
Aluminum (0.8%):
Alcoa, Inc. (c) 150,000 9,731
Banks (1.9%):
Mellon Financial Corp. 400,000 12,850
SunTrust Banks, Inc. (c) 175,000 8,881
21,731
Biotechnology (2.0%):
Chiron Corp. (b) (c) 425,000 19,231
Genentech, Inc. (b) 35,000 4,095
23,326
Chemicals -- General (1.0%):
Dow Chemical Co. (c) 100,000 11,300
Computers & Peripherals (7.2%):
Cisco Systems, Inc. (b) 100,000 6,933
Electronic Data Systems Corp. (c) 54,500 3,747
Hewlett-Packard Co. (c) 50,000 6,750
International Business Machines Corp. 475,400 53,066
Seagate Technology, Inc. (b) 250,000 12,703
83,199
Containers (1.4%):
Newell Rubbermaid, Inc. (c) 640,000 16,120
Cosmetics & Related (3.0%):
Avon Products, Inc. 590,000 24,485
Gillette Co. 285,000 10,545
35,030
Electronic & Electrical -- General (0.9%):
Thermo Electron Corp. (b) 525,000 10,172
Entertainment (0.9%):
Walt Disney Co. (c) 250,000 10,828
Financial Services (4.3%):
Citigroup, Inc. 302,500 17,980
Franklin Resources, Inc. (c) 235,000 7,579
Goldman Sachs Group, Inc. (c) 38,918 3,629
MBNA Corp. 780,000 20,718
49,906
Food Processing & Packaging (2.0%):
Quaker Oats Co. (c) 212,300 13,839
Sara Lee Corp. 622,000 9,330
23,169
Forest Products --
Lumber & Paper (1.2%):
Bowater, Inc. 251,800 13,849
Health Care (1.7%):
Columbia HCA Healthcare Corp. 300,000 8,531
Tenet Healthcare Corp. (c) 424,800 10,833
19,364
Heavy Machinery (3.8%):
Caterpillar, Inc. 405,000 15,972
Deere & Co. 317,900 12,835
Ingersoll-Rand Co. 326,000 15,302
44,109
Insurance (1.1%):
Progressive Corp. (c) 200,400 13,114
Insurance -- Life (2.3%):
American General Corp. 175,000 9,800
MetLife, Inc. (b) (c) 995,000 16,480
26,280
Insurance -- Multi-Line (2.2%):
American International Group, Inc. 176,296 19,338
Lincoln National Corp. 170,000 5,918
25,256
Manufacturing -- Miscellaneous (1.4%):
Eaton Corp. 190,000 15,960
Media (2.2%):
News Corp. Ltd. ADR (c) 491,900 25,302
Medical Supplies (1.8%):
Biomet, Inc. 340,967 12,168
Guidant Corp. (b) 160,000 9,180
21,348
Metals (0.6%):
Reynolds Metal Co. 98,600 6,557
Metals -- Fabrication (0.9%):
Kennametal, Inc. 362,000 10,408
Oil & Gas Exploration,
Production & Services (2.7%):
Noble Affiliates, Inc. (c) 446,500 16,102
Transocean Sedco Forex, Inc. 314,982 14,804
30,906
Oil-Integrated Companies (5.6%):
Texaco, Inc. 662,000 32,768
Unocal Corp. 450,000 14,541
USX -- Marathon Group, Inc. 780,000 18,184
65,493
Oilfield Services & Equipment (2.4%):
Halliburton Co. 150,600 6,655
Schlumberger Ltd. (c) 284,000 21,743
28,398
Paper Products (2.2%):
International Paper Co. 697,800 25,644
Pharmaceuticals (10.5%):
Abbott Laboratories 600,000 23,063
American Home Products Corp. 551,000 30,959
Bristol-Myers Squibb Co. 225,000 11,798
Cardinal Health, Inc. 200,000 11,013
See notes to financial statements.
99
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Diversified Stock Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
McKesson HBOC, Inc. (c) 650,000 $ 10,969
Smithkline Beecham PLC ADR 495,000 34,032
121,834
Publishing (0.9%):
Dow Jones & Co., Inc. (c) 170,000 11,029
Radio & Television (2.9%):
AT&T Corp. -- Liberty Media,
Class A (b) (c) 174,698 8,724
Charter Communications, Inc. (b) 746,100 10,958
Comcast Corp., Special Class A Shares 350,000 14,022
33,704
Semiconductors (4.9%):
Intel Corp. 270,000 34,239
LSI Logic Corp. (b) (c) 360,600 22,538
56,777
Software & Computer Services (8.0%):
America Online, Inc. (b) (c) 525,000 31,402
Compuware Corp. (b) 769,000 9,661
Microsoft Corp. (b) 500,000 34,874
Parametric Technology Corp. (b) 900,000 7,341
SunGard Data Systems, Inc. (b) 275,000 9,505
92,783
Telecommunications -- Equipment (6.7%):
General Motors, Class H (c) 159,300 15,343
Motorola, Inc. 400,000 47,625
Tellabs, Inc. (b) 275,000 15,073
78,041
Utilities -- Natural Gas (0.3%):
Enron Corp. 56,400 3,930
Utilities -- Telecommunications (2.6%):
AT&T Corp. (c) 287,151 13,406
CenturyTel, Inc. 448,400 10,986
WorldCom, Inc. (b) 124,206 5,644
30,036
Wholesale Distribution (1.2%):
W.W. Grainger, Inc. 329,300 14,283
Wireless Communications (0.2%):
Nextel Partners, Inc., Class A (b) 106,230 2,330
Total Common Stocks (Cost $1,064,701) 1,124,817
Securities Purchased With
Cash Collateral (12.4%)
Commercial Paper (0.5%):
Windmill Funding, 6.12%, 5/17/00 $ 5,547 5,547
Investment Companies (0.1%):
AIM Short Term Prime
Money Market Fund 438,449 439
AIM Liquid Assets Money Market Fund 584,190 584
1,023
Time Deposits (0.4%):
Fifth Third Bank, 6.06%, 5/1/00 1,678 1,679
Firstar Bank, 6.00%, 5/1/00 2,797 2,797
4,476
Repurchase Agreements (11.4%):
Lehman Corp., 6.11%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 20,000 20,000
Prudential Corp., 6.19%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 20,000 20,000
Morgan Stanley Dean Witter,
6.16%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 15,000 15,000
First Union, 6.22%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 20,000 20,000
Deutsche Bank, 6.16%, 5/1/00
(Collateralized by $20,600
Yosemite Security Trust,
8.25%, 11/15/04
Market value - $20,627) 20,000 20,000
Salomon Corp., 6.14%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 20,000 20,000
Merrill Lynch, 6.19%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 18,200 18,200
133,200
Total Securities Purchased
With Cash Collateral (Cost $144,246) 144,246
Total Investments (Cost $1,245,675) (a) -- 112.4% 1,305,791
Liabilities in excess of other assets -- (12.4%) (143,959)
TOTAL NET ASSETS -- 100.0% $1,161,832
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 176,226
Unrealized depreciation (116,110)
Net unrealized appreciation $ 60,116
(b) Non-income producing securities.
(c) All or a portion of this security was loaned as of April 30, 2000.
ADR -- American Depository Receipts
See notes to financial statements.
100
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Stock Index Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (5.5%)
Household Finance, 6.10%, 5/1/00 $ 51,155 $ 51,155
Total Commercial Paper (Cost $51,155) 51,155
Common Stocks (94.0%)
Advertising (0.2%):
Interpublic Group of Cos., Inc. 19,729 809
Omnicom (d) 12,474 1,136
Young & Rubicam, Inc. (d) 4,893 272
2,217
Aerospace/Defense (1.1%):
B.F. Goodrich Co. (d) 7,743 247
Boeing Co. 61,068 2,424
General Dynamics Corp. 14,128 826
Honeywell International, Inc. 55,648 3,116
Lockheed Martin Corp. (d) 27,834 692
Northrop Grumman Corp. (d) 4,885 346
Raytheon Co., Class B 23,790 528
United Technologies Corp. 33,391 2,077
10,256
Airlines (0.2%):
AMR Corp. (b) 10,410 355
Delta Air Lines, Inc. 9,075 479
Southwest Airlines Co. 35,460 768
U.S. Airways Group, Inc. (b) (d) 5,023 140
1,742
Aluminum (0.3%):
Alcan Aluminum Ltd. 15,405 505
Alcoa, Inc. (d) 25,869 1,677
Reynolds Metal Co. 4,445 296
2,478
Apparel (0.1%):
Liz Claiborne, Inc. 4,156 192
Russell Corp. 2,324 46
VF Corp. 8,303 235
473
Apparel -- Footwear (0.1%):
Nike, Inc., Class B 19,402 843
Reebok International Ltd. (b) 3,955 67
910
Automobiles (1.0%):
Ford Motor Co. 84,910 4,643
General Motors Corp. (d) 45,004 4,213
Navistar International Corp. (b) 4,443 156
PACCAR, Inc. (d) 5,506 262
9,274
Automotive Parts (0.2%):
Dana Corp. (d) 11,564 351
Delphi Automotive Systems 39,717 760
Genuine Parts Co. (d) 12,499 328
TRW, Inc. 8,548 500
1,939
Banks (4.4%):
AmSouth Bankcorp 27,492 400
Bank of America Corp. (d) 120,009 5,880
Bank of New York Co., Inc. (d) 51,766 2,126
Bank One Corp. (d) 80,622 2,459
BB & T Corp. (d) 24,423 650
Chase Manhattan Corp. 57,979 4,178
Comerica, Inc. 10,994 466
Fifth Third Bancorp (d) 21,701 1,370
First Union Corp. 69,435 2,213
Firstar Corp. 68,904 1,714
FleetBoston Financial Corp. 64,361 2,281
Huntington Bancshares, Inc. 16,090 294
J.P. Morgan & Co., Inc. 12,171 1,562
KeyCorp 31,444 582
Mellon Financial Corp. 35,756 1,149
National City Corp. 43,342 737
Northern Trust Corp. 15,648 1,003
Old Kent Financial Corp. (d) 9,319 281
PNC Bank Corp. 20,667 902
Regions Financial Corp. (d) 15,370 314
SouthTrust Corp. 11,796 282
State Street Corp. 11,246 1,089
Summit Bancorp 12,285 312
SunTrust Banks, Inc. 22,492 1,141
Synovus Financial Corp. 19,669 365
U.S. Bancorp 52,961 1,076
Union Planters Corp. (d) 9,914 281
Wachovia Corp. (d) 14,252 893
Wells Fargo Co. 116,051 4,765
40,765
Beverages (1.8%):
Anheuser-Busch Cos., Inc. 32,708 2,308
Brown-Forman Corp., Class B 4,816 263
Coca Cola Enterprises, Inc. (d) 29,909 637
Coca-Cola Co. 173,631 8,172
Coors (Adolph) Co. (d) 2,591 132
Pepsico, Inc. 102,330 3,754
Seagram Co. Ltd. 30,474 1,646
16,912
Bio-Technology (0.4%):
Amgen, Inc. (b) 71,809 4,021
Brokerage Services (1.2%):
Merrill Lynch & Co., Inc. (d) 26,057 2,656
Morgan Stanley, Dean Witter & Co. (d) 80,073 6,146
Schwab (Charles) Corp. (d) 57,641 2,565
11,367
See notes to financial statements.
101
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Stock Index Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Building Materials (0.2%):
Armstrong World Industries, Inc. (d) 2,816 $ 55
Centex Corp. 4,175 101
Kaufman & Broad Home Corp. 3,352 65
Masco Corp. 31,423 705
Owens Corning 3,853 70
Pulte Corp. 3,040 65
Vulcan Materials Co. (d) 7,033 308
1,369
Chemicals -- General (0.9%):
Air Products & Chemicals, Inc. 16,119 501
Ashland, Inc. 4,993 170
Dow Chemical Co. (d) 15,416 1,742
E.I. Du Pont de Nemours (d) 73,426 3,483
Eastman Chemical Co. 5,499 288
Englehard Corp. 8,846 155
Great Lakes Chemical Corp. (d) 4,043 109
Hercules, Inc. (d) 7,474 116
Praxair, Inc. (d) 11,174 497
Rohm & Haas Co. 15,387 548
Sigma-Aldrich Corp. 7,092 208
Union Carbide Corp. 9,410 555
W.R. Grace & Co. (b) 5,046 66
8,438
Commercial Services (0.2%):
Cendant Corp. (b) 49,629 766
Ecolab, Inc. (d) 9,109 356
Paychex, Inc. 17,373 914
Quintiles Transnational Corp. (b) (d) 8,081 116
2,152
Computers & Peripherals (9.9%):
3Com Corp. (b) 24,065 949
Adaptec, Inc. (b) 7,307 197
Apple Computer, Inc. (b) (d) 11,364 1,410
Cabletron Systems, Inc. (b) 12,812 293
Ceridian Corp. (b) 10,168 221
Cisco Systems, Inc. (b) 481,000 33,347
Compaq Computer Corp. 119,082 3,483
Computer Sciences Corp. (b) 11,763 959
Dell Computer Corp. (b) 180,322 9,039
Electronic Data Systems 33,094 2,275
Gateway, Inc. (b) 22,251 1,229
Hewlett-Packard Co. 70,648 9,537
International Business Machines Corp. 126,717 14,145
Lexmark International Group, Inc. (b) 8,979 1,060
NCR Corp. (b) 6,788 262
Network Appliance, Inc. (b) 21,410 1,583
Seagate Technology, Inc. (b) 15,173 771
Silicon Graphics, Inc. (b) (d) 12,948 93
Sun Microsystems, Inc. (b) 110,963 10,202
Unisys Corp. (b) 21,834 506
91,561
Construction (0.0%):
Fluor Corp. 5,345 179
Consumer Products (1.0%):
American Greetings Corp., Class A (d) 4,536 82
Clorox Co. 16,626 611
Colgate-Palmolive Co. (d) 40,953 2,339
Fortune Brands, Inc. (d) 11,534 288
Jostens, Inc. 2,345 58
Newell Rubbermaid, Inc. (d) 19,826 499
Procter & Gamble Co. (d) 92,490 5,515
Tupperware Corp. 4,053 77
9,469
Containers (0.1%):
Ball Corp. 2,128 67
Bemis, Inc. 3,677 135
Crown Cork & Seal, Inc. 9,094 148
Owens-Illinois, Inc. (b) 10,553 142
Pactiv Corp. 12,046 99
Sealed Air Corp. (b) (d) 5,871 327
918
Cosmetics & Related (0.4%):
Alberto Culver Co. 3,918 93
Avon Products, Inc. (d) 17,033 707
Gillette Co. 75,404 2,790
International Flavor & Fragrance, Inc. 7,389 254
3,844
Distribution/Wholesale (0.2%):
Costco Wholesale Corp. (b) (d) 31,255 1,690
Electrical Equipment (0.2%):
Emerson Electric Co. 30,303 1,663
W.W. Grainger, Inc. 6,564 285
1,948
Electronic & Electrical -- General (5.0%):
General Electric Co. 230,642 36,268
Tandy Corp. 13,589 775
Texas Instruments, Inc. (d) 57,151 9,308
46,351
Electronic Components/
Instruments (0.1%):
Teradyne, Inc. (b) 12,021 1,323
Electronics (0.7%):
Analog Devices (b) (d) 24,588 1,889
Johnson Controls, Inc. 6,006 380
Millipore Corp. 3,182 228
PE Corp. -- PE Biosystems Group 14,491 869
PerkinElmer, Inc. 3,358 184
Solectron Corp. (b) (d) 41,662 1,951
Tektronix, Inc. 3,322 192
Thermo Electron Corp. (b) 11,123 216
Thomas & Betts Corp. 4,064 125
6,034
Entertainment (0.7%):
Brunswick Corp. 6,455 124
The Walt Disney Co. (d) 145,509 6,302
6,426
See notes to financial statements.
102
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Stock Index Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Environmental Control (0.1%):
Allied Waste Industries, Inc. (b) 13,275 $ 81
Waste Management, Inc. 43,558 692
773
Financial & Insurance (0.0%):
MBIA, Inc. (d) 7,000 346
Financial Services (3.7%):
American Express Co. 31,470 4,722
Associates First Capital Corp. (d) 51,193 1,136
Bear Stearns Companies, Inc. 7,972 342
Capital One Financial Corp. 13,861 606
Citigroup, Inc. 237,016 14,088
Countrywide Credit Industries, Inc. 7,967 220
Deluxe Corp. 5,160 130
Equifax, Inc. 9,942 243
Fannie Mae 72,054 4,346
Franklin Resources, Inc. (d) 17,479 564
Freddie Mac 48,869 2,245
Household International, Inc. 33,049 1,380
Lehman Brothers Holding, Inc. (d) 8,437 692
MBNA Corp. 56,362 1,497
Paine Webber Group, Inc. 10,032 440
Price (T. Rowe) Associates (d) 8,411 321
Providian Financial Corp. 9,980 879
SLM Holding Corp. 11,183 350
34,201
Food Distributors (0.5%):
Albertsons, Inc. (d) 29,780 970
Great Atlantic & Pacific Tea, Inc. 2,697 49
Kroger Co. (b) (d) 58,651 1,089
Safeway, Inc. (b) 35,767 1,578
SUPERVALU, Inc. 9,814 203
Sysco Corp. 23,198 873
Winn-Dixie Stores, Inc. (d) 10,275 170
4,932
Food Processing & Packaging (1.1%):
Archer Daniels Midland Co. (d) 42,682 424
Bestfoods 19,608 986
Campbell Soup Co. (d) 29,976 779
ConAgra, Inc. 34,617 653
General Mills, Inc. 21,168 770
H.J. Heinz Co. (d) 24,932 848
Hershey Foods Corp. (d) 9,727 441
Kellogg Co. 28,498 696
Nabisco Group Holdings Corp. 22,927 295
Quaker Oats Co. (d) 9,405 613
Ralston-Ralston Purina Group 21,217 375
Sara Lee Corp. 63,878 958
Unilever NV 40,180 1,832
Wm. Wrigley Jr. Co. (d) 8,138 589
10,259
Forest Products --
Lumber & Paper (0.7%):
Boise Cascade Corp. 4,018 131
Champion International Corp. (d) 6,762 445
Fort James Corp. 15,210 364
Georgia Pacific Corp. 12,020 442
International Paper Co. 29,108 1,070
Kimberly-Clark Corp. 39,056 2,267
Louisiana Pacific Corp. 7,483 100
Mead Corp. 7,216 251
Potlatch Corp. 2,035 80
Temple-Inland, Inc. 3,926 197
Westvaco Corp. (d) 7,050 218
Weyerhauser Co. 16,509 882
Willamette Industries, Inc. 7,842 299
6,746
Health Care (0.7%):
Columbia/HCA Healthcare Corp. 39,596 1,126
Humana, Inc. (b) 11,776 91
Mallinckrodt, Inc. 4,820 130
Manor Care, Inc. (b) 7,244 86
McKesson HBOC, Inc. 19,806 334
Medtronic, Inc. 83,961 4,360
Wellpoint Health Networks (b) 4,474 330
6,457
Heavy Machinery (0.2%):
Caterpillar Tractor, Inc. 24,994 986
Deere & Co. 16,449 664
Ingersoll Rand Co. 11,499 540
McDermott International, Inc. 4,186 34
2,224
Hotels & Motels (0.1%):
Hilton Hotels Corp. 25,926 220
Marriott International, Inc., Class A 17,489 560
780
Household Goods -- Appliances,
Furnishings & Electronics (0.1%):
Leggett & Platt, Inc. (d) 13,798 295
Maytag Corp. 5,935 204
Whirlpool Corp. (d) 5,232 341
840
Insurance -- Multi-Line (2.5%):
Aetna, Inc. 10,052 582
Aflac, Inc. 18,707 913
Allstate Corp. (d) 56,616 1,338
American General Corp. 17,371 973
American International Group 108,836 11,938
Aon Corp. 18,040 488
CIGNA Corp. 11,850 945
Cincinnati Financial Corp. 11,537 465
Conseco, Inc. 22,995 125
Hartford Financial Services Group, Inc. 15,579 813
Jefferson Pilot Corp. 7,362 490
Lincoln National Corp. 13,741 478
Loews Corp. 7,455 411
Marsh & McLennan Cos., Inc. 18,755 1,849
MGIC Investment Corp. 7,431 355
Progressive Corp. (d) 5,140 336
Safeco Corp. (d) 9,139 202
See notes to financial statements.
103
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Stock Index Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Torchmark Corp. 9,247 $ 232
UnumProvident Corp. (d) 16,873 287
23,220
Insurance -- Property, Casualty,
Health (0.1%):
Chubb Corp. (d) 12,368 787
St. Paul Cos., Inc. 15,975 569
1,356
Internet Content (1.6%):
America Online, Inc. (b) 160,400 9,593
Yahoo, Inc. (b) (d) 37,010 4,821
14,414
Leisure -- Recreation, Gaming (0.2%):
Carnival Corp. (d) 43,371 1,078
Harrah's Entertainment, Inc. (b) 9,040 186
Mirage Resorts, Inc. (b) 13,581 277
1,541
Machine -- Diversified (0.2%):
Briggs & Stratton Corp. 1,615 62
Cummins Engine Co., Inc. (d) 2,910 103
Dover Corp. 14,314 728
NACCO Industries, Inc. 573 26
Rockwell International Corp. 13,340 525
1,444
Manufacturing -- Capital Goods (0.2%):
Cooper Industries, Inc. 6,619 227
Illinois Tool Works, Inc. 21,122 1,353
1,580
Manufacturing -- Miscellaneous (1.6%):
Corning, Inc. 19,881 3,926
Crane Co. 4,632 124
Danaher Corp. 10,006 572
Eaton Corp. 5,174 435
FMC Corp. (b) 2,150 125
ITT Industries, Inc. 6,180 195
Minnesota Mining & Manufacturing Co. 28,048 2,426
National Service Industries, Inc. 2,861 62
Pall Corp. (d) 8,717 194
Parker-Hannifin Corp. 7,879 366
PPG Industries, Inc. 12,217 664
Textron, Inc. 10,456 648
Tyco International Ltd. 118,876 5,462
15,199
Media (1.5%):
Media One Group, Inc. (b) (d) 43,020 3,253
Time Warner, Inc. (d) 90,438 8,134
Viacom, Inc., Class B (b) (d) 48,996 2,664
14,051
Medical Services (0.2%):
Healthsouth Corp. (b) 27,152 219
Tenet Healthcare Corp. (b) 21,928 559
Unitedhealth Group, Inc. 11,933 796
1,574
Medical Supplies (0.5%):
Bausch & Lomb, Inc. 4,057 245
Baxter International, Inc. 20,451 1,331
Becton Dickinson & Co. 17,685 453
Biomet, Inc. 7,934 283
Boston Scientific Corp. (b) (d) 29,152 773
C.R. Bard, Inc. 3,598 157
Guidant Corp. 21,606 1,240
St. Jude Medical, Inc. 5,916 185
4,667
Medical -- Information Systems (0.0%):
IMS Health, Inc. 21,646 369
Metals -- Fabrication (0.0%):
Timken Co. 4,353 80
Worthington Industries, Inc. 6,273 78
158
Mining (0.1%):
Barrick Gold Corp. 27,716 466
Homestake Mining Co. 18,296 110
Newmont Mining Corp. 11,782 276
852
Motorcycle (0.1%):
Harley-Davidson, Inc. (d) 21,274 847
Newspapers (0.4%):
Dow Jones & Co., Inc. (d) 6,314 410
Gannett Co., Inc. 19,597 1,253
Knight-Ridder, Inc. (d) 5,900 289
New York Times Co., Class A (d) 12,039 496
Times Mirror Co., Class A 4,217 411
Tribune Co. 16,705 649
3,508
Office Equipment & Supplies
(Non-Computer Related) (0.4%):
Avery Dennison Corp. 7,921 520
IKON Office Solutions, Inc. 10,538 62
Office Depot, Inc. (b) (d) 23,140 244
Pitney Bowes, Inc. 18,647 762
Staples, Inc. (b) 33,026 630
Xerox Corp. (d) 46,695 1,234
3,452
Oil & Gas Exploration,
Production & Services (1.1%):
Amerada Hess Corp. (d) 6,376 406
Anadarko Petroleum Corp. (d) 8,964 389
Apache Corp. (d) 8,020 388
Burlington Resource, Inc. 15,289 601
Coastal Corp. 15,019 754
Columbia Energy Group 5,713 358
Enron Corp. 50,305 3,507
Kerr-McGee Corp. (d) 6,712 347
Occidental Petroleum Corp. 25,839 554
Oneok, Inc. 2,171 55
Rowan Cos., Inc. (b) 6,491 181
Tosco Corp. (d) 10,118 324
See notes to financial statements.
104
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Stock Index Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Transocean Sedco Forex, Inc. 22,096 $ 1,039
Union Pacific Resources Group, Inc. (d) 17,718 340
Williams Cos., Inc. 30,560 1,140
10,383
Oil-Integrated Companies (4.0%):
Chevron Corp. 46,133 3,927
Conoco, Inc., Class B 44,023 1,095
Exxon Mobil Corp. 242,773 18,861
Phillips Petroleum Co. (d) 17,805 845
Royal Dutch Petroleum Co. 150,736 8,648
Sunoco, Inc. 6,343 192
Texaco, Inc. 38,878 1,924
Unocal Corp. 17,041 551
USX-Marathon Group, Inc. 21,842 509
36,552
Oilfield Services & Equipment (0.5%):
Baker Hughes, Inc. 23,142 736
Halliburton Co. 31,054 1,372
Schlumberger Ltd. 38,652 2,960
5,068
Paint, Varnishes, Enamels (0.0%):
Sherwin-Williams Co. 11,660 290
Pharmaceuticals (7.8%):
Abbott Laboratories 108,067 4,154
Allergan, Inc. 9,243 544
Alza Corp., Class A (b) (d) 7,179 316
American Home Products Corp. 91,788 5,157
Biogen, Inc. (b) 10,561 621
Bristol-Myers Squibb Co. 139,446 7,312
Cardinal Health, Inc. 19,774 1,089
Eli Lilly & Co. (d) 76,660 5,927
Johnson & Johnson, Inc. 97,813 8,070
Merck & Co., Inc. 164,312 11,420
Pfizer, Inc. 272,136 11,463
Pharmacia Corp. 87,985 4,394
Schering-Plough Corp. 103,271 4,163
Warner-Lambert Co. 60,361 6,870
Watson Pharmaceuticals, Inc. (b) (d) 6,747 303
71,803
Photography (0.1%):
Eastman Kodak Co. 22,186 1,241
Polaroid Corp. (d) 3,130 63
1,304
Pipelines (0.1%):
El Paso Energy Corp. 16,050 682
Primary Metal & Mineral
Production (0.1%):
Freeport-McMoRan Copper & Gold, Inc.,
Class B 11,492 111
Inco Ltd. (b) 13,494 211
Phelps Dodge Corp. 5,692 263
Placer Dome, Inc. 22,889 186
771
Publishing (0.1%):
Dun & Bradstreet 11,309 341
McGraw-Hill Cos., Inc. 13,785 723
Meredith Corp. 3,616 101
R.R. Donnelley & Sons Co. 8,888 189
1,354
Radio & Television (0.8%):
CBS Corp. (b) 53,594 3,149
Clear Channel Communications,
Inc. (b) (d) 23,795 1,713
Comcast Corp., Class A Special Shares 65,134 2,609
7,471
Railroads (0.3%):
Burlington Northern Santa Fe 32,122 776
CSX Corp. 15,348 321
Kansas City Southern
Industries, Inc. (d) 7,769 558
Norfolk Southern Corp. (d) 26,853 473
Union Pacific Corp. 17,473 736
2,864
Restaurants (0.5%):
Darden Restaurants, Inc. 9,008 166
McDonald's Corp. 95,183 3,629
Tricon Global Restaurants (b) (d) 10,615 362
Wendy's International, Inc. 8,405 188
4,345
Retail (2.3%):
Bed Bath & Beyond, Inc. (b) (d) 9,865 362
Best Buy Co., Inc. (b) 14,369 1,160
Dollar General Corp. 18,581 425
K-Mart Corp. (b) (d) 34,227 278
Target Corp. 30,802 2,050
Wal-Mart Stores, Inc. 313,082 17,338
21,613
Retail -- Department Stores (0.4%):
Consolidated Stores Corp. (b) (d) 7,791 97
Dillard's, Inc., Class A 7,374 103
Federated Department Stores,
Inc. (b) (d) 14,760 502
Harcourt General, Inc. 5,003 187
J.C. Penney Co., Inc. 18,308 253
Kohls Corp. (b) (d) 22,920 1,100
May Department Stores Co. (d) 23,374 643
Nordstrom, Inc. 9,462 263
Sears, Roebuck & Co. 26,569 973
4,121
Retail -- Drug Stores (0.4%):
CVS Corp. (d) 27,548 1,198
Longs Drug Stores Corp. 2,766 64
Rite Aid Corp. 18,202 91
Walgreen Co. (d) 70,735 1,990
3,343
See notes to financial statements.
105
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Stock Index Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Retail -- Specialty Stores (1.6%):
AutoZone, Inc. (b) (d) 9,714 $ 223
Circuit City Stores, Inc. 14,295 841
Home Depot, Inc. (d) 161,848 9,075
Limited, Inc. (d) 15,101 682
Lowe's Cos. 26,876 1,330
The Gap, Inc. 59,815 2,198
TJX Cos., Inc. 21,798 418
Toys "R" Us, Inc. (b) 16,867 257
15,024
Rubber & Rubber Products (0.0%):
Cooper Tire & Rubber Co. 5,332 72
Goodyear Tire & Rubber Co. 10,990 304
376
Savings & Loans (0.2%):
Golden West Financial Corp. 11,361 388
Washington Mutual, Inc. (d) 40,582 1,037
1,425
Semiconductors (5.2%):
Advanced Micro Devices, Inc. (b) (d) 10,348 908
Altera Corp. (b) 14,045 1,436
Applied Materials, Inc. (b) (d) 53,800 5,478
Conexant Systems, Inc. (b) (d) 15,095 904
Intel Corp. 234,860 29,784
KLA-Tencor Corp. (b) 12,907 966
Linear Technology Corp. 21,625 1,235
LSI Logic Corp. (b) (d) 20,910 1,307
Micron Technology, Inc. (b) 18,996 2,645
Molex, Inc. (d) 13,786 757
National Semiconductor Corp. (b) 12,057 732
Xilinx, Inc. (b) 22,586 1,654
47,806
Software & Computer Services (7.0%):
Adobe Systems, Inc. 8,333 1,008
Autodesk, Inc. (d) 4,330 166
Automatic Data Processing, Inc. (d) 44,305 2,384
BMC Software, Inc. (b) (d) 17,165 804
Citrix Systems, Inc. (b) 12,599 769
Computer Associates International, Inc. 41,369 2,309
Compuware Corp. (b) 25,340 318
EMC Corp. (b) 71,527 9,938
First Data Corp. 29,459 1,434
Microsoft Corp. (b) 365,883 25,521
Novell, Inc. (b) 22,958 451
Oracle Corp. (b) (d) 198,343 15,855
Parametric Technology Corp. (b) 19,329 158
Peoplesoft, Inc. (b) 18,872 263
Shared Medical Systems Corp. (d) 1,891 78
VERITAS Software Corp. (b) 27,210 2,919
64,375
Steel (0.1%):
Allegheny Technologies, Inc. 6,577 159
Bethlehem Steel Corp. (b) 9,220 50
Nucor Corp. 6,131 263
USX-U.S. Steel Group, Inc. 6,214 156
628
Tax Return Preparation (0.0%):
H&R Block, Inc. (d) 6,913 289
Telecommunications (0.9%):
Global Crossing Ltd. (b) (d) 54,796 1,726
Nextel Communications (b) (d) 25,618 2,804
Sprint Corp. (PCS Group) (b) 60,588 3,332
7,862
Telecommunications -- Equipment (4.5%):
ADC Telecommunications, Inc. (b) (d) 21,113 1,283
Andrew Corp. (b) 5,662 167
Comverse Technology, Inc. (b) (d) 10,734 957
Lucent Technologies, Inc. (d) 224,068 13,934
Motorola, Inc. 49,851 5,935
Nortel Networks Corp. 101,418 11,486
Qualcomm, Inc. (b) (d) 51,876 5,625
Scientific-Atlanta, Inc. 11,116 723
Tellabs, Inc. (b) 28,279 1,550
41,660
Textile Manufacturing (0.0%):
Springs Industries, Inc., Class A 1,258 52
Tobacco & Tobacco Products (0.4%):
Philip Morris Cos., Inc. 166,331 3,639
UST, Inc. 12,027 180
3,819
Tools & Hardware Manufacturing (0.1%):
Black & Decker Corp. (d) 6,106 257
Milacron, Inc. 2,602 47
Snap-on, Inc. (d) 4,113 109
Stanley Works 6,286 185
598
Toys (0.1%):
Hasbro, Inc. 12,631 201
Mattel, Inc. 29,579 363
564
Transportation Leasing & Trucking (0.0%):
Ryder Systems, Inc. 4,181 93
Transportation Services (0.1%):
Fedex Corp. (b) (d) 20,383 768
Travel Services (0.0%):
Sabre Holdings Corp. (d) 9,008 315
Utilities -- Electric (1.7%):
Ameren Corp. (d) 9,646 354
American Electric Power Co. (d) 13,645 500
Carolina Power & Light Co. 11,219 410
Central & South West Corp. 14,948 324
CINergy Corp. (d) 11,171 299
CMS Energy Corp. (d) 8,140 155
Consolidated Edison Co. of
New York, Inc. (d) 15,537 547
See notes to financial statements.
106
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Stock Index Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Constellation Energy Group, Inc. 10,513 $ 348
Detroit Edison Co. 10,196 333
Dominion Resources, Inc. (d) 21,335 960
Duke Energy Corp. 25,706 1,479
Edison International 24,407 465
Entergy Corp. (d) 17,352 441
FirstEnergy Corp. 16,381 417
Florida Progress Corp. 6,903 338
FPL Group, Inc. 12,600 569
GPU, Inc. 8,676 243
New Century Engergies, Inc. 8,123 265
Niagara Mohawk Holdings, Inc. (b) 11,875 165
Northern States Power Co. 10,882 237
Peco Energy Co. 13,060 544
PG&E Corp. (d) 26,992 700
Pinnacle West Capital Corp. 5,957 209
PPL Corp. 10,101 241
Public Service Enterprise Group 15,366 551
Reliant Energy, Inc. (d) 20,785 553
Southern Co. (d) 47,316 1,180
Texas Utilities Co. 19,430 655
The AES Corp. (b) (d) 14,508 1,305
Unicom Corp. 15,291 608
15,395
Utilities -- Gas (0.1%):
Eastern Enterprises 1,899 116
NICOR, Inc. 3,307 112
Peoples Energy Corp. (d) 2,498 78
Sempra Energy 14,365 266
572
Utilities -- Telecommunications (6.0%):
Alltel Corp. 22,068 1,470
AT&T Corp. (d) 224,621 10,487
Bell Atlantic Corp. 109,155 6,467
BellSouth Corp. 132,320 6,442
CenturyTel, Inc. 9,819 241
GTE Corp. 68,314 4,628
SBC Communications, Inc. 239,808 10,508
Sprint Corp. (FON Group) (d) 61,259 3,767
U. S. West, Inc. 35,521 2,529
WorldCom, Inc. (b) 199,526 9,066
55,605
Total Common Stocks (Cost $540,849) 869,036
U.S. Treasury Bills (0.5%)
5.65%, 6/15/00 (c) $ 4,500 4,469
Total U.S. Treasury Bills (Cost $4,469) 4,469
Securities Purchased With Cash Collateral (11.7%)
Commercial Paper (1.2%):
Windmill Funding, 6.12%, 5/17/00 11,068 11,068
Investment Companies (0.2%):
AIM Short Term Prime
Money Market Fund 874,769 875
AIM Liquid Assets Money Market Fund 1,165,542 1,166
2,041
Time Deposits (1.0%):
Fifth Third Bank, 6.06%, 5/1/00 3,348 3,348
Firstar Bank, 6.00%, 5/1/00 5,581 5,581
8,929
Repurchase Agreements (9.3%):
Lehman Corp., 6.11%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 15,000 15,000
Morgan Stanley Dean Witter,
6.16%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 18,000 18,000
First Union, 6.22%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 20,000 20,000
Deutsche Bank, 6.16%, 5/1/00
(Collateralized by $15,450
KeyCorp, 7.50%, 6/15/06
Market value -- $15,023) 15,000 15,000
Salomon Corp., 6.14%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 18,000 18,000
86,000
Total Securities Purchased
With Cash Collateral (Cost $108,038) 108,038
Total Investments (Cost $704,511) (a) -- 111.7% 1,032,698
Liabilities in excess of other assets -- (11.7%) (107,998)
TOTAL NET ASSETS -- 100.0% $ 924,700
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $366,074
Unrealized depreciation (36,668)
Net unrealized appreciation $329,406
(b) Non-income producing securities.
(c) Serves as collateral for futures contracts.
Number of Market
Contracts Value
Futures Contracts
S&P 500 Index,
face amount $56,451
expiring June 15, 2000 158 $57,670
Total Futures Contracts (Cost $56,451) $57,670
(d) All or a portion of the security was loaned as of April 30, 2000.
See notes to financial statements.
107
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Growth Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (0.3%)
Household Finance, 6.10%, 5/1/00 $ 1,124 $ 1,124
Total Commercial Paper (Cost $1,124) 1,124
Common Stocks (99.7%)
Aerospace/Defense (4.1%):
Boeing Co. 116,300 4,616
Honeywell International, Inc. 122,600 6,865
United Technologies Corp. 107,800 6,704
18,185
Banks (2.5%):
Mellon Financial Corp. 161,900 5,201
Wells Fargo Co. 150,700 6,188
11,389
Beverages (1.6%):
Anheuser-Busch Cos., Inc. 27,000 1,905
Coca-Cola Co. (c) 22,400 1,054
Pepsico, Inc. 118,300 4,341
7,300
Bio-Technology (0.4%):
Amgen, Inc. (b) 30,900 1,730
Chemicals -- General (0.5%):
E.I. Du Pont de Nemours 43,600 2,068
Computers & Peripherals (13.5%):
Cisco Systems, Inc. (b) (c) 306,200 21,227
Dell Computer Corp. (b) (c) 201,500 10,100
Hewlett-Packard Co. (c) 50,300 6,791
International Business Machines Corp. 122,800 13,708
Sun Microsystems, Inc. (b) 99,800 9,175
61,001
Consumer Products (1.7%):
Colgate-Palmolive Co. (c) 94,900 5,421
Procter & Gamble Co. (c) 37,700 2,248
7,669
Electrical Equipment (0.8%):
Emerson Electric Co. 62,300 3,419
Electronic & Electrical -- General (4.8%):
General Electric Co. 135,400 21,292
Financial Services (4.1%):
Citigroup, Inc. 128,000 7,608
Fannie Mae 90,000 5,428
Goldman Sachs Group, Inc. (c) 30,800 2,872
MBNA Corp. 97,200 2,582
18,490
Food Processing & Packaging (2.2%):
Bestfoods 80,600 4,050
General Mills, Inc. 160,000 5,820
9,870
Forest Products --
Lumber & Paper (0.9%):
International Paper Co. 67,200 2,470
Mead Corp. 48,000 1,671
4,141
Health Care (2.1%):
McKesson HBOC, Inc. 107,900 1,821
Medtronic, Inc. (c) 144,700 7,515
9,336
Insurance -- Multi-Line (2.4%):
American International Group 98,600 10,815
Internet Content (0.5%):
America Online, Inc. (b) (c) 35,400 2,117
Manufacturing -- Miscellaneous (0.7%):
Tyco International Ltd. 70,000 3,216
Media (2.7%):
Time Warner, Inc. (c) 73,400 6,602
Viacom, Inc., Class B (b) (c) 99,000 5,383
11,985
Newspapers (1.2%):
Gannett Co., Inc. 81,000 5,174
Oil & Gas Exploration,
Production & Services (1.6%):
Anadarko Petroleum Corp. (c) 57,900 2,515
Enron Corp. 48,000 3,345
Transocean Sedco Forex, Inc. 23,465 1,103
6,963
Oil-Integrated Companies (3.2%):
Chevron Corp. 36,300 3,090
Conoco, Inc., Class A (c) 61,300 1,460
Conoco, Inc., Class B 61,500 1,530
Exxon Mobil Corp. 105,000 8,157
14,237
Oilfield Services & Equipment (1.4%):
Schlumberger Ltd. 79,300 6,071
Pharmaceuticals (12.4%):
Abbott Laboratories 91,900 3,532
American Home Products Corp. 86,200 4,843
Bristol-Myers Squibb Co. (c) 110,500 5,794
Cardinal Health, Inc. (c) 75,900 4,179
Eli Lilly & Co. (c) 34,400 2,660
Johnson & Johnson, Inc. 82,300 6,790
Merck & Co., Inc. 99,000 6,881
Pfizer, Inc. 351,100 14,790
Schering-Plough Corp. 158,000 6,369
55,838
Retail (4.0%):
Target Corp. 108,400 7,215
Wal-Mart Stores, Inc. 193,000 10,688
17,903
See notes to financial statements.
108
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Growth Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Retail -- Drug Stores (0.7%):
Walgreen Co. (c) 119,200 $ 3,353
Retail -- Specialty Stores (2.5%):
AutoZone, Inc. (b) 42,600 977
Home Depot, Inc. (c) 185,100 10,377
11,354
Semiconductors (6.7%):
Altera Corp. (b) (c) 36,700 3,753
Applied Materials, Inc. (b) (c) 33,700 3,431
Intel Corp. 158,400 20,087
Xilinx, Inc. (b) 37,800 2,769
30,040
Software & Computer Services (10.7%):
Automatic Data Processing, Inc. 144,500 7,776
Electronic Data Systems 113,200 7,783
EMC Corp. (b) 33,300 4,627
Microsoft Corp. (b) 205,300 14,319
Oracle Corp. (b) (c) 147,700 11,806
VERITAS Software Corp. (b) (c) 14,500 1,556
47,867
Telecommunications -- Equipment (4.1%):
Lucent Technologies, Inc. 98,800 6,144
Motorola, Inc. 82,200 9,787
Tellabs, Inc. (b) 45,300 2,483
18,414
Utilities -- Telecommunications (5.7%):
AT&T Corp. (c) 47,400 2,213
GTE Corp. 78,000 5,285
SBC Communications, Inc. 237,300 10,396
WorldCom, Inc. (b) 171,000 7,770
25,664
Total Common Stocks (Cost $284,046) 446,901
Securities Purchased With Cash Collateral (8.5%)
Commercial Paper (2.3%):
Windmill Funding, 6.12%, 5/17/00 $ 10,050 10,050
Investment Companies (0.4%):
AIM Short Term Prime
Money Market Fund 794,336 794
AIM Liquid Assets Money
Market Fund 1,058,374 1,058
1,852
Time Deposits (1.8%):
Fifth Third Bank, 6.06%, 5/1/00 3,041 3,041
Firstar Bank, 6.00%, 5/1/00 5,068 5,068
8,109
Repurchase Agreements (4.0%):
Lehman Corp., 6.11%, 5/1/00
(Collateralized by $4,514
Applied Materials, Inc.
Market value - 4,514) 4,000 4,000
Merrill Lynch, 6.19%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 4,000 4,000
Morgan Stanley Dean Witter,
6.16%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 5,000 5,000
First Union, 6.22%, 5/1/00
(Collateralized by $5,150
GMAC, 8.75%, 7/15/05
market value - $5,029) 5,000 5,000
18,000
Total Securities Purchased
With Cash Collateral (Cost $38,011) 38,011
Total Investments (Cost $323,181) (a) -- 108.5% 486,036
Liabilities in excess of other assets -- (8.5%) (38,114)
TOTAL NET ASSETS -- 100.0% $447,922
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $168,930
Unrealized depreciation (6,075)
Net unrealized appreciation $162,855
(b) Non-income producing securities.
(c) All or a portion of this security was loaned as of April 30, 2000.
See notes to financial statements.
109
<PAGE>
Statements of Assets and Liabilities
The Victory Portfolios April 30, 2000
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
<TABLE>
<CAPTION>
Established Diversified Stock
Value Lakefront Value Stock Index Growth
Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Cost $420,140; $1,580; $309,889;
$1,112,475; $618,511 & $305,181) $571,513 $1,743 $413,774 $1,172,591 $ 946,698 $468,036
Repurchase agreements at amortized cost 41,000 -- -- 133,200 86,000 18,000
Cash -- -- -- 59 -- --
Interest and dividends receivable 542 3 138 997 707 275
Receivable from affiliates 30 5 -- -- 3 20
Receivable for capital shares issued 220 -- -- 527 18 36
Receivable from brokers for investments sold -- -- 1,782 -- -- --
Unamortized organization costs -- 11 -- -- -- --
Prepaid expenses and other assets 91 11 25 9 31 31
Total Assets 613,396 1,773 415,719 1,307,383 1,033,457 486,398
LIABILITIES:
Payable to Custodian -- -- -- -- 1 --
Payable for capital shares redeemed -- -- -- 178 8 60
Payable for return of collateral received 57,582 -- -- 144,246 108,038 38,011
Payable for net variation margin on
open futures contracts -- -- -- -- 286 --
Payable for organization cost -- 25 -- -- -- --
Accrued expenses and other payables:
Investment advisory fees 346 1 128 627 380 277
Administration fees 73 -- 4 21 -- 10
Custodian fees 9 -- 19 20 12 9
Accounting fees -- -- 2 2 -- --
Transfer agent fees 12 2 14 163 29 18
Shareholder service fees -- Class A 102 -- -- 182 -- 55
Shareholder service and 12b-1 fees -- Class B -- -- -- 60 -- 29
12b-1 fees -- Class G 1 -- 246 48 3 2
Other 2 -- 19 4 -- 5
Total Liabilities 58,127 28 432 145,551 108,757 38,476
NET ASSETS:
Capital 361,045 1,416 244,565 903,312 593,373 270,225
Undistributed (distributions in excess of)
net investment income (37) -- (164) (364) 575 (628)
Net unrealized appreciation/depreciation
from investments and futures 151,373 163 103,885 60,116 329,406 162,855
Accumulated undistributed net realized gains
from investment transactions and futures 42,888 166 67,001 198,768 1,346 15,470
Net Assets $555,269 $1,745 $415,287 $1,161,832 $ 924,700 $447,922
Net Assets
Class A $553,351 -- $ 965,681 $ 901,247 $442,655
Class B -- -- 72,626 -- --
Class G 1,918 $415,287 123,525 23,453 5,267
Total $555,269 $415,287 $1,161,832 $ 924,700 $447,922
Outstanding units of beneficial interest (shares)
Class A 32,307 -- 57,300 37,340 17,530
Class B -- -- 4,449 -- --
Class G 112 13,515 7,339 972 209
Total 32,419 139 13,515 69,088 38,312 17,739
Net asset value
Redemption price per share $12.59
Redemption price per share -- Class A $ 17.13 $ 16.85 $ 24.14 $ 25.25
Offering and redemption price per share -- Class B $ 16.32
Offering and redemption price per share -- Class G $ 17.13 $ 30.73 $ 16.83 $ 24.13 $ 25.22
Maximum sales charge 5.75% 5.75% N/A 5.75% 5.75% 5.75%
Maximum offering price per share
(100%/(100%-maximum sales charge)
of net asset value adjusted to nearest cent) $13.36
Maximum offering price per share
(100%/(100%-maximum sales charge)
of net asset value adjusted to
nearest cent) -- Class A $ 18.18 $ 17.88 $ 25.61 $ 26.79
</TABLE>
See notes to financial statements.
110
<PAGE>
Statements of Operations
The Victory Portfolios For the Six Months Ended April 30, 2000
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Established Diversified Stock
Value Lakefront Value Stock Index Growth
Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Interest income $ 153 $ -- $ 315 $ 465 $ 2,331 $ 64
Dividend income 4,725 14 2,453 6,481 4,802 2,014
Securities Lending 19 -- -- 100 60 15
Foreign tax withholding -- -- (2) (2) (6) --
Total Income 4,897 14 2,766 7,044 7,187 2,093
Expenses:
Investment advisory fees 2,333 9 1,120 3,769 2,704 1,759
Administration fees 388 1 304 684 555 306
Shareholder service fees 713 1 -- 1,112 -- 416
Shareholder service fees and
12b-1 fees -- Class B -- -- -- 369 -- 122
12b-1 -- Class G 2 -- 1,078 295 21 6
Accounting fees 49 18 40 74 81 45
Custodian fees 58 3 48 123 107 50
Legal and audit fees 26 1 35 58 41 20
Amortization of organization costs -- 3 -- -- -- --
Trustees' fees and expenses 6 -- 4 12 9 4
Transfer agent fees 21 4 -- 301 52 39
Registration and filing fees 18 6 17 37 38 20
Printing fees 3 -- 31 96 11 7
Other 24 1 -- 45 36 17
Total Expenses 3,641 47 2,677 6,975 3,655 2,811
Expenses voluntarily reduced (25) (4) (293) (123) (976) (33)
Expenses Before Reimbursement
from Distributor 3,616 43 2,384 6,852 2,679 2,778
Expenses Reimbursed by Distributor (113) (30) -- -- (12) (57)
Net Expenses 3,503 13 2,384 6,852 2,667 2,721
Net Investment Income (Loss) 1,394 1 382 192 4,520 (628)
Realized/Unrealized Gains (Losses)
from Investments and Futures:
Net realized gains (losses) from
investment transactions and futures 42,913 168 67,003 199,916 3,918 15,573
Change in unrealized appreciation/depreciation
from investments and futures (32,213) (119) (62,198) (87,400) 50,476 15,791
Net realized/unrealized gains (losses)
from investments and futures 10,700 49 4,805 112,516 54,394 31,364
Change in net assets resulting from operations $ 12,094 $ 50 $ 5,187 $112,708 $58,914 $30,736
</TABLE>
See notes to financial statements.
111
<PAGE>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Value Lakefront Established Value
Fund Fund Fund
Six Six Six Seven
Months Year Months Year Months Months Year
Ended Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, April 30, October 31, March 31,
2000 1999 2000 1999 2000 1999<F1> 1999
<S> <C> <C> <C> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 1,394 $ 1,185 $ 1 $ 7 $ 382 $ 83 $ 4,759
Net realized gains/(losses)
from investment
transactions and futures 42,913 70,672 168 50 67,003 30,682 41,202
Net change in unrealized
appreciation/depreciation
from investments and futures (32,213) 29,655 (119) 212 (62,198) 14,949 (54,160)
Change in net assets resulting
from operations 12,094 101,512 50 269 5,187 45,714 (8,199)
Distributions to Shareholders:
From net investment
income by class:
Class A (1,429) (1,320) (1) (9) -- -- --
Class B -- -- -- -- -- -- --
Class G (2) -- -- -- (546) (485) (4,946)
From net realized gains from
investment transactions (70,536) (86,132) (50) (145) (55,588) -- (30,865)
Change in net assets from
distributions to shareholders (71,967) (87,452) (51) (154) (56,134) (485) (35,811)
Capital Transactions:
Proceeds from shares issued 62,727 117,771 348 434 25,734 32,462 315,787
Dividends reinvested 65,487 81,419 18 65 56,055 484 34,887
Cost of shares redeemed (124,555) (119,080) (281) (76) (84,843) (87,871) (394,935)
Change in net assets from
capital transactions 3,659 80,110 85 423 (3,054) (54,925) (44,261)
Change in net assets (56,214) 94,170 84 538 (54,001) (9,696) (88,271)
Net Assets:
Beginning of period 611,483 517,313 1,661 1,123 469,288 478,984 567,255
End of period $ 555,269 $ 611,483 $1,745 $1,661 $415,287 $469,288 $ 478,984
Share Transactions:
Issued 3,587 6,393 29 34 857 943 10,251
Reinvested 3,795 5,077 1 6 1,812 15 1,130
Redeemed (7,416) (6,523) (23) (6) (2,832) (2,562) (12,812)
Change in shares (34) 4,947 7 34 (163) (1,604) (1,431)
<FN>
<F1> For the period April 1, 1999 through October 31, 1999.
</FN>
</TABLE>
See notes to financial statements.
112
<PAGE>
THE VICTORY PORTFOLIOS Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Diversified Stock Stock Index Growth
Fund Fund 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,
2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 192 $ 2,936 $ 4,520 $ 10,034 $ (628) $ (742)
Net realized gains/(losses) from
investment transactions and futures 199,916 176,486 3,918 40,302 15,573 20,812
Net change in unrealized appreciation/
depreciation from investments and futures (87,400) 21,114 50,476 111,423 15,791 48,341
Change in net assets resulting from operations 112,708 200,536 58,914 161,759 30,736 68,411
Distributions to Shareholders:
From net investment income by class:
Class A (555) (3,340) (4,757) (10,232) -- --
Class B -- (4) -- (17) -- --
Class G (1) -- (77) -- -- --
From net realized gains from
investment transactions (177,058) (198,727) (28,851) (61,389) (20,902) (22,258)
Change in net assets from distributions
to shareholders (177,614) (202,071) (33,685) (71,638) (20,902) (22,258)
Capital Transactions:
Proceeds from shares issued 177,607 327,346 86,195 195,289 42,511 152,381
Proceeds from shares issued
in connection with acquisition -- 60,016 -- -- -- --
Dividends reinvested 154,383 168,060 30,986 65,410 18,009 18,991
Cost of shares redeemed (239,967) (403,292) (85,327) (110,350) (39,849) (69,584)
Change in net assets from capital transactions 92,023 152,130 31,854 150,349 20,671 101,788
Change in net assets 27,117 150,595 57,083 240,470 30,505 147,941
Net Assets:
Beginning of period 1,134,715 984,120 867,617 627,147 417,417 269,476
End of period $1,161,832 $1,134,715 $924,700 $ 867,617 $447,922 $417,417
Share Transactions:
Issued 10,583 18,534 3,616 8,819 1,729 6,438
Issued in connection with acquisition -- 4,456 -- -- -- --
Reinvested 9,526 10,957 1,299 3,319 731 936
Redeemed (14,294) (22,921) (3,592) (4,976) (1,612) (2,949)
Change in shares 5,815 11,026 1,323 7,162 848 4,425
</TABLE>
See notes to financial statements.
113
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Value Fund
Class G
Class A Shares Shares
Six December 15,
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,
2000 1999 1998 1997 1996 1995<F2> 2000<F3>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 18.84 $ 18.81 $ 17.07 $ 14.18 $ 11.87 $ 10.13 $16.73
Investment Activities
Net investment income 0.04 0.04 0.09 0.15 0.20 0.27 0.03
Net realized and
unrealized gains
(losses) from
investments 0.44 3.16 3.16 3.57 2.65 1.92 0.41
Total from
Investment
Activities 0.48 3.20 3.25 3.72 2.85 2.19 0.44
Distributions
Net investment income (0.04) (0.04) (0.10) (0.16) (0.20) (0.27) (0.04)
In excess of net
investment income -- -- -- -- -- (0.01) --
Net realized gains (2.15) (3.13) (1.41) (0.67) (0.34) (0.17) --
Total Distributions (2.19) (3.17) (1.51) (0.83) (0.54) (0.45) (0.04)
Net Asset Value, End of Period $ 17.13 $ 18.84 $ 18.81 $ 17.07 $ 14.18 $ 11.87 $17.13
Total Return
(excludes sales charges) 2.49%<F7> 20.02% 20.46% 27.24% 24.66% 22.28% 2.62%<F7>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $553,351 $611,483 $517,313 $472,047 $382,083 $295,871 $1,918
Ratio of expenses to
average net assets <F5> 1.22%<F8> 1.40% 1.34% 1.32% 1.33% 0.99% 1.45%<F8>
Ratio of net investment income
to average net assets <F5> 0.49%<F8> 0.20% 0.54% 0.93% 1.56% 2.55% 0.04%<F8>
Ratio of expenses to
average net assets<F1> 1.27%<F8> 1.45% 1.46% <F4> 1.35% 1.30% 2.69%<F8>
Ratio of net investment income
to average net assets<F1> 0.44%<F8> 0.15% 0.42% <F4> 1.54% 2.24% (1.20)%<F8>
Portfolio turnover <F6> 13% 36% 40% 25% 28% 23% 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> 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.
<F3> Period from commencement of operations.
<F4> There were no voluntary fee reductions during the period.
<F5> Effective February 28, 2000, 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 1.45% until at least February 28, 2001
<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> Annualized.
</FN>
</TABLE>
See notes to financial statements.
114
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Lakefront Fund
Six March 3,
Months Year Year 1997
Ended Ended Ended through
April 30, October 31, October 31, October 31,
2000 1999 1998 1997<F2>
(Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $12.58 $11.52 $11.29 $10.00
Investment Activities
Net investment income 0.01 0.07 0.13 0.12
Net realized and unrealized gains
(losses) from investments 0.37 2.51 0.43 1.27
Total from Investment Activities 0.38 2.58 0.56 1.39
Distributions
Net investment income (0.01) (0.08) (0.14) (0.10)
Net realized gains (0.36) (1.44) (0.19) --
Total Distributions (0.37) (1.52) (0.33) (0.10)
Net Asset Value, End of Period $12.59 $12.58 $11.52 $11.29
Total Return (excludes sales charges) 3.11%<F3> 25.02% 5.05% 13.87%<F3>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $1,745 $1,661 $1,123 $1,255
Ratio of expenses to average net assets <F5> 1.50%<F4> 1.10% 0.32% 0.00%<F4>
Ratio of net investment income to
average net assets <F5> 0.08%<F4> 0.51% 1.14% 1.67%<F4>
Ratio of expenses to average net assets<F1> 5.46%<F4> 6.79% 6.45% 7.27%<F4>
Ratio of net investment income to
average net assets<F1> (3.88)%<F4> (5.18)% (4.99)% (5.60)%<F4>
Portfolio turnover 33% 23% 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.
<F5> Effective February 28, 2000, 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 Fund at a maximum of 1.50%
until at least February 28, 2001 and then 2.00% until at least February
28, 2010.
</FN>
</TABLE>
See notes to financial statements.
115
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Established Value Fund
Six April 1, Eleven
Months 1999 Year Year Year Year Months
Ended to Ended Ended Ended Ended Ended
April 30, October 31, March 31, March 31, March 31, March 31, March 31,
2000 1999<F2> 1999 1998 1997 1996 1995
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 34.31 $ 31.34 $ 33.94 $ 28.83 $ 27.57 $ 23.39 $ 22.52
Investment Activities
Net investment
income (loss) 0.03 0.02 0.29 0.46 0.44 0.44 0.38
Net realized and
unrealized gains
(losses) from investments 0.53 2.98 (0.71) 7.70 3.62 5.18 1.52
Total from
Investment Activities 0.56 3.00 (0.42) 8.16 4.06 5.62 1.90
Distributions
Net investment income (0.04) (0.03) (0.30) (0.48) (0.45) (0.43) (0.37)
Net realized gains (4.10) -- (1.88) (2.57) (2.35) (1.01) (0.66)
Total Distributions (4.14) (0.03) (2.18) (3.05) (2.80) (1.44) (1.03)
Net Asset Value, End of Period $ 30.73 $ 34.31 $ 31.34 $ 33.94 $ 28.83 $ 27.57 $ 23.39
Total Return 1.57%<F3> 9.59%<F3> (1.01)% 29.67% 15.14% 24.84% 8.85%<F3>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $415,287 $469,288 $478,984 $567,255 $429,726 $366,417 $277,370
Ratio of expenses to
average net assets <F5> 1.10%<F4> 1.10%<F4> 1.09% 1.10% 1.12% 1.15% 1.20%<F4>
Ratio of net investment income
to average net assets <F5> 0.18%<F4> 0.03%<F4> 0.92% 1.44% 1.57% 1.70% 1.87%<F4>
Ratio of expenses to
average net assets<F1> 1.24%<F4> 1.27%<F4> <F6> <F6> <F6> <F6> <F6>
Ratio of net investment income
to average net assets<F1> 0.04%<F4> (0.14)%<F4> <F6> <F6> <F6> <F6> <F6>
Portfolio turnover 16% 11% 37% 20% 31% 18% 24%
<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.
116
<PAGE>
The Victory Portfolios Financial Highlights
(Continued on Next Page)
<TABLE>
<CAPTION>
Diversified Stock Fund
Class A Shares
Six
Months Year Year Year Year
Ended Ended Ended Ended Ended
April 30, October 31, October 31, October 31, October 31,
2000 1999 1998<F6> 1997 1996<F2>
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 17.96 $ 18.85 $ 17.76 $ 15.75 $ 13.62
Investment Activities
Net investment income (loss) 0.01 0.06 0.11 0.16 0.20
Net realized and unrealized gains
(losses) from investments 1.72 2.92 3.07 3.84 3.21
Total from Investment Activities 1.73 2.98 3.18 4.00 3.41
Distributions
Net investment income (0.01) (0.06) (0.11) (0.16) (0.19)
Net realized gains (2.83) (3.81) (1.98) (1.83) (1.09)
Total Distributions (2.84) (3.87) (2.09) (1.99) (1.28)
Net Asset Value, End of Period $ 16.85 $ 17.96 $ 18.85 $ 17.76 $ 15.75
Total Return (excludes sales charges) 10.23%<F3> 19.39% 19.60% 27.96% 27.16%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $965,681 $957,001 $933,158 $762,270 $571,153
Ratio of expenses to average net assets 1.09%<F4> 1.06% 1.02% 1.03% 1.05%
Ratio of net investment income (loss)
to average net assets 0.13%<F4> 0.34% 0.64% 0.97% 1.40%
Ratio of expenses to average net assets<F1> 1.11%<F4> 1.10% 1.13% <F5> 1.08%
Ratio of net investment income (loss)
to average net assets<F1> 0.11%<F4> 0.30% 0.53% <F5> 1.37%
Portfolio turnover <F7> 51% 83% 84% 63% 94%
<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 March 1, 1996, the Fund designated the existing shares as
Class A Shares and commenced offering Class B Shares.
<F3> Not annualized.
<F4> Annualized.
<F5> There were no voluntary fee reductions during the period.
<F6> 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.
<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.
117
<PAGE>
The Victory Portfolios Financial Highlights--continued
<TABLE>
<CAPTION>
Diversified Stock Fund
Class B Shares Class G Shares
Six March 1, Six March 26,
Months Year Year Year 1996 Year Months 1999
Ended Ended Ended Ended through Ended Ended through
April 30, October 31, October 31, October 31, October 31, October 31, April 30, October 31,
2000 1999 1998<F7> 1997 1996<F2> 1995 2000 1999<F9><F10>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 17.55 $ 18.60 $ 17.62 $ 15.71 $14.18 $ 12.68 $ 17.95 $ 17.14
Investment Activities
Net investment
income (loss) (0.06) (0.08) (0.08) (0.06) 0.07 0.27 (0.01) (0.01)
Net realized and
unrealized gains
(losses) from
investments 1.66 2.84 3.04 3.85 1.57 2.33 1.72 0.82
Total from
Investment
Activities 1.60 2.76 2.96 3.79 1.64 2.60 1.71 0.81
Distributions
Net investment income -- -- -- -- (0.07) (0.27) -- --
In excess of net
investment income -- -- -- (0.05) (0.04) (0.01) -- --
Net realized gains (2.83) (3.81) (1.98) (1.83) -- (1.38) (2.83) --
Total
Distributions (2.83) (3.81) (1.98) (1.88) (0.11) (1.66) (2.83) --
Net Asset Value,
End of Period $ 16.32 $ 17.55 $ 18.60 $ 17.62 $15.71 $ 13.62 $ 16.83 $ 17.95
Total Return
(excludes
sales charges) 9.72%<F4> 18.24% 18.34% 26.48% 26.61%<F3> 23.54% 10.11%<F4> 4.73%<F3>
Ratios/Supplemental Data:
Net Assets,
End of Period (000) $72,626 $71,122 $50,962 $30,198 $8,228 $409,549 $123,525 $106,592
Ratio of expenses to
average net assets 2.14%<F5> 2.06% 2.08% 2.19% 2.07%<F5> 0.92% 1.33%<F5> 1.35%<F5>
Ratio of net investment
income (loss)
to average net assets (0.93)%<F5> (0.68)% (0.42)% (0.29)% 0.11%<F5> 2.11% (0.12)%<F5> (0.07)%<F5>
Ratio of expenses to
average net assets<F1> 2.16%<F5> 2.10% 2.18% <F6> 2.08%<F5> 0.95% 1.35%<F5> 1.38%<F5>
Ratio of net investment
income (loss)
to average
net assets<F1> (0.95)%<F5> (0.72)% (0.52)% <F6> 0.10%<F5> 2.07% (0.14)%<F5> (0.10)%<F5>
Portfolio turnover <F8> 51% 83% 84% 63% 94% 75% 51% 83%
<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 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> Not annualized.
<F5> Annualized.
<F6> There were no voluntary fee reductions during the period.
<F7> 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
<F8> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
<F9> Period from commencement of operations
<F10> Effective March 26, 1999, the Gradison Growth and Income Fund merged
into the Victory Diversified Stock Fund.
</FN>
</TABLE>
See notes to financial statements.
118
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Stock Index Fund
Class A Shares Class G Shares
Six Six July 2,
Months Year Year Year Year Year Months 1999
Ended Ended Ended Ended Ended Ended Ended through
April 30, October 31, October 31, October 31, October 31, October 31, April 30, October 31,
2000 1999 1998<F5> 1997 1996 1995 2000 1999<F2>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 23.46 $ 21.03 $ 18.75 $ 14.85 $ 12.50 $ 10.18 $ 23.46 $23.96
Investment Activities
Net investment income 0.12 0.28 0.37 0.29 0.28 0.27 0.10 0.06
Net realized and
unrealized gains
(losses) from
investments 1.47 4.47 3.37 4.23 2.58 2.31 1.46 (0.50)
Total from
Investment
Activities 1.59 4.75 3.74 4.52 2.86 2.58 1.56 (0.44)
Distributions
Net investment income (0.13) (0.29) (0.36) (0.29) (0.28) (0.26) (0.11) (0.06)
Net realized gains (0.78) (2.03) (1.10) (0.33) (0.23) -- (0.78) --
Total Distributions (0.91) (2.32) (1.46) (0.62) (0.51) (0.26) (0.89) (0.06)
Net Asset Value,
End of Period $ 24.14 $ 23.46 $ 21.03 $ 18.75 $ 14.85 $ 12.50 $ 24.13 $23.46
Total Return
(excludes sales charges) 6.83%<F3> 24.91% 20.99% 31.16% 23.38% 25.72% 6.69%<F3> (0.02)%<F3>
Ratios/Supplemental Data:
Net Assets,
End of Period (000) $901,247 $858,235 $627,147 $465,015 $277,124 $160,822 $23,453 $9,382
Ratio of expenses to
average net assets <F7> 0.59%<F4> 0.58% 0.57% 0.56% 0.57% 0.55% 0.82%<F4> 0.80%<F4>
Ratio of net
investment income
to average net
assets <F7> 1.01%<F4> 1.28% 1.83% 1.74% 2.14% 2.53% 0.73%<F4> 0.85%<F4>
Ratio of expenses to
average net assets<F1> 0.81%<F4> 0.81% 0.84% 0.86% 0.89% 0.87% 1.19%<F4> 1.02%<F4>
Ratio of net
investment income
to average net
assets<F1> 0.79%<F4> 1.05% 1.56% 1.44% 1.82% 2.21% 0.36%<F4> 0.63%<F4>
Portfolio turnover <F6> 1% 3% 8% 11% 4% 12% 1% 3%
<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 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.
<F6> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
<F7> Effective February 28, 2000, 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 Class G Shares of the Fund at
a maximum of 0.82% until at least February 28, 2001.
</FN>
</TABLE>
See notes to financial statements.
119
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Growth Fund
Class A Shares Class G Shares
Six December 15,
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,
2000 1999 1998 1997 1996 1995<F2> 2000<F4>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 24.71 $ 21.62 $ 18.01 $ 14.57 $ 12.15 $ 10.23 $24.53
Investment Activities
Net investment income (loss) (0.04) (0.04) (0.03) 0.03 0.08 0.11 (0.03)
Net realized and
unrealized gains
(losses) on investments 1.81 4.90 4.88 4.07 2.93 1.97 0.72
Total from
Investment Activities 1.77 4.86 4.85 4.10 3.01 2.08 0.69
Distributions
Net investment income -- -- -- (0.04) (0.08) (0.11) --
Net realized gains (1.23) (1.77) (1.24) (0.62) (0.51) (0.05) --
Total Distributions (1.23) (1.77) (1.24) (0.66) (0.59) (0.16) --
Net Asset Value, End of Period $ 25.25 $ 24.71 $ 21.62 $ 18.01 $ 14.57 $ 12.15 $25.22
Total Return
(excludes sales charges) 7.31%<F8> 24.25% 28.59% 29.08% 25.66% 20.54% 2.81%<F8>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $442,655 $417,417 $269,476 $185,533 $147,753 $108,253 $5,267
Ratio of expenses to
average net assets <F6> 1.25%<F7> 1.41% 1.35% 1.34% 1.33% 1.07% 1.45%<F7>
Ratio of net investment
income (loss) to
average net assets <F6> (0.29)%<F7> (0.21)% (0.13)% 0.19% 0.64% 1.00% (0.59)%<F7>
Ratio of expenses to
average net assets<F1> 1.29%<F7> 1.49% 1.49% <F3> 1.39% 1.42% 1.85%<F7>
Ratio of net investment
income (loss) to
average net assets<F1> (0.33)%<F7> (0.29)% (0.27)% <F3> 0.58% 0.65% (0.99)%<F7>
Portfolio turnover <F5> 16%<F7> 33% 29% 21% 27% 107% 16%<F7>
<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 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.
<F3> There were no voluntary fee reductions during the period.
<F4> Period from commencement of operations.
<F5> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
<F6> Effective December 15, 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 Class A and Class G Shares of
the Fund at a maximum of 1.20% and 1.45%, respectively, until at least
February 28, 2001.
<F7> Annualized.
<F8> Not annualized.
</FN>
</TABLE>
See notes to financial statements.
120
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Special Value Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (5.1%)
Household Finance, 6.10%, 5/1/00 $ 10,531 $ 10,531
Total Commercial Paper (Cost $10,531) 10,531
Common Stocks (94.5%)
Automotive Parts (1.8%):
Lear Corp. (b) 55,000 1,647
Superior Industries International 60,520 1,948
3,595
Banks (4.0%):
First Security Corp. 118,199 1,670
Marshall & Ilsley Corp. 26,000 1,206
Mercantile Bankshares Corp. 60,600 1,727
North Fork Bancorporation 107,000 1,732
Southtrust Corp. 77,301 1,845
8,180
Biotechnology (0.5%):
Chiron Corp. (b) (c) 22,400 1,014
Building Materials (1.4%):
Martin Marietta Materials (c) 52,274 2,771
Chemicals (2.9%):
Lubrizol Corp. 76,000 1,948
Minerals Technologies, Inc. 44,500 2,057
Solutia, Inc. 142,000 1,935
5,940
Computers & Peripherals (2.0%):
Diebold, Inc. 145,102 4,190
Containers (0.6%):
Newell Rubbermaid, Inc. 50,400 1,269
Electrical Equipment (1.7%):
American Power Conversion (b) 98,999 3,496
Electronic & Electrical -- General (5.3%):
Arrow Electronics, Inc. (b) (c) 82,400 3,610
Vishay Intertechnology, Inc. (b) 85,375 7,161
10,771
Electronics (1.8%):
SCI Systems, Inc. (b) 69,756 3,715
Financial & Insurance (1.5%):
AMBAC Financial Group, Inc. 64,200 3,082
Financial Services (2.3%):
Heller Financial, Inc. 118,100 2,296
Reliastar Financial Corp. 55,000 2,368
4,664
Food Processing & Packaging (1.9%):
McCormick & Co., Inc.
(non-voting shares) (c) 62,900 1,962
Universal Foods Corp. 115,600 1,900
3,862
Food Production -- Diversified (0.5%):
Dean Foods Co. 41,000 1,005
Forest Products --
Lumber & Paper (1.6%):
Bowater, Inc. 60,200 3,311
Health Care (5.6%):
Health Management Assoc., Inc.,
Class A (b) 291,300 4,643
Omnicare, Inc. (c) 379,464 5,762
Steris Corp. (b) 119,699 1,077
11,482
Identification System (1.2%):
Symbol Technologies, Inc. 45,050 2,512
Insurance (1.5%):
Horace Mann Educators (c) 92,800 1,351
The PMI Group, Inc. 33,474 1,622
2,973
Insurance -- Multi-Line (1.8%):
Protective Life Corp. (c) 153,284 3,650
Leisure -- Recreation, Gaming (0.7%):
Mandalay Resort Group (b) (c) 74,000 1,397
Manufacturing -- Miscellaneous (3.4%):
Parker Hannifin Corp. 55,900 2,599
Pentair, Inc. 110,106 4,212
6,811
Medical Supplies (2.0%):
Biomet, Inc. 112,726 4,023
Metals -- Fabrication (1.9%):
Kennametal, Inc. 136,190 3,915
Newspapers (1.6%):
A.H. Belo Corp. 195,700 3,266
Oil & Gas Exploration,
Production & Services (7.1%):
Anadarko Petroleum Corp. (c) 76,200 3,309
BJ Services Co. (b) 59,599 4,186
Murphy Oil Corp. 24,400 1,440
Nabors Industries, Inc. (b) 69,900 2,757
Transocean Sedco Forex, Inc. 57,418 2,699
14,391
See notes to financial statements.
121
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Special Value Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Oil Marketing & Refining (1.7%):
Lyondell Petochemical (c) 42,000 $ 772
Tosco Corp. (c) 82,999 2,661
3,433
Pharmaceuticals (2.7%):
Forest Laboratories, Inc. (b) 22,500 1,891
Mylan Laboratories 129,800 3,683
5,574
Pipelines (0.9%):
Questar Corp. (c) 99,900 1,879
Publishing (1.5%):
Readers Digest Association, Inc. (c) 98,300 3,146
Real Estate Investment Trusts (2.3%):
Equity Residential Properties Trust (c) 56,400 2,566
Kilroy Realty Corp. 62,200 1,501
Mack-Cali Realty Corp. 20,900 538
4,605
Retail (2.1%):
American Eagle Outfitters (b) (c) 42,000 714
AutoZone, Inc. (b) 79,899 1,833
Saks, Inc. (b) 147,400 1,686
4,233
Retail -- Specialty Stores (0.8%):
TJX Cos., Inc. 87,000 1,669
Savings & Loans (0.9%):
Charter One Financial, Inc. 92,855 1,886
Semiconductors (2.1%):
Altera Corp. (b) 29,600 3,026
LSI Logic Corp. (b) 21,800 1,363
4,389
Software & Computer Services (6.4%):
Cadence Design Systems, Inc. (b) (c) 186,998 3,144
Fiserv, Inc. (b) 71,450 3,281
Networks Associates, Inc. (b) (c) 71,419 1,817
SunGard Data Systems, Inc. (b) 141,500 4,890
13,132
Staffing (1.2%):
Robert Half International, Inc. (b) 40,941 2,503
Steel (0.5%):
AK Steel Holding Corp. 93,300 1,032
Textile Manufacturing (1.2%):
Shaw Industries, Inc. 32,574 515
Warnaco Group, Inc., Class A (c) 179,800 1,910
2,425
Tobacco & Tobacco Products (0.4%):
UST, Inc. 56,400 846
Transportation Leasing & Trucking (2.1%):
CNF Transportation, Inc. 84,214 2,352
GATX Corp. 54,702 1,956
4,308
Utilities -- Electric (4.9%):
Calpine Corp. (b) 20,400 1,867
DPL, Inc. 78,151 1,817
DQE, Inc. (c) 55,300 2,115
Florida Progress Corp. 42,600 2,087
SCANA Corp. 83,358 2,157
10,043
Utilities -- Natural Gas (3.7%):
Keyspan Corp. 127,750 3,753
MCN Energy Group, Inc. (c) 53,000 1,322
Utilicorp United, Inc. 133,000 2,560
7,635
Utilities -- Telecommunications (1.4%):
CenturyTel, Inc. 119,180 2,920
Wireless Communications (1.1%):
Nextel Partners, Inc., Class A (b) 105,600 2,317
Total Common Stocks (Cost $165,830) 193,260
Securities Purchased With Cash Collateral (11.4%)
Commercial Paper (0.8%):
Windmill Funding, 6.12%, 5/17/00 $ 1,655 1,655
Investment Companies (0.1%):
AIM Short Term Prime
Money Market Fund 130,813 131
AIM Liquid Assets Money Market Fund 174,295 174
305
Time Deposits (0.7%):
Fifth Third Bank, 6/06%, 5/1/00 501 501
Firstar Bank, 6.00%, 5/1/00 835 835
1,336
Repurchase Agreements (9.8%):
First Union., 6.22%, 5/1/00
(Collateralized by $4,120
Toll Road Inv, 2/15/16,
Countrywide Capital, 8.05%, 6/15/27,
Market value -- $4,092) 4,000 4,000
Prudential Bache Corp., 6.19%, 5/1/00
(Collateralized by $4,097
Temple-Inland, 6.75%, 3/1/09,
Fico, 0.00%, 2/8/11,
Dean Witter, 6.75%,10/15/13,
Market value -- $4,065) 4,000 4,000
See notes to financial statements.
122
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
Special Value Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Morgan Stanley Dean Witter,
6.16%, 5/1/00
(Collateralized by $4,120
Royal Bank Scotland, 9.12%, 3/31/05,
Sprint Capital, 6.38%, 5/1/09,
Transcanada Pipeline, 9.88%, 1/1/21,
market value -- $4,113) $ 4,000 $ 4,000
Goldman Sachs Group L.P.,
6.14%, 5/1/00
(Collateralized by $6,053
Associates Corp. N.A., 5.75%, 11/1/03,
Nationwide Mutual Insurance,
8.38%, 2/15/04,
Zurich Capital Trust, 8.37%, 6/1/37,
Market value -- $5,916) 4,000 4,000
Lehman Inc., 6.11%, 5/1/00
(Collateralized by $4,514
Applied Materials, Inc.
market value - $4,500) 4,000 4,000
20,000
Total Securities Purchased
With Cash Collateral (Cost $23,296) 23,296
Total Investments (Cost $199,657) (a) -- 111.0% 227,087
Liabilities in excess of other assets -- (11.0%) (22,573)
TOTAL NET ASSETS -- 100.0% $204,514
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $ 44,694
Unrealized depreciation (17,264)
Net unrealized appreciation $ 27,430
(b) Non-income producing securities.
(c) All or a portion of this security was loaned as of April 30, 2000.
See notes to financial statements.
123
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
Ohio Regional Stock Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (10.8%)
Household Finance, 6.10%, 5/1/00 $ 1,137 $ 1,137
Total Commercial Paper (Cost $1,137) 1,137
Common Stocks (89.3%)
Agriculture & Livestock (0.7%):
Andersons, Inc. 10,000 75
Amusement & Recreation Services (0.9%):
Cedar Fair L.P. 5,000 96
Automotive Parts (2.0%):
Dana Corp. 7,000 213
Banks (9.1%):
BancFirst Ohio Corp. 2,900 56
Charter One Financial, Inc. 17,165 349
FirstMerit Corp. 11,000 180
National City Corp. 1,000 17
Provident Financial Group, Inc. 12,500 365
967
Chemicals -- General (6.5%):
Ferro Corp. 10,000 229
OM Group, Inc. 10,000 459
688
Commercial Services (3.3%):
Convergys Corp. (b) 8,000 352
Computers & Peripherals (5.5%):
Diebold, Inc. 20,000 577
Conglomerates (4.9%):
Lancaster Colony Corp. 10,000 262
Myers Industries, Inc. 18,000 252
514
Electronic & Electrical -- General (0.7%):
Pioneer-Standard Electronics, Inc. 5,000 77
Electronics (7.9%):
Keithley Instruments, Inc. 15,000 835
Food Distributors (1.4%):
Kroger Co. (b) 8,000 149
Food Processing & Packaging (0.8%):
J.M. Smucker Co., Class A 5,000 80
Forest Products --
Lumber & Paper (1.6%):
Mead Corp. 5,000 174
Health Care (6.3%):
Gliatech, Inc. (b) 10,500 160
Invacare Corp. 10,000 267
Omnicare, Inc. 16,000 243
670
Insurance (3.2%):
Ohio Casualty Corp. 17,000 283
State Auto Financial Corp. 5,000 50
333
Insurance -- Multi-Line (4.3%):
Cincinnati Financial Corp. 1,450 58
Progressive Corp. 6,000 393
451
Machine Tools (2.7%):
Lincoln Electric Holding, Inc. 15,000 286
Manufacturing -- Capital Goods (3.2%):
Robbins & Myers, Inc. 4,000 98
Thor Industries, Inc. 9,000 242
340
Manufacturing -- Miscellaneous (2.7%):
Eaton Corp. 2,000 168
Parker-Hannifin Corp. 2,530 118
286
Media (3.5%):
Scripps (E.W.) Co., Class A 8,000 374
Metals -- Fabrication (2.2%):
Timken Co. 7,000 130
Worthington Industries, Inc. 8,000 99
229
Oil-Integrated Companies (2.2%):
USX-Marathon Group, Inc. 10,000 233
Paint, Varnishes, Enamels (1.9%):
Sherwin-Williams Co. 8,000 199
Retail -- Specialty Stores (3.2%):
Jo-Ann Stores Inc., Class B (b) 7,000 53
Limited, Inc. 4,000 180
Value City Department Stores, Inc. (b) 10,000 102
335
Rubber & Rubber Products (1.1%):
Goodyear Tire & Rubber Co. 4,000 111
Software & Computer Services (2.3%):
Reynolds & Reynolds Co., Class A 10,000 238
Utilities -- Electric (3.3%):
DPL, Inc. 15,000 349
Utilities -- Telecommunications (1.9%):
Broadwing, Inc. 7,000 198
Total Common Stocks (Cost $3,929) 9,429
Total Investments (Cost $5,066) (a) -- 100.1% 10,566
Liabilities in excess of other assets -- (0.1)% (14)
TOTAL NET ASSETS -- 100.0% $10,552
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $5,587
Unrealized depreciation (87)
Net unrealized appreciation $5,500
(b) Non-income producing securities.
See notes to financial statements.
124
<PAGE>
THE VICTORY PORTFOLIOS Schedule of Investments
Small Company Opportunity Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (1.9%)
Household Finance, 6.10%, 5/1/00 $ 2,157 $ 2,157
Total Commercial Paper (Cost $2,157) 2,157
Common Stocks (97.9%)
Aerospace/Defense (1.3%):
Triumph Group, Inc. (b) 55,000 1,478
Airlines (0.9%):
Mesaba Holdings, Inc. (b) 83,000 1,038
Apparel (1.9%):
Gildan Activewear, Inc., Class A (b) 65,000 2,230
Apparel -- Footwear (3.0%):
Timberland Co. (b) 50,000 3,469
Automotive Parts (3.4%):
BorgWarner Automotive, Inc. 25,000 1,045
Tower Automotive, Inc. (b) (c) 100,000 1,562
Wynn's International, Inc. 100,000 1,388
3,995
Banks (7.4%):
Chittenden Corp. (c) 70,000 1,858
HUBCO, Inc. 67,100 1,514
M & T Bank Corp. 2,500 1,098
Mercantile Bankshares Corp. (c) 57,000 1,625
Provident Bankshares Corp. 84,000 1,255
Provident Financial Group, Inc. (c) 38,000 1,114
8,464
Building Materials (3.0%):
NCI Building Systems, Inc. (b) 75,000 1,434
Southdown, Inc. 35,000 2,035
3,469
Chemicals (1.4%):
Cambrex Corp. 40,000 1,640
Commercial Services (3.7%):
ABM Industries, Inc. 91,000 2,297
Mail-Well, Inc. (b) 150,000 1,341
NCO Group, Inc. (b) 20,000 688
4,326
Computers & Peripherals (3.5%):
Affiliated Computer Services,
Inc. (b) (c) 50,000 1,656
InterVoice-Brite, Inc. (b) 70,000 1,116
National Computer Systems, Inc. 25,000 1,286
4,058
Construction & Housing (1.1%):
D.R. Horton, Inc. 102,000 1,320
Distribution/Wholesale (5.0%):
Advanced Marketing Services 125,000 2,481
Hughes Supply, Inc. (c) 70,000 1,068
Savoir Technology Group, Inc. (b) 100,000 863
Watsco, Inc. 110,000 1,416
5,828
Electronic & Electrical -- General (3.5%):
CTS Corp. 40,000 2,523
LSI Industries, Inc. 85,000 1,519
4,042
Electronic Components/
Instruments (6.2%):
Actel Corp. (b) 23,000 847
C&D Technologies, Inc. 50,000 3,221
Technitrol, Inc. 45,000 3,060
7,128
Engineering, Industrial
Construction (1.1%):
URS Corp. (b) 100,000 1,275
Financial Services (3.8%):
AmeriCredit Corp. (b) 110,000 2,055
DVI, Inc. (b) 90,000 1,249
Old Kent Financial Corp. 36,000 1,085
4,389
Food Products (1.9%):
Michael Foods, Inc. 74,000 1,587
Pilgrims Pride Corp., Class B 90,000 669
2,256
Health Care (4.2%):
Cooper Cos., Inc. 65,000 2,186
Universal Health Services, Inc. (b) 50,000 2,737
4,923
Home Furnishings (1.3%):
Furniture Brands International,
Inc. (b) 78,000 1,458
Insurance -- Multi-Line (1.3%):
Protective Life Corp. 63,000 1,500
Machinery -- Diversified (3.0%):
Gehl Co. (b) 80,000 1,559
Thomas Industries, Inc. 60,000 1,208
United Dominion Industries Ltd. 40,000 698
3,465
Medical -- Information Systems (0.9%):
Shared Medical Systems Corp. (c) 25,000 1,036
Metals -- Fabrication (3.6%):
Mueller Industries, Inc. (b) 75,000 2,470
Reliance Steel & Aluminum 75,000 1,725
4,195
Oil & Gas Exploration,
Production & Services (1.7%):
Noble Affiliates, Inc. 28,000 1,010
Vintage Petroleum, Inc. 47,000 934
1,944
Pharmaceuticals (4.7%):
Alpharma, Inc., Class A (c) 45,000 1,738
Barr Laboratories, Inc. (b) 40,000 1,728
Medicis Pharmaceutical, Class A (b) 45,000 1,968
5,434
See notes to financial statements.
125
<PAGE>
THE VICTORY PORTFOLIOS Schedule of Investments--continued
Small Company Opportunity Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Real Estate Investment Trusts (1.8%):
National Golf Properties, Inc. 75,000 $ 1,434
Cousins Properties, Inc. (c) 16,000 628
2,062
Restaurants (1.3%):
O'Charley's, Inc. (b) 120,000 1,523
Retail (2.7%):
Barnes & Nobles, Inc. (b) (c) 64,000 1,184
BJ's Wholesale Club, Inc. (b) 55,000 1,949
3,133
Savings & Loans (4.8%):
Andover Bancorp, Inc. 75,000 2,049
ITLA Capital Corp. (b) 130,000 1,779
Roslyn Bancorp, Inc. 100,000 1,700
5,528
Software & Computer Services (1.4%):
Group 1 Software, Inc. (b) 18,700 278
Progress Software Corp. (b) 70,000 1,400
1,678
Staffing (3.0%):
On Assignment, Inc. (b) (c) 90,000 2,823
Personnel Group of America,
Inc. (b) (c) 130,000 683
3,506
Telecommunications (1.8%):
Dycom Industries, Inc. (b) 40,000 2,080
Telecommunications -- Equipment (2.9%):
Anaren Microwave, Inc. (b) 23,000 2,392
Anixter International, Inc. (b) 30,000 1,011
3,403
Tools & Hardware Manufacturing (1.5%):
Applied Power Inc., Class A 60,000 1,718
Transportation Leasing & Trucking (3.6%):
Forward Air Corp. (b) 75,000 2,578
USFreightways Corp. 35,000 1,632
4,210
Wire & Cable Products (0.3%):
Cable Design Technologies Corp. (b) 9,000 308
Total Common Stocks (Cost $89,329) 113,509
Securities Purchased With Cash Collateral (10.0%)
Commercial Paper (2.5%):
Windmill Funding, 6.12%, 5/17/00 $ 2,842 2,842
Investment Companies (0.4%):
AIM Short Term Prime
Money Market Fund 224,612 225
AIM Liquid Assets Money Market Fund 299,273 299
524
Time Deposits (2.0%):
Fifth Third Bank, 6.06%, 5/1/00 860 860
Firstar Bank, 6.00%, 5/1/00 1,433 1,433
2,293
Repurchase Agreements (5.2%):
First Union., 6.22%, 5/1/00
(Collateralized by $2,060
GMAC, 8.75%, 7/15/05,
Corestates Capital, 9.63%, 2/15/01,
market value -- $2,014) 2,000 2,000
Merrill Lynch, 6.19%, 5/1/00
(Collateralized by $2,170
Dial Corp , 6.01%,10/25/02
market value -- $2,062) 2,000 2,000
Morgan Stanley Dean Witter, 6.16%, 5/1/00
(See Significant Accounting
Policies, Securities Lending in the
Notes to Financial Statements
For collateral description) 2,000 2,000
6,000
Total Securities Purchased
With Cash Collateral (Cost $11,659) 11,659
Total Investments (Cost $103,145) (a) -- 109.8% 127,325
Liabilities in excess of other assets -- (9.8%) (11,396)
TOTAL NET ASSETS -- 100.0% $115,929
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $33,907
Unrealized depreciation (9,727)
Net unrealized appreciation $24,180
(b) Non-income producing securities.
(c) All or a portion of this security was loaned as of April 30, 2000.
See notes to financial statements.
126
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments
International Growth Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Commercial Paper (5.1%)
United States (5.1%):
Household Finance Corp.,
6.10%, 5/1/00 11,247 $ 11,247
Total Commercial Paper (Cost $11,247) 11,247
Common Stocks (94.7%)
Argentina (0.1%):
Diversified (0.1%):
PC Holdings SA, B Class (b) 130,000 196
Total Argentina 196
Australia (1.5%):
Banks (0.2%):
Westpac Banking Corp. 70,310 448
Beverages (0.1%):
Foster's Brewing Group Ltd. 59,550 150
Financial Services (0.1%):
Lend Lease Corp., Ltd. 19,128 207
Leisure -- Recreation, Gaming (0.1%):
Aristocrat Leisure Ltd. 12,800 114
Medical Services (0.1%):
Gradipore Ltd. 62,835 216
Metals & Mining (0.1%):
Pasminco Ltd. (b) 342,500 180
Mining (0.2%):
WMC Ltd. 89,500 371
Multimedia (0.3%):
News Corp. Ltd. 43,678 555
News Corp. Ltd., Preferred 33,300 358
913
Software & Computer Services (0.0%):
Solution 6 Holdings Ltd. 32,500 99
Telecommunications (0.1%):
Davnet Ltd. 77,690 111
Erg Ltd. 20,720 99
210
Utilities -- Telecommunications (0.2%):
Telstra Corp. 29,300 75
Telstra Corp. Ltd., ADR 16,000 344
419
Total Australia 3,327
Brazil (0.8%):
Commercial Banking (0.1%):
Unibanco, GDR 8,600 214
Electronic & Electrical -- General (0.1%):
CIA Paranese de Energia, ADR 40,000 295
Food Distributors,
Supermarkets & Wholesalers (0.2%):
Companhia Brasileira de Distribuicao
Grupo Pao de Acucar 15,500 442
Utilities -- Telecommunications (0.4%):
Telecomunicacoes
Brasileiras SA, ADR (b) 6,000 0
Telecomunicacoes
Brasileiras-Telebras SA, ADR 6,800 804
Total Brazil 1,755
Britain (13.5%):
Advertising (0.4%):
WPP Group PLC 60,750 922
Banks (1.1%):
Barclays PLC 59,370 1,532
Lloyds TSB Group PLC 92,300 906
2,438
Building Materials (0.2%):
CRH PLC 30,700 492
Catering (0.7%):
Compass Group PLC 112,150 1,613
Computers & Peripherals (0.3%):
Sema Group PLC 38,840 631
Manufacturing -- Miscellaneous (0.5%):
Invensys PLC 215,475 1,043
Newspapers (0.7%):
Pearson PLC 46,165 1,585
Oil & Gas Exploration,
Production & Services (2.6%):
British Petroleum Co. PLC 484,100 4,200
Centrica PLC 387,500 1,425
5,625
Pharmaceuticals (1.9%):
Glaxo Wellcome PLC 79,600 2,474
Smithkline Beecham PLC 130,010 1,789
4,263
Retail (0.6%):
Dixons Group PLC 123,780 506
Kingfisher PLC 92,000 761
1,267
Telecommunications (2.9%):
Vodafone Airtouch PLC 1,378,950 6,333
Telecommunications -- Equipment (0.5%):
COLT Telecom Group PLC 11,130 487
Energis PLC (b) 12,420 617
1,104
Utilities -- Telecommunications (1.1%):
British Telecommunications PLC 119,669 2,148
Cable & Wireless PLC 22,070 368
2,516
Total Britain 29,832
See notes to financial statements.
127
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
International Growth Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Canada (4.0%):
Diversified (1.0%):
Bombadier, Inc., Class B 80,500 $ 2,162
Oil & Gas Exploration,
Production & Services (0.7%):
Suncor Energy, Inc. 36,500 1,558
Telecommunications (1.9%):
Nortel Networks Corp. 38,000 4,294
Telecommunications -- Equipment (0.4%):
BCE, Inc. (b) 7,000 810
Total Canada 8,824
Chile (0.1%):
Utilities -- Electric (0.1%):
Endesa, ADR 26,000 299
Total Chile 299
Denmark (0.4%):
Telecommunications (0.4%):
Tele Danmark AS 11,890 872
Total Denmark 872
Finland (3.8%):
Commercial Banking (0.5%):
Nordic Baltic Holding, FDR 182,540 1,158
Software & Computer Services (0.3%):
Tietoenator OYJ, Class B 12,830 620
Telecommunication Services (0.3%):
Sonera OYJ 13,391 738
Telecommunications -- Equipment (2.7%):
Nokia OYJ 100,582 5,783
Total Finland 8,299
France (10.2%):
Automobiles (0.2%):
PSA Peugeot Citroen 2,590 537
Banks (0.7%)
Banque Nationale de Paris 10,680 865
Credit Lyonnais SA (b) 18,300 715
1,580
Beverages (0.1%):
LVMH Moet-Hennessy Louis Vuitton 572 241
Building Materials (0.6%):
Compagnie de Saint Gobain 5,865 803
Lafarge SA 6,100 506
1,309
Commercial Services (1.0%):
Vivendi 22,140 2,195
Computers & Peripherals (0.2%):
Cap Gemini SA 2,450 482
Construction (0.4%):
Bouygues 1,390 889
Diversified (0.2%):
Lagardere SA 6,400 434
Electronic & Electrical -- General (0.5%):
Rexel 10,625 735
Thomson Multimedia 4,565 449
1,184
Food Products (0.9%):
Carrefour Supermarche 21,400 1,396
Casino Guichard Perrachon 5,772 528
1,924
Insurance (0.3%):
AXA SA 4,100 609
Machinery & Engineering (0.2%):
Schneider Electric SA 8,020 526
Oil & Gas Exploration,
Production & Services (1.5%):
Total Fina SA, Class B 20,932 3,184
Radio & Television (0.3%):
Canal Plus 2,915 563
Retail -- Department Stores (0.9%):
Pinault-Printemps-Redoute SA 9,290 1,879
Telecommunications -- Equipment (0.9%):
Alcatel SA 8,678 2,016
Utilities -- Telecommunications (0.9%):
France Telecom SA 13,060 2,026
Utilities -- Water (0.4%):
Suez-Lyonnaise De Eaux 5,555 873
Total France 22,451
Germany (6.5%):
Automobiles (0.6%):
Bayerische Motoren Werke AG 29,600 789
DaimlerChrysler AG 8,300 484
1,273
Banks (0.6%):
Dresdner Bank AG (Registered) 18,860 771
HypoVereinsbank 10,550 655
1,426
Chemicals -- General (0.4%):
BASF AG 20,600 893
Insurance (1.4%):
Allianz AG, Registered 5,206 2,009
Muenchner Rueckver AG (Registered) 3,525 1,031
3,040
Manufacturing -- Miscellaneous (1.1%):
Siemens AG, Registered 10,780 1,594
Veba AG 17,880 886
2,480
Medical Services (0.4%):
Fresenius AG, Preferred 4,020 861
See notes to financial statements.
128
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
International Growth Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Software & Computer Services (0.7%):
SAP AG 2,374 $ 1,116
SAP AG, Preferred 590 348
1,464
Telecommunications (1.3%):
Deutsche Telekom AG (Registered) 43,930 2,874
Total Germany 14,311
Greece (0.4%):
Banks (0.1%):
Alpha Credit Bank 5,500 306
Telecommunications (0.1%):
STET Hellas Telecommunications SA (b) 12,000 275
Telecommunications -- Equipment (0.2%):
Hellenic Telecommunications, ADR (b) 28,000 326
Total Greece 907
Hong Kong (2.6%):
Banks (0.2%):
Hang Seng Bank 41,400 381
Computer Services (0.0%):
iSteelAsia.Com Ltd. (b) 14 0
Diversified (0.6%):
Guoco Group Ltd. 124,000 289
Hutchison Whampoa Ltd. 71,000 1,036
1,325
Financial Services (0.1%):
JCG Holdings Ltd. 518,000 269
Investment Company (0.2%):
HSBC Holdings PLC 43,600 487
Petrochemicals (0.0%):
Shanghai Petrochemical Ltd. 458,000 62
Printing (0.1%):
Next Media Ltd. 816,000 162
Real Estate (0.5%):
Cheung Kong Holdings Ltd. 66,000 788
Sun Hung Kai Properties Ltd. 39,000 309
1,097
Retail -- Specialty Stores (0.2%):
Giordano International Ltd. 242,000 396
Telecommunications (0.2%):
Cable & Wireless HKT Ltd. 198,400 467
Telecommunications -- Equipment (0.4%):
China Telecom Ltd. (b) 114,000 823
Utilities -- Electric (0.0%):
Shandong International Power Dev Co-H 392,000 40
Wholesale Distribution (0.1%):
Van Shung Chong Holdings Ltd. 500,000 122
Total Hong Kong 5,631
Hungary (0.1%):
Utilities -- Telecommunications (0.1%):
Matav Rt. 40,000 275
Total Hungary 275
Ireland (0.2%):
Building Materials (0.2%):
CRH PLC 23,380 375
Total Ireland 375
Israel (0.3%):
Banks (0.2%):
Bank Leumi-Le Israel 170,000 370
Telecommunications-Equipment (0.1%):
Partner Communications, ADR (b) 25,000 267
Total Israel 637
Italy (2.7%):
Commercial Banking (0.3%):
Banca Intesa SPA 157,312 581
Financial Services (0.2%):
San Paolo-IMI SPA 25,363 356
Insurance (0.3%):
Alleanza Assicurazion SPA 14,850 154
Assicurazioni Generali 20,760 592
746
Oil-Integrated Companies (0.1%):
ENI SPA 55,000 274
Utilities --Telecommunications (1.8%):
Telecom Italia Mobile SPA 224,360 2,147
Telecom Italia SPA 79,158 1,109
Telecom Italia SPA-RNC 118,900 751
4,007
Total Italy 5,964
Japan (25.2%):
Automobiles (1.3%):
Suzuki Motor Corp. 46,000 685
Toyota Motor Corp. 46,000 2,286
2,971
Banks (1.0%):
Bank of Tokyo-Mitsubishi Ltd. 31,000 400
Industrial Bank Of Japan 211,000 1,738
2,138
Brewery (1.0%):
Kirin Brewery Co. Ltd. 163,000 2,122
Brokerage Services (0.4%):
Nikko Securities Co. Ltd. 82,000 967
Chemicals -- General (0.9%):
Shin-Etsu Chemical Co. 39,000 2,061
Chemicals -- Specialty (0.6%):
Kaneka Corp. 101,000 1,299
See notes to financial statements.
129
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
International Growth Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Computers & Peripherals (0.7%):
Fujitsu Ltd. 57,000 $ 1,614
Construction (0.6%):
Nippon Comsys Corp. 38,000 735
Sekisui House Ltd. 68,000 623
1,358
Cosmetics & Related (0.6%):
KAO Corp. 45,000 1,370
Electronic & Electrical -- General (6.5%):
Canon, Inc. 26,000 1,188
Fanuc 26,200 2,744
Mabuchi Motor 10,000 1,101
Murata Manufacturing Co. Ltd. 16,000 3,109
NEC Corp. 24,000 653
Secom 19,000 1,593
Sharp Corp. 110,000 2,122
Sony Corp. 14,200 1,631
14,141
Electronic Components/
Instruments (0.2%):
Softbank Corp. 1,800 443
Financial Services (0.4%):
Daiwa Securities Group, Inc. 59,000 901
Health & Personal Care (0.5%):
Terumo 35,000 1,059
Insurance (0.5%):
Tokio Marine & Fire Insurance Co. 105,000 1,024
Machinery & Equipment (1.0%):
Daifuku Co. Ltd. 85,000 839
Makino Milling Machine Co. 140,000 1,394
2,233
Manufacturing -- Capital Goods (0.6%):
Taiyo Yuden Co. Ltd. 19,000 1,345
Paper and Forest Products (0.6%):
Hokuetsu Paper Mills Ltd. 92,000 664
Rengo Co. Ltd. 103,000 591
1,255
Pharmaceuticals (0.4%):
Takeda Chemical Industries 15,000 987
Retail (3.2%):
Fast Retailing Co. Ltd. 4,200 1,850
Ryohin Keikaku Ltd. 9,100 1,688
Seven-Eleven Japan Co. Ltd. 26,000 3,200
6,738
Telecommunication Services (0.4%):
Bellsystem 24, Inc. 1,350 933
Telecommunications -- Equipment (0.6%):
Matsushita Communications
Industries 9,000 1,411
Utilities -- Telecommunications (3.2%):
Nippon Telegraph & Telephone Corp. 154 1,909
NTT Data Corp. 149 1,985
NTT Mobile Communications
Network, Inc. 87 2,907
6,801
Total Japan 55,171
Malaysia (0.4%):
Automobiles (0.3%):
Oriental Holdings Berhad 275,000 655
Commercial Banking (0.0%):
AMMB Holdings Berhad 12,000 45
Entertainment (0.0%):
Resorts World Behard 24,000 78
Telecommunications (0.1%):
Telekom Malaysia 50,000 174
Total Malaysia 952
Mexico (0.8%):
Financial Services (0.3%):
Grupo Financiero Bancomer, Class O (b) 1,550,000 705
Retail (0.2%):
Controladora Comercial Mexicana SA 408,500 438
Telecommunications -- Equipment (0.3%):
Telefonos De Mexico SA, Series L 235,000 694
Total Mexico 1,837
Netherlands (7.2%):
Banks (0.5%):
ING Groep NV 21,050 1,151
Chemicals -- General (0.4%):
Akzo Nobel NV 22,175 910
Computer Services (0.3%):
Getronics NV 11,790 705
Computers & Peripherals (0.3%):
CMG PLC 10,900 700
Electronic Components/
Instruments (0.9%):
Philips Electronics NV 42,260 1,890
Financial Services (0.3%):
Fortis (NL) 29,775 750
Food & Dairy Products (0.4%):
Numico NV 26,320 981
Food Products (0.2%):
Unilever NV 7,550 344
Insurance (0.4%):
Aegon NV 12,100 872
Newspapers (0.4%):
VNU NV 15,865 851
See notes to financial statements.
130
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
International Growth Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Oil & Gas Exploration,
Production & Services (1.7%):
Royal Dutch Petroleum Co. 56,255 $ 3,249
Royal Dutch Petroleum Co., ADR 8,385 481
3,730
Publishing (0.3%):
Wolters Kluwer CVA 24,740 585
Semiconductors (0.7%):
STMicroelectronics NV 8,510 1,628
Telecommunications -- Equipment (0.4%):
Royal KPN NV 7,678 776
Total Netherlands 15,873
New Zealand (0.1%):
Airline Servicing (0.0%):
Auckland International Airport Ltd. 41,000 45
Household Goods -- Appliances,
Furnishings & Electronics (0.0%):
Fisher & Paykel Industries Ltd. 15,000 44
Telecommunications (0.1%):
Telecom Corp. of New Zealand Ltd. 48,650 207
Total New Zealand 296
Norway (0.3%):
Environmental Control (0.3%):
Tomra Systems ASA 34,000 703
Total Norway 703
Philippines (0.1%):
Banks (0.1%):
Bank of Phillippine Islands 57,500 129
Total Philippines 129
Poland (0.1%):
Oil-Integrated Companies (0.1%):
Polski Koncern Naftowy (b) 50,000 249
Total Poland 249
Portugal (0.2%):
Telecommunications --
Equipment (0.2%):
PT Multimedia Servicos (b) 7,200 504
Total Portugal 249
Russia (0.2%):
Oil & Gas Transmission (0.1%):
OAO Gazprom, ADR 40,000 265
Oil-Integrated Companies (0.1%):
Lukoil Holding, ADR 3,100 187
Total Russia 452
Singapore (0.9%):
Airlines (0.2%):
Singapore Airlines Ltd. 34,000 352
Banks (0.1%):
Overseas-Chinese Banking Corp. 30,450 209
Conglomerates (0.0%):
Keppel Corp. 47,000 109
Electronics (0.3%):
Natsteel Electronics Ltd. 109,000 625
Engineering (0.1%):
Singapore Technologies Engineering Ltd. 128,000 180
Medical Services -- Hospital
Management & Nursing Homes (0.0%):
Parkway Holdings 33,000 95
Real Estate (0.1%):
City Developments Ltd. 27,000 123
Pacific Century Region
Developments Ltd. 16,000 133
256
Transportation (0.1%):
Neptune Orient Lines (b) 182,218 163
Total Singapore 1,989
South Africa (0.8%):
Banks (0.3%):
ABSA Group Ltd. 210,000 744
Computers & Peripherals (0.3%):
Comparex Holdings Ltd. 250,000 374
Datatec Ltd. 27,500 200
574
Diversified (0.2%):
Rembrandt Group Ltd. 57,000 442
Total Singapore 1,760
South Korea (1.2%):
Electronic & Electrical -- General (0.5%):
Samsung Electronics, GDR 7,746 1,225
Telecommunications -- Equipment (0.5%):
Hanaro Telecom Inc., ADR (b) 8,100 64
Korea Telecom, ADR 30,690 1,059
1,123
Utilities --Electric (0.2%):
Korea Electric Power Corp., ADR 24,150 395
Total South Korea 2,743
Spain (2.4%):
Banks (0.9%):
Banco Bilbao Vizcaya SA 102,233 1,397
Banco Santander Central Hispano SA 66,110 691
2,088
Travel Services (0.3%):
Amadeus Global Travel Distribution,
Class A (b) 61,740 765
Utilities --Telecommunications (1.2%):
Telefonica SA (b) 109,580 2,445
Total Spain 5,298
See notes to financial statements.
131
<PAGE>
THE VICTORY PORTFOLIOS Schedules of Investments--continued
International Growth Fund April 30, 2000
(Amounts in Thousands, Except Shares) (Unaudited)
Shares or
Principal Market
Security Description Amount Value
Sweden (3.3%):
Insurance (0.4%):
Skandia Forsakrings AB 16,950 $ 812
Retail (0.4%):
Hennes & Mauritz AB, B Class 32,750 871
Telecommunications -- Equipment (2.5%):
Ericsson LM, Class B 62,470 5,561
Total Sweden 7,244
Switzerland (2.6%):
Banks (0.1%):
Credit Suisse Group, Registered 944 171
Commercial Services (0.4%):
Adecco SA Registered Shares 975 802
Food Processing & Packaging (0.3%):
Nestle SA, Registered Shares 318 562
Pharmaceuticals (1.8%):
Novartis AG, Registered 1,740 2,436
Roche Holding AG 159 1,664
4,100
Total Switzerland 5,635
Taiwan (1.2%):
Computers & Peripherals (0.3%):
Asustek Computer Inc., GDR 19,244 254
Powerchip Semiconductor, GDR (b) 22,250 512
766
Electronic Components/
Instruments (0.1%):
Winbond Electronics Corp., GDR (b) 7,000 216
Semiconductors (0.4%):
Taiwan Semiconductor, ADR (b) 16,404 858
Steel -- Producers (0.0%):
China Steel Corp., ADR, Series 144A (b) 7,620 108
Textile Manufacturing (0.4%):
Far Eastern Textile, GDR (b) 38,700 776
Total Taiwan 2,724
Thailand (0.1%):
Financial Services (0.0%):
ABN Amro Asia Securities PCL 54,100 44
Petrochemicals (0.1%):
National Petrochemical PLC 92,700 106
Total Thailand 150
Turkey (0.4%):
Banks (0.2%):
Yapi ve Kredi Bankasi AS 14,497,738 462
Diversified (0.0%):
Sabanci Holding AS 4,420,000 72
Home Furnishings (0.1%):
Vestel Elektronik Sanayi (b) 650,000 245
Investment Company (0.1%)
Dogan Yayin Holding (b) 6,000,000 145
Total Turkey 924
Total Common Stocks (Cost $171,058) 208,588
Convertible Bonds (0.5%)
Banks (0.5%):
Mitsubishi Bank International Finance
Bermuda, 3.00%, 11/30/02 $ 943 1,008
Total Convertible Bonds (Cost $943) 1,008
Foreign Bond (0.1%)
Italy (0.1%):
Utilities -- Telecommunications (0.1%):
Tecnost International 166,489 155
Total Foreign Bond (Cost $139) 155
Total Investments (Cost $183,387) (a) -- 100.4% 220,998
Liabilities in excess of other assets -- (0.4)% (780)
TOTAL NET ASSETS -- 100.0% $220,218
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows (amounts in thousands):
Unrealized appreciation $30,990
Unrealized depreciation (2,371)
Net unrealized appreciation $28,619
(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:
Australian
Dollar 5/2/00 $ 2 2 --
British Pound 5/3/00 301 298 $ 3
Euro Dollar 5/2/00 59 59 --
5/31/00 112 111 1
Hong Kong
Dollar 5/2/00 46 47 (1)
Thailand Baht 5/2/00 3 3 --
Japanese Yen 5/2/00 10 10 --
Total Short
Contracts $533 $530 $ 3
Long Contracts:
Euro Dollar 5/31/00 $541 $525 $(16)
Total Long
Contracts $541 $525 $(16)
See notes to financial statements.
132
<PAGE>
Statements of Assets and Liabilities
The Victory Portfolios April 30, 2000
(Amounts in Thousands, Except Per Share Amounts) (Unaudited)
<TABLE>
<CAPTION>
Ohio Small
Special Regional Company International
Value Stock Opportunity Growth
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (Cost $179,657; $5,066;
$97,145 & $183,387) $207,087 $10,566 $121,325 $220,998
Repurchase agreements at amortized cost 20,000 -- 6,000 --
Foreign currency (cost $132) -- -- -- 131
Interest and dividends receivable 146 5 96 308
Receivable from affiliates 16 -- 2 22
Receivable for capital shares issued -- -- 1 22
Receivable from brokers for investments sold 2,038 -- 318 1,714
Receivable for foreign exchange contracts -- -- -- 3
Reclaims receivable -- -- -- 194
Prepaid expenses and other assets 37 14 27 13
Total Assets 229,324 10,585 127,769 223,405
LIABILITIES:
Payable for capital shares redeemed -- 5 -- 285
Payable to brokers for investments purchased 1,240 -- -- 2,521
Payable for forward currency contracts purchased -- -- -- 16
Payable for return of collateral received 23,296 -- 11,659 --
Accrued expenses and other payables:
Investment advisory fees 132 7 58 237
Administration fees 37 -- 1 5
Custodian fees 8 2 6 54
Accounting fees 2 1 2 --
Transfer agent fees 40 12 37 38
Shareholder service fees -- Class A 37 3 8 14
12b-1 fees -- Class G -- -- 45 17
Other 18 3 24 --
Total Liabilities 24,810 33 11,840 3,187
NET ASSETS:
Capital 159,155 5,068 84,560 166,917
Undistributed (distributions in excess of)
net investment income 43 (16) (190) (1,303)
Net unrealized appreciation/depreciation from investments 27,430 5,500 24,180 34,750
Net unrealized appreciation/depreciation from translation
of assets and liabilities in foreign currencies -- -- -- 2,830
Accumulated undistributed net realized gains (losses)
from investment and foreign currency transactions 17,886 -- 7,379 17,024
Net Assets $204,514 $10,552 $115,929 $220,218
Net Assets
Class A $204,502 $10,552 $ 22,452 $177,426
Class G 12 -- 93,477 42,792
Total $204,514 $10,552 $115,929 $220,218
Outstanding units of beneficial interest (shares)
Class A 14,271 1,921 959 10,974
Class G 1 -- 4,003 2,655
Total 14,272 1,921 4,962 13,629
Net asset value
Redemption price per share -- Class A $ 14.33 $ 5.49 $ 23.41 $ 16.17
Redemption price per share -- Class G 14.30 -- $ 23.35 $ 16.12
Maximum sales charge 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 $ 15.20 $ 5.82 $ 24.84 $ 17.16
</TABLE>
See notes to financial statements.
133
<PAGE>
Statements of Operations
The Victory Portfolios For the Six Months Ended April 30, 2000
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Ohio Small
Special Regional Company International
Value Stock Opportunity Growth
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
Investment Income:
Interest income $ 160 $ 8 $ 39 $ 279
Dividend income 1,645 184 588 1,043
Securities Lending 16 -- 10 --
Foreign tax withholding -- -- (1) (113)
Total Income 1,821 192 636 1,209
Expenses:
Investment advisory fees 880 61 413 1,189
Administration fees 155 12 99 162
Shareholder service fees -- Class A 255 20 41 212
Shareholder service fees and 12b-1 fees -- Class B 1 2 -- 2
12b-1 fees -- Class G -- -- 246 107
Accounting fees 39 21 25 44
Custodian fees 40 7 15 226
Legal and audit fees 11 2 6 10
Trustees' fees and expenses 2 -- -- 7
Transfer agent fees 55 18 10 37
Registration and filing fees 27 6 24 17
Printing fees 8 2 8 13
Other 11 2 11 6
Total Expenses 1,484 153 898 2,032
Expenses voluntarily reduced by advisor (28) (6) (72) (69)
Expenses before reimbursement from distributor 1,456 147 826 1,963
Expenses reimbursed by distributor (64) (3) -- (6)
Net Expenses 1,392 144 826 1,957
Net Investment Income (Loss) 429 48 (190) (748)
Realized/Unrealized Gains (Losses) from Investments
and Foreign Currencies:
Net realized gains (losses) from investment transactions 18,657 6,043 14,253 17,664
Net realized gains (loss) from foreign currency transactions -- -- -- (489)
Net change in unrealized appreciation/depreciation
from investments 11,038 (5,251) (444) 383
Net change in unrealized appreciation/depreciation from
translation of assets and liabilities in foreign currencies -- -- -- (42)
Net realized/unrealized gains (losses) from
investments and foreign currencies 29,695 792 13,809 17,516
Change in net assets resulting from operations $30,124 $ 840 $13,619 $16,768
</TABLE>
See notes to financial statements.
134
<PAGE>
The Victory Portfolios Statements of Changes in Net Assets
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Special Ohio Regional Small Company International
Value Fund Stock Fund Opportunity Fund Growth Fund
Six Six Six Six
Months Year Months Year Months Period Year Months Year
Ended Ended Ended Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, April 30, October 31, March 31, April 30, October 31,
2000 1999 2000 1999 2000 1999<F1> 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
From Investment Activities:
Operations:
Net investment
income (loss) $ 429 $ 1,414 $ 48 $ 300 $ (190) $ (311) $ 622 $ (748) $ (517)
Net realized gains/
(losses) from
investment
transactions 18,657 12,285 6,043 8,475 14,253 1,814 (7,458) 17,664 21,931
Net realized (losses)
from foreign
currency
transactions -- -- -- -- -- -- -- (489) (443)
Net change in
unrealized
appreciation/
depreciation
from investments 11,038 (10,033) (5,251) (10,275) (444) 2,716 (37,144) 383 25,042
Net change in
unrealized
appreciation/
depreciation
from translation
of assets and
liabilities in
foreign currencies -- -- -- -- -- -- -- (42) (6)
Change in net assets
resulting
from operations 30,124 3,666 840 (1,500) 13,619 4,219 (43,980) 16,768 46,007
Distributions to
Shareholders:
From net investment
income
Class A (443) (1,724) (75) (295) -- -- -- -- --
Class G -- -- -- -- -- -- (890) -- --
From net realized
gains from
investment transactions (13,039) (14,036) (14,519) (4,990) -- -- (6,817) (21,077) (4,776)
Change in net assets
From distributions
to shareholders (13,482) (15,760) (14,594) (5,285) -- -- (7,707) (21,077) (4,776)
Capital Transactions:
Proceeds from
shares issued 16,808 38,223 1,120 3,704 20,231 33,493 163,831 87,034 151,295
Proceeds from shares
exchanged from Class B 1,190 -- 535 -- -- -- -- 938 938
Proceeds from shares
issued in connection
with acquisition -- -- -- -- -- -- 70,516 -- 29,076
Dividends reinvested 11,176 13,171 10,522 3,610 -- -- 7,587 13,953 3,192
Cost of shares redeemed (73,715) (154,595) (11,599) (18,920) (74,935) (71,046) (175,583) (63,614) (172,483)
Cost of shares
exchanged
to Class A (1,190) -- (535) -- (938) (938)
Change in net assets from
capital transactions (45,731) (103,201) 43 (11,606) (54,704) (37,553) 66,351 37,373 11,080
Change in net assets (29,089) (115,295) (13,711) (18,391) (41,085) (33,334) 14,664 33,064 52,311
Net Assets:
Beginning of period 233,603 348,898 24,263 42,654 157,014 190,348 175,684 187,154 134,843
End of period $204,514 $ 233,603 $ 10,552 $ 24,263 $115,929 $157,014 $ 190,348 $220,218 $ 187,154
Share Transactions:
Issued 1,241 2,803 80 201 922 1,512 6,944 5,147 10,645
Issued in connection
with exchange
from Class B 101 -- 53 -- -- -- -- 58 --
Issued in connection
with acquisition -- -- -- -- -- -- 3,124 -- 2,363
Reinvested 849 993 1,418 193 -- -- 305 880 228
Redeemed (5,662) (11,530) (1,005) (1,031) (3,418) (3,245) (7,479) (3,741) (12,116)
Redeemed in
connection with
exchange to Class A (101) -- (53) -- -- -- -- (58) --
Change in shares (3,572) (7,734) 493 (637) (2,496) (1,733) 2,894 2,286 1,120
<FN>
<F1> For the period April 1, 1999 through October 31, 1999.
</FN>
</TABLE>
See notes to financial statements.
135
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Special Value Fund
Class G
Class A Shares Shares
Six December 21,
Months Year Year Year Year 1999
Ended Ended Ended Ended Ended through
April 30, October 31, October 31, October 31, October 31, April 30,
2000 1999 1998 1997 1996<F4> 2000<F8>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 13.09 $ 13.64 $ 16.68 $ 14.15 $ 12.15 $ 12.48
Investment Activities
Net investment income (loss) 0.03 0.07 0.09 0.10 0.12 --
Net realized and
unrealized gains
(losses) on investments 1.99 0.04 (1.79) 3.50 2.33 1.82
Total from
Investment Activities 2.02 0.11 (1.70) 3.60 2.45 1.82
Distributions
Net investment income (0.03) (0.08) (0.09) (0.12) (0.11) --
Net realized gains (0.75) (0.58) (1.25) (0.95) (0.34) --
Total Distributions (0.78) (0.66) (1.34) (1.07) (0.45) --
Net Asset Value, End of Period $ 14.33 $ 13.09 $ 13.64 $ 16.68 $ 14.15 $ 14.30
Total Return (excludes sales charges) 15.94%<F2> 0.80% (11.22)% 27.05% 20.60% 14.72%<F2>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $204,502 $232,272 $346,962 $420,020 $289,460 $ 12
Ratio of expenses to
average net assets <F7> 1.34%<F3> 1.43% 1.40% 1.37% 1.37% 1.59%<F3>
Ratio of net investment income
(loss) to average net assets <F7> 0.39%<F3> 0.51% 0.56% 0.65% 0.88% (0.08)%<F3>
Ratio of expenses to
average net assets<F1> 1.43%<F3> 1.53% 1.51% <F6> 1.40% 59.05%<F3>
Ratio of net investment income
(loss) to average net assets<F1> 0.30%<F3> 0.41% 0.45% <F6> 0.85% (57.54)%<F3>
Portfolio turnover <F5> 29% 43% 44% 39% 55% 29%
<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 1, 1996, the Fund designated the existing shares as
Class A Shares and commenced offering Class B Shares.
<F5> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
<F6> There were no voluntary fee reductions during the period.
<F7> Effective February 28, 2000, 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 1.60% until at least February 28, 2001.
<F8> Period from commencement of operations.
</FN>
</TABLE>
See notes to financial statements.
136
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Ohio Regional Stock Fund
Six
Months Year Year Year Year
Ended Ended Ended Ended Ended
April 30, October 31, October 31, October 31, October 31,
2000 1999 1998 1997 1996<F2>
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 17.00 $ 20.67 $ 23.56 $ 17.95 $ 15.94
Investment Activities
Net investment income (loss) 0.02 0.18 0.18 0.14 0.14
Net realized and unrealized gains
(losses) from investments 0.87 (1.26) (0.80) 5.96 2.62
Total from Investment Activities 0.89 (1.08) (0.62) 6.10 2.76
Distributions
Net investment income (0.05) (0.17) (0.17) (0.14) (0.14)
Net realized gains (12.35) (2.42) (2.10) (0.35) (0.36)
In excess of net realized gains -- -- -- -- (0.25)
Total Distributions (12.40) (2.59) (2.27) (0.49) (0.75)
Net Asset Value, End of Period $ 5.49 $ 17.00 $ 20.67 $ 23.56 $ 17.95
Total Return (excludes sales charges) 6.33%<F3> (6.31)% (3.13)% 34.61% 17.79%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $10,552 $23,529 $41,653 $53,703 $45,294
Ratio of expenses to average net assets 1.74%<F4> 1.39% 1.26% 1.26% 1.39%
Ratio of net investment income
(loss) to average net assets 0.43%<F4> 0.92% 0.76% 0.67% 0.79%
Ratio of expenses to average net assets<F1> 1.81%<F4> 1.48% 1.37% 1.26% 1.40%
Ratio of net investment income
(loss) to average net assets<F1> 0.36%<F4> 0.83% 0.65% 0.67% 0.78%
Portfolio turnover -- 2% 6% 8% 6%
<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 March 1, 1996, the Fund designated the existing shares as
Class A Shares and commenced offering Class B Shares.
<F3> Not annualized.
<F4> Annualized.
</FN>
</TABLE>
See notes to financial statements.
137
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
Small Company Opportunity Fund
Class A Shares
Six April 1, March 26,
Months 1999 1999
Ended to to
April 30, October 31, March 31,
2000 1999 1999<F3><F4>
(Unaudited)
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 21.08 $ 20.71 $ 20.23
Investment Activities
Net investment income (loss) (0.02)<F2> (0.01) --
Net realized and unrealized gains (losses) on investments 2.35 0.38 0.48
Total from Investment Activities 2.33 0.37 0.48
Distributions
Net investment income -- -- --
Net realized gains -- -- --
Total Distributions -- -- --
Net Asset Value, End of Period $ 23.41 $ 21.08 $ 20.71
Total Return (excludes sales charges) 11.05%<F6> 1.79%<F6> 2.37%<F6>
Ratios/Supplemental Data:
Net Assets, End of Period (000) $22,452 $51,599 $64,587
Ratio of expenses to average net assets <F5> 1.12%<F7> 0.98%<F7> 0.98%<F7>
Ratio of net investment income (loss) to average net assets <F5> (0.16)%<F7> 0.09%<F7> 1.50%<F7>
Ratio of expenses to average net assets<F1> 1.23%<F7> 1.17%<F7> 1.19%<F7>
Ratio of net investment income (loss) to average net assets<F1> (0.27)%<F7> (0.28)%<F7> 1.29%<F7>
Portfolio turnover <F8> 11% 16% 30%
<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> Period from commencement of operations.
<F4> 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.
<F5> Effective February 28, 2000, 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.
<F6> Not annualized
<F7> Annualized
<F8> Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
<F9> There were no fee reductions during the period.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Small Company Opportunity Fund
Class G Shares
Six April 1, Eleven
Months 1999 Year Year Year Year Months Year
Ended to Ended Ended Ended Ended Ended Ended
April 30, October 31, March 31, March 31, March 31, March 31, March 31, April 30,
2000 1999 1999<F4> 1998 1997 1996 1995 1994
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset
Value,
Beginning
of Period $ 21.04 $ 20.71 $ 27.89 $ 22.77 $ 22.26 $ 18.10 $ 18.35 $ 17.55
Investment
Activities
Net investment
income (loss) (0.05) (0.06) 0.10 0.23 0.20 0.19 0.13 0.08
Net realized and
unrealized gains
(losses) on
investments 2.36 0.39 (6.06) 8.72 2.52 4.73 0.18 1.59
Total from
Investment
Activities 2.31 0.33 (5.96) 8.95 2.72 4.92 0.31 1.67
Distributions
Net investment
income -- -- (0.14) (0.27) (0.17) (0.18) (0.12) (0.07)
Net realized gains -- -- (1.08) (3.56) (2.04) (0.58) (0.44) (0.80)
Total
Distributions -- -- (1.22) (3.83) (2.21) (0.76) (0.56) (0.87)
Net Asset Value,
End of Period $ 23.35 $ 21.04 $ 20.71 $ 27.89 $ 22.77 $ 22.26 $ 18.10 $ 18.35
Total Return
(excludes
sales charges) 10.98%<F6> 1.59%<F6> (22.08)% 42.02% 12.46% 28.00% 1.75%<F6> 9.75%
Ratios/Supplemental
Data:
Net Assets,
End of Period (000) $93,477 $105,415 $125,761 $175,684 $114,451 $102,979 $84,738 $83,297
Ratio of expenses to
average net
assets <F5> 1.30%<F7> 1.29%<F7> 1.30% 1.31% 1.36% 1.41% 1.37%<F7> 1.38%
Ratio of net
investment income
(loss) to average
net assets <F5> (0.33)%<F7> 0.39%<F7> 0.41% 0.86% 0.90% 0.95% 0.84%<F7> 0.47%
Ratio of expenses to
average net assets<F1> 1.41%<F7> 1.47%<F7> <F9> <F9> <F9> <F9> <F9> <F9>
Ratio of net
investment income
(loss) to average
net assets<F1> (0.44)%<F7> (0.58)%<F7> <F9> <F9> <F9> <F9> <F9> <F9>
Portfolio turnover <F8> 11% 16% 30% 42% 35% 24% 32% 40%
<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> Period from commencement of operations.
<F4> 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.
<F5> Effective February 28, 2000, 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.
<F6> Not annualized
<F7> Annualized
<F8> Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
<F9> There were no fee reductions during the period.
</FN>
</TABLE>
See notes to financial statements.
138
<PAGE>
The Victory Portfolios Financial Highlights
<TABLE>
<CAPTION>
International Growth Fund
Class A Shares Class G Shares
Six Six March 26,
Months Year Year Year Year Year Months 1999
Ended Ended Ended Ended Ended Ended Ended through
April 30, October 31, October 31, October 31, October 31, October 31, April 30, October 31,
2000 1999 1998 1997 1996<F3> 1995<F10> 2000 1999<F8><F9>
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 16.51 $ 13.19 $ 13.31 $ 13.01 $ 12.33 $ 13.32 $ 16.48 $ 13.73
Investment Activities
Net investment
income (loss) (0.05) (0.05) 0.07<F2> 0.09 0.08 0.05 (0.05) (0.03)
Net realized and
unrealized gains
(losses) from
investments and
foreign currencies 1.55 3.85 0.65 0.67 0.62 (0.42) 1.53 2.78
Total from
Investment
Activities 1.50 3.80 0.72 0.76 0.70 (0.37) 1.48 2.75
Distributions
Net investment income -- -- (0.06) (0.01) (0.02) -- -- --
Net realized gains (1.84) (0.48) (0.78) (0.45) -- (0.55) (1.84) --
Tax return of capital -- -- -- -- -- (0.07) -- --
Total
Distributions (1.84) (0.48) (0.84) (0.46) (0.02) (0.62) (1.84) --
Net Asset Value,
End of Period $ 16.17 $ 16.51 $ 13.19 $ 13.31 $ 13.01 $ 12.33 $ 16.12 $ 16.48
Total Return
(excludes
sales charges) 9.27%<F4> 29.43% 5.79% 6.04% 5.65% (2.50)% 9.16%<F4> 20.03%<F4>
Ratios/Supplemental Data:
Net Assets,
End of Period (000) $177,426 $149,193 $134,491 $106,189 $121,517 $106,477 $42,792 $37,322
Ratio of expenses to
average net assets<F6> 1.76%<F5> 1.75% 1.71% 1.69% 1.73% 1.53% 1.99%<F5> 2.00%<F5>
Ratio of net investment
income (loss) to
average net assets <F6> (0.66)%<F5> (0.32)% 0.55% 0.63% 0.64% 0.75% (0.88)%<F5> (1.79)%<F5>
Ratio of expenses to
average net assets<F1> 1.82%<F5> 1.88% 1.82% 1.69% 1.75% 1.65% 2.07%<F5> 2.24%<F5>
Ratio of net investment
income (loss) to
average net assets<F1> (0.72)%<F5> (.45)% 0.44% 0.63% 0.62% 0.63% (0.96)%<F5> (2.03)%<F5>
Portfolio turnover <F7> 40% 106% 86% 116% 178% 68% 40% 106%
<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> Not annualized
<F5> Annualized.
<F6> Effective December 15, 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.
<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 International Fund merged into
the Victory International Growth Fund.
<F10> 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.
</FN>
</TABLE>
See notes to financial statements.
139
<PAGE>
Statements of Cash Flows
The Victory Portfolios For the Six Months Ended April 30, 2000
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Limited Investment
Term Intermediate Quality
Income Income Bond Balanced
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
Increase (decrease) in cash
Cash Flows from Operating Activities:
Net Investment Income $ 1,167 $ 5,984 $ 3,840 $ 4,967
Adjustments to reconcile net investment income to net cash
provided by operating activities:
Purchases of investment securities (262,706) (535,445) (291,348) (1,800,419)
Proceeds from disposition of investments securities 269,491 562,078 316,172 1,842,408
Decrease (increase) in investments purchased
with cash collateral from securities lending 3,501 (12,817) (12,091) 2,245
Decrease (increase) in dividends, interest, and
other receivables 152 (455) 110 143
Increase (decrease) in payable for return of
collateral received from securities lending (3,501) 12,817 12,091 (2,245)
Increase (decrease) in accrued expenses and other payables (1) (58) (59) (71)
Net amortization/accretion from investments -- -- (12) (15)
Net cash provided by operating activities 8,103 32,104 28,703 47,013
Cash Flows from Financing Activities:
Proceeds from shares issued 2,429 15,768 9,746 63,827
Cost of shares redeemed (9,631) (45,976) (37,036) (105,162)
Cash distributions paid (575) (1,896) (1,413) (5,541)
Net cash used in financing activities (7,777) (32,104) (28,703) (46,876)
Increase (decrease) in cash 326 -- -- 137
Cash:
Beginning balance -- -- -- --
Ending Balance $ 326 $ -- $ -- $ 137
Non-cash financing activities not included herein consist of
reinvestment of dividends from net investment income and distributions
of net realized capital gains of $595, $4,154, $2,514, and $37,355.
</TABLE>
See notes to financial statements.
140
<PAGE>
Statements of Cash Flows
The Victory Portfolios For the Six Months Ended April 30, 2000
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Small
Diversified Stock Special Company
Stock Index Value Opportunity
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
Increase (decrease) in cash
Cash Flows from Operating Activities:
Net Investment Income (loss) $ 192 $ 4,520 $ 429 $ (190)
Adjustments to reconcile net investment income to net cash
provided by operating activities:
Purchases of investment securities (2,529,890) (6,428,948) (754,598) (181,814)
Proceeds from disposition of investments securities 2,615,688 6,424,271 813,405 237,061
(Increase) decrease in investments purchased
with cash collateral from securities lending (130,823) 13,529 1,527 4,421
Decrease (increase) in dividends, interest,
and other receivables (258) 2,013 64 13
Increase in payable for return of collateral received from
securities lending 130,823 (13,529) (1,527) (4,421)
Increase (decrease) in accrued expenses and other payables 27 81 (45) (53)
Net amortization/accretion from investments (153) -- --
Net cash provided by (used in) operating activities 85,759 1,784 59,255 55,017
Cash Flows from Financing Activities:
Proceeds from shares issued 177,723 86,278 16,812 20,266
Cost of shares redeemed (240,210) (85,363) (73,761) (75,283)
Cash distributions paid (23,231) (2,699) (2,306) --
Net cash (used in) provided by financing activities (85,718) (1,784) (59,255) (55,017)
Increase (decrease) in cash 41 -- -- --
Cash:
Beginning balance 18 -- -- --
Ending Balance $ 59 $ -- $ -- $ --
Non-cash financing activities not included herein consist of
reinvestment of dividends from net investment income and distributions
of net realized capital gains of $154,383, $11,176, $30,986, and $0.
</TABLE>
See notes to financial statements.
141
<PAGE>
Notes to Financial Statements
The Victory Portfolios April 30, 2000
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, Established Value Fund,
Diversified Stock Fund, Stock Index Fund, Growth Fund, Special Value
Fund, Ohio Regional Stock Fund, Small Company Opportunity Fund, and the
International 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 Intermediate Income
Fund, Fund for Income, Investment Quality Bond Fund, National Municipal
Bond Fund, New York Tax-Free Fund, Ohio Municipal Bond Fund, Convertible
Securities Fund, Real Estate Investment Fund, Value Fund, Established
Value, Stock Index Fund, Growth Fund, Special Value Fund, Small Company
Opportunity Fund, and the International Growth Fund are authorized to
issue two classes of shares: Class A Shares and Class G Shares. The
Balanced Fund and the Diversified Stock Fund are authorized to issue
three classes of shares: Class A Shares, Class B Shares, and 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 Fund for Income
seeks to provide a high level of current income consistent with
preservation of shareholders' capital. The Government Mortgage Fund
seeks to provide a high level of current income consistent with safety
of principal. 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 Balanced
Fund seeks to provide income and long-term growth of capital. The
Convertible Securities Fund seeks to provide a high level of current
income together with long-term capital appreciation. The REI Fund seeks
to provide total return through investments in real estate-related
securities. The Value Fund and the Special Value Fund seek to provide
long-term growth of capital and dividend income. The Value Fund and the
Special Value Fund seek to provide long-term growth of capital and
dividend income. The Lakefront Fund seeks to provide long-term growth of
capital and income. The Established Value Fund seeks to obtain long-term
capital growth by investing primarily in common stocks. The Diversified
Stock Fund and the Growth Fund seek to provide 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 Ohio Regional Stock
Fund and the Small Company Opportunity Fund seek to provide capital
appreciation. The International Growth Fund seeks to provide capital
growth consistent with reasonable investment risk.
2. Reorganizations:
December 1, 1999, the Board of Directors of the Trust approved the
conversion and transfer of all the assets and liabilities represented by
Class B Shares into additional Class A Shares for the Special Value
Fund, the National Municipal Bond Fund, the New York Tax-Free Fund, and
the Ohio Municipal Bond Fund. This transfer was completed on February
25, 2000.
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
Continued
142
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
Company Opportunity Fund 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 (depreciation)
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 Shares (000) -- $31,894 $ 31,894
Class G Shares (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 Shares (000) -- $83,257 $ 83,257
Class G Shares (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>
Continued
143
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
<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 Shares (000) -- $ 996,070 $ 996,070
Class B Shares (000) -- 65,343 65,343
Class G Shares (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 $ 7.14
Class B Shares -- $ 16.83 $ 6.83
Class G Shares -- -- $ 7.14
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 Shares (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 Shares (000) -- $131,095 $131,095
Class B Shares (000) -- 515 515
Class G Shares (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>
Continued
144
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
<TABLE>
<CAPTION>
Before After
Reorganization Reorganization
Victory
Gradison Victory Small
Opportunity Special Company
Value Growth Opportunity
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 Sharess (000) -- $ 63,184 $ 63,184
Class G Shares (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>
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,
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, REI Fund, Value
Fund, Lakefront Fund, Established Value Fund, Diversified Stock Fund,
Stock Index Fund, Growth Fund, Special Value Fund, Ohio Regional Stock
Fund, Small Company Opportunity Fund, Special Value Fund, and the
International Growth 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.
Continued
145
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
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.
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, Value Fund, Lakefront Fund, Established Value Fund,
Diversified Stock Fund, Stock Index Fund, Growth Fund, Special Value
Fund, Ohio Regional Stock Fund, Small Company Opportunity Fund, and
International Growth 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. These
amounts are included in amounts payable for investments purchased on the
accompanying statements of assets and liabilities.
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
Continued
146
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
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 Limited Term
Income Fund, Intermediate Term Income Fund, Investment Quality Bond
Fund, Balanced Fund, Convertible Securities Fund, Value Fund,
Diversified Stock Fund, Stock Index Fund, Growth Fund, Special Value
Fund, Ohio Regional Fund and Small Company Opportunity Fund. The
following Funds had securities with the following market values on
loan as of April 30, 2000 (amounts in thousands):
<TABLE>
<CAPTION>
Market Value of
Loaned Securities
<S> <C>
Limited Term Income Fund $ 9,499
Intermediate Income Fund 50,561
Investment Quality Bond Fund 30,363
Balanced Fund 56,864
Value Fund 57,582
Diversified Stock Fund 144,246
Stock Index Fund 108,038
Growth Fund 38,011
Special Value Fund 23,296
Small Company Opportunity Fund 11,659
</TABLE>
The loaned securities were fully collateralized by cash, and short-term
securities purchased with such cash collateral, as of April 30, 2000.
As disclosed in the Schedule of Investments the Victory Limited Term
Income Fund invested cash collateral in a Morgan Stanley Dean Witter
Repurchase Agreement with an interest rate of 6.16% and a maturity date
of 5/1/00 which was collateralized by the following securities (amounts
in thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$ -- Gables Realty Ltd., 6.55%, 10/1/00 $ --
13 GMAC , 5.95%, 3/14/03 1,759
1,948 Sprint Cap Corp., 6.38%, 5/1/09 247
18 Transcanada Pipeline, 9.88%, 1/1/21 22
$2,028
</TABLE>
As disclosed in the Schedule of Investments the Victory Limited Term
Income Fund invested cash collateral in a Merrill Lynch Repurchase
Agreement with an interest rate of 6.19% and a maturity date of 5/1/00
which was collateralized by the following securities (amounts in
thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$ 25 Leucadia National, 8.25%, 6/15/05 $ 25
45 Occidental Petroleum, 10.13%, 11/15/01 46
16 Pennsylvania Power Co., 7.63%, 7/1/23 14
227 Quno Corp, 9.13%, 5/15/05 228
611 Union Pacific 7.05%, 5/15/18 572
633 Union Pacific 7.00%, 10/15/06 553
90 Waste Management, 8.75%, 5/1/18 81
274 Waste Management, 7.65%, 3/15/11 232
355 Waste Management, 6.88%, 5/15/09 290
20 WMX Technologies, 6.70%, 5/1/01 19
$2,060
</TABLE>
Continued
147
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
As disclosed in the Schedule of Investments the Victory Intermediate
Income Fund invested cash collateral in a Lehman Repurchase
Agreement with an interest rate of 6.11% and a maturity date of
5/1/00 which was collateralized by the following securities
(amounts in thousands):
<TABLE>
<CAPTION>
Shares/Par Description Market Value
<S> <C> <C>
160 Conagra, Inc. $ 3,110
70 Constellation Energy Group 2,375
19 Coors (Adolph), Class B 972
43 Cooper Industries, Inc. 1,474
59 Cvs Corp. 2,610
5,725 Newbury Funding, 22.60%, 2/15/30 5,152
$15,693
</TABLE>
As disclosed in the Schedule of Investments the Victory Intermediate
Income Fund invested cash collateral in a Morgan Stanley Dean Witter
Repurchase Agreement with an interest rate of 6.16% and a maturity date
of 5/1/00 which was collateralized by the following securities (amounts
in thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$2,672 Amsouth Bancorp, 6.75%, 11/25/05 $ 2,557
2,859 Consumers Energy, 6.38%, 2/1/08 2,549
50 Raytheon, 8.30%, 3/1/10 49
74 RGS Funding Corp, 9.81%, 12/7/21 81
5,116 Star Capital, 6.92%, 6/15/00 4,956
$10,192
</TABLE>
As disclosed in the Schedule of Investments the Victory Balanced Fund
invested cash collateral in a Goldman Sachs Repurchase Agreement with an
interest rate of 6.14% and a maturity date of 5/1/00 which was
collateralized by the following securities (amounts in thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$3,347 American Home Products, 7.90%, 2/15/00 $ 3,369
84 Ford Motor Credit, 5.96%, 5/14/00 83
4,300 Pacific Bell, 6.13%, 2/15/08 3,884
83 Philip Morris, 9.00%, 1/1/01 83
3,294 Proctor & Gamble, 8.50%, 8/10/09 3,509
1,264 Santander Financial Issuances, 6.80%, 7/15/05 1,198
$12,126
</TABLE>
As disclosed in the Schedule of Investments the Victory Balanced Fund
invested cash collateral in a Merrill Lynch Repurchase Agreement with an
interest rate of 6.19% and a maturity date of 5/1/00 which was
collateralized by the following securities (amounts in thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$1,020 CIA International Telecom, 8.85%, 8/1/04 $ 954
3,200 La Quinta Inns, 7.11%, 10/17/01 1,984
975 Province of Buenos Aires, 13.25%, 3/29/10 975
325 La Quinta Inns, 7.27%, 2/26/07 249
6,380 Southwestern Bell, 6.25%, 7/7/05 6,138
$10,300
</TABLE>
Continued
148
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
As disclosed in the Schedule of Investments the Victory Balanced Fund
invested cash collateral in a Lehman Repurchase Agreement with an
interest rate of 6.11% and a maturity date of 5/1/00 which was
collateralized by the following securities (amounts in thousands):
<TABLE>
<CAPTION>
Shares Description Market Value
<S> <C> <C>
30 AMFM, Inc. $ 1,931
86 Comerica, Inc. 3,702
34 CommScope, Inc. 1,573
11 COMSAT Corp. 262
75 Concentric Network Corp. 3,098
$10,566
</TABLE>
As disclosed in the Schedule of Investments the Victory Balanced Fund
invested cash collateral in a Morgan Stanley Dean Witter Repurchase
Agreement with an interest rate of 6.16% and a maturity date of 5/1/00
which was collateralized by the following securities (amounts in
thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$ 85 Coca-Cola Enterprises, 6.75%, 1/15/38 $ 73
3,363 Commercial Credit, 5.90%, 9/1/03 3,180
3,175 Dillard Department Stores, 7.85%, 10/1/12 2,553
412 TXU Eastern Funding, 6.45%, 5/15/05 388
6,050 First USA Credit Card Master Trust, 6.50%, 1/18/06 5,865
-- Transcanada Pipeline, 9.88%, 1/1/21
$12,059
</TABLE>
As disclosed in the Schedule of Investments the Value Fund invested cash
collateral in a Lehman Repurchase Agreement with an interest rate of
6.11% and a maturity date of 5/1/00 which was collateralized by the
following securities (amounts in thousands):
<TABLE>
<CAPTION>
Shares Description Market Value
<S> <C> <C>
10 AMFM, Inc. $ 644
-- Carter Wallace, Inc. -CL B 3
20 CCB Financial Corp. 815
2 Celestial Seasonings, Inc. 51
8 Celgene Corp. 373
-- Carrier Access Corp.
2 Chesapeake Utilities 46
36 Ciena Corp. 4,479
$6,411
</TABLE>
As disclosed in the Schedule of Investments the Value Fund invested cash
collateral in a Merrill Lynch Repurchase Agreement with an interest rate
of 6.19% and a maturity date of 5/1/00 which was collateralized by the
following securities (amounts in thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$2,370 Bank United, 8.00%, 3/15/09 $2,100
1,765 Province of Buenos Aires, 13.25%, 3/29/10 1,765
357 Greentree Financial, 6.50%, 9/26/02 211
50 Philippine Long Distance Telephone, 9.25% 46
$4,122
</TABLE>
Continued
149
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
As disclosed in the Schedule of Investments the Value Fund
invested cash collateral in a Goldman Sachs Repurchase
Agreement with an interest rate of 6.14% and a maturity date
of 5/1/00 which was collateralized by the following securities
(amounts in thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$1,828 Ontario Province, 7.75%, 6/4/02 $1,842
114 Ford Motor Credit, 6.34%, 6/14/00 113
775 First Union, 7.70%, 2/15/05 774
3,475 First Union, 6.95%, 11/1/04 3,377
$6,106
</TABLE>
As disclosed in the Schedule of Investments the Victory Diversified
Stock Fund invested cash collateral in a Lehman Brothers Repurchase
Agreement with an interest rate of 6.11% and a maturity date of 5/1/00
which was collateralized by the following securities (amounts in
thousands):
<TABLE>
<CAPTION>
Shares Description Market Value
<S> <C> <C>
24 AAR Corp. $ 365
4 Acacia Research Corp. 77
0 ACTV, Inc. 3
8 Advanced Fibre Communications, Inc. 374
5 Aerial Communications, Inc 207
54 Agribrands International, Inc. 2,007
17 Align-Rite International, Inc. 425
0 Alleghany Corp. 23
0 Alliance Capital Management Holdings LP 5
25 AMFM, Inc. 1,609
13 Anadigics, Inc. 931
2 Applied Films Corp. 36
0 Arden Realty, Inc. 2
0 Aspect Development, Inc. 1
12 AsiaInfo Holdings, Inc. 531
8 Bangor Hydro Electric 127
0 Bell Microproducts, Inc. 1
1 Berkshire Hathaway, Inc., Class B 2,768
0 Bombardier, Inc., Class B 20
1 Buckeye Partners LP 39
25 Hadco Corp. 2,005
26 Inktomi Corp. 3,956
84 Metamor Worldwide, Inc. 1,315
43 Network Peripherals, Inc. 1,163
58 NYFIX, Inc. 1,511
67 Reynolds & Reynolds Co. 1,499
$21,000
</TABLE>
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 6.16% and a maturity date
of 5/1/00 which was collateralized by the following securities (amounts
in thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$4,200 Amsouth Bancorp, 6.13%, 3/1/09 $ 3,629
236 Amsouth Bancorp, 6.75%, 11/1/25 226
85 Consumers Energy, 6.38%, 2/1/08 75
4,500 FleetBoston Financial Corp., 6.88%, 1/15/28 3,834
1,400 PSI Energy, 7.85%,10/15/07 1,350
6,300 Texas Utilities Electric Co., 7.17%, 8/1/07 6,023
67 Washington Mutual, Inc. 8.25%, 4/1/10 67
$15,204
</TABLE>
Continued
150
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
As disclosed in the Schedule of Investments the Victory
Diversified Stock Fund invested cash collateral in a Merrill
Lynch Repurchase Agreement with an interest rate of 6.19% and
a maturity date of 5/1/00 which was collateralized by the
following securities (amounts in thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$ 7,470 Bank United, 8.00%, 3/15/09 $ 6,618
480 Colonial Realty LP, 6.98%, 9/26/05 438
1,000 Conseco, Inc., 6.80%, 6/15/05 610
775 Delta Airlines, 6.65%, 3/15/04 717
30 Doral Financial, 8.50%, 7/8/04 30
24 Occidental Petroleum, 8.75%, 1/15/23 25
10,215 Petro Mexicanos, 8.63%, 12/1/23 8,989
645 SK Telecom, 7.75%, 4/29/04 626
600 Waste Management, 6.88%, 5/15/09 490
$18,543
</TABLE>
As disclosed in the Schedule of Investments the Victory Diversified
Stock Fund invested cash collateral in a Prudential Bache Repurchase
Agreement with an interest rate of 6.19% and a maturity date of 5/1/00
which was collateralized by the following securities (amounts in
thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$5,200 Cox Communications, 7.50%, 8/15/04 $ 5,090
3,600 Fleet National Bank, 6.46%, 7/24/00 3,602
1,900 Ford Motor Credit, 7.75%, 11/15/02 1,911
406 MBNA Corp, 6.59%, 6/8/00 405
3,775 Safeway Inc 5.88%, 11/15/01 3,669
120 Texaco Capital, 8.63%, 6/30/10 129
5,000 US Bank NA Minnesota, 6.43%, 6/5/00 5,003
527 Zeneca Wilmington, 6.30%, 6/15/03 517
$20,326
</TABLE>
As disclosed in the Schedule of Investments the Victory Diversified
Stock Fund invested cash collateral in a First Union Repurchase
Agreement with an interest rate of 6.22% and a maturity date of 5/1/00
which was collateralized by the following securities (amounts in
thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$3,191 American General Finance Corp., 5.75%, 11/1/03 $ 3,010
4,715 BankAmerica, 8.07%, 12/31/26 4,432
4,425 First Union Corp, 7.50%, 7/15/06 4,343
3,480 First Union, 7.95%, 11/15/29 3,261
5,000 Household Finance Corp, 6.45%, 2/1/09 4,492
518 Southern Co. Capital Trust, 8.19%, 2/1/37 468
182 Viacom Inc., 11.38%, 1/15/09 198
$20,204
</TABLE>
Continued
151
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
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 6.14% and
a maturity date of 5/1/00 which was collateralized by the
following securities (amounts in thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$3,800 Archer Daniels, 6.95%, 12/15/97 $ 3,227
1,567 Boeing Co., 7.25%, 6/15/25 1,509
1,055 BT Institutional Capital Trust A, 8.09%, 12/01/26 1,035
6,543 Chase Manhattan, 7.25%, 6/1/07 6,545
2,130 Citicorp Lease, 7.22%, 6/15/05 2,100
1,158 GMAC, 6.28%, 6/12/00 1,157
309 Hydro-Quebec, 8.00%, 2/1/13 321
2,800 Liberty Mutual, 8.50%, 5/15/25 2,723
1,783 National Westminster Bank, 6.66%, 6/16/00 1,788
3,514 Sanwa Business, 6.76%, 7/03/02 3,451
$23,856
</TABLE>
As disclosed in the Schedule of Investments the Victory Stock Index Fund
invested cash collateral in a Lehman Inc., Repurchase Agreement with an
interest rate of 6.11% and a maturity date of 5/1/00 which was
collateralized by the following securities (amounts in thousands):
<TABLE>
<CAPTION>
Shares Description Market Value
<S> <C> <C>
33 Clorox Co. $ 1,234
156 CMP Group, Inc. 4,513
32 CMS Energy Corp. 595
50 Coastal Corp. 2,540
6 Cobalt Networks, Inc. 161
39 Columbia Energy Group 2,458
82 Comcast Corp. -Special Class A 3,393
15 Comerica, Inc. 645
14 CAN Financial Corp. 424
$15,963
</TABLE>
As disclosed in the Schedule of Investments the Victory Stock Index Fund
invested cash collateral in a Morgan Stanley Repurchase Agreement with
an interest rate of 6.16% and a maturity date of 5/1/00 which was
collateralized by the following securities (amounts in thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$ 139 Consumers Energy, 6.38%, 2/1/08 $ 124
100 Indiana Michigan Power, 9.82%, 12/7/22 113
900 Meritor, 6.80%, 2/15/09 746
93 NGC Corp, 7.13%, 5/15/18 83
6,005 Raytheon Co., 8.30%, 3/1/10 5,916
1,498 RGS Funding Corp., 9.81%, 12/7/21 1,654
2,500 Royal Bank Scotland, 9.12%, 3/31/49 2,512
166 Safeway, Inc., 7.50%, 9/15/09 160
3,000 Sprint Capital, 6.38%, 5/1/09 2,699
30 Time Warner, 8.38%, 3/15/23 30
3,500 Transcanada Pipeline, 9.88%, 1/1/21 4,139
77 Washington Mutual, 8.25%, 4/1/10 77
$18,253
</TABLE>
Continued
152
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
As disclosed in the Schedule of Investments the Victory Stock
Index Fund invested cash collateral in a First Union
Repurchase Agreement with an interest rate of 6.22% and a
maturity date of 5/1/00 which was collateralized by the
following securities (amounts in thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$ 561 GMAC, 8.75%, 7/15/05 $ 583
7,924 First Union Capital, 7.93%, 1/15/27 6,974
7,435 GTE Florida, Inc, 6.25%, 11/15/05 6,938
5,723 Reliant Energy, 7.81%, 6/15/00 5,701
$20,196
</TABLE>
As disclosed in the Schedule of Investments the Victory Stock Index Fund
invested cash collateral in a Salomon Repurchase Agreement with an
interest rate of 6.14% and a maturity date of 5/1/00 which was
collateralized by the following securities (amounts in thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$1,064 American General, 6.83%, 11/5/02 $ 1,044
1,774 Carolina Power & Light, 6.88, 8/15/23 1,475
1,598 Citicorp 99, 7.22%, 6/15/05 1,576
114 City Group, 5.50%, 2/15/04 105
4,100 Credit Suisse, 6.50%, 5/1/08 3,749
202 General Electric Cap Corp., 8.70%, 2/15/03 209
6,321 GMAC, 6.28%, 6/12/00 6,317
2,336 Hydro-Quebec, 8.00%, 2/1/13 2,384
3,200 Sanwa Business Credit, 6.76%, 7/3/02 3,143
2,536 National Westminster, 6.66%, 6/16/00 2,543
$22,545
</TABLE>
As disclosed in the Schedule of Investments the Victory Growth Fund
invested cash collateral in a Morgan Stanley Dean Witter Repurchase
Agreement with an interest rate of 6.16% and a maturity date of 5/1/00
which was collateralized by the following securities (amounts in
thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$1,210 First USA, 6.50%, 1/18/06 $ 582
35 GTE Florida, Inc. 6.25%, 11/15/05 4,604
737 RGS (Aegco) Funding Co, 9.81%, 12/7/21 37
5 Transcanada Pipeline, 9.88%, , 1/1/21 973
$6,196
</TABLE>
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 6.19% and a maturity date of 5/1/00 which was
collateralized by the following securities (amounts in thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$ 5 Associates Corp., 6.41%, 6/19/00 $ 5
737 Banco Hipot, 10.63%, 8/07/06 758
35 Bell Atlantic Financial, 7.60%, 3/15/07 34
1,210 Colgate Palmolive, 6.02%, 8/15/03 1,160
815 Dial Corp, 6.01%, 10/25/02 775
25 General Mills, 8.95%, 12/18/00 26
250 National City Bank , 7.25%, 7/15/10 239
1,000 Sears Roebuck, 9.03%, 2/14/12 1,068
60 Walt Disney, 6.30%, 11/22/05 57
$4,122
</TABLE>
Continued
153
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
As disclosed in the Schedule of Investments the Small Company
Fund invested cash collateral in a Morgan Stanley Dean Witter
Repurchase Agreement with an interest rate of 6.16% and a
maturity date of 5/1/00 which was collateralized by the
following securities (amounts in thousands):
<TABLE>
<CAPTION>
Principal Description Market Value
<S> <C> <C>
$ 729 Amsouth Bancorp, 6.75%, 11/1/25 $ 697
3,106 Eastern, 6.45%, 5/15/05 3
500 First Union Securities, 6.75%, 11/15/29 468
1 Gables Realty, 6.55%, 10/1/00 1
15 Royal Bank Scotland, 9.12%, 3/31/05 15
878 Star Capital, 6.92%, 6/15/00 851
$2,035
</TABLE>
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, REI
Fund, Value Fund, Lakefront Fund, Established Value Fund, Diversified
Stock Fund, Stock Index Fund, Growth Fund, Special Value Fund, Ohio
Regional Stock Fund, Small Company Opportunity Fund, and the
International Growth Fund. Dividends from net investment income are
declared and paid monthly for the 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, and Balanced Fund. Distributable net realized
capital gains, if any, are declared and distributed at least annually.
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. Net investment losses incurred by
a Fund are reclassified as an offset to capital in the accompanying
statements of assets and liabilities.
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.
Costs incurred in connection with the organization of the Funds are
being amortized on a straight-line basis over a period not to exceed
sixty months from the date the Funds commenced operations. Organization
costs were paid by the Distributor on behalf of the REI Fund and the
Lakefront Fund and are being amortized over a five year period with a
corresponding payable from the Funds to the Distributor
Continued
154
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
4. Purchases and Sales of Securities:
Purchases and sales of securities (excluding short-term securities) for
the period ended April 30, 2000 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
Purchases Sales
<S> <C> <C>
Limited Term Income Fund $ 42,672 $ 44,206
Intermediate Income Fund 292,404 291,591
Fund for Income 32,027 61,021
Government Mortgage Fund 118,022 155,426
Investment Quality Bond Fund 208,111 231,929
National Municipal Bond Fund 29,706 34,321
New York Tax-Free Fund 2,428 4,505
Ohio Municipal Bond Fund 62,553 84,122
Balanced Fund 374,104 351,509
Convertible Securities Fund 37,119 42,417
REI Fund 5,700 6,635
Value Fund 76,882 134,421
Lakefront Fund 611 560
Diversified Stock Fund 584,643 698,905
Stock Index Fund 66,314 8,451
Growth Fund 72,485 71,350
Established Value Fund 69,301 125,250
Special Value Fund 59,641 123,446
Ohio Regional Stock Fund 31 15,815
International Growth Fund 94,609 83,212
Small Company Opportunity Fund 14,404 67,679
</TABLE>
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 Class A shares of all the Funds, except
the Stock Index Fund and the Financial Reserves Fund, the Class B shares
for the Balanced Fund and the Diversified Stock Fund, the Investor and
Select Shares of the Federal Money Market Fund and the Institutional
Money Market Fund and the Select Shares of the U.S. Government
Obligations 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.
Continued
155
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
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 period ended
April 30, 2000 , the Distributor received approximately $355,000 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 $313,000 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 Advisor 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, Ohio Municipal Bond Fund, Established
Value Fund, Diversified Stock Fund, Small Company Opportunity Fund and
the International Growth Fund at a maximum of .89%, .91%, 1.10%, 1.44%,
1.30%, and 2.00% 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. Additionally, effective
February 28, 2000, the Advisor 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 Limited Term Income Fund
(Class A), Intermediate Income Fund (Class A shares), Intermediate
Income Fund (Class G shares), Fund for Income (Class A Shares),
Investment Quality Bond Fund (Class A Shares), Investment Quality Bond
Fund (Class G shares), Balanced Fund (Class G shares), Convertible
Securities Fund (Class A Shares), Convertible Securities Fund (Class G
shares), REI Fund (Class A Shares), REI Fund (Class G shares), Value
Fund (Class G shares), Established Value Fund (Class A Shares), Stock
Index Fund (Class G shares), Growth Fund (Class A Shares), Growth Fund
(Class G Shares) at a maximum of .90%, .90%, 1.00%, 1.00%, 1.10%, 1.10%,
1.55%, 1.55%, 1.24%, 1.40%, 1.65%, 1.45%, .88%, .82%, 1.20% and 1.45% of
average daily net assets, respectively, until at least February 28,
2001. Also, effective February 28, 2000, the Adviser has also 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 28, 2001 and to 2.00% until at least February 28, 2010.
Continued
156
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
Additional information regarding related party transactions is as
follows for the period ended April 30, 2000:
<TABLE>
<CAPTION>
Investment
Advisory Administration
Fees Fees
Percentage
of Average Voluntary Voluntary
Daily Fee Fee
Net Assets Reductions Reductions
(000) (000)
<S> <C> <C> <C>
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% 447 --
Limited Term Income Fund 0.50% 9 --
Intermediate Income Fund 0.75% 235 --
Fund for Income 0.50% 44 101
Government Mortgage Fund 0.50% -- --
Investment Quality Bond Fund 0.75% 157 --
National Municipal Bond Fund 0.55% 56 --
New York Tax-Free Fund 0.55% 20 7
Ohio Municipal Bond Fund 0.60% 189 --
Balanced Fund 0.80% 107 --
Convertible Securities Fund 0.75% -- --
Real Estate Investment Fund 0.80% 30 --
Value Fund 0.75% 25 --
Lakefront Fund 1.00% 4 --
Diversified Stock Fund 0.65% 110 13
Stock Index Fund 0.60% 421 555
Growth Fund 0.75% 33 --
Established Value Fund 0.51% 105 188
Special Value Fund 0.80% 28 --
Ohio Regional Stock Fund 0.75% 6 --
Small Company Opportunity Fund 0.62% 8 64
International Growth Fund 1.10% 69 --
</TABLE>
The Trust and KeyCorp entered into an agreement (the "Put Agreement")
dated August 13, 1999 which provided the Trust the right to require
KeyCorp to purchase certain General American Life Insurance Company
("GALIC") securities held by the Prime Obligations Fund, the Financial
Reserves Fund and another fund within the Trust, on or before October
15, 1999. On August 23, 1999 and October 1, 1999, approximately $5.5
million and $49.5 million par value and $4 million and $36 million par
value of GALIC securities, respectively, were sold by the Prime
Obligations Fund and the Financial Reserves Fund at par in connection
with the terms of the acquisition of GALIC by an unaffiliated external
party. Accordingly, the Put Agreement expired on October 15, 1999
without any transactions described therein having been exercised.
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 Transfer Agency, Accounting Services and
Administrative Services agreements 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 $23.00 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
Continued
157
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
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.
6. Capital Share Transactions:
Capital share transactions for those Funds with multiple share classes
were as follows (amounts in thousands):
<TABLE>
<CAPTION>
U.S. Government Obligations Fund
Six Months Year
Ended Ended
April 30, October 31,
2000 1999
<S> <C> <C>
Capital and Share Transactions:
Investor Shares:
Proceeds from shares issued $ 966,885 $ 901,949
Dividends reinvested 14 21
Cost of shares redeemed (853,816) (1,086,810)
----------------------------------------------------------------------------------------------------------------------------
Total $ 113,083 $ (184,840)
Select Shares:
Proceeds from shares issued 2,513,817 3,085,952
Dividends reinvested 36,016 60,036
Cost of shares redeemed (2,619,101) (2,934,450)
----------------------------------------------------------------------------------------------------------------------------
Total (69,268) 211,538
</TABLE>
Continued
158
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
<TABLE>
<CAPTION>
Intermediate Investment
Income Quality
Fund Fund for Income Bond Fund
Period Six Months Ten Months Period
Ended Ended Ended Ended
April 30, April 30, October 31, April 30,
2000 2000 1999 2000
<S> <C> <C> <C> <C>
Capital Transactions:
Class A Shares:
Proceeds from shares issued $ 15,742 $ 10,580 $ 16,785 $ 9,731
Proceeds from shares issued in
connection with acquisition -- -- 33,350 --
Dividends reinvested 4,154 890 821 2,514
Cost of shares redeemed (45,961) (11,849) (8,309) (36,899)
---------------------------------------------------------------------------------------------------------------------------
Total $(26,065) $ (379) $ 42,647 $(24,654)
Class G Shares:
Proceeds from shares issued $ 26 $ 23,964 $ 86,968 $ 7
Dividends reinvested -- 5,424 8,370 --
Cost of shares redeemed -- (60,701) (55,719) --
---------------------------------------------------------------------------------------------------------------------------
Total $ 26 $(31,313) $ 39,619 $ 7
Share Transactions:
Class A Shares:
Issued 1,710 833 1,301 1,055
Issued in connection with acquisition -- -- 2,426 --
Reinvested 452 71 64 272
Redeemed (4,979) (938) (642) (3,998)
---------------------------------------------------------------------------------------------------------------------------
Total (2,817) (34) 3,149 (2,671)
Class G Shares:
Issued 3 1,891 6,704 1
Reinvested -- 429 647 --
Redeemed -- (4,785) (4,293) --
---------------------------------------------------------------------------------------------------------------------------
Total 3 (2,465) 3,058 1
</TABLE>
Continued
159
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
<TABLE>
<CAPTION>
National Municipal
Bond Fund New York Tax-Free Fund Ohio Municipal Bond Fund
Period Year Period Year Six Months Year
Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, April 30, October 31,
2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C>
Capital Transactions:
Class A Shares:
Proceeds from shares issued $ 7,086 $ 11,987 $ 679 $ 3,414 $ 2,847 $ 15,845
Proceeds from shares exchanged
from Class B 2,150 -- 3,605 -- -- --
Dividends reinvested 589 2,014 218 466 337 1,118
Cost of shares redeemed (11,014) (20,612) (3,297) (6,902) (12,654) (18,208)
---------------------------------------------------------------------------------------------------------------------------
Total $ (1,189) $ (6,611) $ 1,205 $(3,022) $ (9,470) $ (1,245)
Class B Shares:
Proceeds from shares issued $ 35 $ 784 $53 $ 679 -- --
Dividends reinvested 28 121 38 117 -- --
Cost of shares redeemed (240) (754) (274) (729) -- --
Cost of shares exchanged to Class A (2,150) -- (3,605) -- -- --
---------------------------------------------------------------------------------------------------------------------------
Total $ (2,327) $ 151 $(3,788) $ 67 -- --
Class G Shares:
Proceeds from shares issued $ 932 -- $ 319 -- $ 4,930 $ 24,863
Proceeds from shares issued in
connection with acquisition -- -- -- -- -- 118,155
Dividends reinvested -- -- 2 -- 2,540 3,031
Cost of shares redeemed (821) -- (50) -- (22,896) (20,870)
---------------------------------------------------------------------------------------------------------------------------
Total $ 111 -- $ 271 -- $(15,426) $125,179
Share Transactions:
Class A Shares:
Issued 699 1,132 57 270 256 1,351
Issued in connection with
exchange from Class B 214 -- 258 -- -- --
Reinvested 58 191 19 37 30 96
Redeemed (1,087) (1,962) (276) (544) (1,138) (1,569)
---------------------------------------------------------------------------------------------------------------------------
Total (116) (639) 58 (237) (852) (122)
Class B Shares:
Issued 3 73 4 54 -- --
Reinvested 3 11 3 10 -- --
Redeemed (23) (72) (23) (59) -- --
Redeemed in connection with
exchange to Class A (214) -- (258) -- -- --
---------------------------------------------------------------------------------------------------------------------------
Total (231) 12 (274) 5 -- --
Class G Shares:
Issued 92 -- 27 -- 445 2,162
Issued in connection with acquisition -- -- -- -- -- 10,429
Reinvested -- -- -- -- 230 266
Redeemed (81) -- (4) -- (2,060) (1,818)
---------------------------------------------------------------------------------------------------------------------------
Total 11 -- 23 -- (1,385) 11,039
</TABLE>
Continued
160
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
<TABLE>
<CAPTION>
Real
Convertible Estate
Balanced Securities Investment
Fund Fund Fund
Period Year Period Period
Ended Ended Ended Ended
April 30, October 31, April 30, April 30,
2000 1999 2000 2000
<S> <C> <C> <C> <C>
Capital Transactions:
Class A Shares:
Proceeds from shares issued $ 62,520 $ 54,573 $ 13,114 $ 2,541
Dividends reinvested 36,384 32,438 3,905 85
Cost of shares redeemed (103,840) (96,089) (19,565) (2,678)
---------------------------------------------------------------------------------------------------------------------------
Total $ (4,936) $ 9,078 $ (2,546) $ (52)
Class B Shares:
Proceeds from shares issued $ 678 $ 5,337 -- --
Dividends reinvested 968 517 -- --
Cost of shares redeemed (1,182) (1,240) -- --
---------------------------------------------------------------------------------------------------------------------------
Total $ 464 $ 4,614 -- --
Class G Shares:
Proceeds from shares issued $ 603 -- $ 70 $ 34
Dividends reinvested 3 -- -- --
Cost of shares redeemed (16) -- -- --
---------------------------------------------------------------------------------------------------------------------------
Total $ 590 -- $ 70 $ 34
Share Transactions:
Class A Shares:
Issued 4,311 3,646 1,001 252
Reinvested 2,574 2,212 307 9
Redeemed (7,424) (6,414) (1,503) (275)
---------------------------------------------------------------------------------------------------------------------------
Total (539) (556) (195) (14)
Class B Shares:
Issued 48 355 -- --
Reinvested 68 35 -- --
Redeemed (85) (84) -- --
---------------------------------------------------------------------------------------------------------------------------
Total 31 306 -- --
Class G Shares:
Issued 43 -- 5 4
Reinvested -- -- -- --
Redeemed (1) -- -- --
---------------------------------------------------------------------------------------------------------------------------
Total 42 -- 5 4
</TABLE>
Continued
161
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
<TABLE>
<CAPTION>
Value Diversified
Fund Stock Fund
Period Six Months Year
Ended Ended Ended
April 30, April 30, October 31,
2000 2000 1999
<S> <C> <C> <C>
Capital Transactions:
Class A Shares:
Proceeds from shares issued $ 60,452 $ 149,086 $ 268,453
Dividends reinvested 65,485 126,609 157,657
Cost of shares redeemed (124,156) (212,404) (382,001)
---------------------------------------------------------------------------------------------------------------------------
Total $ 1,781 $ 63,291 $ 44,109
Class B Shares:
Proceeds from shares issued -- $ 1,148 $ 17,642
Dividends reinvested -- 11,082 10,399
Cost of shares redeemed -- (6,158) (7,181)
---------------------------------------------------------------------------------------------------------------------------
Total -- $ 6,072 $ 20,860
Class G Shares:
Proceeds from shares issued $ 2,275 $ 27,373 $ 41,251
Proceeds from shares issued
in connection with acquisition -- -- 60,016
Dividends reinvested 2 16,692 4
Cost of shares redeemed (399) (21,405) (14,110)
---------------------------------------------------------------------------------------------------------------------------
Total $ 1,878 $ 22,660 $ 87,161
Share Transactions:
Class A Shares:
Issued 3,450 8,876 15,244
Reinvested 3,795 7,797 10,267
Redeemed (7,391) (12,654) (21,736)
---------------------------------------------------------------------------------------------------------------------------
Total (146) 4,019 3,775
Class B Shares:
Issued -- 70 1,040
Reinvested -- 701 690
Redeemed -- (375) (417)
---------------------------------------------------------------------------------------------------------------------------
Total -- 396 1,313
Class G Shares:
Issued 137 1,637 2,250
Issued in connection with acquisition -- -- 4,456
Reinvested -- 1,028 --
Redeemed (25) (1,265) (768)
---------------------------------------------------------------------------------------------------------------------------
Total 112 1,400 5,938
</TABLE>
Continued
162
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
<TABLE>
<CAPTION>
Growth
Stock Index Fund Fund Special Value Fund
Six Months Year Period Period Year
Ended Ended Ended Ended Ended
April 30, October 31, April 30, April 30, October 31,
2000 1999 2000 2000 1999
<S> <C> <C> <C> <C> <C>
Capital Transactions:
Class A Shares:
Proceeds from shares issued $ 70,284 $ 185,881 $ 36,936 $ 16,730 $ 38,026
Proceeds from shares issued in
connection with acquisition -- -- -- -- --
Proceeds from shares
exchanged from Class B -- -- -- 1,190 --
Dividends reinvested 30,529 65,393 18,009 11,103 13,093
Cost of shares redeemed (82,514) (110,122) (39,432) (73,536) (153,798)
---------------------------------------------------------------------------------------------------------------------------
Total $ 18,299 $ 141,152 $ 15,513 $(44,513) $(102,679)
Class B Shares:
Proceeds from shares issued -- -- -- $ 27 $ 197
Dividends reinvested -- -- -- 73 78
Cost of shares redeemed -- -- -- (140) (797)
Cost of shares exchanged to Class A -- -- -- (1,190) --
---------------------------------------------------------------------------------------------------------------------------
Total -- $ (1,230) $ (522)
Class G Shares:
Proceeds from shares issued $ 15,911 $ 9,408 $ 5,575 $ 51 --
Proceeds from shares issued in
connection with acquisition -- -- -- -- --
Dividends reinvested 457 17 -- -- --
Cost of shares redeemed (2,813) (228) (417) (39) --
---------------------------------------------------------------------------------------------------------------------------
Total $ 13,555 $ 9,197 $ 5,158 $ 12 --
Share Transactions:
Class A Shares:
Issued 2,945 8,410 1,503 1,235 2,788
Issued in connection with acquisition -- -- -- -- --
Issued in connection with
exchange from Class B -- -- -- 101 --
Reinvested 1,280 3,318 731 843 987
Redeemed (3,474) (4,966) (1,595) (5,648) (11,468)
---------------------------------------------------------------------------------------------------------------------------
Total 751 6,762 639 (3,469) (7,693)
Class B Shares:
Issued -- -- -- 2 15
Reinvested -- -- -- 6 6
Redeemed -- -- -- (11) (62)
Redeemed in connection with
exchange to Class A -- -- -- (101) --
---------------------------------------------------------------------------------------------------------------------------
Total -- -- -- (104) (41)
Class G Shares:
Issued 671 409 226 4 --
Issued in connection with acquisition -- -- -- -- --
Reinvested 19 1 -- -- --
Redeemed (118) (10) (17) (3) --
---------------------------------------------------------------------------------------------------------------------------
Total 572 400 209 1 --
</TABLE>
Continued
163
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
<TABLE>
<CAPTION>
Ohio Regional Small Company
Stock Fund Opportunity Fund International Growth Fund
Seven
Six Months Year Six Months Months Six Months Year
Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, April 30, October 31,
2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C>
Capital Transactions:
Class A Shares:
Proceeds from shares issued $ 1,111 $ 3,687 $ 4,865 $ 10,585 $ 80,052 $ 148,118
Proceeds from shares exchanged
from Class B 535 -- -- -- 938 --
Dividends reinvested 10,270 3,491 -- -- 9,735 3,177
Cost of shares redeemed (11,427) (18,698) (37,566) (24,871) (59,030) (167,989)
---------------------------------------------------------------------------------------------------------------------------
Total $ 489 $(11,520) $(32,701) $(14,286) $ 31,695 $ (16,694)
Class B Shares:
Proceeds from shares issued $ 9 $ 17 -- -- $ 209 $ 213
Dividends reinvested 252 119 -- -- 72 15
Cost of shares redeemed (172) (222) -- -- (14) (51)
Cost of shares exchanged to Class A (535) -- -- -- (938) --
---------------------------------------------------------------------------------------------------------------------------
Total $ (446) $ (86) -- -- $ (671) $ 177
Class G Shares:
Proceeds from shares issued -- -- $ 15,366 $ 22,908 $ 6,773 $ 2,964
Proceeds from shares issued in
connection with acquisition -- -- -- -- -- 29,076
Dividends reinvested -- -- -- -- 4,146 --
Cost of shares redeemed -- -- (37,369) (46,175) (4,570) (4,443)
---------------------------------------------------------------------------------------------------------------------------
Total -- -- $(22,003) $(23,267) $ 6,349 $ 27,597
Share Transactions:
Class A Shares:
Issued 79 200 221 476 4,734 10,428
Issued in connection with
exchange from Class B 53 -- -- -- 58 --
Reinvested 1,395 186 -- -- 613 227
Redeemed (990) (1,018) (1,710) (1,147) (3,469) (11,813)
---------------------------------------------------------------------------------------------------------------------------
Total 537 (632) (1,489) (671) 1,936 (1,158)
Class B Shares:
Issued 1 1 -- -- 13 16
Reinvested 23 7 -- -- 5 1
Redeemed (15) (13) -- -- (1) (4)
Redeemed in connection with
exchange to Class A (53) -- -- -- (58) --
---------------------------------------------------------------------------------------------------------------------------
Total (44) (5) -- -- (41) 13
Class G Shares:
Issued -- -- 701 1,036 400 201
Issued in connection with acquisition -- -- -- -- -- 2,363
Reinvested -- -- -- -- 262 --
Redeemed -- -- (1,708) (2,098) (271) (299)
---------------------------------------------------------------------------------------------------------------------------
Total -- -- (1,007) (1,062) 391 2,265
</TABLE>
Continued
164
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
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.
8. Federal income Tax Information (Unaudited):
For the taxable year ended October 31, 1999, a portion of income
dividends paid by the following funds qualify for the dividends received
deduction available to corporations:
Qualified Dividend Income
Balanced Fund 36.21%
Convertible Securities Fund 37.94%
Value Fund 100.00%
Lakefront Fund 42.30%
Established Value Fund 39.83%
Diversified Stock Index 44.95%
Stock Index Fund 45.39%
Special Value Fund 100.00%
Ohio Regional Stock Fund 100.00%
Exempt-interest dividends are as follows for the year ended October 31,
1999 (amounts in thousands):
Tax-Free Money Market Fund $16,862
Ohio Municipal Money Market Fund 23,878
National Municipal Bond Fund 1,758
New York Tax-Free Bond Fund 871
Ohio Municipal Bond Fund 6,426
During the year ended October 31, 1999, the following Funds paid
long-term capital gain distributions (amounts in thousands):
Intermediate Income Fund $ 298
National Municipal Bond Fund 317
Ohio Municipal Bond Fund 218
Balanced Fund 23,694
Convertible Securities Fund 213
Value Fund 85,590
Lakefront Fund 107
Diversified Stock Fund 177,828
Stock Index Fund 58,555
Growth Fund 22,258
Special Value Fund 14,036
Ohio Regional Stock Fund 4,990
International Growth Fund 4,776
Continued
165
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
As of October 31, 1999, for federal income tax purposes, the
following funds have capital loss carryforwards available to
offset future capital gains, if any (amounts in thousands):
Amount Expires
Prime Obligations Fund $ 11 2007
Tax-Free Money Market Fund 4 2006
Tax-Free Money Market Fund 27 2007
Ohio Municipal Money Market Fund 5 2007
Limited Term Income Fund 1,335 2002
Limited Term Income Fund 553 2003
Limited Term Income Fund 906 2005
Limited Term Income Fund 1,116 2007
Intermediate Income Fund 5,229 2007
Fund for Income 585 2001
Fund for Income 5,491 2002
Fund for Income 864 2003
Fund for Income 62 2004
Fund for Income 606 2007
Government Mortgage Fund 698 2002
Government Mortgage Fund 109 2005
Government Mortgage Fund 2,523 2007
Investment Quality Bond Fund 3,961 2002
Investment Quality Bond Fund 6,428 2007
New York Tax-Free Bond Fund 2 2006
New York Tax-Free Bond Fund 16 2007
Ohio Municipal Bond Fund 497 2007
Real Estate Investment Fund 497 2006
Real Estate Investment Fund 1,400 2007
Small Company Opportunity Fund* 6,164 2006
Small Company Opportunity Fund 701 2007
*This loss cannot be used to offset future gains attributable to
unrealized appreciation of securities held by the Gradison Opportunity
Value Fund at the time of the merger.
As of October 31, 1999, the following Fund had additional capital loss
carryforwards, subject to any applicable limitations on availability, to
offset future capital gains, if any, as the successor of a merger with
the Government Bond Fund (amounts in thousands):
Amount Expires
Investment Quality Bond Fund $2,498 2001
Investment Quality Bond Fund 2,760 2002
Investment Quality Bond Fund 755 2003
Investment Quality Bond Fund 6 2004
Continued
166
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
9. Voting Results of a Special Shareholder meeting (unaudited):
A Shareholder meeting was held on March 27, 2000. At the meeting,
shareholders voted on the following matters with the following results
as indicated below (amounts in thousands):
Proposal 1
For the Trust to elect the Board of Trustees of the Trust.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Theodore H. Emmerich 7,017,357 -- 181,560 Passed
Dr. Harry Gazelle 7,014,923 -- 183,994 Passed
Frankie D. Hughes 7,032,333 -- 166,584 Passed
Roger Noall 6,959,362 -- 239,556 Passed
Eugene J. McDonald 7,032,245 -- 166,672 Passed
Dr. Thomas F. Morrissey 7,030,565 -- 168,352 Passed
Patrick Swygert 7,029,446 -- 169,471 Passed
Frank A. Weil 7,032,067 -- 166,850 Passed
Donald E. Weston 6,965,594 -- 233,324 Passed
Leigh A. Wilson 7,031,424 -- 167,494 Passed
</TABLE>
Proposal 2
For the Trust,* to approve an Amendment and Restatement of seven
sections of the Trust Instrument as follows: a)
Reorganizations, b) voting powers, c) required redemptions, d)
record date, e) master/feeder structure, f) derivative
actions, and g) future amendments.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
a) Regorganizations 5,263,551 215,415 304,093 Passed
b) Voting Powers 5,340,482 138,463 304,093 Passed
c) Required Redemptions 5,402,281 80,335 306,691 Passed
d) Record Date 5,406,116 68,996 306,119 Passed
e) Master/Feeder Structure 5,371,967 103,145 306,119 Passed
f) Derivative Actions 5,382,740 94,249 303,976 Passed
g) Future Amendments 5,195,718 193,193 304,216 Passed
</TABLE>
*This was Proposal 3 for Victory Government Mortgage Funds and Victory
Ohio Regional Stock Fund shareholders.
Continued
167
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
Proposal 2 for Victory Government Mortgage Fund and Victory Ohio
Regional Stock Fund only
To approve an Agreement and Plan of Reorganization and Termination
pursuant to which the Ohio Regional Stock Fund and the Government
Mortgage Fund will transfer all of the assets and liabilities to the
Established Value Fund and the Fund for Income, respectively, in
exchange for shares of the Ohio Regional Stock Fund and the Government
Mortgage Fund, respectively. The Ohio Regional Stock Fund and the
Government Mortgage Fund will distribute such shares to its shareholders
in an amount equal in net asset value to the shares of the Ohio Regional
Stock Fund and the Government Mortgage Fund held by such shareholders as
of the date of the exchange. After the distribution, the Ohio Regional
Stock Fund and the Government Mortgage Fund will be terminated.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Government Mortgage Fund 6,850 32 222 Passed
Ohio Regional Stock Fund 1,025 1 5 Passed
</TABLE>
Proposal 3
To approve an Amended and Restated Rule 12b-1 Distribution Plan.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Balanced Fund -- Class A Shares 18,851 61 86 Passed
Convertible Securities Fund -- Class A 3,055 120 97 Passed
Diversified Stock Fund -- Class A 32,721 448 869 Passed
Financial Reserves Fund 563,629 20,547 45,756 Passed
Fund for Income -- Class A 2,736 15,300 48 Passed
Growth -- Class A 15,646 137 320 Passed
Intermediate Income Fund -- Class A 18,410 30 117 Passed
International Growth Fund -- Class A 8,031 178 160 Passed
Investment Quality Bond Fund -- Class A 9,096 167 788 Passed
Lakefront Fund -- Class A 99 -- -- Passed
Limited Term Income Fund -- Class A 3,116 24 797 Passed
National Municipal Bond Fund -- Class A 1,719 32 34 Passed
New York Tax Free Fund -- Class A 579 111 21 Passed
Ohio Municipal Bond Fund -- Class A 4,818 118 337 Passed
Ohio Municipal Money Market Fund -- Class A 419,373 10,312 21,492 Not Passed<F1>
Prime Obligations Fund -- Class A 678,652 22,509 58,271 Not Passed<F1>
Real Estate Investment Fund -- Class A 1,319 1 27 Passed
Small Company Opportunity Fund -- Class A 1,059 17 54 Passed
Special Value Fund -- Class A 10,240 -- 722 Passed
Stock Index Fund -- Class A 22,036 50 739 Passed
Stock Index Fund -- Class G 257 2 18 Not Passed<F1>
Tax Free Money Market Fund 266,579 11,505 21,464 Not Passed<F1>
U.S. Government Obligations -- Investor Class 230,421 12,416 3,620 Passed
U.S. Government Obligations -- Select Class 639,116 8,427 17,949 Not Passed<F1>
Value -- Class A 28,136 30 126 Passed
<FN>
<F1> The proposal failed due to the lack of a sufficient amount of shares
voting.
</FN>
</TABLE>
Continued
168
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
Proposal 4
For the Trust, excluding Ohio Regional Stock Fund and Government
Mortgage Fund, to approve a series of proposals to change certain
fundamental investment restrictions applicable to each fund. The
fourteen separate proposals associated with the changes in the
fundamental investment restrictions are as follows:
a) The elimination of investment restrictions relating to
diversification of investments for all Funds.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Balanced Fund 19,120 16 100 Passed
Convertible Securities Fund 3,096 8 84 Passed
Diversified Stock Fund 35,349 317 1,164 Passed
Established Value Fund 6,334 46 308 Not Passed<F1>
Financial Reserves Fund 574,393 1,059 54,479 Passed
Fund for Income 8,090 16 414 Passed
Growth Fund 15,067 108 412 Passed
Intermediate Income Fund 18,444 -- 105 Passed
International Growth Fund 9,172 161 216 Passed
Investment Quality Bond Fund 9,177 47 741 Passed
Lakefront Fund 99 -- -- Passed
Limited Term Income Fund 3,130 -- 804 Passed
National Municipal Bond Fund 1,757 30 33 Passed
New York Tax Free Fund 572 29 105 Passed
Ohio Municipal Bond Fund 10,412 84 385 Not Passed<F2>
Ohio Municipal Money Market Fund 422,631 5,597 22,949 Not Passed<F1>
Prime Obligations Money Market Fund 675,739 18,050 64,705 Not Passed<F1>
Real Estate Investment Fund 1,304 -- 29 Passed
Small Company Opportunity Fund 2,641 33 179 Not Passed<F1>
Special Value Fund 10,207 -- 722 Passed
Stock Index Fund 22,140 29 683 Passed
Tax Free Money Market Fund 272,765 2,571 24,212 Not Passed<F1>
U.S. Government Obligations Fund 884,337 3,936 22,677 Not Passed<F1>
Value Fund 27,384 -- 126 Passed
<FN>
<F1> Although a majority of the votes cast were in favor of the proposal, it
failed to pass because the 1940 Act requires that at least 50% of the
Fund's outstanding shares be present at the meeting.
<F2> Although a majority of the votes cast were in favor of the proposal,
it failed to pass because the 1940 Act requires that at least 67% of
the Fund shares present at the meeting vote in favor of the proposal.
</FN>
</TABLE>
Continued
169
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
b) To revise and update each Fund's policy regarding concentration of
investments in an industry to be consistent with the current legal
interpretations.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Balanced Fund 19,099 37 100 Passed
Convertible Securities Fund 3,096 8 84 Passed
Diversified Stock Fund 35,345 320 1,164 Passed
Established Value Fund 6,334 46 308 Not Passed<F1>
Financial Reserves Fund 571,392 4,061 54,479 Passed
Fund for Income 8,080 25 414 Passed
Growth Fund 15,067 108 412 Passed
Intermediate Income Fund 18,426 18 105 Passed
International Growth Fund 9,171 163 216 Passed
Investment Quality Bond Fund 9,188 37 741 Passed
Lakefront Fund 99 -- -- Passed
Limited Term Income Fund 3,130 -- 804 Passed
National Municipal Bond Fund 1,760 27 33 Passed
New York Tax Free Fund 572 29 105 Not Passed<F2>
Ohio Municipal Bond Fund 10,41 86 385 Passed
Ohio Municipal Money Market Fund 422,435 5,793 22,949 Not Passed<F1>
Prime Obligations Fund 675,439 19,086 64,705 Not Passed<F1>
Real Estate Investment Fund 1,304 -- 29 Passed
Small Company Opportunity Fund 2,638 35 722 Not Passed<F1>
Special Value Fund 10,207 -- 722 Passed
Stock Index Fund 22,140 30 683 Passed
Tax Free Money Market Fund 272,611 2,725 24,212 Not Passed<F1>
Value Fund 27,384 -- 126 Passed
<FN>
<F1> Although a majority of the votes cast were in favor of the proposal, it
failed to pass because the 1940 Act requires that at least 50% of the
Fund's outstanding shares be present at the meeting.
<F2> Although a majority of the votes cast were in favor of the proposal,
it failed to pass because the 1940 Act requires that at least 67% of
the Fund shares present at the meeting vote in favor of the proposal.
</FN>
</TABLE>
c) To eliminate the fundamental investment restriction on joint trading
accounts.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Balanced Fund 19,120 16 100 Passed
Diversified Stock Fund 35,315 351 1,164 Passed
Established Value Fund 6,331 49 308 Not Passed<F1>
Growth Fund 15,041 134 412 Passed
Intermediate Income Fund 18,426 18 105 Passed
International Growth Fund 9,164 170 216 Passed
Investment Quality Bond Fund 9,177 47 741 Passed
Limited Term Income Fund 3,130 -- 804 Passed
Ohio Municipal Bond Fund 10,410 86 385 Passed
Prime Obligations Fund 674,286 19,204 64,705 Not Passed<F1>
Small Company Opportunity Fund 2,642 32 179 Not Passed<F1>
Special Value Fund 10,207 -- 722 Passed
Stock Index Fund 22,140 29 683 Passed
Tax Free Money Market Fund 272,830 2,506 24,212 Not Passed<F1>
Value Fund 27,382 2 126 Passed
<FN>
<F1> Although a majority of the votes cast were in favor of the proposal, it
failed to pass because the 1940 Act requires that at least 50% of the
Fund's outstanding shares be present at the meeting.
<F2> Although a majority of the votes cast were in favor of the proposal,
it failed to pass because the 1940 Act requires that at least 67% of
the Fund shares present at the meeting vote in favor of the proposal.
</FN>
</TABLE>
Continued
170
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
d) To clarify and standardize the restriction on borrowing which
will give the Fund the flexibility to engage in certain
security transactions for any purpose that does not involve
leveraging.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Balanced Fund 19,098 37 100 Passed
Convertible Securities Fund 3,070 34 84 Passed
Diversified Stock Fund 35,202 464 1,164 Passed
Established Value Fund 6,300 79 308 Not Passed<F1>
Financial Reserves Fund 574,393 1,059 54,479 Passed
Fund for Income 8,074 31 414 Passed
Growth Fund 15,025 150 412 Passed
Intermediate Income Fund 18,422 22 105 Passed
International Growth Fund 9,159 175 216 Passed
Investment Quality Bond Fund 9,168 56 741 Passed
Lakefront Fund 99 -- -- Passed
Limited Term Income Fund 3,130 -- 804 Passed
National Municipal Bond Fund 1,757 30 33 Passed
New York Tax Free Fund 572 29 105 Not Passed<F2>
Ohio Municipal Bond Fund 10,378 119 385 Passed
Ohio Municipal Money Market Fund 422,046 6,182 22,949 Not Passed<F1>
Prime Obligations Fund 674,461 19,029 64,705 Not Passed<F1>
Real Estate Investment Fund 1,304 -- 29 Passed
Small Company Opportunity Fund 2,623 50 179 Not Passed<F1>
Special Value Fund 10,207 -- 722 Passed
Stock Index Fund 22,129 41 683 Passed
Tax Free Money Market Fund 268,801 6,536 24,212 Not Passed<F1>
U.S. Government Obligations Fund 883,163 5,110 23,677 Not Passed<F1>
Value Fund 27,357 27 126 Passed
<FN>
<F1> Although a majority of the votes cast were in favor of the proposal, it
failed to pass because the 1940 Act requires that at least 50% of the
Fund's outstanding shares be present at the meeting.
<F2> Although a majority of the votes cast were in favor of the proposal,
it failed to pass because the 1940 Act requires that at least 67% of
the Fund shares present at the meeting vote in favor of the proposal.
</FN>
</TABLE>
e) To update the lending restriction to clarify that the Funds may lend
their portfolio securities and engage in certain types of security
transactions that might be construed as "lending" transactions.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Balanced Fund 19,098 37 100 Passed
Convertible Securities Fund 3,069 35 84 Passed
Diversified Stock Fund 35,229 437 1,164 Passed
Established Value Fund 6,303 77 308 Not Passed<F1>
Financial Reserves Fund 574,191 1,261 54,479 Passed
Fund for Income 8,078 27 414 Passed
Growth Fund 15,051 124 412 Passed
Intermediate Income Fund 18,422 22 105 Passed
International Growth Fund 9,169 165 216 Passed
Investment Quality Bond Fund 9,168 56 741 Passed
Lakefront Fund 99 -- -- Passed
Limited Term Income Fund 3,130 -- 804 Passed
National Municipal Bond Fund 1,757 30 33 Passed
New York Tax Fee Fund 566 35 105 Not Passed<F2>
Ohio Municipal Bond Fund 10,390 106 385 Passed
Ohio Municipal Money Market Fund 422,410 5,818 22,949 Not Passed<F1>
Prime Obligations Fund 674,683 18,807 64,705 Not Passed<F1>
Real Estate Investment Fund 1,304 -- 29 Passed
Small Company Opportunity Fund 2,622 52 179 Not Passed<F1>
Special Value Fund 10,194 13 722 Passed
Stock Index Fund 22,131 38 683 Passed
Tax Free Money Market Fund 269,314 6,022 24,212 Not Passed<F1>
U.S. Government Obligations Fund 884,,97 4,175 23,677 Not Passed<F1>
Value Fund 27,357 27 125 Passed
<FN>
<F1> Although a majority of the votes cast were in favor of the proposal, it
failed to pass because the 1940 Act requires that at least 50% of the
Fund's outstanding shares be present at the meeting.
<F2> Although a majority of the votes cast were in favor of the proposal,
it failed to pass because the 1940 Act requires that at least 67% of
the Fund shares present at the meeting vote in favor of the proposal.
</FN>
</TABLE>
Continued
171
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
f) To clarify and modernize the language concerning senior
securities to make it consistent with permitted activities
approved by the SEC.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Balanced Fund 19,120 16 100 Passed
Convertible Securities Fund 3,068 36 84 Passed
Diversified Stock Fund 35,287 379 1,164 Passed
Established Value Fund 6,327 52 308 Not Passed<F1>
Financial Reserves Fund 574,393 1,059 54,479 Passed
Fund for Income 8,086 19 414 Passed
Growth Fund 15,041 134 412 Passed
Intermediate Income Fund 18,426 18 105 Passed
International Growth Fund 9,164 170 216 Passed
Investment Quality Bond Fund 9,177 47 741 Passed
Lakefront Fund 99 -- -- Passed
Limited Term Income Fund 3,130 -- 804 Passed
National Municipal Bond Fund 1,760 27 33 Passed
New York Tax Free Fund 569 33 105 Not Passed<F2>
Ohio Municipal Bond Fund 10,415 81 385 Passed
Oho Municipal Money Market Fund 423,352 4,876 22,949 Not Passed<F1>
Prime Obligations Fund 675,359 18,131 64,705 Not Passed<F1>
Real Estate Investment Fund 1,304 -- 29 Passed
Small Company Opportunity Fund 2,641 33 179 Not Passed<F1>
Special Value Fund 10,207 -- 722 Passed
Stock Index Fund 22,145 24 683 Passed
Tax Free Money Market 272,183 3,153 24,212 Not Passed<F1>
U.S. Government Obligations Fund 884,275 3,998 23,677 Not Passed<F1>
Value Fund 27,357 27 126 Passed
<FN>
<F1> Although a majority of the votes cast were in favor of the proposal, it
failed to pass because the 1940 Act requires that at least 50% of the
Fund's outstanding shares be present at the meeting.
<F2> Although a majority of the votes cast were in favor of the proposal,
it failed to pass because the 1940 Act requires that at least 67% of
the Fund shares present at the meeting vote in favor of the proposal.
</FN>
</TABLE>
g) To modernize the current language of the real estate investment
restriction by allowing the Fund to invest in certain newer financial
instruments that were precluded under the prior restriction
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Balanced Fund 19,099 36 100 Passed
Convertible Securities Fund 3,069 34 84 Passed
Diversified Stock Fund 35,291 375 1,164 Passed
Established Value Fund 6,318 61 308 Not Passed<F1>
Financial Reserves Fund 570,461 4,991 54,479 Passed
Fund for Income 8,084 21 414 Passed
Growth Fund 15,057 117 412 Passed
Intermediate Income Fund 18,423 21 105 Passed
International Growth Fund 9,171 163 216 Passed
Investment Quality Bond Fund 9,188 37 741 Passed
Lakefront Fund 99 -- -- Passed
Limited Term Income Fund 3,130 -- 804 Passed
National Municipal Bond Fund 1,760 27 33 Passed
New York Tax Free Fund 572 29 105 Not Passed<F2>
Ohio Municipal Bond Fund 10,364 132 385 Passed
Ohio Municipal Money Market Fund 422,023 6,205 22,949 Not Passed<F1>
Prime Obligations Fund 674,066 19,424 64,705 Not Passed<F1>
Real Estate Investment Fund 1,304 -- 29 Passed
Small Company Opportunity Fund 2,628 46 179 Not Passed<F1>
Special Value Fund 10,207 -- 722 Passed
Stock Index Fund 22,145 24 683 Passed
Tax Free Money Market Fund 269,526 5,811 24,212 Not Passed<F1>
U.S. Government Obligations Fund 882,649 5,624 23,677 Not Passed<F1>
Value Fund 27,357 27 126 Passed
<FN>
<F1> Although a majority of the votes cast were in favor of the proposal, it
failed to pass because the 1940 Act requires that at least 50% of the
Fund's outstanding shares be present at the meeting.
<F2> Although a majority of the votes cast were in favor of the proposal,
it failed to pass because the 1940 Act requires that at least 67% of
the Fund shares present at the meeting vote in favor of the proposal.
</FN>
</TABLE>
Continued
172
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
h) To revise the restriction relating to underwriting
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Balanced Fund 19,099 36 100 Passed
Convertible Securities Fund 3,095 8 84 Passed
Diversified Stock Fund 35,254 411 1,164 Passed
Established Value Fund 6,333 47 308 Not Passed<F1>
Financial Reserves Fund 575,316 135 54,479 Passed
Fund for Income 8,89 16 414 Passed
Growth Fund 15,057 117 412 Passed
Intermediate Income Fund 18,444 -- 105 Passed
International Growth Fund 9,171 162 216 Passed
Investment Quality Bond Fund 9,168 56 741 Passed
Lakefront Fund 99 -- -- Passed
Limited Term Income Fund 3,130 -- 804 Passed
National Municipal Bond Fund 1,760 27 33 Passed
New York Tax Free Fund 570 31 105 Not Passed<F2>
Ohio Municipal Bond Fund 10,378 128 385 Passed
Ohio Municipal Money Market Fund 423,859 4,369 22,949 Not Passed<F1>
Prime Obligations Fund 675,011 18,479 64,705 Not Passed<F1>
Real Estate Investment Fund 1,304 -- 29 Passed
Small Company Opportunity Fund 2,635 39 179 Not Passed<F1>
Special Value Fund 10,207 -- 722 Passed
Stock Index Fund 22,145 24 683 Passed
Tax Free Money Market Fund 272,800 2,536 24,212 Not Passed<F1>
U.S. Government Obligations Fund 885,718 2,554 23,677 Not Passed<F1>
Value Fund 27,357 27 126 Passed
<FN>
<F1> Although a majority of the votes cast were in favor of the proposal, it
failed to pass because the 1940 Act requires that at least 50% of the
Fund's outstanding shares be present at the meeting.
<F2> Although a majority of the votes cast were in favor of the proposal,
it failed to pass because the 1940 Act requires that at least 67% of
the Fund shares present at the meeting vote in favor of the proposal.
</FN>
</TABLE>
i) To eliminate the fundamental investment restriction on pledging
assets for security.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Established Value Fund 6,325 55 308 Not Passed<F1>
Fund for Income 8,074 31 414 Passed
<FN>
<F1> Although a majority of the votes cast were in favor of the proposal, it
failed to pass because the 1940 Act requires that at least 50% of the
Fund's outstanding shares be present at the meeting.
</FN>
</TABLE>
j) To eliminate the restriction relating to investing to influence
management or exercise control.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Convertible Securities Fund 3,095 8 84 Passed
Established Value Fund 6,320 59 308 Not Passed<F1>
<FN>
<F1> Although a majority of the votes cast were in favor of the proposal, it
failed to pass because the 1940 Act requires that at least 50% of the
Fund's outstanding shares be present at the meeting.
</FN>
</TABLE>
k) To eliminate the restriction relating to purchasing on margin and
short selling.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Convertible Securities Fund 3,095 8 84 Passed
Established Value Fund 6,310 70 308 Not Passed<F1>
<FN>
<F1> Although a majority of the votes cast were in favor of the proposal, it
failed to pass because the 1940 Act requires that at least 50% of the
Fund's outstanding shares be present at the meeting.
</FN>
</TABLE>
l) To amend and re-classify from fundamental to non-fundamental the
restrictions relating to illiquid and restricted securities.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Convertible Securities Fund 3,095 9 84 Passed
Established Value Fund 6,326 54 308 Not Passed<F1>
<FN>
<F1> Although a majority of the votes cast were in favor of the proposal, it
failed to pass because the 1940 Act requires that at least 50% of the
Fund's outstanding shares be present at the meeting.
</FN>
</TABLE>
Continued
173
<PAGE>
Notes to Financial Statements--continued
The Victory Portfolios April 30, 2000
m) To eliminate the restriction which prohibits the Fund from
owning the securities of an issuer when a Trustee or Officer
of the Fund who is also a director or officer of that issuer
owns certain amounts of the securities of that issuer.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Established Value Fund 6,334 45 308 Not Passed<F1>
<FN>
<F1> Although a majority of the votes cast were in favor of the proposal, it
failed to pass because the 1940 Act requires that at least 50% of the
Fund's outstanding shares be present at the meeting.
</FN>
</TABLE>
n) To eliminate the restriction limiting investments in the securities
of unseasoned issuers to ore more than 5% of the assets of the Fund.
<TABLE>
<CAPTION>
For Against Abstain Election Results
<S> <C> <C> <C> <C>
Established Value Fund 6,340 39 308 Not Passed<F1>
<FN>
<F1> Although a majority of the votes cast were in favor of the proposal, it
failed to pass because the 1940 Act requires that at least 50% of the
Fund's outstanding shares be present at the meeting.
</FN>
</TABLE>
10. Subsequent Events
On May 5, 2000, the assets and liabilities of the Class A Shares and
Class B Shares of the Ohio Regional Stock Fund and the Government
Mortgage Fund were transferred into the Class A Shares of the
Established Value Fund and the Fund For Income, respectively.
Additionally, the assets and liabilities of Balanced Fund repesented by
Class B shares were converted into additional Class A shares. The
transfer of these assets and liabilities was approved by the Board of
Directors of the Trust on December 1, 1999.
174
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176
<PAGE>
The Victory Funds
127 Public Square
OH-01-27-1612
Cleveland, Ohio 44114
Bulk Rate
U.S. Postage
PAID
Cleveland, OH
Permit No. 469
Victory Funds
(Logo)(R)
Call Victory at:
800-539-FUND (800-539-3863)
Visit our web site at:
www.victoryfunds.com
1VF-SEMI-AR 6/00
